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, 2001

                                       OR

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

     For the transition period from ____________ to ____________


                          Commission file No. 33-98682

                        AMERICAN COMMERCE SOLUTIONS, INC.
                        f/k/a JD American Workwear, 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)

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

        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 [ ] No [X]

     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. [ ]

     State the issuer's revenues for its most recent fiscal year: $2,108,640

     The aggregate  market value of the voting and  non-voting  common equity of
the  registrant  held by  non-affiliates  of the registrant at June 20, 2001 was
approximately  $1,252,792  based  upon the  closing  sale  price of $.26 for the
Registrant's  Common  Stock,  $.002  par  value,  as  reported  by the  National
Association of Securities Dealers OTC Bulletin Board on June 1, 2001.

     As of June 20, 2001 the registrant  had 10,718,432  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, 2001

                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
                                     PART I

Item 1.  Description of Business                                               1
Item 2.  Description of Property                                               9
Item 3.  Legal Proceedings                                                     9
Item 4.  Submission of Matters to Vote of Securities Holders                   9

                                    PART II

Item 5.  Market for Common Equity and Related Security
          Stockholder Matters                                                 10
Item 6.  Management's Discussion and Analysis or Plan of Operation            12
Item 7.  Financial Statements                                                 16
Item 8.  Changes in and Disagreements with Accountants on
          Accounting And Financial Disclosure                                 16

                                    PART III

Item 9.  Directors, Executive Officers, Promoters, and Control
          Persons; Compliance with Section 16(a) of the Exchange Act          16
Item 10. Executive Compensation                                               17
Item 11. Security Ownership of Certain Beneficial Owners and Management       21
Item 12. Certain Relationships and Related Transactions                       25
Item 13. Exhibits and Reports on Form 8-K                                     26
<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. Business - Forward Looking Statements".

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

GENERAL

     American Commerce  Solutions,  Inc., f/k/a JD American  Workwear,  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.

     On June 1, 2000,  the Company  acquired  100% of the  outstanding  stock of
Rhode Island Truck and Equipment Corp., the parent  corporation of International
Paving,  and  100%  of  the  outstanding  stock  of  Patina  Corp.,  the  parent
corporation  of  International  Machine and Welding,  Inc. In December 2000, the
Company changed its name to American Commerce Solutions,  Inc. Concurrently with
the name change,  the Company  formed a new Rhode Island  corporation to operate
as, and under the name of, JD American Workwear, Inc.

     American Commerce Solutions,  Inc. is a multi-industry  holding company for
its  operating  subsidiaries.  As of the  close of its most  recently  completed
fiscal  year,  the Company had three wholly owned  subsidiary  operations,  each
operating  in a different  business  segment.  These  subsidiaries  consisted of
International  Machine and Welding,  Inc. in its  manufacturing  segment,  Rhode
Island  Truck and  Equipment  in its  construction  management  segment,  and JD
American Workwear, Inc. in its product marketing segment. The Board of Directors
of the Company has  determined  that it will  discontinue  the  operations of JD
American  Workwear,  Inc.  as of June 1, 2001.  The  Company is  negotiating  an
agreement and has entered into a letter of intent with David N. DeBaene, founder
of JD American Workwear, to sell the operations to him.

     The  Company  intends  to  expand  its  holdings  by  acquiring  additional
subsidiaries to generate additional revenue within both its current segments and
new business  segments.  This concept has been a  developing  business  strategy
since August 1999.

SUBSIDIARY OPERATIONS

     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 parts number.  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
<PAGE>
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 sent on  consolidated  shipments.  This has created a niche market for
the direct parts sales  division.  Management  is in the process of  negotiating
with agents in various  markets,  including  South America,  the Caribbean,  and
Puerto  Rico to solicit  parts  sales.  The  operation  currently  has two major
customer  relationships in the Caribbean.  Management  believes that this market
has not been fully  targeted by its  competitors  and is a  potential  source of
significant business.

     JD American Workwear,  Inc., a Rhode Island corporation was incorporated in
February  2001 to become a subsidiary  and provide the ongoing  operations  that
were formerly the  responsibility  of the parent  company.  This  subsidiary was
engaged in the  business  of  designing,  manufacturing,  marketing  and selling
commercial and industrial workwear products. The subsidiary's products consisted
of a line of  commercial  and  industrial  workwear  highlighted  by its two key
proprietary  safety  products  -  denim  safety  work  jeans  ("JD  Safety  Work
Jeans(TM)")  and  cotton/poly  blend uniform style safety work pants ("JD Safety
Uniform  Pants(TM)").  The operations initial product, JD Safety Work Jeans, was
designed  and  patented  by David N.  DeBaene,  the  subsidiary  President,  and
assigned to the  predecessor  company,  JD American  Workwear,  Inc., a Delaware
corporation in January 1995. In June 1997, the Delaware  corporation was awarded
a second patent with respect to certain unique functional characteristics of its
Safety Uniform Pants. The operation marketed its products  throughout the United
States  and   internationally   principally  for  industrial  and  manufacturing
applications.

     The Board of Directors of American Commerce Solutions,  Inc. has decided to
discontinue  the  operations JD American  Workwear,  Inc and is  negotiating  an
agreement with David N. DeBaene, the founder, to sell the operations to him.

     Rhode Island Truck and Equipment  Corp. is licensed to sell used trucks and
equipment. Its wholly owned subsidiary, International Paving provides commercial
and residential  concrete and paving services.  Since being acquired by American
Commerce,  International  Paving has been able to increase  its bonding line and
secure  contracts  from  municipalities  in Rhode Island to repair  roadways and
rights of way.  Currently there is little activity in the truck sales operations
and the used  truck  sales  license is being  maintained  for a  possibility  of
reentering this market.

BUSINESS STRATEGY

     The Company has adopted a business  strategy  that focuses on expansion and
diversification  through  acquisitions  of companies in other lines of business.
Under the new strategy, the Company has developed three segments: Manufacturing,
Product Marketing, and Construction Management.

     Manufacturing  Segment.  This segment 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.

     Product Marketing Segment. This segment was formed for sales of JD American
Workwear Products. Operations have been discontinued as of June 1, 2001.

     Construction Management Segment. This segment was formed for the operations
of Rhode  Island  Truck  and  Equipment  Corporation.  Rhode  Island  Truck  and
Equipment  Corporation is licensed to sell used commercial trucks,  construction
equipment and tools,  and through its  International  Paving  division  provides
hauling, paving, commercial and demolition recycling services.

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 divisions.  The operations of Division 1 provide specialized  machining of
very large  components  and machinery  repair to  industries  such as aerospace,

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<PAGE>
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 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.

PRODUCT MARKETING SEGMENT

     The  Product  Marketing  Segment  through the JD  American  Workwear,  Inc.
operation offered three main lines of products:  JD Safety Work Jeans, JD Safety
Uniform Pants and JD Rugged 5-pocket  Jeans.  For the fiscal year ended February
28,  2001,  sales of JD Safety Work Jeans  accounted  for  approximately  23% of
revenues,  sales of JD Safety Uniform Pants accounted for  approximately 5%, and
sales of JD Rugged  5-pocket  Jeans  accounted  for  approximately  72%. For the
fiscal year ended February 29, 2000, sales of JD Safety Work Jeans accounted for
approximately  31% of revenues,  sales of JD Safety Uniform Pants  accounted for
approximately  54%,  and  sales  of  JD  Rugged  5-pocket  Jeans  accounted  for
approximately 15%.

CONSTRUCTION MANAGEMENT SEGMENT

     The  Construction  Management  Segment offers  commercial  and  residential
paving  and  concrete  work  through  its  International  Paving  operations,  a
subsidiary  of Rhode Island Truck and  Equipment  Corp.  These  operations  have
experienced  a 600%  increase in  municipal  contracts  in the first  quarter of
fiscal 2002 with more  potential  contracts  to bid.  The  bonding  line for bid
contracts has been expanded from $100,000 to $600,000  since the  acquisition by
American  Commerce.  The  subsidiary  intends  to  expand  further  by  offering
recycling  services for concrete,  asphalt and other  non-putricable  commercial
waste  that  management  believes  will  reduce  the  seasonality  of cash  flow
substantially  as the inventory of material that may be ground or crushed can be
stockpiled for processing  during the seasonal  downturns in concrete and paving
work. Rhode Island Truck and Equipment Corp. holds a license to sell used trucks
and  construction  equipment.  While  no  sales  were  made in  fiscal  2001 the
operation  will  continue to maintain  its license to sell used  vehicles.  This
subsidiary has substantial  room for expansion in its region and can be assisted
in used equipment sales by its sister operations in the manufacturing division.

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.

PRODUCT MARKETING SEGMENT

     Proprietary Products.  The JD Safety Work Jeans and JD Safety Uniform Pants
were manufactured in the United States  exclusively from raw materials  produced
in the United States. The division  manufactured some of the component parts and
subassemblies; however, final assembly was performed by outside contractors. The
segment had no significant  manufacturing  activity or purchase of raw materials
during the years ended February 28, 2001 and February 29, 2000.

CONSTRUCTION MANAGEMENT SEGMENT

     Because  of  its  regional  nature  the  Construction  Management  Division
purchases  its concrete and  supplies and asphalt from local  suppliers  located

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<PAGE>
near its job sites.  This  arrangement  is  consistent  with  industry  standard
practice  albeit  providing  certain risk if the  suppliers  services were to be
interrupted.  In such an event the cost  completing  certain jobs would increase
and delays  could be  suffered  with the  transportation  of goods  coming  from
distant sites.

MARKETING AND SALES

MANUFACTURING SEGMENT

     International  Machine and Welding,  Inc.'s 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 60% of the Company's repair revenue. The recent installation of an
additional track press will allow this division to double its capacity.

PRODUCT MARKETING SEGMENT

     The JD Safety Work Jeans,  JD Safety  Uniform  Pants and its private  label
conventional  workwear were marketed and sold through a network of distributors,
catalog  merchants  and retail  resellers.  The marketing and sales efforts were
segmented into the following general categories: (1) direct marketing sales, (2)
catalog sales (3) distributor sales, (4) uniform rental service  companies,  and
(5) retail  customers.  Recent marketing efforts have been limited due to a lack
of cash flow.

CONSTRUCTION MANAGEMENT SEGMENT

     Rhode Island Truck and Equipment Corp. has expanded its operations and been
successful in bidding  several  municipal  contracts that are one year in length
with a one-year  renewal  option.  The expansion of the bonding line to $600,000
from $100,000 in fiscal 2001 has created the opportunity for this growth. Direct
marketing  through  mailings  and  advertising  in  regional  yellow  pages  has
increased our visibility. This increased visibility is expected to be a catalyst
in capturing a greater share of the larger market for residential and commercial
paving caused by an extremely harsh winter in fiscal 2001.

COMPETITION

MANUFACTURING SEGMENT

     The principal competitors of the Manufacturing Segment 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

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<PAGE>
either by  completing  the work at the  customers  site or because of  immediate
turnaround capabilities.

PRODUCT MARKETING SEGMENT

     The principal competitive factors in the JD American Workwear, Inc. markets
include innovative product design, product quality,  value, product performance,
durability, availability,  established customer relationships, name recognition,
distribution  and price.  The operation had been able to compete  principally on
the basis of its innovative  product design,  quality,  product  performance and
value.

     JD American  Workwear,  Inc.  competed with a number of companies,  many of
which have longer operating histories,  more established markets and far greater
financial,  advertising,  research and  development,  manufacturing,  marketing,
personnel and other  resources than it.  Dominant  competitors  of  conventional
workwear include Carhart Industries, Red Kap Industries, and Angelica Corp.

CONSTRUCTION MARKETING SEGMENT

     This segment primarily competes with other local paving contractors located
in its  service  market.  Within  the  local  markets  competition  is  intense.
Significant competitive factors in this business are ability to deliver services
rapidly,   quality  of  work,  quality  of  staff  and  honesty.  The  principal
competitors include J.H. Lynch & Sons, Narragansett  Improvement Co., and Tilcon
Corp., a national conglomerate.

PATENTS AND PROPRIETARY RIGHTS

     The JD American Workwear,  Inc.'s first patent,  U.S. Patent No. 5,038,408,
covers certain functional  features of the JD Safety Work Jeans. The Jean Patent
was issued to David N.  DeBaene  and was  thereupon  assigned  to the Company in
January 1995. In connection with the  assignment,  the Company agreed to pay Mr.
DeBaene  $50,000 for the Jean Patent.  The Jean Patent expires in the year 2008,
seventeen years from the date of issuance.

     In June 1997, the Company was granted U.S.  Patent No.  5,634,215  covering
certain  functional  features of its JD Safety  Uniform  Pants.  The  functional
features of the jeans and pants on which  patent  protection  has been  granted,
include  wear and  protective  abrasion-resistant,  reinforcing  panels that are
strategically positioned onto work pant garments in the seat and knees. The wear
and abrasion resistant panels are formed of specially fabricated materials.  The
Uniform Patent expires in the year 2008.

     On August 29, 2000, U.S. Patent No.  6,108,819 was issued covering  certain
functional  features to be incorporated  in its new product,  the JD Safety Back
Brace Pants.  The patented  features relate to the design of the back brace, its
detachable  feature,  and its coupling  mechanism for attaching the brace to the
pant.  While the patents offer a certain degree of  protection,  there can be no
assurance  that they will  provide the Company with any  meaningful  competitive
advantage. This patent will expire in 2014.

CUSTOMER DEPENDENCE

     International  Machine and  Welding,  Inc.  has a broad and diverse base of
customers.  This segment  generates a significant  amount of revenues from sales
and services provided to three different  industries.  The construction industry
accounted for approximately 26.6% of the segment's revenues in fiscal 2001 while
the  industrial  and mining  industries  accounted for  approximately  17.2% and
16.6%,   respectively,   of  the  segment's   total   revenues.   Due  to  these
concentrations,  the results of  operations  of the segment could be affected by
changes in the economic,  regulatory,  or other related conditions  impacting on
these industries.

     For fiscal 2001, JD American  Workwear,  Inc.'s  largest  customers  were a
liquidator,  The  Sportman's  Guide,  that  purchased  30.1% and  retailers  who
combined  comprised  8.3%. No customer other than the liquidator  purchased more
than 10% of the total sales for the year ended  February 28, 2001. The remaining

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sales were to businesses or individual customers. For fiscal 2000, the Company's
customer's  who sales  exceeded 10% of the  divisions  sales were JC Penney with
sales of 14%, and UniFirst Corporation with sales of 18%.

