SECURITIES AND EXCHANGE COMMISSION
                Washington, D.C. 20549

                     FORM 10-KSB
                      (Mark One)

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


                For the fiscal year ended December
                       31, 2000
                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 number 0-31245

             KAW ACQUISITION CORPORATION
                (Exact name of small business issuer
                   in its charter)

            Nevada                       91-2048013
     (State or other jurisdiction of     (I.R.S. Employer
     incorporation or organization)      Identification No.)


        963 Valley View Drive, Meadowbrook PA 19046-1317
       (Address of principal executive offices (zip code))

        Issuer's Telephone Number:          918-336-1773


     Securities registered under Section 12(g) of the Exchange
     Act: Common Stock $0.001 par value per share.

     Check whether the issuer (1) filed all reports required to
     be filed by Section 13 or 15(d) of the Exchange Act during
     the last 12 months (or for such shorter period that the
     registrant was required to file such reports), and (2) has
     been subject to such filing requirements for the past 90
     days.

                    Yes    X              No

     Check if there is no disclosure of delinquent files in
     response to Item 405 of Regulation S-B is not contained in
     this form, 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 issuer's revenues for its most recent fiscal year.
           $0


     State the aggregate market value of the voting and
     non-voting common equity held by non-affiliates computed
     by reference to the price at which the common equity was
     sold, or the average bid and asked price of such common
     equity, as of a specified date within the past 60 days.
                                                         $0

     State the number of shares outstanding of each of the
     issuer's classes of common equity, as of the latest
     practicable date.

               Class                      Outstanding at
     Common Stock, par value            December 31, 2000
              $0.001                          500,000

                             PART I

     ITEM 1. DESCRIPTION OF BUSINESS

            Kaw Acquisition Corporation ("the Company") was
     incorporated on May 3, 2000, under the laws of the State
     of Nevada to engage in any lawful corporate undertaking,
     including, but not limited to, selected mergers and
     acquisitions.  The Company has been in the developmental
     stage since inception and has no operations to date other
     than issuing shares to its original shareholder.

            The Company's purpose is to seek, investigate and,
     if such investigation warrants, acquire an interest in a
     business entity which desires to seek the perceived
     advantages of a corporation which has a class of
     securities registered under the Exchange Act.  The Company
     will not restrict its search to any specific business,
     industry, or geographical location and it may participate
     in a business venture of virtually any kind or nature.
     Management anticipates that it will be able to participate
     in only one potential business venture because the Company
     has nominal assets and limited financial resources.

            The Company registered its common stock on a Form
     10-SB Registration Statement filed pursuant to the
     Securities Exchange Act of 1934 (the "Exchange Act") and
     Rule 12(g) thereof.  The Company files with the Securities
     and Exchange Commission periodic and current reports under
     Rule 13(a) of the Exchange Act, including Quarterly
     Reports on Form 10-QSB and Annual Reports Form 10-KSB.

     SUBSEQUENT EVENTS

     CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.

     On January 17, 2003, Kaw Acquisition Corporation (the
     "Registrant") notified the accounting firm of Magee,
     Rausch & Shelton, LLP, of Tulsa, Oklahoma ("MRS") that MRS
     had been replaced as the Registrant's principal
     accountant.  MRS reported on and audited the financial
     statements prepared by the Registrant for the period since
     inception (May 3, 2000) and ending July 15, 2000.

     On October 25, 2002, the Registrant engaged the accounting
     firm of James J. Taylor ("JJT") of New Braunfels, Texas,
     as its principal accountant to audit the financial
     statements prepared by the Registrant for the current
     fiscal year and for its past filings.  The decision to
     change accountants was recommended by the Company's Board
     of Directors and was based on the recommendation of
     Special Counsel to the Registrant to change as JJT would
     be more accessible in the State of Texas to potential
     merger candidates.

