UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended February 28, 2001


                             C and E Holdings, Inc.
                       (Name of Small Business Registrant)

        Nevada                       0-31163                   86-0984818
(State of Incorporation)      Commission File Number         (I.R.S. Employer
                                                          Identification Number)


                  2816 East Windrose Dr, Phoenix,Arizona 85032
           (Address of Principal Executive Offices Including Zip Code)


                                 (602) 493 0369
                         (Registrants Telephone Number)


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

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

                          Common Stock $.0001 par value
                                (Title of Class)

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

The registrant's revenues for its most recent fiscal year were $0

Number of  shares  outstanding  of each of the  registrant's  classes  of common
equity, (par value $.0001) as of May 27, 2001 is 2,000,000.

The following  documents  are herein  incorporated  by reference:  (1) Form 10SB
filed on July 26, 2000 and is  incorporated in Part III 13(a) and a 10-QSB filed
on October 16, 2000.

         Transitional Small Business Disclosure Format: [ ] Yes [X] No
<PAGE>
                            C AND E HOLDINGS, INC.

                                     INDEX


                                     PART I
                                                                            PAGE
                                                                            ----
ITEM 1.  DESCRIPTION OF BUSINESS                                              1
           BUSINESS DEVELOPMENT
           BUSINESS
           PATENTS

ITEM 2.  DESCRIPTION OF PROPERTY                                              3
ITEM 3.  LEGAL PROCEEDINGS                                                    3
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  3

                                    PART II

ITEM 5.  MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS                                                              4
ITEM 6.  MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION                        5
ITEM 7.  FINANCIAL STATEMENTS                                                 7
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL MATTERS                                                7

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                    7
ITEM 10. EXECUTIVE COMPENSATION                                               8
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT       8
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                       8
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                     8

                                       1
<PAGE>
                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

     C and E Holdings, Inc. was incorporated in The State of Nevada onMarch 7,
2000. Its purpose is to engage in any lawful corporate activity, which includes
mergers and acquisitions. The registrant is in a development stage and has no
operations to date other than issuing of shares to the original shareholders. It
was formed to provide a method for a private domestic or foreign registrant to
become a public reporting registrant thereby causing their shares to be
qualified to trade in the domestic secondary markets.

     There have been no bankruptcy, receivership or similar proceeding in the
Registrant's history.

     There are certain benefits to being a reporting registrant with a publicly
traded class of stock. They are perceived as follows:

     *    increased ability to raise capital
     *    enhanced visibility in the financial community particularly helpful to
          raise debt if needed
     *    presence in the capital markets of the United States
     *    ability to use registered securities to acquire other companies and or
          their assets
     *    improved competitive position
     *    increased corporate prestige
     *    key employees compensation through stock options
     *    shareholder liquidity and corporate valuation

     An entity may be interested in merging with the registrant if it is
interested in using public securities to make acquisitions of other companies or
one that is interested in becoming public without substantial dilution of its
stock. Other targeted companies may be those which have not been able to locate
an underwriter with acceptable terms; one that feels it can raise capital on
more favorable terms as a public entity or a foreign registrant seeking entry
into the United States stock markets.

     The Registrant's business has numerous associated risks such as;
competition, no operating history, lack of any agreements with possible targeted
companies, management control, lack of market research, stock dilution,
taxation, target registrant's need for audited financial and possible computer
problems.

     The business of seeking mergers with other companies or acquiring other
companies is highly competitive. There are many large corporations and venture
capital firms that seek other entities with which to merge or acquire. These
corporations and venture capital firms are better financed than the registrant
and have more expertise in the field of mergers and acquisitions. The registrant
will not be a significant competitor in this field.

                                       1
<PAGE>
BUSINESS

     The registrant is without operating history. It has no revenue and limited
assets. The Registrant will in all likelihood operate at a loss and will be
unable to reverse that situation until a merger or acquisition occurs. There is
no targeted registrant nor any assurance the registrant will be able to close a
business transaction needed to reverse its anticipated losses.

     The registrant has no current agreement with respect to a merger or
acquisition with a targeted registrant. There is no assurance that the
Registrant will be successful in its plan to merge or acquire another entity.
There has been no industry identification by management nor has there been a
business model established consisting of the required operating history, assets
and revenues of a target registrant. Therefore, the registrant may enter into an
agreement which may result in a business combination with an entity without
significant operating history, revenues or assets precluding the potential for
current earnings or increased net worth.

     The management of the registrant consists of its only officers and
shareholders. They will devote a portion of their time to the business of the
Registrant attempting to locate and close with a potential targeted registrant.
There is neither compensation paid nor an agreement to enter into such a
contract in the future. The loss of these individuals could adversely affect the
Registrant's development and its continued operations.