     Rhode Island Truck and Equipment Corp. does not rely on recurring customers
to generate its revenues.  The shift to more municipal and commercial  contracts
in the paving subsidiary is expected to provide the base for future  operations.
In fiscal 2001,  commercial  contracts for paving were 22.5% of the revenue with
all other sales being to residential  customers.  No customer provided more than
10% of sales.

GOVERNMENTAL REGULATION

     Except for certain  regulations  relating  to bidding  for,  and  providing
services to, municipalities by our Construction Management Division, the Company
is not  subject to any  significant  governmental  regulations  that  materially
effect its operations.

COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS


     During the past two fiscal  years the Company has not incurred any material
costs associated with compliance with federal, state or local environmental law.

EMPLOYEES

     At May 14, 2001, the Company and its subsidiaries had twenty-five employees
devoting  full-time  hours,  seven part time employees and seven  contractors or
commission  representatives.  Of these workers,  six are  performing  executive,
management and marketing functions,  five are performing  accounting,  financial
and office functions,  and one is performing order fulfillment  functions,  five
provide sales  functions  and the  remainder  provide  support,  maintenance  or
fulfill shop operation  requirements.  The parent  operation has three full time
employees and one consultant.  The  Manufacturing  Segment employs eighteen full
time,  six part time and six  consultants  or commission  sales  personnel;  the
Product  Marketing  Segment had three full time employees;  and the Construction
Management Segment had four full time and one part time employee.

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 belief's 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

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<PAGE>
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, 2001 of  $10,010,063  and net income to common  shareholders  of
$38,375 for the year ended  February 28, 2001. At February 29, 2000, the Company
had an  accumulated  deficit of  $8,263,003,  and  incurred a net loss to common
shareholders,  of $2,467,929  for the year ended  February 29, 2000. The Company
had negative cash flow from  operations  during each of the years ended February
28, 2001 and February 29, 2000. 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  operations  will allow the Company to achieve  this goal.
Management believes  discontinuing the operations of JD American Workwear,  Inc.
will improve overall cash flows to allow  management to focus on its strategy of
growth through  acquisition  without the  requirement  of committing  additional
financial resources to the failing segment.

     Growth  Plans and Risk of  Expansion.  In recent  months,  the  Company has
adopted and  implemented a business  strategy,  which seeks growth and expansion
through the acquisition of other companies with diversified lines of businesses.
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  expanded  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 completed any such
transactions   since  June  2001.   The  Company   does  not  have  any  current
understandings,  arrangements,  or agreements (oral or written)  relating to any
specific acquisition but it is engaged in preliminary discussions with potential
acquisition candidates.  However, 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.

                                       7
<PAGE>
     Need for Additional  Financing.  Cash flow from  operations,  loans and the
sale of securities  provided the working capital needs and principal payments on
long-term  debt through most of fiscal 2001.  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  onto a  significant  extent on the continued
efforts and abilities of our Chairman,  Robert E. Maxwell,  and President Steven
D. Smith.  If the company were to lose the services of any 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.  From March 1, 2000 through June 30,
2001 the price of our common  shares has ranged from $1.9375 to $0.01 per share.
The price of our 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  68.30% 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.

     Possible  Change in Control.  Pursuant to its agreements  with ULLICO,  the
Series B Preferred  Stock holders shall be entitled to elect one director out of
the seven  authorized  directors of the Company's  board and one director out of
the three directors comprising the Company's Compensation  Committee. If certain
events  occur or do not occur,  such as the failure to pay either a PIK Dividend
or cash  dividend  to the Series B  Preferred  Stockholders,  the holders of the
Series B Preferred  Stock shall be  entitled,  immediately  upon giving  written
notice,  to elect a number of directors  that will  constitute a majority of the
authorized number of directors. Moreover, ULLICO holds Series B Preferred Stock,
which is currently  convertible  into 641,400 shares of Common Stock,  and holds
warrants  to  purchase  1,032,550  shares  of  Common  Stock.  Pursuant  to  its
agreements  with  ULLICO,  in the  event  the  Company  does not  reach  certain
performance  milestones,  the  Series B  Preferred  Stock  held by ULLICO may be
converted  into a greater  number of shares of the  Company's  Common Stock than
provided for upon  conversion if the  performance  targets are met. As a result,
ULLICO  could  potentially  obtain a  substantial  controlling  interest  in the
Company.  There can be no  assurance  that the Company  will be able to meet the
performance targets set forth in the applicable agreements and, therefore, avoid
a possible  change in control of the Company's  capital stock.  Such a change in
control may result in  fundamental  changes to the management of the Company and
the character of its business.

     Pursuant to the  acquisition  of Patina  Corp.,  the Company  issued  9,800
shares of Series C 6% Convertible  Preferred Stock.  International  Commerce and
Finance, Inc., a corporation  wholly-owned by Mr. Hefner, a director of American
Commerce, was issued 8,100 shares of the Series C Preferred Stock. Each share of
Series C Preferred  Stock is  convertible  into 1,000 shares of Common Stock but
only is entitled  to 363.52  votes per share.  Because the voting  rights of the
Series C  Preferred  Stock is less than its  conversion  rate,  the  issuance of
Series C Preferred Stock did not result in a change of control of the Company.

     In November 2000,  International Commerce and Finance, Inc. converted 4,133
shares of Series C Preferred Stock in to 4,133,000 restricted common shares and,
as a  result,  currently  holds  approximately  41.08%  of the  Company's  total
outstanding  voting power.  If the remaining  3,967 shares of Series C Preferred
Stock held are totally  converted  into common stock,  a change of control would
take  place  since  International  Commerce  and  Finance,  Inc.  would  possess
approximately  50.50%  of the total  outstanding  voting  power of the  Company.
Furthermore,  Mr.  Hefner,  though his  control of  International  Commerce  and
Finance,  Inc.  and his own  personal  holdings,  currently  holds  or  controls

                                       8
<PAGE>
approximately  42.64% of the Company's total outstanding  voting power or 43.06%
if his currently  exercisable options were exercised.  If the Series C Preferred
Stock held by Mr.  Hefner and  International  Commerce  and Finance were totally
converted,  Mr. Hefner would hold or control  approximately  52.43% of the total
outstanding  voting power of the Company or 52.72% if his currently  exercisable
options were exercised.

     Withdrawal of  Registration  Statements.  During the fourth  quarter of the
2001 fiscal year, the Company filed a registration  statement on Form S-8 on two
separate occasions to register common stock issuable pursuant to options granted
under the  Company's  stock option plan.  Because the Company had failed to make
all of its required  filings under the Securities  Exchange Act of 1934 prior to
the filing of these Form S-8 registration statements, registration of the shares
on Form S-8 may not have been technically available to the Company. Accordingly,
these  registration  statements  are  expected to be withdrawn by the Company in
July  2001.  A new Form S-8 will be filed  to  register  the  shares  underlying
unexercised  options,  which were intended to be included in the withdrawn  Form
S-8's.  However,  shares previously issued pursuant to exercised options may not
be  registered  on a Form S-8.  Accordingly,  any shares issued upon exercise of
options in  reliance on the  technically  defective  Form S-8's to be  withdrawn
cannot be registered using a subsequent Form S-8 registration statement, leaving
the Company with a potential  liability for 619,500 shares issued under the Form
S-8's to be withdrawn.

ITEM 2. PROPERTIES

     With the  acquisition  of Patina Corp.  and its  subsidiary,  International
Machine and  Welding,  Inc. the Company  owns a 38,000  square foot  facility in
Bartow,  Florida,  which currently serves as the principal  executive offices of
American Commerce. This building is encumbered under a default judgment in favor
of GE Capital Corp and secured by a mortgage to GE Capital Corp.

     In December 1998, the Company  purchased the 19,600 square foot building in
Coventry, Rhode Island formerly leased by the Company. The purchase price of the
property was  $145,000,  of which  $125,000 was paid in the form of a promissory
note to the seller  bearing  interest  at 10.5%,  secured  by a mortgage  on the
property.  The  promissory  note  required  monthly  payments of $2,686.74 and a
balloon payment of approximately  $57,934 in January 2002. The Company defaulted
on the note and the entire principal  balance plus accrued interest was declared
due  immediately.  In August 2000,  the Company was  notified  that the mortgage
holder  intended  begin   foreclosure   proceedings   unless  the  arrearage  of
approximately  $32,000 was paid. On June 29, 2000,  the building was sold to the
mortgage  holder in a tax sale.  The  Company  redeemed  the  building by paying
approximately  $4,200 for the taxes and  required  interest  prior to six months
from the date of the sale. The building fell into  arrearage  thereafter and the
building was sold in March 2001. JD American Workwear, Inc. is currently leasing
the facility from the new owner at $1,670 per month. With the sale of the assets
of this subsidiary in July 2001 the lease will be converted to the name of David
N. DeBaene or assigned as he requires and is acceptable to the lessor.

     Rhode Island Truck and  Equipment  Corp.  is housed in an 8,000 square foot
structure in West Warwick,  Rhode Island.  Alfred Joaquin,  who is the father of
the  subsidiary's  President,  owns this building.  The subsidiary pays $600 per
month on a month-to-month lease.

ITEM 3. LEGAL PROCEEDINGS

     None.

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

     During the fourth  quarter of the fiscal year covered by this  report,  the
following  matters were submitted to a vote of the Company's  shareholders at an
annual meeting of shareholders: (a) the election of a board of directors, (b) to
increase  the  authorized  common  shares to  30,000,000,  (c) to  increase  the
authorized amount of employee stock options to 2,000,000,  and (d) to change the
name of the corporation to American Commerce Solutions,  Inc. All proposals were
approved by the shareholders and have been implemented.

                                       9
<PAGE>
     The following directors were elected:  Robert E. Maxwell, Daniel L. Hefner,
Norman J.  Birmingham,  David N. DeBaene and Herbert C.  Canapary.  Each elected
member  received  5,548,382  votes in favor  with 3,083  abstaining.  There were
7,335,020 votes that could have been cast leaving 1,783,555 that cast no vote on
any proposal.

     The proposal to increase the number of authorized shares to 30,000,000 from
7,500,000 passed with 5,414,947 affirmative votes and 136,518 dissenting votes.

     The proposal to increase the number of shares  available for the 1995 Stock
Option  Plan to be  increased  from  750,000 to  2,000,000  shares  passed  with
5,526,385 affirmative votes and 25,080 dissenting votes.

     The  amendment  to  Articles  of  Incorporation  to change  the name of the
corporation  to  American  Commerce   Solutions,   Inc.  passed  with  5,535,435
affirmative votes and 16,030 dissenting votes.

                                     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.

<TABLE>
<CAPTION>
                                                                         Bid Prices
                                                                     ------------------
                                                                      High        Low
                                                                     -------    -------
<S>                                                                  <C>        <C>
FISCAL 2002

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

FISCAL 2001

First Quarter  (March 1, 2000 through May 31, 2000)                  $1.9375    $  0.88

Second Quarter  (June 1, 2000 through August 31, 2000)               $1.4375    $0.6875

Third Quarter  (September 1, 2000 through November 30, 2000)         $  1.25    $  0.10

Fourth Quarter  (December 1, 2000 through February 28, 2001)         $  1.50    $  0.01

FISCAL  2000

First Quarter  (March 1, 1999 through May 31, 1999)                  $ 3.625    $ 2.375

Second Quarter (June 1, 1999 through August 31, 1999)                $ 3.625    $  2.50

Third Quarter (September 1, 1999 through November 30, 1999)          $ 3.125    $  1.50

Fourth Quarter (December 1, 1999 through February 29, 2000)          $ 2.125    $  0.90
</TABLE>

                                       10
<PAGE>
     On June 1, 2001 the  closing  bid price of the  Company's  Common  Stock as
reported by the OTCBB was $0.47 and there were approximately 341 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.

DELISTING OF SECURITIES

     On September 12, 2000, the Company's  Common Stock was removed from trading
on the  OTC  Bulletin  Board  System  because  of its  non-compliance  with  the
requirement  to timely file its annual  report on Form  10-KSB.  The Company was
reinstated in January 2001.

RECENT SALES OF UNREGISTERED SECURITIES

     In March 2001, 500,000 common shares were issued to Allen L. Burditt II for
consulting services to be rendered in reliance on a registration statement filed
on Form S-8 under the  Securities  Act of 1933.  This Form S-8 will be withdrawn
and these  shares  will be  included  in a  registration  statement  to be filed
subsequently.

     On February 14, 2001,  39,350 shares were issued to Randolph  Beimel or his
assigns  in  exercise  of  options  he had been  granted  in March  2000 with an
exercise price of $0.20 per share. 10,000 common shares were issued to Richard K
Nicholson for the  conversion  of a $5,000 debt and 250,000  common shares for a
receivable of $125,000. Mr. Nicholson has paid $20,000 of the amount due and has
a remaining  balance of $105,000.  200,000  common shares were issued to various
assignees  of Jeffrey  Joaqui to purchase of Rhode  Island  Truck and  Equipment
Corp. 908,750 common shares were issued to various debtors debt of approximately
$180,000.  25,000 shares each were issued to Bruce Boyer and James Hopstetter to
extend an option to purchase a business they own.  These shares were issued with
reliance on an  exemption  from the  registration  requirements  provided for in
Section 4(2) of the Securities Act of 1933.

     On January 12, 2001,  265,000  common shares were issued for legal services
provided of approximately $30,000 in reliance on a registration  statement filed
on Form S-8 under the Securities  Act of 1933.  This Form S-8 will be withdrawn.
Approximately  119,500 shares acquired upon exercise of options and subsequently
sold in the market cannot be registered in a new Form S-8. The remaining  shares
will be registered on a Form S-8  registration  statement to be filed  following
the filing of this Form 10-KSB.

     On November  28,  2000,  holders of Series C Preferred  Stock  shareholders
elected to convert  5,000  preferred  shares into  5,000,000  restricted  common
shares in accordance  with the terms and  conditions of the  designation.  These
shares  were  issued  with  reliance  on  an  exemption  from  the  registration
requirements  provided for in Section 4(2) of the  Securities  Act of 1933.  The
preferred  shares  carry a stated value of $1,000 each and  conversion  of 1,000
shares of common stock for each preferred share.