     The financial statements reviewed as of July 15, 2000 and
     reported by MRS did not contain an adverse opinion or a
     disclaimer of opinion, nor were qualified or modified as
     to uncertainty, audit scope, or accounting principles.
     Additionally, during he Registrant's two most recent
     fiscal years and any subsequent interim period preceding
     MRS' dismissal, there were no disagreements with the
     Registrant's former accountant on any matter of accounting
     principles or practices, financial statement disclosure,
     or auditing scope or procedures.  A copy of this
     disclosure has been provided to MRS.  A copy of MRS'
     letter addressed to the Securities and Exchange Commission
     stating whether it agrees with the statements made by the
     Registrant contained in this Item 4 is attached to this
     Report as an exhibit.

     OTHER EVENTS

     The Board of Directors recommended to the Registrant
     shareholders, and on September 30, 2002, the shareholders
     of the Registrant approved, a Resolution to amend the
     Registrant's Articles of Incorporation to:

     - -    create a Class A Common Stock from the authorized
            capital stock consisting of 12,000,000 shares with
            a par value of $0.001 per share,

     - -    create a Class B Common Stock from the authorized
            capital stock consisting of 88,000,000 shares with
            a par value of $0.001 per share, and

     - -    add a preferred stock class for 20.0 million
            additional authorized shares.


     ITEM 2. DESCRIPTION OF PROPERTY

            The Company has no properties and at this time has
     no agreements to acquire any properties.  The Company
     currently uses the offices of Management at no cost to the
     Company.  Management has agreed to continue this
     arrangement until the Company completes a business
     combination.
     S
     ITEM 3.        LEGAL PROCEEDINGS

            There is no litigation pending or threatened by or
     against the Company.

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

            No matter was submitted to a vote of security
     holders, through the solicitation of proxies or otherwise,
     during the fourth quarter of the fiscal year covered by
     this report.

                                  PART II

     ITEM 5.        MARKET FOR COMMON EQUITY AND RELATED
                    STOCKHOLDER MATTERS

            Following a business combination, a target company
     will normally wish to cause the Company's common stock to
     trade in one or more United States securities markets.
     The target company may elect to take the steps required
     for such admission to quotation following the business
     combination or at some later time.

            If, after a business combination, the Company does
     not meet the qualifications for listing on the Nasdaq
     SmallCap Market, the Company may apply for quotation of
     its securities on the NASD OTC Bulletin Board.  In certain
     cases the Company may elect to have its securities
     initially quoted in the "pink sheets" published by the
     National Quotation Bureau, Inc.

            To have its securities quoted on the NASD OTC
     Bulletin Board a company must:

            (1)     be a company that reports its current
     financial information to the Securities and Exchange
     Commission, bank regulators or insurance regulators;

            (2)     has at least one market maker who completes
     and files a Form 211 with NASD Regulation, Inc.

            The NASD OTC Bulletin Board is a dealer-driven
     quotation service.  Unlike the Nasdaq Stock Market,
     companies cannot directly apply to be quoted on the NASD
     OTC Bulletin Board, only market makers can initiate
     quotes, and quoted companies do not have to meet any
     quantitative financial requirements.  Any equity security
     of a reporting company not listed on the Nasdaq Stock
     Market or on a national securities exchange is eligible.

            In order to qualify for listing on the Nasdaq
     SmallCap Market, a company must have at least (i) net
     tangible assets of $4,000,000 or market capitalization of
     $50,000,000 or net income for two of the last three years
     of $750,000; (ii) a public float of 1,000,000 shares with
     a market value of $5,000,000; (iii) a bid price of $4.00);
     (iv) three market makers; (v) 300 shareholders, and (vi)
     an operating history of one year or, if less than one
     year, $50,000,000 in market capitalization.  For continued
     listing on the Nasdaq SmallCap Market, a company must have
     at last (i) net tangible assets of $2,000,000 or market
     capitalization of $35,000,000 or net income for two of the
     last three years of $500,000; (ii) a public float of
     500,000 shares with a market value of $1,000,000; (iii) a
     bid price of $1.00; (iv) two market makers; and (v) 300
     shareholders.

            In general, there is greatest liquidity for traded
     securities on the Nasdaq SmallCap Market, less on the NASD
     OTC Bulletin Board, and least through quotation by the
     National Quotation Bureau, Inc., on the "pink sheets".  It
     is not possible to predict where, if at all, the
     securities of the Company will be traded following a
     business combination.

            During the past three years, the Company has sold
     securities which were not registered as follows:

                                 NUMBER OF
     DATE             NAME         SHARES    CONSIDERATION

     06/29/2000   Peter R. Goss    500,000     $ 500


     ITEM 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OR
                    PLAN OF OPERATION

            The Company will attempt to locate and negotiate
     with a business entity for the combination of that target
     company with the Company.  The combination will normally
     take the form of a merger, stock-for-stock exchange or
     stock-for-assets exchange (the "business combination").
     In most instances the target company will wish to
     structure the business combination to be within the
     definition of a tax-free reorganization under Section 351
     or Section 368 of the Internal Revenue Code of 1986, as
     amended.  No assurances can be given that the Company will
     be successful in locating or negotiating with any target
     business.

            The Company has not restricted its search for any
     specific kind of businesses, and it may acquire a business
     which is in its preliminary or development stage, which is
     already in operation, or in essentially any stage of its
     business life.  It is impossible to predict the status of
     any business in which the Company may become engaged, in
     that such business may need to seek additional capital,
     may desire to have its shares publicly traded, or may seek
     other perceived advantages which the Company may offer.

            In implementing a structure for a particular
     business acquisition, the Company may become a party to a
     merger, consolidation, reorganization, joint venture, or
     licensing agreement with another corporation or entity.

            It is anticipated that any securities issued in any
     such business combination would be issued in reliance upon
     exemption from registration under applicable federal and
     state securities laws.  In some circumstances, however, as
     a negotiated element of its transaction, the Company may
     agree to register all or a part of such securities
     immediately after the transaction is consummated or at
     specified times thereafter.  If such registration occurs,
     it will be undertaken by the surviving entity after the
     Company has entered into an agreement for a business
     combination or has consummated a business combination.
     The issuance of additional securities and their potential
     sale into any trading market which may develop in the
     Company's securities may depress the market value of the
     Company's securities in the future if such a market
     develops, of which there is no assurance.

            The Company will participate in a business
     combination only after the negotiation and execution of
     appropriate agreements.  Negotiations with a target
     company will likely focus on the percentage of the Company
     which the target company shareholders would acquire in
     exchange for their shareholdings.  Although the terms of
     such agreements cannot be predicted, generally such
     agreements will require certain representations and
     warranties of the parties thereto, will specify certain
     events of default, will detail the terms of closing and
     the conditions which must be satisfied by the parties
     prior to and after such closing and will include
     miscellaneous other terms.  Any merger or acquisition
     effected by the Company can be expected to have a
     significant dilutive effect on the percentage of shares
     held by the Company's shareholders at such time.

            The Company has entered into an agreement with
     Peter R. Goss, its sole shareholder, to supervise the
     search for target companies as potential candidates for a
     business combination.  The Agreement will continue until
     such time as the Company has effected a business
     combination.  Peter R. Goss has agreed to pay all expenses
     of the Company until such time as a business combination
     is effected, without repayment.  Peter R. Goss, the sole
     Officer and Director of the Company, is the sole Officer
     and Director and controlling Shareholder of Kaw
     Acquisition Corporation.

            The Company does not anticipate expending funds
     itself for locating a target company.  Peter R. Goss, the
     Officer and Director of the Company, provides his services
     without charge or repayment.  The Company will not borrow
     any funds to make any payments to the Company's
     Management, its affiliates or associates.  If Peter R.
     Goss stops or becomes unable to continue to pay the
     Company's operating expenses, the Company may not be able
     to timely make its periodic reports required under the
     Exchange Act nor to continue to search for an acquisition
     target.  In such event, the Company would seek alternative
     sources of funds or services, primarily through the
     issuance of its securities.

            Peter R. Goss may only locate potential target
     companies for the Company and is not authorized to enter
     into any agreement with a potential target company binding
     the Company.  Peter R. Goss may provide assistance to
     target companies incident to and following a business
     combination, and receive payment for such assistance from
     target companies.  The Agreement with Peter R. Goss is not
     exclusive and the Company may enter into similar
     agreements with other persons or entities.