     In June 2000, 9,800 shares of Series C 6% Convertible  Preferred Stock were
issued in conjunction  with the acquisition of Patina  Corporation.  The options
were issued with  reliance on an exemption  from the  registration  requirements
provided for in Section 4(2) of the  Securities  Act of 1933.  These shares were
issued ratably to the holders of record of Patina Corporation on June 1, 2000.

     On May 19, 2000, Mission Bay Consultants,  Inc. exercised stock options for
the  purchase of 10,000  common  shares and options for the  issuance of 150,000
shares of common stock at a total  exercise  price of $30,000.  The options were
granted on March 3, 2000.  The stock  options for 10,000 shares were issued upon

                                       11
<PAGE>
the exercise of stock options  granted under the 1995 Stock Option Plan and were
issued as free-trading  shares pursuant to a registration on Form S-8 previously
filed for all shares  authorized  under the plan. The additional  150,000 common
shares  were  issued for the  exercise of options  granted  with  reliance on an
exemption from the registration requirements provided for in Section 4(2) of the
Securities Act of 1933.

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, 2001 and February 29, 2000. 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  three  subsidiaries  that  operated  in three  distinct
segments  during the fiscal year ended  February  28, 2001.  These  segments are
Manufacturing,  Product Marketing and Construction Management. To facilitate the
readers  understanding of the Company's financial  performance,  this discussion
and analysis is presented on a segment basis.  There is no comparative  data for
the Manufacturing or Construction Management segments.

MANUFACTURING SEGMENT

     The  manufacturing  segment  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. Management has implemented an
aggressive  marketing  campaign and hired additional sales staff in an effort to
improve the utilization of its assets.

     The  segments  sales  expectations  were met in its  first  nine  months of
operations  with the profit  minimally short of forecasts due primarily to costs
associated with its financing activities and not as a result of operations. With
the expanded sales and marketing programs in place, and existing capacity of its
facilities the operations are poised for growth in fiscal 2002.

PRODUCT MARKETING SEGMENT

     Since its inception,  JD American  Workwear,  Inc. had been involved in the
design and development of its products,  the development of  relationships  with
various  suppliers  and  manufacturing  contractors  and  the  marketing  of its
products through various distribution  channels.  The first commercial shipments
of JD Safety Work Jeans were made in September  1993,  and the first  commercial
shipments of an early version of JD Safety  Uniform Pants were made during 1995.
Following the Company's  initial  public  offering in January 1996,  the Company
significantly  increased its expenditures for inventory,  salaries,  advertising
marketing  and other costs in attempt to increase  its level of  production.  In
March 1996,  relatively small quantities of a later version of JD Safety Uniform
Pants were sold, and this version became the working prototype for the JD Safety
Uniform Pants previously manufactured by the division.

     Segment losses to date had  principally  been the result of product design,
testing and development  expenses,  marketing  expenses,  initial production and
administrative  costs,  professional fees and the write down of inventory to net
realizable  value in fiscal 2000 and 2001. Most of the losses in fiscal 2001 and
2000 are a result of the failure of the  marketing  program to produce sales and
the lack of cash flow to market the products. Historically, the operation used a
team of independent  sales  representatives  and sales agents to generate sales.
During  fiscal  2000,  all  marketing  personnel  were  terminated  because  the
operational sales did not provide sufficient cash flow to pay their salaries.

                                       12
<PAGE>
Management has decided that these operations be discontinued as of June 1, 2001.
An agreement for the sale of the operations,  is under negotiation with David N.
DeBaene, founder and current President of JD American Workwear.

CONSTRUCTION MANAGEMENT SEGMENT

     This segment derives its income principally from residential and commercial
paving and concrete  installation and repair.  This segment  under-performed  in
fiscal  2001,  and provided a loss from  operations.  Management  refocused  its
efforts during its seasonal  downtime in the fourth quarter and readily marketed
itself  to  municipalities  in Rhode  Island.  During  the  fourth  quarter  its
construction  bonding lines were increased from $100,000 to $600,000 allowing it
to bid jobs of larger scope. Since fiscal year end,  International  Paving, Inc.
has  been  successful  in  securing  an  increased   amount  of  contracts  with
municipalities. This trend upward is expected to continue.

FISCAL YEAR 2001 COMPARED TO FISCAL YEAR 2000

GENERAL

     The Company's consolidated net sales increased to $2,108,640 for the fiscal
year ended  February 28, 2001, an increase of  $1,836,575  from $272,065 for the
fiscal year ended February 29, 2000.  This increase was due to the  acquisitions
completed during fiscal 2001.

     Gross profit for the  consolidated  operations  increased to $1,046,167 for
the fiscal year ended February 28, 2001,  from $72,742 for the fiscal year ended
February 29, 2000.  Gross  profit  increased as a percentage  of sales to 49.61%
from 26.74% due to the higher margins of the acquired subsidiaries.

     Selling,  general and  administrative  expenses increased to $2,263,777 for
fiscal 2001 from  $1,432,966 for fiscal 2000, an increase of $830,811 or 57.98%.
The  increase  was  attributable  to the  addition  of the  expenses  of the new
acquisitions.

     The  Company's  net gain to common  shareholders  increased  to $38,375 for
fiscal  2001 from a net loss to common  shareholders  of  $2,467,929  for fiscal
2000.  This was  attributable  to an  extraordinary  gain on the  troubled  debt
extinguishment  of mandatory  redeemable  preferred stock of $1,994,768 from the
restructuring of the Series B Preferred Stock agreement.

MANUFACTURING SEGMENT

     The  Manufacturing  segment  provided  net  sales  of  $1,653,399  from its
inception on June 1, 2000 through the fiscal year ended  February 28, 2001.  The
machining  operations  provided  $633,758  or 38.3% of net sales  with parts and
service  providing  $1,019,641 or 61.7% of net sales.  Companies whose purchases
exceeded 5% of revenues were IMC Agrico at 5.47% and the City of Jacksonville at
6.06%.

     Gross  profit from the  Manufacturing  segment was  $907,530 in fiscal 2001
providing a gross profit margin of 54.9%

     Selling,  general and administrative expenses were $929,026 creating a loss
from operations of $21,496.  Interest expenses were $120,994 creating a net loss
for the segment of $142,490.

PRODUCT MARKETING SEGMENT

     Net sales of the Product  Marketing  segment  decreased to $187,682 for the
fiscal  year ended  February  28, 2001 from  $272,065  for the fiscal year ended
February 29, 2000, a decrease of $84,383 or 31.0%. This decrease was principally
attributable  to decreased  marketing  efforts and the failure of the segment to
provide adequate cash flow to market its product.

                                       13
<PAGE>
     Gross profit decreased to $23,774 for fiscal 2001 from $72,742,  for fiscal
2000, a decrease of $48,968.  Gross profit decreased as a percentage of sales to
13.2%  from  26.7%  primarily  because  of the  loss on a  discounted  sale to a
liquidator of approximately $36,000.

     Selling,  general and  administrative  expenses decreased to $1,166,727 for
fiscal 2001 from  $1,432,966  for fiscal  2000, a decrease of $266,239 or 18.6%.
The decrease was attributable,  in part, to a reduction in employee compensation
expense  of  $106,402  as a result  of the  reduction  in staff,  and  decreased
consulting fees of $161,588, as management sought to reduce overall expenses.

     During the fourth  quarter  of fiscal  2001,  an  inventory  adjustment  of
$341,630 was charged to  operations  to reflect the  reduction of the  inventory
value to net  realizable  value  based on the actual  sales  prices and  volumes
attained in fiscal 2001.

     Interest  expense  increased  to $62,817 for fiscal  2001 from  $57,816 for
fiscal 2000, an increase of $5,001 or 8.6%. The increase in interest  expense is
primarily due to the increase in short-term debt through increased borrowing.

     A continuing decline in sales and the negative cash flow generated from the
operations  caused  management  to make a decision to sell or  discontinue  this
operation with no current intention to operate any further in this segment after
June 1, 2001.

CONSTRUCTION MANAGEMENT SEGMENT

     The Construction Management segment provided net sales of $267,559 from its
inception on June 1, 2000 through the fiscal year ended  February 28, 2001.  The
paving  operations  provided  substantially  all of the net sales.  One customer
provided 7.8% of revenues in fiscal 2001.

     Gross profit was $114,863 in fiscal 2001 providing a gross profit margin of
42.9%

     Selling,  general and administrative expenses were $168,024 creating a loss
from operations of $53,161.  Interest expense was $1,055 creating a net loss for
the segment of $54,216.

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 of the Series B Preferred Stock  relinquished all mandatory
conversion  rights  allowing the Company to reclassify  the  preferred  stock to
equity and  recognized  a gain on the  extinguishment  of  mandatory  redeemable
preferred stock of $1,994,768.

INVENTORY WRITE DOWN

     During the fourth quarter of the year ended  February 29, 2000,  management
determined that, due to the failure of JD American Workwear's marketing programs
to produce a satisfactory level of sales,  finished goods inventory  contained a
significant amount of overstocked and obsolete product. As a result, a provision
for  inventory  losses of  $531,438  was  charged  to  operations  to write down
inventory to its net  realizable  value.  This was based on the  Company's  best
estimates  of product  sales  prices in  accordance  with its revised  plans for
product  marketing.  Management  also  reclassified  a portion of  inventory  to
long-term  assets based on estimates about the timing of product sales under the
revised  plan.  During the fourth  quarter of the year ended  February 28, 2001,
management  reevaluated its estimates of net realizable value of inventory based
on actual sales of product styles and liquidation sale pricing.  As a result, an
additional provision for loss on inventory of $341,630 was charged to operations
during the fourth quarter of the year ended February 28, 2001.

LIQUIDITY AND CAPITAL RESOURCES

     During the fiscal year ended  February  28, 2001,  operations  provided the
Company cash of $236,341.  During the year ended  February 29, 2000,  operations
used cash of $263,693. Accounts receivable increased to $254,499 at February 28,

                                       14
<PAGE>
2001 from  $48,856 at February 29,  2000,  an increase of  $205,643,  or 420.9%.
Inventory  increased to $717,709 at February 28, 2001 from  $185,169 at February
29,  2000,  an  increase  of  $532,540,  or 287.5%.  The  increase  in  accounts
receivable and inventory is due to the acquisitions of the subsidiaries.

     During   fiscal  2001  and  2000,   the  Company  used  funds  for  capital
expenditures of $5,452 and $3,084, respectively.

     Cash  flows  from  operations,  loans and the sale of equity  provided  for
working  capital needs and principal  payments on long-term  debt through fiscal
2001.  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 financed
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.

RECENT DEVELOPMENTS

     In an attempt to stop the negative  cash flow of the JD American  Workwear,
Inc.  subsidiary,  the  Executive  Committee  of the Board of  Directors  made a
decision to  discontinue  the operation of this  subsidiary on June 1, 2001. The
Company is negotiating funding to sell the subsidiary to its President, David N.
DeBaene.

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.

     The Construction Management segment is susceptible to seasonal adversity as
paving and concrete work are not done at temperatures  below forty degrees which
restricts work between mid December and early March.

OTHER DEVELOPMENTS

     Private  Placement  of Series B  Preferred  Stock.  On April 9,  1998,  the
Company entered into a Securities Purchase Agreement (the "Purchase  Agreement")
with The Union Labor Life Insurance Company, a Maryland corporation  ("ULLICO"),
and certain additional agreements related to the Purchase Agreement. Pursuant to
the terms of the Purchase  Agreement,  the Company issued to ULLICO 2,500 shares
of Series B 12% Cumulative  Convertible  Preferred  Stock,  $0.001 par value per
share (the "Series B Preferred Stock").  As a part of the issuance of the Series
B Preferred Stock,  the Company also issued to ULLICO a detached  ten-year stock
purchase warrant to purchase 799,000 shares of Common Stock at an exercise price
of $0.01 per share (the "Investor  Warrant").  The aggregate  purchase price for
the Series B  Preferred  Stock and the  Investor  Warrant  was  $2,500,000.  The
Company used the net proceeds to facilitate  and expand a program of union labor
manufacturing of its products, to repay certain notes payable and long-term debt
and for  sales  and  administrative  salaries,  product  development,  sales and
marketing expense, and other general corporate purposes.

     On October 23, 2000 the terms of the original agreements were substantially
modified to meet the changing  needs of the  Company.  ULLICO  relinquished  all
mandatory  conversion  rights  allowing  the  Company  to  recognize  a gain  on
extinguishment  of mandatory  redeemable  preferred  stock of $1,994,768.  Other
changes  in the  agreement  reduced  the  dividend  from 12% to 6% per annum and
extended  the period for the  payment in kind option an  additional  four years.
Cash dividends only will be required on pro rata basis of the Series C Preferred
stock,  originally  issued  in  the  Patina  Corp.  acquisition,   that  may  be
outstanding at each dividend date as compared with amount originally issued. The
restrictive  covenants  requiring  preapproval  of all  acquisitions  and equity
financing were removed subject to a limitation  that no  transactions  involving
equity could be issued at less than one dollar per share and the  termination of
all anti-dilution provisions.

                                       15
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

     The response to this item is included as a separate  section of this report
commencing on page 32.

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

     On July 13, 2000 the management of JD American Workwear,  Inc. informed the
auditing firm of Bederson and Company,  LLP that they were  dismissed  effective
immediately.  This  action was taken by the Board of  Directors  of the  Company
after disagreements over internal controls, which included the lack of attention
to the general ledger caused by a delay in replacing the Chief Financial Officer
and the treatment of certain  contingent  or  consignment  sales  issues;  audit
documentation  requirements;  and the schedule for completing the current fiscal
year audit.  On July 14, 2000 Bederson and Company LLP informed the Company that
it had become aware of material  errors in, and was withdrawing its report dated
June 7, 1999 on, the Company's financial  statements for the year ended February
28, 1999.  Bederson  and Company LLP also stated that it was not  currently in a
position  to  re-audit  and  reissue  its  report  on  the  Company's  financial
statements  for  the  year  ended  February  28,  1999  because  of  a  lack  of
independence. The independence issue was subsequently rectified as of August 18,
2000 and accordingly Bederson has reissued its report dated June 7, 1999, except
for Note 12,  which is as of  September  27, 2000,  on the  Company's  financial
statements  for  the  year  ended  February   28,1999,   which  report  contains
explanatory  paragraphs  regarding  the  correction  of  errors  and  expressing
substantial doubt about the Company's ability to continue as a going concern.