            The Board of Directors has passed a Resolution
     which contains a policy that the Company will not seek a
     business combination with any entity in which the
     Company's Officer, Director, shareholders or any affiliate
     or associate serves as an officer or director or holds any
     ownership interest.

     ITEM 7.        FINANCIAL STATEMENTS

            The financial statements for the year ended
     December 31, 2000, are attached to this filing.

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

            There were no changes in or disagreements with
     accountants on accounting and financial disclosure for the
     period covered by this report.

                                 PART III

     ITEM 9.        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
                    AND CONTROL PERSONS; COMPLIANCE WITH
                    SECTION 16(A) OF THE EXCHANGE ACT

            The Directors and Officers of the Company are as
     follows:

          Name               Age      Positions and
                                      Offices Held

     Peter R. Goss            64        President,
                                        Secretary,
                                        Director

            There are no agreements or understandings for the
     Officer or Director to resign at the request of another
     person and the above-named Officer and Director is not
     acting on behalf of nor will act at the direction of any
     other person.

            Set forth below is the name of the Director and
     Officer of the Company, all positions and offices with the
     Company held, the period during which he has served as
     such, and the business experience during at least the last
     five years:

            Peter Goss graduated in 1959 from Temple University
     with a B.S. Degree in Business Administration.  In 1967,
     Mr. Goss received his M.B.A. in Industrial Relations from
     Temple University through the Graduate School.  Over the
     course of his career, Mr. Goss has worked for the U.S.
     Government as a Management Analyst from 1961 to 1967, and
     for the Radio Corporation of America as a Senior System
     Analyst from 1967 to 1969.  Currently, Mr. Goss serves as
     President of Village Mortgage Corporation and as Trustee
     of his land development and property management for his
     family.  Village Mortgage Corporation is involved with the
     placement of residential and commercial loans, development
     of .com companies, acquisition of venture capital, and
     land development and home building.  Mr. Goss has served
     as President for Village Mortgage Corporation since 1987.

     OTHER SIMILAR COMPANIES

            Peter R. Goss, the President of the Company, has
     been and is currently involved with companies similar to
     this one.  The initial business purpose of each of these
     companies was or is to engage in a business combination
     with an unidentified company or companies.

     CONFLICTS OF INTEREST

            A conflict may arise in the event that a similar
     company with which Mr. Goss is affiliated also actively
     seeks a target company.  It is anticipated that target
     companies will be located for the Company and other
     similar companies in chronological order of the date of
     formation of such companies or, in the case of companies
     formed on the same date, alphabetically.  However, other
     companies may differ from the Company in certain items
     such as place of incorporation, number of shares and
     shareholders, working capital, types of authorized
     securities, or other items.  It may be that a target
     company may be more suitable for or may prefer a certain
     company formed after the Company.  In such case, a
     business combination might be negotiated on behalf of the
     more suitable or preferred similar company regardless of
     date of formation.

            Mr. Goss has other ongoing business concerns.  As
     such, demands may be placed on the time of Mr. Goss which
     would detract from the amount of time he is able to devote
     to the Company.  Mr. Goss intends to devote as much time
     to the activities of the Company as required.  However,
     should such a conflict arise, there is no assurance that
     Mr. Goss would not attend to other matters prior to those
     of the Company.

            The terms of a business combination may include
     such terms as Mr. Goss remaining a Director or Officer of
     the Company.  The terms of a business combination may
     provide for a payment by cash or otherwise to Peter Goss
     by a target business for the purchase of all or part of
     his common stock of the Company owed by Mr. Goss.  Mr.
     Goss would directly benefit from such employment or
     payment.  Such benefits may influence Mr. Goss' choice of
     a target business.

            Management may agree to pay finder's fees, as
     appropriate and allowed, to unaffiliated persons who may
     bring a target business to the Company where that
     reference results in a business combination.  The amount
     of any finder's fee will be subject to negotiation, and
     cannot be estimated at this time.  No finder's fee will be
     paid to the management or promoters of the Company, or to
     their associates or affiliates.  No loans of any type have
     been, or will be, made to management or promoters of the
     Company or to any of their associates or affiliates.

            The Company will not enter into a business
     combination, or acquire any assets of any kind for its
     securities, in which management or promoters of the
     Company or any affiliates or associates have any interest,
     direct or indirect.

            There are no binding guidelines or procedures for
     resolving potential conflicts of interest.  Failure by
     management to resolve conflicts of interest in favor of
     the Company could result in liability of management to the
     Company.  However, any attempt by shareholders to enforce
     a liability of management to the Company would most likely
     be prohibitively expensive and time consuming.

     ITEM 10.       EXECUTIVE COMPENSATION

            The Company's Officer and Director does not receive
     any compensation for his services rendered to the Company,
     nor has he received such compensation in the past.  The
     Officer and Director is not accruing any compensation
     pursuant to any agreement with the Company.  However, the
     Officer and Director of the Company anticipates receiving
     benefits as a beneficial shareholder of the Company, and
     as the Officer and Director.

            No retirement, pension, profit sharing, stock
     option or insurance programs or other similar programs
     have been adopted by the Company for the benefit of its
     employees.


     ITEM 11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                    OWNERS AND MANAGEMENT

            The following table sets forth, as of December 31,
     2000, each person known by the Company to be the
     beneficial owner of five percent or more of the Company's
     common stock and the Director and Officer of the Company.
     Except as noted, the holder thereof has sole voting and
     investment power with respect to the shares shown.

     Name and Address       Amount of Beneficial    Percentage
     of Beneficial Owner         Ownership           Of Class

     Peter Goss                   500,000             100%
     963 Valley View Drive
     Meadowbrook PA 19046-1317

     All Executive Officers
     and Directors as a Group
     (1 Person)                   500,000             100%


     ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            On June 29, 2000, the Company issued a total of
     500,000 shares of common stock to the following for a
     total of $500.00 in cash.

                                  Number of         Total
          Name                     Shares        Consideration

      Peter R. Goss                500,000          $500

            The Board of Directors has passed a Resolution
     which contains a policy that the Company will not seek an
     acquisition or merger with any entity in which the
     Company's Officer, Director, shareholders or any affiliate
     or associate serves as an officer or director or holds any
     ownership interest.  Management is not aware of any
     circumstances under which this policy may be changed.

     ITEM 13.       EXHIBITS AND REPORTS ON FORM 8-K

            (a)     Exhibits
             99.3   Certification

            (b)     There were no reports on Form 8-K filed by
     the Company during the quarter ended December 31, 2000.

              [ remainder of page intentionally left blank ]
                           SIGNATURES

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


                                    KAW ACQUISITION CORPORATION


                                    By: /s/ Peter R. Goss
                                        Peter R. Goss
                                        President

     Dated:   March 28, 2003


            Pursuant to the Securities Exchange Act of 1934,
     this report has been signed below by the following persons
     on behalf of the registrant and in the capacities and on
     the dates indicated.

     NAME                    OFFICE                    DATE

     /s/ Peter R. Goss        Director           March 28, 2003
     Peter R. Goss




     EXHIBIT 99.3


                               CERTIFICATION

     I, Peter R. Goss, President, Chief Executive Officer and
     Acting Chief Financial Officer of Kaw Acquisition
     Corporation, certify that:

            1.        I have reviewed this annual report on
     Form 10-KSB of Kaw Acquisition Corporation;

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

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

            4.        I am responsible for establishing and
     maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the
     registrant and I have:

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

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

             c.       presented in this quarterly report my
            conclusions about the effectiveness of the
            disclosure controls and procedures based on my
            evaluation as of the Evaluation Date;

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

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

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

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



                       By: /s/ Peter R. Goss
                           Peter R. Goss
                           President, Chief Executive Officer
                           and Acting Chief Financial Officer

     Dated:   March 28, 2003





                   KAW ACQUISITION CORPORATION
                  INDEX TO FINANCIAL STATEMENTS

                                                      Page

     Independent Auditor's Report                       1

     Balance Sheet - December 31, 2000                  2

     Statement of Operations -
       For the Period from May 3, 2000
       (Date of Inception) to December 31, 2000         3