     The  auditing  firm of Bella,  Hermida,  Gilman,  Hancock  and  Mueller was
engaged on July 14, 2000 to audit the  Company's  financial  statements  for the
year ended February 29, 2000.

                                    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 officers or directors of the Company:

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

Robert E. Maxwell       66      Chairman of the Board and Director
Steven D. Smith         47      President and Director
Frank D. Puissegur      42      Acting Chief Financial Officer and Director
Daniel L. Hefner        51      Executive Vice President, Secretary and Director
Herbert C. Canapary     68      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. Three board members were
elected to two-year terms at the annual  stockholders  meeting held December 15,
2000.  Robert  Maxwell is the only board member  elected to a two-year term that
remains.  The  other two  seats  have  reverted  to  annual  positions  with the
resignation of the members previously elected. 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:

                                       16
<PAGE>
     Mr.  Maxwell has been a director and the Chairman of the Board of Directors
of the  Company  since June 2000.  Mr.  Maxwell is also the  General  Manager of
International  Machine and Welding,  Inc., a recently acquired subsidiary of the
Company. He was the owner/operator of Florida Machine and Welding, Inc., located
in Bartow,  Florida,  for the past 23 years until the sale of its assets in June
2000.  During the past 31 years Mr. Maxwell also operated Florida  Equipment and
Service,  Inc., an independently owned construction  equipment sales and service
organization.  Mr. Maxwell has been an officer and director of two  corporations
which  each filed for  Chapter 11  protection  under the U.S.  Bankruptcy  Code.
Florida  Equipment and Service,  Inc. was  liquidated in August 1999 and Florida
Machine and Welding, Inc. had its plan of reorganization confirmed in May 2000.

     Mr. Smith has been  President of the Company since December 2000 and became
a director  in May 2001.  He has held the  positions  of CEO or COO at  Paradigm
Manufacturing / Creative  Engineering  Concepts from March 1998 through November
30, 2000, COO at Apollo  International  (OTCBB:AIOD) from February 1996 to March
1998, and COO at Manutek, Inc. from 1978 to 1993. During his professional career
he has been awarded to citations in recognition of business  achievements by the
Governor of Indiana, was a finalist for Entrepreneur of the Year (1988).

     Mr. Puissegur joined the Company in June 2001. 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.

     Mr. Hefner has been Executive Vice President, Secretary and Director of the
Company  since  June  2000.  Mr.  Hefner   currently   serves  as  President  of
International Commerce and Finance, Inc. a holding company for manufacturing and
technology  companies,  and he has held this  position  since August  1999.  Mr.
Hefner has been active for the past ten 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. During 1999, Mr. Hefner was Chief Operating Officer for
Chronicle Communications, Inc. (OTCBB: CRNC), a Tampa based printer.

     Mr.  Canapary  has served as a Director  of the  Company  since April 1998,
pursuant to the  Securities  Purchase  Agreement  dated April 9, 1998,  with The
Union Labor Life Insurance  Company.  Mr.  Canapary has been employed by ULLICO,
for 18 years, and presently serves as ULLICO's Vice-President of Investments.

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 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, 2001
(collectively, the " Named Executive Officers").

                                       17
<PAGE>
                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                            Compensation
                                                             Awards (1)
                                            Annual          ------------
                                         Compensation        Securities
Name and                     Fiscal    -----------------     Underlying       All Other
Principal Position            Year     Salary      Bonus      Options       Compensation (3)
------------------            ----     ------      -----      -------       ----------------
<S>                          <C>      <C>          <C>      <C>             <C>
David N. DeBaene              2001    $ 87,500     $    0      125,000         $  840
Subsidiary President (2)      2000     145,769          0            0              0
                              1999     125,000          0            0         $5,160

Steven D. Smith,              2001      15,000      3,750      100,000              0
President (2)
</TABLE>

----------
(1)  The Company does not have a long-term  compensation  program that  includes
     long-term incentive payments. However, the Company's 1995 stock option plan
     provides  participants with  performance-based  compensation in the form of
     incentive stock options. See "Stock Option Plan."
(2)  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 and  immediately  elected Mr.  Smith to serve as  President of the
     Company.
(3)  The Company had a medical  insurance  plan in fiscal 1999 and reinstated it
     in December 2000.  Mr. Smith did not qualify for inclusion  until after the
     fiscal year ended February 28, 2001.

     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

     On December 1, 2000 the Company  entered into an employment  agreement with
Steven D. Smith. The contract provides for a five-year term expiring on November
30, 2004, contains 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 December 1 of each contract year at the rate of 100,000 common share
equivalents  with the exercise price at 110% of the closing price on the date of
the grant. 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 and contains  equivalent  terms in relation to  termination as
described below.

     On January 1, 2000,  the prior  employment  agreement with David N. DeBaene
was cancelled and a new contract signed  providing for a five-year term expiring
on December 31, 2004. The contract automatically renews in five years absent any
notice  180 days  prior to the end of the  term.  The base  salary  of  $150,000
increases on each anniversary at a rate of 13% over the prior year's salary. Mr.
DeBaene was granted  25,000  options upon signing at an exercise price of $1.59,
which was in excess of the $1.30 price per share on the nearest  trading date to
the signing of the contract.  The contract  further  provides for bonuses on the
net pre-tax profits of the Consumer Products Division at 4% of the profit of the
division  if the  profit is less than  $2,500,000  and  increasing  ratably to a
maximum of 10% if the profit exceeds $5,000,001.

     The contract also provides for certain payments in the event Mr. DeBaene is
terminated  without  cause or a change in control or  position  occurs  that Mr.
DeBaene has not agreed to. These  payments  would require the remaining  term of

                                       18
<PAGE>
the contract to be paid upon  termination  and the  repurchase by the company of
all outstanding stock owned by Mr. DeBaene.

     This contract was amended at June 1, 2000 reducing the salary to $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. Mr. DeBaene resigned
from this contract  effective May 19, 2001with all amounts currently due accrued
for future payment.

     On January 1, 2000 Norman J. Birmingham signed an employment  contract that
provides  for a salary of $150,000 in the first year of a five-year  term,  with
annual  increases  of 13%. Mr.  Birmingham  was granted  25,000  options with an
exercise  price of $1.59,  which was  above the $1.30  closing  bid price on the
nearest trading day to the contract signing.  The contract further provides that
a bonus  will be paid on the  consolidated  pre tax  income  of the  corporation
beginning  with  2% if  the  corporation's  net  pre-tax  income  is  less  than
$2,500,000  and  increasing  ratably  to  4.5%  if the  pre-tax  income  is over
$5,000,001.

     The contract also provides for certain payments in the event Mr. Birmingham
is terminated  without cause or a change in control or position  occurs that Mr.
Birmingham has not agreed to. These payments would require the remaining term of
the contract to be paid upon  termination  and the  repurchase by the company of
all outstanding stock owned by Mr. Birmingham.

     This  contract has been amended  retroactive  to June 1, 2000  reducing the
salary to $60,000,  providing 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 at
110% of the  closing  price of the  Common  Stock on the day of the  grant.  The
contract also provides for a $750 per month car allowance and the payment of all
insurance,  fuel and  maintenance  costs.  The  amended  contract  includes  the
termination  described  above and omits the prior bonus method.  Mr.  Birmingham
resigned on April 6, 2001 with all amounts accrued currently due and accrued for
future payment. The contract has been terminated.

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 Herbert Canapary 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.

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

                                       19
<PAGE>
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 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.  At February  28,  1999,
approximately 20 persons were eligible to receive ISOs under the Plan.

     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).

     At February  28,  2001,  the Company did not have any  long-term  incentive
plans nor had it awarded any restricted  shares to any Named Executive  Officer.
The set forth  below  contains  information  with  respect to the award of stock
options  during the fiscal year ended  February 28, 2001 to the Named  Executive
Officers covered by the Salary Compensation Table.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR
                               (Individual Grants)

<TABLE>
<CAPTION>
                       Number of        % of Total
                       Securities      Options/SAR's
                       underlying        Granted to       Exercise
                      Options/SAR's     Employees in       or Base
Name                   Granted (1)     Fiscal Year (2)   Price ($/Sh)    Expiration Date
----                   -----------     ---------------   ------------    ---------------
<S>                   <C>              <C>                <C>         <C>
David N. DeBaene      100,000 (3)           25.0          $1.30625        May 31, 2005

Steven D. Smith       100,000 (4)           25.0          $0.61875        November 30, 2005
</TABLE>

----------
(1)  These  options  were  granted  to  employees  under  the  1995 JD  American
     Workwear,  Inc.  Employee  Stock  Option Plan.  The  material  terms of all
     options granted during the 2001 fiscal year are as follows: (i) all options
     are directly related to the employment agreement of the individual grantee,
     (ii) all have an  exercise  price of 110% of the fair  market  value on the
     date  of  the  grant,  (iii)  all  have  a ten  year  term  and  are  fully
     exercisable,  (iv) no options  will be  exercisable  more than three months
     following the termination of employment  (except in the case of disability,
     in which case such options will be exercisable up to one year  thereafter)'
     and (v) all options are otherwise subject to the 1995 JD American Workwear,
     Inc Employee Stock Option Plan.
(2)  During the fiscal year ended  February 28,  2001,  employees of the Company
     were granted and  aggregate of 400,000  options  under the 1995 JD American
     Workwear, Inc. Employee Stock Option Plan.
(3)  These options were granted on June 1, 2000.
(4)  These options were granted on December 1, 2000.

                                       20
<PAGE>
               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  2001,  the
number of stock  options  held on February 28, 2001 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
                       Shares                           at Fiscal Year End                      At Fiscal Year End (1)
                     Acquired on        Value     ------------------------------------    ------------------------------------
Name                Exercised (#)     Realized    Exercisable (#)    Unexercisable (#)    Exercisable ($)    Unexercisable ($)
----                -------------     --------    ---------------    -----------------    ---------------    -----------------
<S>                 <C>               <C>          <C>            <C>               <C>            <C>
David N. DeBaene          0             $ 0          100,000               0                         0               0
Steven D. Smith           0               0          100,000               0                   100,000               0
</TABLE>

----------
(1)  Based upon the closing  price of the Common Stock as quoted on the Over The
     Counter Bulletin Board on February 28, 2001 of $1.00 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 June 1, 2001, 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.

                                       21
<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                                    0                    **

Steven D. Smith (3)                            100,000 (3)                **

Frank D. Puissegur                                   0                    **

Herbert Canapary (4)                         1,673,950 (4)             11.71%
111 Massachusetts Ave.
Washington, DC

Daniel L. Hefner (5)                         8,522,000 (5)             63.76%
1400 Chamber Dr.
Bartow, FL

All Directors and Executive                 10,295,950 (7)             71.01%
Officers as a Group (6 persons)

Other Beneficial Holders

David N. DeBaene                             1,128,000 (6)              8.42%
46 Old Flat River Road
Coventry, RI

Norman J. Birmingham                         1,125,000 (8)              8.39%
5950 Windwood Dr.
Lakeland, FL

ULLICO                                       1,673,950 (10)            11.71 %
111 Massachusetts Ave
Washington, DC

International Commerce and                   7,975,000 (9)             60.12%
Finance, Inc.
Tampa, FL

----------
(**) 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 100,000 shares of Common Stock,  which may be acquired pursuant to
     currently exercisable options.
(4)  Includes the following shares of Common Stock beneficially owned by ULLICO,
     a company for which Mr.  Canapary  serves as Vice  President of Investments
     and by reason of his position  shares  voting power and may be deemed to be
     the beneficial  owner of such shares:  (a) 1,032,550 shares of Common Stock
     that may be acquired pursuant to currently  exercisable  warrants,  and (b)
     660,600 shares of Common Stock upon  conversion of 3,303 shares of Series B
     Preferred Stock.

                                       22
<PAGE>
(5)  Includes (a) 100,000 shares of Common Stock, which may be acquired pursuant
     to  currently  exercisable  options  and  147,000  shares of  Common  stock
     issuable upon conversion of 147 shares of Series C Preferred Stock, and (b)
     the following  shares of Common Stock  beneficially  owned by International
     Commerce and Finance,  Inc., a Florida  corporation,  which is beneficially
     owned by Mr.  Hefner:  (i)  4,008,000  shares  of  Common  Stock,  and (ii)
     3,967,000  shares of Common Stock issuable upon  conversion of 3,967 shares
     of Series C Preferred Stock.
(6)  Includes (a) 12,500 shares of Common stock owned by Mr. DeBaene's wife, (b)
     48,000 shares of Common Stock owned of record by Mr. DeBaene's father,  (c)
     152,000  shares of Common  Stock owned of record by Mr.  DeBaene's  mother,
     104,000  shares of Common Stock would be issued upon the  conversion of 104
     shares of Series C Preferred  Stock, and (d) 125,000 shares of Common Stock
     that may be acquired pursuant to currently exercisable options.
(7)  Includes  (a)  200,000  shares of Common  Stock  subject  to  options,  (b)
     1,032,550  shares of Common  Stock  subject to  warrants,  and (c)  788,400
     shares of Common Stock  issuable upon  conversion  of the preferred  stock,
     which may be acquired by directors and officers as a group upon exercise of
     the options, warrants and conversion of the Preferred Stock held by them.
(8)  Includes (a) 125,000 shares of Common Stock, which may be acquired pursuant
     to currently  exercisable  options,  and (b) 489,000 shares of Common Stock
     issuable upon conversion of 489 shares of Series C Preferred Stock.
(9)  Includes  3,967,000 shares of Common Stock issuable upon of 3,967 shares of
     Series C Preferred Stock. This corporation is wholly owned by Mr. Hefner.
(10) Includes  1,032,550 shares of Common Stock,  which may be acquired pursuant
     to  currently  exercisable  warrants  and  660,600  shares of Common  Stock
     issuable upon conversion of 3,303 shares of Series B Preferred Stock.

     The Company has three classes of preferred stock  outstanding  comprised of
110 shares of Series A Preferred Stock, 3,303 shares of Series B Preferred Stock
and  4,800  shares  of  Series C  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.  Each  share of  Series B  Preferred  Stock is
convertible  into 200 shares of Common Stock and votes on an as converted basis.
Each share of Series C preferred  Stock converts to 1,000 shares of Common Stock
and has voting rights of 363.52 votes per preferred share.