     Statement of Cash Flows -
       For the Period from May 3, 2000
       (Date of Inception) to December 31, 2000         4

     Statement of Changes in Stockholder's Equity -
       For the Period from May 3, 2000
       (Date of Inception) to December 31, 2000         5

     Notes to Financial Statements                      6

                              James J. Taylor
                        Certified Public Accounting


                       INDEPENDENT AUDITOR'S REPORT


     Board of Directors
     Kaw Acquisition Corporation
     (A Development Stage Company)

     I have examined the accompanying balance sheet of Kaw
     Acquisition Corporation (a development stage company) as
     of December 31, 2000 and the related statements of
     operations and retained deficit, cash flows, and
     stockholder's equity for the period from May 3, 2000 (date
     of inception) to December 31, 2000.  These financial
     statements are the responsibility of the Company's
     management.  My responsibility is to express an opinion on
     these financial statements based on my audit.

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

     In my opinion, the financial statements referred to above
     present fairly in all material respects, the financial
     position of Kaw Acquisition Corporation (a development
     stage company) as of December 31, 2000, and the results of
     its operations and retained deficit, cash flows, and
     stockholder's equity for the period from May 3, 2000 (date
     of inception) to December 31, 2000 in conformity with
     generally accepted accounting principles.


     March 28, 2003


     /s/   James J. Taylor


     555 IH35 South  Suite 312  New Braunfels, Texas 78130
     Telephone (830)624-1000  (830)624-0300
                  e-mail address: james_j_taylor@msn.com

                                    -1-




                   KAW ACQUISITION CORPORATION
                  (A DEVELOPMENT STAGE COMPANY)

                          BALANCE SHEET

                        DECEMBER 31, 2000


                             ASSETS

     Cash                                                $ 474
                                                         ______
            Total Assets                                 $ 474
                                                         ______




              LIABILITIES AND STOCKHOLDER'S EQUITY

     LIABILITIES                                         $ 0


     STOCKHOLDER'S EQUITY:
       Common stock - $0.001 par value, 100 million
       shares authorized,
       500,000 shares issued and outstanding               500
         Retained Earnings                                 (26)
                                                         ______
           Total Stockholder's equity                      474
                                                         ______
           Total Liabilities and Stockholder's Equity    $ 474
                                                         ______




         SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                               -2-


                   KAW ACQUISITION CORPORATION
                  (A DEVELOPMENT STAGE COMPANY)

         STATEMENTS OF OPERATIONS AND RETAINED DEFICITS

     FOR THE PERIOD OF MAY 3, 2000 (DATE OF INCEPTION) TO
                        DECEMBER 31, 2000






     INCOME                                              $ 474

     EXPENSES
       Bank Charges                                         26
                                                          ____
         Total Expenses                                     26
                                                          ____

     NET INCOME (LOSS)                                     (26)

     RETAINED DEFICIT MAY 3, 2000 (date of inception)        0
                                                           ____
     RETAINED DEFICIT DECEMBER 31, 2000                    (26)
                                                           ____






              SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                                    -3-



                   KAW ACQUISITION CORPORATION
                  (A DEVELOPMENT STAGE COMPANY)

                     STATEMENT OF CASH FLOWS

     FOR THE PERIOD OF MAY 3, 2000 (DATE OF INCEPTION) TO
                        DECEMBER 31, 2000



     CASH FLOWS FROM OPERATING ACTIVITIES
     Net income (loss)                                 $ (26)

     Adjustments to reconcile net income to net cash
     flows from operating activities                       0

     Net cash provided by (used in) operating
     activities                                          (26)

     CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from issuance of common stock             500

     Net cash provided by financing activities          500

     NET INCREASE IN CASH AND CASH EQUIVALENTS          474



     CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       0

     CASH AND CASH EQUIVALENTS, END OF PERIOD          $474



         SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                               -4-



                   KAW ACQUISITION CORPORATION
                  (A DEVELOPMENT STAGE COMPANY)

          STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY

     FOR THE PERIOD OF MAY 3, 2000 (DATE OF INCEPTION) TO
                        DECEMBER 31, 2000




                              COMMON                      TOTAL
                              STOCK    COMMON             STOCK-
                              SHARES   STOCK   RETAINED   HOLDER'S
     DATE                     ISSUED   AMOUNT  DEFICITS   EQUITY

     5/3/00
            Original common
            stock issue       500,000  $ 500     $ 0       $500

     12/31/00
            Net loss for the
            period of May 3,
            2000 to December
            31, 2000                             (26)       (26)

     12/31/00
            Totals            500,000  $ 500    $(26)      $474




         SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                               -5-


                   KAW ACQUISITION CORPORATION
                (A DEVELOPMENT STAGE CORPORATION)
                  NOTES TO FINANCIAL STATEMENTS
     FOR THE PERIOD FROM MAY 3, 2000 (DATE OF INCEPTION) TO
                        DECEMBER 31, 2000


     NOTE 1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            ORGANIZATION AND BUSINESS OPERATIONS:
            Kaw Acquisition Corporation was incorporated in
            Nevada on May 3, 2000 to serve as a vehicle to
            effect a merger, exchange of capital stock, asset
            acquisitions or other business combinations with a
            domestic or foreign private business.  At December
            31, 2000, the Company had not yet commenced any
            formal business operations, and all activity to
            date relates to the Company's formation and
            proposed fund raising.  The Company's fiscal year
            ends December 31.

            The Company's ability to commence operations is
            contingent upon its abilities to identify a
            prospective target business and raise capital that
            it will require through the issuance of equity
            securities, dent securities, bank borrowings or a
            combination thereof.

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

            CASH AND CASH EQUIVALENTS:
            For purposes of the statement of cash flows, the
            Company considers all highly liquid investments
            purchased with an original maturity of three months
            or less to be cash equivalents.

            FEDERAL INCOME TAXES:
            The Company accounts for income taxes under the
            Financial Accounting Standards Board of Financial
            Accounting Standards No. 109, "Accounting for
            Income Taxes" ("Statement 109").  Provisions for
            income taxes are calculated on a pretax income
            reported for financial statement purposes.
            Deferred income taxes (liability) or benefit from
            income taxes (asset) are provided through timing
            differences between the reporting of financial
            statement income and taxable income.  If material,
            these differences will be recorded as deferred
            income taxes of benefit from income taxes.  Due to
            the Company's operational inactivity from the date
            of inception through December 31, 2000, no deferred
            taxes or benefit from income taxes has been provided.

     NOTE 2  -  STOCKHOLDER'S EQUITY:

            In the original charter issued by the State of
            Nevada on May 3, 2000, the Company was authorized
            to issue 10,000,000 shares of common stock at a par
            value of $0.001 per share.  Of the number of shares
            authorized, 500,000 shares have been issued to
            Peter R. Goss, pursuant to Rule 506, for the
            aggregate consideration of $500.

     NOTE 3  -  SERVICES AGREEMENT:

            On June 29, 2000, the Company signed an agreement
            with Peter R. Goss, a related entity.  The
            Agreement calls for Peter R. Goss to provide the
            following services, without reimbursement from the
            Company, until the Company enters into a business
            combination as described in Note 1:
            1.      Preparation and filing of required
                    documents with the Securities and Exchange
                    Commission.
            2.      Location and review of potential target
                    companies.
            3.      Payment of all corporate, organizational,
                    and other costs incurred by the Company.

     NOTE 4  - SUBSEQUENT EVENTS:
            On September 30, 2002, at a duly called meeting of
            the Board of Directors, a resolution amending the
            articles of incorporation to provide for Class A
            and Class B common stock and to provide for
            Preferred Shares.  The classes are as follows:
                1.  Class A Common Stock consisting of
                    12,000,000 shares with a par value of
                    $0.001 per share.
                2.  Class B Common Stock consisting of
                    88,000,000 shares with a par value of
                    $0.001 per share.
                3.  Preferred Stock consisting of 20,000,000
                    shares with a par value of $0.001 per share.