     Gerald Hoak,  owner of 20 shares or 18.18% of Series A Preferred Stock, and
Merit  Capital  Associates,  owner of 40 shares or 36.36% of Series A  Preferred
Stock are the only owners of more than 5% of the class.  All outstanding  shares
of Series B Preferred Stock are owned by Union Labor Life Insurance  Company,  a
Delaware corporation over which Mr. Canapary, a director of the Company,  shares
voting  power.  No  director  or officer is the  beneficial  owner of any of the
Series A or Series B  Preferred  Stock,  except as stated  above.  The  Series C
Preferred Stock beneficially  owned by directors or executives,  and each person
owning more than 5% of the outstanding shares of Series C Preferred Stock are as
follows:  (a) 3,967  shares or 82.65% are  beneficially  owned by  International
Commerce and Finance,  Inc, a corporation  wholly-owned  by Mr. Hefner,  (b) Mr.
Hefner  individually  holds 147 shares,  or 3.06%, and 489 shares, or 10.19% are
beneficially owned by Norman J. Birmingham.

                                       23
<PAGE>
BENEFICIAL VOTING POWER HELD

     The  following  table sets forth the voting power in the  Company's  equity
securities,  as of June 1, 2001, 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
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                                             *
Steven D. Smith                                               *
Herbert Canapary (2)(11)                                  11.84%
David M. DeBaene (3)(11)                                   9.61%
Daniel L. Hefner  (4)(11)(14)                             43.06%
All directors and executive officers
   as a group (5 persons) (5)                             60.43%

Other Equity Holders

Norman J. Birmingham (6)(11)(14)                           6.08%
Gerald Hoak (7)(12)                                           *
International Commerce and Finance (8)(11)(14)            41.08%
Merit Capital Assoc. (9)(12)                                  *
ULLICO (10)(11)(13)                                       11.84%

----------
*    Less than 1%
(1)  Based upon 10,718,432  outstanding  shares of common stock, 110 outstanding
     shares of Series A Preferred Stock,  3,303  outstanding  shares of Series B
     Preferred Stock, and 4,800 outstanding  shares of Series C Preferred Stock.
     Each  share of  Common  Stock is  entitled  to one  vote  per  share.  Each
     outstanding  share of Series A Preferred  Stock, B Preferred  Stock,  and C
     Preferred  Stock is entitled to 1,289 votes,  200 votes,  and 363.52 votes,
     respectively.  Accordingly,  as of June 20,  2001,  the Series A  Preferred
     Stock,  Series B Preferred Stock, and Series C Preferred Stock are entitled
     to an  aggregate of 141,790  votes,  660,600  votes,  and  1,744,896  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)  Consisting of the following votes  beneficially  held by ULLICO,  a company
     for which Mr.  Canapary is the Vice  President  of  Investments  and shares
     voting  power:  (a) 1,032,550  votes with respect to Common Stock,  and (b)
     660,600 votes with respect to 3,303 shares of Series B Preferred Stock.
(3)  Consisting  of (a)  1,100,150  votes with respect to shares of Common Stock
     held  individually and certain family members  referenced in the Beneficial
     Ownership  Table, (b) 61,798.4 votes with respect to 170 shares of Series C
     Preferred Stock held individually and certain family members  referenced in
     the  Beneficial  Ownership  Table,  and (c) 125,000  votes upon exercise of
     currently exercisable options to purchase Common Stock.
(4)  Consisting  of: (a) 100,000  votes upon  exercise of currently  exercisable
     options to purchase  Common Stock,  153,000 shares of Common Stock held and
     53,437.44 votes with respect to 147 shares of Series C Preferred Stock held
     individually,  and (b) the following votes held by ICF: (i) 4,008,000 votes
     with respect to Common Stock, and (iii)  1,442,083.8  votes with respect to
     3,967 shares of Series C Preferred Stock.

                                       24
<PAGE>
(5)  Consisting  of (a) 100,000  votes upon  exercise of  currently  exercisable
     options to purchase  Common  Stock held by Steven D. Smith,  and (b) Item 2
     above,  and (c) Item 3 above,  and (d) Item 4 above  totaling in  aggregate
     8,983,619.6 votes.
(6)  Consisting of 125,000 votes upon exercise of currently  exercisable options
     to purchase Common Stock and 177,761.28 votes with respect to 489 shares of
     Series C Preferred Stock.
(7)  Consisting  of 25,780 votes with respect to 20 shares of Series A Preferred
     Stock held.
(8)  Consists of 4,008,000  votes with  respect to Common Stock and  1,442,083.8
     votes with respect to 3,967 shares of Series C Preferred Stock.
(9)  Consisting  of 51,560 votes with respect to 40 shares of Series A Preferred
     Stock.
(10) Consisting  of  1,032,550  votes upon  exercise  of  currently  exercisable
     warrants to purchase  Common Stock and 660,640  votes with respect to 3,303
     Series B Preferred Stock.
(11) Holder in excess  of 5% of the  outstanding  Common  Stock,  excluding  any
     conversion of the preferred stock.
(12) Holder in excess of 5% of the outstanding Series A Preferred Stock.
(13) Holder in excess of 5% of the outstanding Series B Preferred Stock.
(14) Holder in excess of 5% of the outstanding Series C Preferred Stock.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATED PARTY LOANS

     The Company has from time to time  borrowed  money from or loaned  money to
related parties.  At February 28, 2001, the Company owed approximately  $145,000
in the aggregate to the parents of David N.  DeBaene.  These loans bear interest
at the rate of 10% and will be repaid out of operating  cash flow at the rate of
$5,500 per month,  when cash is  available.  In addition,  at February 28, 2001,
David N. DeBaene had loaned approximately  $35,000 to the Company.  Interest has
been imputed on this loan at 7%.

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").

                                       25
<PAGE>
CONSULTING AGREEMENTS

     Prior to the implementation of the Company's current business strategy, the
Company  engaged the  services of Mission Bay  Consulting,  Inc.,  a  management
consultant  and public  relations  firm,  to provide it with guidance and assist
with respect to investor  relations and as a finder of lenders or investors.  On
April 2, 1997,  the Company  entered into a one-year  Consulting  Agreement with
Mission Bay. In connection with this Consulting Agreement, the Company issued to
Mission  Bay an option to  purchase  an  aggregate  of 200,000  shares of common
stock,  and also  issued  28,000  shares of common  stock,  under the 1995 Stock
Option  Plan.  The Company  also agreed to  reimburse  Mission Bay for  expenses
incurred in connection  with the  Consulting  Agreement.  In September  1997, in
consideration  of the  extension  of the  Consulting  Agreement,  50,000 of said
options were surrendered and the Company issued 50,000 shares of Common Stock to
Mission  Bay under the 1995 Stock  Option  Plan.  In January  1998,  the Company
issued 9,500 shares to an employee of Mission Bay Consulting,  in  consideration
of services rendered related to business expansion  opportunities outside of the
scope  of the  Consulting  Agreement.  In  June  1998,  in  connection  with  an
additional extension of the term of the Consulting Agreement and an expansion in
scope of the services to be rendered by Mission Bay, the Company  issued options
to purchase an  additional  300,000  shares of Common  Stock at exercise  prices
ranging  from $3.25 to $5.75 per share.  Of these,  options to purchase  100,000
shares have been  exercised and options to purchase  150,000 shares have expired
leaving 50,000 options  outstanding  and exercisable at February 29, 2000. A new
agreement  with  Randolph  Beimel,  a principal in Mission Bay, was agreed to on
March 3, 2000 that provided a grant of 200,000  additional  options  pursuant to
which 100,000 were  exercisable at $0.10 and 100,000 were  exercisable at $0.20.
Unexercised  options under the contract  expired  February 28, 2001.  Mr. Beimel
provided  services as a finder of short-term  loans and continued to assist with
shareholder relations.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     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
     29.

(b)  Reports on Form 8-K

     None

                                       26
<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: July 18,  2001                   By: /s/ Steven D. Smith
                                           -------------------------------------
                                           Steven D. Smith, President

     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             July 18, 2001
---------------------------      and Director
Robert E. Maxwell


/s/ Daniel L. Hefner             Executive Vice President,         July 18, 2001
---------------------------      Secretary and Director
Daniel L. Hefner


/s/ Herbert C. Canapary          Director                          July 18, 2001
---------------------------
Herbert C. Canapary


/s/ Frank D. Puissegur           Acting Chief Financial Officer    July 18, 2001
---------------------------      (Principal Financial Officer)
Frank D. Puissegur               and Director


/s/ Steven D. Smith              President and Director            July 18, 2001
---------------------------      (Principal Executive Officer)
Steven D. Smith

                                       27
<PAGE>
    SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
           SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS

(1)  No annual  report  covering the  registrant's  last fiscal year has been or
     will be sent to security holders of the registrant

(2)  The  proxy  statement  and  form of  proxy  delivered  to the  registrant's
     securities  holders in connection  with the annual meeting of  shareholders
     was filed with the  Commission  on  December 4, 2000,  and is  incorporated
     herein by reference.  No other proxy  statements,  proxies,  or other proxy
     soliciting  material was sent to the registrant's  shareholders  during the
     past fiscal year.

                                       28
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Incorporated Documents                                      SEC Exhibit Reference
----------------------                                      ---------------------
<S>                                                         <C>
   3.1      Certificate of Incorporation of the             As filed with the Registrant's
            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
                                                            Form SB-2 on October 27, 1995, File
                                                            No. 33-98486

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

            Form of Unit Purchase Option issued to          As filed with the Registrant's Form
   4.3      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
            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
            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
            April 9, 1998                                   10KSB on June 13, 1999

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

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

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

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

   4.11     Escrow Agreement                                As filed with the Registrant's Form
                                                            10 KSB on June 13, 1999
</TABLE>
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Incorporated Documents                                      SEC Exhibit Reference
----------------------                                      ---------------------
<S>                                                         <C>
   4.12     Certificate of Designations of Series A         As filed with the Registrant's
            Preferred Stock                                 Form 10-KSB on June 11, 1998

   4.13     Certificate of Designation of Series C          As filed with the Registrant's Form
            Preferred Stock                                 10-KSB on June 12, 2000

   10.1     Lease Agreement for the Registrant's            As filed with the Registrant's Form
            Coventry, RI facility                           SB-2 on October 27, 1995, File No.
                                                            33-98486

   10.2     David N. DeBaene Employment Agreement           As filed with the Registrant's Form
                                                            SB-2 on October 27, 1995, File No.
                                                            33-98486

   10.3     Registrant's 1995 Stock Option Plan             As filed with the Registrant's 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
            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
            Birmingham                                      10-KSB on June 12, 2000

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

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

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

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

   16.1     United States Patent #5,038,408                 As filed with Registrant's Form
                                                            SB-2 on October 27, 1995,
                                                            File No. 33-98486

   99.1      United States Patent #5,634,215                As filed with Registrant's Form
                                                            10-KSB June 11, 1998

   99.2      United States Patent #5,634,215                As filed with Registrant's Form
                                                            10-KSB June 11, 1998

   99.3      United States Patent #6,108,819                As filed with Registrant's Form
             Back Brace Pants                               10-KSB June 11, 1998
</TABLE>
<PAGE>
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

Incorporated Documents                                      SEC Exhibit Reference
----------------------                                      ---------------------
<S>                                                         <C>
             As Filed Herewith

   4.14      Amendment to Series B Preferred
             Certificate

   4.15      Amendment to the Articles of
             Incorporation of JD American Workwear,
             Inc. for name change to American
             Commerce Solutions, Inc. and the
             increase in authorized shares

  10.10      Employment Agreement with Steven D.
             Smith dated December 2000

  10.11      Employment Agreement with Daniel L.
             Hefner dated June 2000
</TABLE>
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES

       CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


                                TABLE OF CONTENTS

                                                                           PAGE
                                                                           ----

INDEPENDENT AUDITORS' REPORT                                               F-2

FINANCIAL STATEMENTS:

  CONSOLIDATED BALANCE SHEETS                                              F-3

  CONSOLIDATED STATEMENTS OF OPERATIONS                                    F-5

  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)     F-6

  CONSOLIDATED STATEMENTS OF CASH FLOWS                                    F-7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                             F-9

                                      F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


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

We have  audited  the  accompanying  consolidated  balance  sheets  of  American
Commerce  Solutions,  Inc.  (a  Delaware  Corporation)  and  subsidiaries  as of
February 28, 2001 and February 29, 2000, and the related consolidated statements
of operations,  changes in stockholders' equity (deficit) and cash flows for the
years then ended. These consolidated financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated financial statements based on our audits.

We conducted  our audits in accordance  with U.S.  generally  accepted  auditing
standards. Those statements 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 audits  provide  for a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the financial  position of American Commerce
Solutions,  Inc. and subsidiaries as of February 28, 2001 and February 29, 2000,
and the  results  of their  operations  and their  cash flows for the years then
ended in conformity with generally accepted accounting principles.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note  2,  the  Company's
significant  operating  losses and negative  working  capital raise  substantial
doubt  about  its  ability  to  continue  as a going  concern.  These  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

Respectfully submitted,

BELLA, HERMIDA, GILLMAN, HANCOCK & MUELLER


June 29, 2001
Certified Public Accountants
Plant City, Florida

                                      F-2
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                                    February 28,    February 29,
                                                        2001            2000
                                                    ------------    ------------
ASSETS

CURRENT ASSETS:
  Cash and Cash Equivalents                          $   34,885       $   11,523
  Accounts Receivable, net of Allowances
   of $46,881 (2001) and $10,000 (2000)                 254,499           48,856
  Inventories                                           717,709          185,169
  Loans Receivable                                      235,356               --
  Loans Receivable, Employees                            12,451            5,020
                                                     ----------       ----------
      Total Current Assets                            1,254,900          250,568

Property and Equipment, Net of
 Accumulated Depreciation of $438,205
 (2001) and $221,153 (2000)                          5,586,766          208,289

Intangible Assets, Net                                   67,324          174,677

Inventory, Long Term                                         --          740,675

Land Held For Resale                                    240,000               --

Equipment Held For Resale                               476,000               --
                                                     ----------       ----------
TOTAL ASSETS                                         $7,624,990       $1,374,209
                                                     ==========       ==========

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

                                      F-3
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  February 28,        February 29,
                                                                      2001                2000
                                                                  ------------         -----------
<S>                                                               <C>                  <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Current Portion of Notes Payable                                $    807,957         $   380,168
  Bank Overdraft                                                         8,649                  --
  Accounts Payable                                                     624,159             361,381
  Accrued Interest on Notes Payable                                    151,696              65,359
  Accrued Expenses                                                      46,988              78,436
  Accrued Payroll                                                      465,845              77,212
                                                                  ------------         -----------
      Total Current Liabilities                                      2,105,294             962,556

LONG-TERM LIABILITIES                                                1,755,949             135,999
                                                                  ------------         -----------

       Total Liabilities                                             3,861,243           1,098,555
                                                                  ------------         -----------

MANDATORY REDEEMABLE PREFERRED STOCK                                        --           1,906,304

STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred Stock, Series A, cumulative
   and convertible, authorized 1,000,000 shares,
    $.001 par value, 110 and 154 shares issued
    and outstanding, respectively, liquidation
    preference $375,690 (2001) and $478,150 (2000)
  Preferred Stock, Series B, cumulative and convertible,
    authorized 3,950 shares, $.001 par value, 3,207 and
    2,843 shares issued and outstanding, respectively                        3
  Preferred Stock, Series C, cumulative and convertible,
    authorized 20,000 shares $.001 par value, 4,800 shares
    issued and outstanding, liquidating preference $5,166,000                5
  Common Stock, authorized 30,000,000 and 7,500,000 shares
    respectively, $.002 par value, issued and outstanding,
    9,617,589 and 2,750,427 shares, respectively                        19,235               5,501
  Additional Paid-in-Capital                                        14,011,567           7,116,100
  Common Stock Receivables                                            (257,000)           (489,248)
  Accumulated Deficit                                              (10,010,063)         (8,263,003)
                                                                  ------------         -----------
    Total Stockholders' Equity (Deficit)                             3,763,747          (1,630,650)
                                                                  ------------         -----------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY (DEFICIT)               $  7,624,990         $ 1,374,209
                                                                  ============         ===========
</TABLE>

                                      F-4
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                       For the Year Ended
                                                  ------------------------------
                                                  February 28,      February 29,
                                                      2001             2000
                                                   -----------      -----------

SALES                                              $ 2,108,640      $   272,065

COST OF GOODS SOLD                                   1,062,473          199,323
                                                   -----------      -----------

  GROSS PROFIT                                       1,046,167           72,742

Selling, General and Administrative Expenses         2,263,777        1,432,966
                                                   -----------      -----------

  LOSS FROM OPERATIONS                              (1,217,610)      (1,360,224)

OTHER (INCOME)EXPENSES:
  Provision for loss on inventory                      341,630          531,438
  Loss on disposal of assets                             3,400
  Interest income                                         (446)            (717)
  Interest expense                                     184,866           57,816
                                                   -----------      -----------

NET LOSS                                            (1,747,060)      (1,948,761)
                                                   -----------      -----------
Accretion of Discount and Dividends on
 Mandatory Redeemable Preferred Stock                  209,333          519,168

Gain on Extinguishment of Mandatory
 Redeemable Preferred Stock                         (1,994,768)
                                                   -----------      -----------

NET PROFIT(LOSS) TO COMMON SHAREHOLDERS            $    38,375      $(2,467,929)
                                                   ===========      ===========

NET PROFIT (LOSS) PER COMMON SHARE                 $      0.01      $     (1.00)
                                                   ===========      ===========

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING           4,249,215        2,466,263
                                                   ===========      ===========

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

                                      F-5
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
           FOR THE YEARS ENDED FEBRUARY 28, 2001 AND FEBRUARY 29, 2000

<TABLE>
<CAPTION>
                                    Common Stock         Preferred Stock     Additional
                                     $.002 Par             $.001 Par          Paid-in       Stock       Accumulated
                                 Shares       Amount    Shares    Amount     Capital     Receivable      Deficit         Total
                                 ------       ------    ------    ------     -------     ----------      -------         -----
<S>                             <C>          <C>           <C>     <C>
Balance, February 28, 1999
 (as restated)                  2,248,241    $  4,496      299     $  0   $  7,021,487    $(332,760)   $ (6,314,242)   $   378,981

Shares issued to retire
 11% notes                          3,788           8       --       --         14,583           --              --         14,591
Common shares issued
 for services                      17,500          35       --       --         26,240           --              --         26,275
Common shares issued for
 receivable                       165,000         330       --       --        186,120     (186,450)             --             --
Options issued for services            --          --       --       --          1,000           --              --          1,000
Exercise of stock options         115,000         230       --       --        385,270     (150,000)             --        235,500
Preferred stock conversion        200,898         402     (145)      --           (402)          --              --             --
Accretion of discount and
 dividends on mandatory
 redeemable preferred stock            --          --       --       --       (519,168)          --              --       (519,168)
Contributed capital                    --          --       --       --            970           --              --            970
Stock receivable paid in
 services                              --          --       --       --             --      179,962              --        179,962

Net loss                               --          --       --       --             --           --      (1,948,761)    (1,948,761)
                               ----------    --------   ------     ----   ------------    ---------    ------------    -----------

Balance, February 29, 2000      2,750,427    $  5,501      154     $  0   $  7,116,100    $(489,248)   $ (8,263,003)   $(1,630,650)

Preferred Shares issued for
Acquisition                            --          --    9,800       10      4,446,159           --              --      4,446,169
Common Shares issued for
 Services                         347,500         695       --       --         42,305           --              --         43,000
Common shares issued for
 Debt Repayment                    10,000          20       --       --          4,980           --              --          5,000
Common Shares Surrendered in
 Cancellation of Stock
 Receivable                      (130,000)       (260)      --       --       (146,640)     146,900              --             --
Exercise of Stock Options
 and Warrants                     199,350         399       --       --        231,354       (7,870)             --        223,883
Preferred stock
  conversion                    5,081,562      10,163   (5,044)      (5)       (10,158)          --              --             --
Common shares issued for
 payables                         908,750       1,817       --       --        179,932        7,870              --        189,619
Common shares issued for
 acquisition                      200,000         400       --       --        237,600           --              --        238,000
Stock receivable paid in
 Services                              --          --       --       --             --      192,348              --        192,348
Extinguishment of Series B
 Mandatory Redeemable Stock            --          --    3,207        3      1,994,768           --              --      1,994,771
Stock receivable paid in cash          --          --       --       --             --       20,000              --         20,000
Common shares issued for
 receivables                      250,000         500       --       --        124,500     (127,000)             --         (2,000)
Accretion of discount and
 dividends on mandatory
 redeemable preferred stock            --          --       --       --       (209,333)          --              --       (209,333)
Net loss                               --          --       --       --             --           --      (1,747,060)    (1,747,060)
                               ----------    --------   ------     ----   ------------    ---------    ------------    -----------

Balance, February 28, 2001      9,617,589    $ 19,235    8,117     $  8   $ 14,011,567    $(257,000)   $(10,010,063)   $ 3,763,747
                               ==========    ========   ======     ====   ============    =========    ============    ===========
</TABLE>

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

                                      F-6
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                       For the Year Ended
                                                                  -----------------------------
                                                                  February 28,     February 29,
                                                                     2001             2000
                                                                  -----------      -----------
<S>                                                               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                          $(1,747,060)     $(1,948,761)
 Adjustments to Reconcile Net Loss to Net Cash
  Provided by (Used in) Operating Activities:
   Depreciation and Amortization                                      308,565           95,428
   Provision for Doubtful Accounts                                     36,881
   Provision for Losses on Inventory                                  341,630          531,438
   Stock Issued for Services                                          465,101          358,207
   Loss on Disposal of Assets                                           3,400
   Changes in Operating Assets and Liabilities
    Net of Effects of Acquisitions:
     Accounts Receivable                                               90,925          445,017
     Inventories                                                      173,782          (20,070)
     Prepaid Expenses and Other Assets                                  7,930
     Accounts Payable and Accrued Liabilities                         519,468          267,118
     Equipment Held for Resale                                         35,000
     Bank Overdraft                                                     8,649
                                                                  -----------      -----------
      Net Cash Provided by (Used in) Operating Activities             236,341         (263,693)
                                                                  -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Increase in Loans Receivable                                       (250,636)              --
  Payments on Loans Receivable                                          9,649               --
  Increase in Shareholder Loans                                        19,846               --
  Payments Made on Shareholder Loans                                     (800)              --
  Cash Acquired in Acquisition Transaction                              2,465               --
  Capital Expenditures                                                 (5,452)          (3,084)
                                                                  -----------      -----------
      Net Cash Used in Investing Activities                          (224,928)          (3,084)
                                                                  -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Bank Overdraft Assumed in Acquisition                               (42,875)              --
  Exercise of Stock Options                                                --           85,500
  Proceeds from Short-Term Debt                                        78,300          132,792
  Proceeds from Long-Term Debt                                         19,955               --
  Principal Payments on Long-Term Debt                                (41,355)        (114,464)
  Principal Payments on Short-Term Debt                               (22,076)              --
  Proceeds Received on Common Stock
   Receivable                                                          20,000               --
                                                                  -----------      -----------
      Net Cash Provided by Financing Activities                        11,949          103,828
                                                                  -----------      -----------
NET INCREASE (DECREASE) IN CASH                                       23,362          (162,949)

CASH, BEGINNING OF YEAR                                               11,523           174,472
                                                                     -------         ---------
CASH, END OF YEAR                                                    $34,885         $  11,523
                                                                     =======         =========
</TABLE>

                                      F-7
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


                                                          For the Year Ended
                                                    ----------------------------
                                                    February 28,    February 29,
                                                       2001             2000
                                                       ----             ----
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During the Year for Interest              $   92,913          $ 18,161
                                                    ==========          ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING
  AND FINANCING ACTIVITIES:
  Securities Issued for Debt Repayment              $    5,000          $ 14,592
                                                    ==========          ========

  Securities Issued for Payables                    $  181,749          $     --
                                                    ==========          ========

  Securities Surrendered                            $  146,900          $     --
                                                    ==========          ========

  Securities Issued for Receivables                 $  125,000          $336,450
                                                    ==========          ========

  Conversion of Preferred Stock                     $        5          $     --
                                                    ==========          ========

  Securities Issued for Acquisition                 $  238,000          $     --
                                                    ==========          ========
  In connection with the  acquisition of all
    of the outstanding common stock of Rhode
    Island Truck and Equipment Corp. for
    $238,000 in common stock, the Company
    acquired assets with a fair value of
    $324,155 and assumed liabilities of $103,613

  Preferred Stock Issued for Acquisition            $4,446,159          $     --
                                                    ==========          ========
  In connection with the acquisition of all of
    the common stock of International Machine
    and Welding, Inc. for $4,446,159 in preferred
    stock, the Company acquired assets with a
    fair value of $6,752,883 and assumed
    liabilities of $2,306,724

  Accretion of Dividends and Discount on
   Mandatory Redeemable Preferred Stock             $  209,333          $     --
                                                    ==========          ========
  Gain on Extinguishment of Mandatory
   Redeemable Preferred Stock                       $1,994,768          $     --
                                                    ==========          ========

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

                                      F-8
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

COMPANY

The  Company,  a  Delaware  Corporation,   was  founded  in  1991  and  formerly
manufactured  patented  industrial and commercial safety clothing under the name
of JD American  Workwear,  Inc.  During the fiscal year ended February 28, 2001,
the Company  completed the acquisition of two  subsidiaries and changed its name
to American  Commerce  Solutions,  Inc. The operations of JD American  Workwear,
Inc. were reincorporated as a subsidiary and American Commerce  Solutions,  Inc.
became the parent corporation to the three operating subsidiaries.

International Machine and Welding,  Inc., located in Bartow,  Florida,  provides
machining,  heavy  equipment  repair and parts  sales.  Rhode  Island  Truck and
Equipment  d/b/a  International  Paving,  located  in  Coventry,  Rhode  Island,
provides paving and concrete  services.  JD American  Workwear,  also located in
Coventry, Rhode Island, sells the industrial and commercial safety clothing that
it formerly  manufactured.  The Company is discontinuing JD American  Workwear's
operations  and  is  attempting  to  liquidate  its  inventory  or to  sell  the
operations back to its founder.

PRINCIPLES OF CONSOLIDATION

The  accompanying  consolidated  financial  statements  include the  activity of
American  Commerce  Solutions,  Inc.  and its  wholly  owned  subsidiaries.  All
intercompany transactions and accounts have been eliminated.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 financial  statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.

CASH AND CASH EQUIVALENTS

The Company  considers all highly liquid  investments  with  maturities of three
months or less, when acquired, to be cash equivalents.

                                      F-9
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVENTORIES

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.

DEPRECIATION AND AMORTIZATION

Property and equipment are stated at cost. The Company computes depreciation and
amortization  expense  using  straight-line  and  accelerated  methods  over the
following estimated useful lives of the assets:

Asset Classification              Estimated Useful Lives
--------------------              ----------------------

Building                                39 Years
Furniture and Fixtures                  5 - 7 Years
Machinery and Equipment                 5 - 7 Years
Office Equipment                        5 - 7 Years
Trucks and Autos                            5 Years

Patent costs include the direct costs of obtaining the patents. Upon issuance of
the patent,  the costs are capitalized  and amortized over the estimated  useful
life of the patent,  generally five to seventeen years,  using the straight-line
method.

Direct  costs  incurred  with the  issuance  of notes and  mandatory  redeemable
preferred stock are deferred and amortized using the effective  interest method,
through the maturity date.

REVENUE RECOGNITION

Sales are recorded when  products,  repairs or parts are shipped or delivered to
the customer.  Provisions  for  discounts  and rebates to  customers,  estimated
returns and allowances and other adjustments are provided for in the same period
the related sales are recorded.

STOCK-BASED COMPENSATION

The Company  accounts for stock  issued to  employees as provided in  Accounting
Principles Board Opinion No. 25, whereby compensation expense is recorded on the
date the  options  are  granted  equal to the excess of the market  price of the
underlying  stock over the exercise  price and provides pro forma  disclosure of
the application of Statement of Financial Accounting Standards No. 123.

                                      F-10
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

BASIC AND DILUTED LOSS PER SHARE

Net  loss  per  common  share  is  computed  by  dividing  net  loss  to  common
shareholders  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 OF FINANCIAL INSTRUMENTS

At February 28, 2001 and  February  29,  2000,  the fair values of cash and cash
equivalents,   accounts  receivable,  and  accounts  payable  approximate  their
carrying  value  due to  their  short-term  nature.  The  fair  value of debt is
estimated  at its  carrying  value based upon  current  rates  available  to the
Company.

RECLASSIFICATION

Certain   reclassifications  have  been  made  to  the  prior  year's  financial
statements to conform to the current year presentation.

LONG LIVED ASSETS

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  121,
"Accounting for the impairment of long-lived assets and for long-lived assets to
be disposed of," long-lived assets, including goodwill and patents, are reviewed
for impairment  whenever  events or changes in  circumstances  indicate that the
carrying amount may not be recoverable.

NOTE 2:  GOING CONCERN

The Company has  incurred  substantial  operating  losses since  inception.  The
Company  recorded  losses from  operations of $ 1,217,610 and $1,360,224 for the
years ended  February  28, 2001 and February  29,  2000,  respectively.  Current
liabilities exceed current assets by $ 850,394 and $711,988 at February 28, 2001
and  February  29,  2000.  Additionally,  the  Company  has been  unable to meet
obligations to its creditors as they have become due. 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.

                                      F-11
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                       FEBRUARY 28, 2001 AND FEBRUARY 29,


NOTE 2: GOING CONCERN (CONTINUED)

Management  has revised its business  strategy to include  expansion  into other
lines of business  through  acquisition  of other  companies in exchange for the
Company's  stock.  During the current  fiscal  year,  the Company  acquired  two
subsidiaries  (See  Note  3).  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  financial  statements  do not
include any adjustments  relating to the  recoverability  and  classification of
recorded asset or the amounts and  classification  of liabilities  that might be
necessary if the Company is unable to continue as a going concern.

NOTE 3: ACQUISITIONS

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 preferred  stock.  The  Company  may also issue up to 1,500  additional
shares of Series C preferred stock based on the profits of the acquired business
through February 28, 2002.

The  following  table  presents the  allocation of the  acquisition  cost to the
assets acquired and liabilities assumed:

     Cash and Cash Equivalents                                 $     2,465
     Accounts Receivable                                           324,394
     Inventories                                                   279,027
     Property, Plant and Equipment                               5,395,997
     Other Noncurrent Assets                                       751,000
                                                               -----------

       Total Assets                                            $ 6,752,883

     Accounts Payable                                             (323,682)
     Other Current Liabilities                                     (40,784)
     Long-Term Liabilities                                      (1,942,258)
                                                               -----------
       Total Liabilities                                        (2,306,724)
                                                               -----------
       Total Acquisition Cost                                  $ 4,446,159
                                                               ===========

                                      F-12
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 3:  ACQUISITIONS (CONTINUED)

On June 1, 2000,  the Company also  completed the purchase of Rhode Island Truck
and  Equipment,  Inc.  also doing  business  as  International  Paving,  Inc. by
acquiring  all of the  outstanding  capital  stock of  Rhode  Island  Truck  and
Equipment,  Inc. for a total purchase  price of $238,000.  The  acquisition  was
accounted for using the purchase  method of  accounting  and,  accordingly,  the
acquired  company's results of operations have been included in the consolidated
financial  statements since the date of acquisition.  The excess of the purchase
price over the  estimated  fair  value of assets  acquired  of $17,458  has been
recorded as goodwill and is being  amortized using the straight line method over
40 years. The acquisition was funded by the issuance of 200,000 shares of common
stock.

The  following  table  presents the  allocation of the  acquisition  cost to the
assets acquired and liabilities assumed:

     Accounts receivable                                         $  10,855
     Inventories                                                    28,250
     Goodwill                                                       17,458
     Property, plant and equipment                                 285,050
                                                                 ---------
       Total Assets                                                341,613
                                                                 ---------

     Accounts Payable                                              (40,657)
     Other Current Liabilities                                     (62,956)
                                                                 ---------
       Total Liabilities                                          (103,613)
                                                                 ---------
       Total Acquisition Cost                                    $ 238,000
                                                                 =========

The following (unaudited) pro forma consolidated results of operations have been
prepared as if the acquisitions had occurred at March 1, 1999:

                                          February 28, 2001    February 29, 2000
                                          -----------------    -----------------

     Revenues                                $2,172,812           $   448,003
     Loss from continuing operations          1,209,912             1,303,852
     Net Income (Loss)                           46,385            (1,893,636)
     Net Income (Loss) per common
      share - basic                                0.01                 (0.77)

The pro forma  information is presented for  informational  purposes only and is
not necessarily indicative of the results of operations that actually would have
been achieved had the  acquisitions  been consummated as of that time, nor is it
intended  to be a  projection  of  future  results.  The pro  forma  information
includes the results of  operations  of Rhode Island Truck and  Equipment,  Inc.
from March 1, 1999. Patina  Corporation and  International  Machine and Welding,
Inc. had no operations prior to the date of acquisition.

                                      F-13
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 4:  INVENTORIES

Inventories consist of the following:

                                                      2001           2000
                                                    --------       --------

     Raw Materials                                  $     --       $ 32,859
     Work-in-process                                  12,217             --
     Finished Goods, Current Portion                 428,031        152,310
     Finished Goods, Long Term                            --        740,675
     Supplies                                        277,461             --
                                                    --------       --------

     Total Inventories                              $717,709       $925,844
                                                    ========       ========

During  the  fourth  quarter of the year ended  February  29,  2000,  management
determined  that,  due to the  failure of the JD American  Workwear's  marketing
programs to produce a  satisfactory  level of sales,  finished  goods  inventory
contained a significant amount of overstocked and obsolete product. As a result,
a provision for inventory  losses of $531,438 was charged to operations to write
down inventory to its net realizable value. This was based on the Company's best
estimates  of product  sales  prices in  accordance  with its revised  plans for
product  marketing.  Management  also  reclassified  a portion of  inventory  to
long-term  assets based on estimates about the timing of product sales under the
revised  plan.  During the fourth  quarter of the year ended  February 28, 2001,
management  reevaluated  its estimates of the net realizable  value of inventory
based on actual  sales of product  styles and  liquidation  sale  pricing.  As a
result, an additional provision for loss on inventory of $341,630 was charged to
operations during the fourth quarter of the year ended February 28, 2001.

NOTE 5: PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS

Property and equipment, at cost, consist of the following:

                                                     2001            2000
                                                  ----------       --------
     Land and Building                            $3,183,763       $225,957
     Furniture and Fixtures                           25,182         25,182
     Machinery and Equipment                       2,341,433         89,587
     Office Equipment                                 39,454         23,996
     Trucks and Autos                                425,826         64,720
     Small Tools                                       9,313             --
                                                  ----------       --------

     Total                                         6,024,971        429,442
     Less:  Accumulated Depreciation                 438,205        221,153
                                                  ----------       --------
     Net Property and Equipment                   $5,586,766       $208,289
                                                  ==========       ========

                                      F-14
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 5:  PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS (CONTINUED)

Depreciation expense for the years ended February 28, 2001 and February 29, 2000
was $304,619 and $64,117, respectively.

Intangible assets, at cost, consist of the following:

                                                      2001           2000
                                                    --------       --------

     Patents                                        $ 70,970       $ 70,970
     Goodwill                                         17,458             --
     Offering Costs                                       --        356,005
                                                    --------       --------

     Total                                            88,428        426,975
     Less: Accumulated Amortization                   21,104        252,298
                                                    --------       --------

     Net Intangible Assets                          $ 67,324       $174,677
                                                    ========       ========

Amortization expense for the years ended February 28, 2001 and February 29, 2000
was $3,619 and $31,311, respectively.

NOTE 6:  NOTES PAYABLE AND LONG-TERM DEBT

The Company's notes payable and long-term debt consist of the following:

                                                           2001           2000
                                                         --------       --------
10.5% note payable, secured by a mortgage
 on the Rhode Island property,  payable
 in monthly installments of $2,687,
 principal and interest, through December
 2001, in default, entire amount due                     $106,323       $112,218

10% note payable to stockholders and
 parents of a majority stockholder,
 payable in monthly installments of
 $5,494, principal and interest,
 maturing September, 2002                                 161,959        142,004

10% note due to an investor, due on
 December 31, 1997, collateralized
 by a mortgage on real estate owned
 by a majority stockholder                                 40,000         40,000

                                      F-15
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 6:  NOTES PAYABLE AND LONG-TERM DEBT (CONTINUED)

                                                           2001           2000
                                                         --------       --------
Loans from stockholders, no written terms,
 interest imputed at 0% to 7% annually                   172,037         116,701

Various loans from individuals, no
 written terms, interest imputed at 0% to
 7% annually                                              24,724          21,500

Capitalized lease on equipment, monthly
 payments of $292, principal and
 interest, in default, entire balance due                  8,641           8,744

11% convertible subordinated notes due to
  investors, matured September 30, 1998
  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. In conjunction with
  these notes, the Company issued warrants to
  purchase 112,500 shares of the Company's
  common stock at a price of $2.00 per share
  The warrants expired on September 30, 2000
  These notes, including accrued interest, are
  convertible at the option of the holder, into
  common stock at $3.85 per share                         75,000          75,000

15% convertible note payable to investor,
  matured June 1, 2000. The note is
  convertible  at $0.70 per share. In
  conjunction with this note, the Company
  issued 3,500 warrants for purchase of
  common stock at $2.00 per share. The
  warrants expire March 1, 2002                            7,000

15% convertible note payable to investor,
  matured August 10, 2000. The note is
  convertible at $0.70 per share. In
  conjunction with this note, the Company
  issued 3,500 warrants for purchase of
  common stock at $2.00 per share. The
  warrants expire May 10, 2002                             7,000

Note payable to investor, matured
  September 7, 2000. Interest payable
  in 2,000 shares of stock until the
  maturity date and at 20% thereafter                      4,000

                                      F-16
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 6:  NOTES PAYABLE AND LONG-TERM DEBT (CONTINUED)

                                                           2001           2000
                                                         --------       --------
7% note payable to accounting firm,
 maturing June 1, 2001                                      30,000

10% note payable,  pursuant to a Chapter 11
  reorganization  plan attached to the assets
  purchased belonging to International Machine
  and Welding,  Inc., secured by a mortgage on
  Florida property, monthly payments of $10,252,
  principal and interest, maturing May 22, 2005          1,163,906

Note payable, pursuant to a Chapter 11
  reorganization plan, secured by a mortgage on
  Florida property, no interest, monthly payments
  of $2,034, maturing January 22, 2010                     219,629

9% loan payable to Internal Revenue Service, pursuant
  to a Chapter 11 Reorganization plan, monthly
  payments of $25, principal and interest, maturing
  May 24, 2005                                               1,352

Loan payable to Internal Revenue Service, pursuant
  to a Chapter 11 reorganization plan, no interest,
  monthly payments of $10, maturing May 24, 2005               448

9% loan payable to Internal Revenue Service
 pursuant to a Chapter 11 reorganization
 plan, secured by tax lien, monthly payments
 of $7,661, principal and interest, maturing
 May 24, 2006                                              416,043

9% loan payable to Florida Department of Revenue,
  pursuant to a Chapter 11 reorganization plan,
  monthly payments totaling $173, principal and
  interest, maturing May 24, 2005                            8,328

Loan payable to Florida Department of Revenue,
  pursuant to a Chapter 11 reorganization plan, no
  interest, monthly payments of $36, principal and
  interest, maturing May 24, 2004                            1,706

                                      F-17
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 6:  NOTES PAYABLE AND LONG-TERM DEBT (CONTINUED)

                                                           2001           2000
                                                         --------       --------
9% loan payable to Polk County, pursuant
 to a Chapter 11 reorganization plan, secured
 by tax lien, monthly payments of $1,455,
 principal and interest, maturing January
 24, 2006                                                 76,967

9% loan payable,  pursuant to a Chapter 11
  reorganization plan, monthly payments of $262,
  principal and interest, maturing May 24, 2005           12,620

Various loans payable, pursuant to a Chapter 11
  reorganization plan, no interest, monthly
  payments totaling $411, maturing May 24, 2004           15,690

1% note payable, secured by a motor vehicle,
  monthly payments of $449, principal and
  interest, maturing December 27, 2001                     4,670

12% note payable, secured by a motor vehicle,
  monthly payments of $903, principal and interest,
  maturing September 10, 2001                              5,863
                                                      ----------        --------

   Total                                               2,563,906         516,167

   Less, Current Portion                                 807,957         380,168
                                                      ----------        --------

   NET LONG-TERM DEBT                                 $1,755,949        $135,999
                                                      ==========        ========

The aggregate principal maturing in subsequent years are:

             Year Ending February 28,                       Amount
             ------------------------                       ------

                       2002                              $   119,151
                       2003                                  127,708
                       2004                                  133,762
                       2005                                1,257,163
                    Subsequent                               118,165
                                                         -----------
                                                         $ 1,755,949
                                                         ===========

                                      F-18
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 7:  COMMITMENTS AND CONTINGENCIES

EMPLOYMENT AGREEMENTS

The Company has  employment  agreements  with four key  employees.  The terms of
which  expire at various  times for each 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, auto
allowances,  stock options,  as well as bonuses,  which may contain  minimum and
incentive components.  The annual commitment for future salaries at February 28,
2001, including minimum bonuses, is approximately $300,000.

CASH IN BANK

The Company  maintains bank  accounts,  which at times contain  balances,  which
exceed the amounts insured by the FDIC.

NOTE 8: EXTINGUISHMENT OF MANDATORY REDEEMABLE PREFERRED STOCK

On April 9, 1998,  the Company  authorized the issuance and sale of 3,950 shares
of Series B 12% Cumulative  Convertible  Preferred Stock and sold 2,500 of these
shares to an investor.  In addition,  the Company issued detached ten-year stock
purchase warrants to purchase 799,000 shares of the Company's common stock at an
exercise  price of $0.01 per share to the  investor  for an  aggregate  purchase
price of  $2,500,000.  A mandatory  redemption of 1,250 shares,  at  $1,250,000,
required on each of the first business days of April, 2004 and 2005. Proceeds of
$960,000 were  allocated to the carrying  value of the Series B Preferred  Stock
and  $1,540,000 to the detached  warrants based on their relative fair values at
date of issue. The difference between the carrying value of the Series B and its
mandatory  redemption  amount  being  accreted to retained  earnings  or, in the
absence of retained  earnings,  to  additional  paid in capital  over the period
until redemption using the effective interest rate method.

During the year ended  February  28,  2001,  the Company was able to negotiate a
troubled debt  restructure  agreement  with the Series B investor.  The investor
agreed  to waive its  rights  to the  mandatory  redemption  required  under the
original stock purchase agreement, in exchange for an equity only interest. As a
result,  the Company has  recognized a gain on the  extinguishment  of mandatory
redeemable preferred stock in the amount of $1,994,768.

                                      F-19
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 8: EXTINGUISHMENT OF MANDATORY REDEEMABLE PREFERRED STOCK (CONTINUED)

Under the terms of the amended  agreement,  the annual dividend rate was reduced
from 12% to 6%,  effective June 1, 2000.  Dividends may be paid in stock through
May 31, 2004 at a conversion rate of $1.00 per share, except that cash dividends
must be paid in lieu of stock as required by provisions  related to the Series C
Preferred stock outstanding. Under these provisions, the entire 6% dividend must
be paid in cash in the event  more  than 50% of the  original  amount  issued is
outstanding  at the dividend  date.  If less than 50% is  outstanding,  the cash
dividend required is determined on a pro rata basis.

The Series B Preferred Stock has rights to receive  cumulative 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.  Cumulative  dividends amounted to $146,074 and $341,160 at
February  28,  2001 and  February  29,  2000,  respectively.  Dividends  paid in
additional  shares and warrants  were  $364,000 for the year ended  February 28,
2001 and  $150,000  for the year ended  February  29, 2000. A total of 1,032,500
warrants to purchase common stock,  including dividends  warrants,  were held by
the Series B stockholder at February 28, 2001.  These  warrants have  expiration
dates ten years from the dates of issue, ranging from April, 2008 to June, 2010.

The Series B Preferred Stock is convertible,  at the option of the holder,  into
the number of shares of Common Stock, which results from dividing the conversion
price of $5.00 per common share into $1,000 for each share of Series B Preferred
Stock being converted.  The Company may, at its own option and at any time after
the third  anniversary of the original issuance of the Series B Preferred Stock,
redeem the Series B Preferred  Stock,  in whole but not in part.  In such event,
the Company is  obligated  to pay  holders of the Series B  Preferred  Stock the
investment  value per share,  plus a redemption  premium equal to a 20% internal
rate of return on the investment value.

Holders  of Series B  Preferred  Stock  vote on an as  converted  basis with the
common  stockholders on all matters to be brought to a vote of the shareholders.
The Series B Preferred Stock holders shall be 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  Stock holders,  the holders of the Series B Preferred  Stock shall be
entitled,  immediately upon giving written notice,  to elect the smallest number
of  directors  that will  constitute  a  majority  of the  authorized  number of
directors.

                                      F-20
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 9:  CAPITALIZATION

SERIES A 10% CONVERTIBLE PREFERRED STOCK

The Company sold 313 shares of Series A 10% Convertible  Preferred Stock through
a Private  Placement  dated August 26, 1997,  at a price of $2,500 per Preferred
Share.  Dividends are payable at a rate of 10% annually,  payable in kind at the
option of the Company. The shares convert automatically upon the registration of
the underlying common stock to be issued upon the conversion.  Holders of Series
A Preferred Stock vote on an as converted basis with the common  stockholders on
all  matters  to be brought to a vote of the  shareholders.  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, 2001,  preferred  dividends  in arrears  amounted to  approximately
$100,690 or $915 per share.

SERIES C 6% CONVERTIBLE PREFERRED STOCK

The Company  issued 9800 shares of Series C 6% Convertible  Preferred  Stock for
the acquisition of Patina, Corporation. Dividends are payable at 6% annually and
may be paid in Common  shares at the option of the Company.  Holders of Series C
Preferred  Stock  vote on an as  converted  basis at a ratio  of 36.8%  with the
common stockholders on all matters brought to a shareholder vote. As of February
28, 2001 dividends in arrears on the Series C shares amounted to $366,000.

STOCK RECEIVABLE

Stock  receivable  represents  amounts due to the Company for shares  issued and
outstanding  at  year-end.  The  Company  holds  a  note  receivable  issued  in
connection with an exercise of stock options in the amount of $150,000. The note
bears  interest at 7% and matures on December 31,  2001.  The Company also has a
stock  receivable  on a placement  of $105,000 and $2,000 due on the exercise of
stock options.

COMMON STOCK OPTIONS

The Company's  1995 Stock Option Plan  authorizes up to 750,000 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  with ten years of the date of the grant.  The  exercise
price of options  granted may not be less than 85% of the fair  market  value of
the stock.

                                      F-21
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 9:  CAPITALIZATION (CONTINUED)


COMMON STOCK OPTIONS (CONTINUED)

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

                                                    Number      Weighted-Average
                                                      of         Exercise Price
                                                    Shares          Per Share
                                                    ------      ----------------
     Options Outstanding, February 28, 1999         271,500           $4.55
       Granted                                      126,000            2.21
       Exercised                                   (115,000)           3.35
       Expired                                     (150,000)           4.75
                                                   --------

     Options Outstanding, February 29, 2000         132,500           $3.14
      Granted                                       200,000             .15
      Exercised                                    (189,350)            .19
      Expired                                       (80,650)           3.28
                                                   --------
     Options Outstanding, February 28, 2001          62,500           $1.57
                                                   ========

At February 28, 2001, 62,500 options,  with a weighted-average  contractual life
of 3.8 years,  were  outstanding at exercise prices ranging from $1.50 to $1.59.
All outstanding options were fully vested and exercisable.

During the years ended  February 28, 2001 and  February  29,  2000,  the Company
granted  200,000  (2001) and 76,000 (2002) stock options to  consultants  with a
fair value of $193,883 and $165,160,  respectively.  The related compensation is
being  expensed over the lives of the  consulting  agreements.  The Company also
granted  50,000  stock  options to two key  employees in  connection  with their
employment  agreements.  The  following  summarizes  information  about  options
granted during the years ended February 28, 2001 and February 29, 2000:

                                      F-22
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 9:  CAPITALIZATION (CONTINUED)

COMMON STOCK OPTIONS (CONTINUED)

                                     Number      Weighted-         Weighted-
                                       of         Average         Average Fair
                                     Shares    Exercise Price    Value Per Share
                                     ------    --------------    ---------------
     Options Granted in 2000
       whose exercise price:
         Equals Market Price         54,000         $2.89            $2.82
         Exceeds Market Price        64,000         $1.81            $0.52
         is Below Market Price        8,000         $1.13            $0.48

     Options Granted in 2001
       whose exercise price:
         is Below Market Price      200,000         $ .15            $1.17

Stock-based  compensation  to  non-employees  is valued using the  Black-Scholes
pricing  model.  The Company  uses the  intrinsic  value  method under APB 25 to
account for stock option compensation granted to employees. Because the exercise
price  at the  date of grant  to  employees  was  above  the  market  price,  no
compensation  expense has been recorded.  Had compensation  cost been recognized
under FAS 123,  the amount  would have been $0 and  $24,000  for the years ended
February 28, 2001 and February 29, 2000, respectively. The pro forma disclosures
required under FAS 123 are as follows:

                                              2001          2000
                                            --------    -------------
     Gain (Loss) Attributable to
      Common Stockholders:
       As Reported                          $ 38,375    $ (2,467,929)
       Pro forma                            $ 38,375    $ (2,491,929)

     Loss per Common Share:
       As Reported                          $   0.01    $      (1.00)
       Pro forma                            $   0.01    $      (1.01)

                                      F-23
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000

NOTE 9:  CAPITALIZATION (CONTINUED)

COMMON STOCK OPTIONS (CONTINUED)

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

                                                        2001          2000
                                                        ----          ----
     Dividend Yield                                        0%            0%
     Expected Volatility                                 230%          105%
     Average Expected Option Life                     1 Year       2 Years
     Risk-Free Interest Rate                            6.50%         6.54%

WARRANTS

During the year ended February 28, 2001, the Company issued 10,500 in connection
with short term  loans.  The Company  also has  warrants  outstanding  that were
issued in prior years as  compensation  for consulting and legal  services.  The
warrants  issued  by  the  Company   generally  contain   provisions   requiring
proportionate  adjustment  of the exercise  price in the event of a stock split,
stock  dividend,  or dilutive  financing.  At  February  28,  2001,  warrants to
purchase 392,816 shares of common stocks at a weighted-average exercise price of
$2.21  were  outstanding  and  exercisable.   The  weighted  average   remaining
contractual life of these warrants is 1.7 years.

NOTE 10: INCOME TAXES

The Company recognizes the amount of taxes payable or refundable for the current
year and recognizes  deferred tax liabilities and assets for the expected future
tax  consequences  of events and  transactions  that have been recognized in the
Company's financial statements or tax returns.

The Company currently has substantial net operating loss carry-forwards that may
be applied  against future  income.  These losses create a deferred tax asset at
February  28, 2001 and  February  29,  2000.  The  Company  has  recorded a 100%
valuation  allowance against net deferred tax assets due to uncertainty of their
ultimate realization.

                                                   2001             2000
                                                ----------       ----------
     Deferred Tax Assets Resulting
       from Net Operating Losses                $1,376,168       $1,114,118

     Less, Valuation Allowance                   1,376,168        1,114,118
                                                ----------       ----------
     Net Deferred Tax Assets                    $        0       $        0
                                                ==========       ==========

                                      F-24
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 10:  INCOME TAXES (CONTINUED)

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

The loss carry-forwards expire as follows:

                 Years of Expiration                Amount
                 -------------------                ------
                        2009                     $   241,269
                        2010                         581,952
                        2011                       1,144,859
                        2012                         786,579
                        2013                       1,131,271
                        2014                       1,654,653
                        2015                       1,886,872
                        2016                       1,747,000
                                                 -----------

                                                 $ 9,174,455
                                                 ===========

NOTE 11: ITEMS AFFECTING FOURTH QUARTER RESULTS OF OPERATIONS

During the fourth  quarter of the year ended  February  28,  2001,  the  Company
determined  that a write down of inventory to net  realizable  value of $341,630
was required as discussed in Note 4. The effect of the year-end  adjustment  was
to  increase  net loss for the fourth  quarter by  $341,630,  or $.08 per common
share.

NOTE 12: SUBSEQUENT EVENTS

In March 2001, the property at 46 Old Flat River Rd. Coventry,  RI was sold to a
relative of the  president  of JD American  Workwear for  $165,000.  JD American
Workwear,  Inc. is leasing the property for $1,670 per month.  The lease expires
on March 31, 2004.

As of June 1, 2001, the Company has  discontinued  the operations of JD American
Workwear,  Inc.  The  Company is  negotiating  a sale of the  operations  to its
founder.

                                      F-25
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 13: SEGMENT REPORTING

The Company's  reportable  business segments correspond with the Company's three
subsidiaries  which offer  distinctive  products and services  that are marketed
through different channels.  They are managed separately because of their unique
geographical locations and operations.

The   Company  has  three   reportable   segments,   as  named  by   management:
Manufacturing,  Construction Management and Product Marketing. The Manufacturing
segment provides specialized machining services to the heavy equipment industry.
The Construction Management segment provides commercial and residential concrete
and paving  services.  The Product  Marketing  segment sells the  industrial and
commercial safety clothing that it formerly manufactured.

The Company's  accounting  policies for segments are the same as those described
in the summary of significant accounting policies.  Management evaluates segment
performance   based  on  segment   profit  and  loss  before  income  taxes  and
nonrecurring gains and losses.

A summary of the Company's segmented information for the year ended February 28,
2001 is as follows:

<TABLE>
<CAPTION>
                                                    Segments
                          --------------------------------------------------------------
                          Construction        Product      Consolidated
                          Manufacturing     Management       Marketing         Totals
                          -------------     ----------       ---------         ------
<S>                        <C>              <C>              <C>            <C>
Net Sales to
 Unaffiliated Customers    $ 1,653,399      $ 267,559        $ 187,682      $ 2,108,640

Interest Expense               120,994          1,055           62,817          184,866

Depreciation and
 Amortization                  254,130         29,584           20,905          304,619

Segment Profit (Loss)          (21,496)       (53,161)        (533,734)        (608,391)

Segment Assets               6,599,988        277,698          747,304        7,624,990

Expenditures for Assets          5,452                                            5,452
</TABLE>

                                      F-26
<PAGE>
               AMERICAN COMMERCE SOLUTIONS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 28, 2001 AND FEBRUARY 29, 2000


NOTE 13:  SEGMENT REPORTING (CONTINUED)

RECONCILIATION OF SEGMENT INFORMATION TO CONSOLIDATED AMOUNTS

Information for the Company's  reportable  segments  relates to the enterprise's
consolidated totals as follows:

   REVENUES
     Total Revenues for Reportable Segments                    $ 2,108,640
                                                               -----------

       Total Consolidated Revenues                             $ 2,108,640
                                                               ===========
   PROFIT OR LOSS
     Total Profit (Loss) for Reportable Segments               $  (608,391)
     Other Income (Expense)                                       (529,450)
     Accretion of Discount and Dividends on
       Mandatory Redeemable Preferred Stock                       (209,333)
     Gain on Extinguishment of Mandatory
       Redeemable Preferred Stock                                1,994,768
     General Corporate Expenses                                   (609,219)
                                                               -----------

       Total Consolidated Profit (Loss)                        $    38,375
                                                               ===========
   ASSETS
     Total Assets for Reportable Segments                      $ 7,624,990
                                                               -----------

       Total Consolidated Assets                               $ 7,624,990
                                                               ===========

MAJOR CUSTOMERS

For the year ended  February  28,  2001,  no  customer  exceeded  10% of revenue
overall although one customer, a liquidator, accounted for 30.14% of the revenue
in the Product  Marketing  segment.  In the year ended  February 29,  2000,  two
customers each  representing more than 10% of gross sales accounted for $87,359,
or 32%, of the segments  sales.  These  customers  were a retailer with sales of
$38,172, or 14%, and a uniform company with sales of $49,187, or 18%.

                                      F-27