     The Registrant has performed limited research in an attempt to determine
whether demand exists for these types of transactions. Even if further research
determines that the demand does in fact exist, there is no assurance that the
registrant will be able to conclude a transaction.

     The successful conclusion of an acquisition or merger by the registrant
will probably result in the issuance of securities to the shareholders of the
targeted registrant. This transaction will cause, in all probability, the
shareholders of the targeted registrant gaining control of the registrant and a
change in the existing management.

     It is the intention of the registrant to structure a transaction with a
targeted registrant to minimize the state and federal tax consequences as they
apply to both parties. There can be no assurance that all the statutory
requirements can be met in the proposed reorganization or that the parties will
receive tax benefits desired in a transfer of stock or assets.

     The registrant will seek those companies, which have audited financial
statements or assure the registrant that said statements will be furnished
within sixty days of closing. If audited financial statements are not available
at closing, the registrant will require representations that the statements,
when audited, will not materially differ from the unaudited statements
presented. There are no assurances that a viable candidate for merger will agree
with the registrant's request, which would result in the failure of the
transaction to close.

     The registrant will require that the targeted registrant be computer
compliant for the year 2000. If the target is not compliant it will be necessary
to disclose what steps it intends to take in order to eliminate any business
disruption created by noncompliance

                                       2
<PAGE>
     The registrant does not believe it could be subject to regulation under the
Investment Company Act, because it will not be engaged in the business of
investing or trading securities. However, if the registrant engages in
operations which result in it holding passive investments in more than one other
company, in could be subject to the regulations found in the Investment Company
Act of 1940 and it would have to register under said act which could result in
significant registration and compliance costs.

     The registrant has no full time employees. The president of the registrant
will devote a portion of his time to the activities of the registrant without
compensation.

     The registrant will send an annual report to its security holders, which
shall contain audited financial statements. The registrant is electronically
filing this Form 10-KSB with the Securities Exchange Commission, to comply with
the reporting requirements as promulgated by the commission. As such, the
Registrant will advise the shareholders that the SEC maintains an Internet site
that contains reports, proxy and information statements, and other information
regarding registrants that file electronically with the SEC at
http://www.sec.gov.

PATENTS

     The Registrant does not own, nor has it applied for any Patents.

ITEM 2. DESCRIPTION OF PROPERTY

     The registrant is housed in the offices of one of its its principal
shareholder, at 2816 East Windrose Drive, Phoenix, Arizona 85032. Rent is not
being charged to the registrant. The registrant owns no real property and has no
plans to acquire real property.

     At this time, the registrant has no policy in terms of investment in real
estate nor does it have any investment in real estate. The registrant has no
immediate plans to invest in real estate mortgages.

ITEM 3. LEGAL PROCEEDINGS

     The registrant is not a party to any litigation and to its knowledge, no
action, suit or proceedings against it has been threatened by any person or
entity.

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

     On October 9, 2000, the security holders unanimously voted to amendment
Article IV of the registrant's Articles of Incorporation increasing the number
of authorized common capital stock to 100,000,000 and shares of preferred stock
to 10,000,000.

                                       3
<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     (a) There is no public trading market for the common equity and there has
been no trading to date. Furthermore, there is no assurance that a public
trading market will ever be established.

     The registrant's securities meet the definition of "penny stock" as found
in Rule 3a51-1 of the Securities Exchange Act of 1934. The Securities and
Exchange Commission has adopted Rule 15g-9 which established sales practice
requirements for certain low price securities ("penny stock"). Unless the
transaction is exempt, it shall be unlawful for a broker or dealer to sell a
penny stock to, or to effect the purchase of a penny stock by, any person unless
prior to the transaction: (i) The broker or dealer has approved the person's
account for transactions in penny stocks pursuant to this rule and (ii) the
broker or dealer has received from the person a written agreement to the
transaction setting forth the identity and quantity of the penny stock to be
purchased. In order to approve a person's account for transactions in penny
stock the broker or dealer must: (a) obtain from the person information
concerning the person's financial situation, investment experience, and
investment objectives; (b) reasonably determine that transactions in penny
stocks are suitable for that person, and that the person has sufficient
knowledge and experience in financial matters that the person reasonably may be
expected to be capable of evaluating the risks of transactions in penny stocks;
(c) deliver to the person a written statement setting forth the basis on which
the broker or dealer made the determination (i) stating in a highlighted format
that it is unlawful for the broker or dealer to affect a transaction in penny
stock unless the broker or dealer has received, prior to the transaction, a
written agreement to the transaction from the person; and (ii) stating in a
highlighted format immediately preceding the customer signature line that (iii)
the broker or dealer is required to provide the person with the written
statement; and (iv) the person should not sign and return the written statement
to the broker or dealer if it does not accurately reflect the person's financial
situation, investment experience, and investment objectives; and (d) receive
from the person a manually signed and dated copy of the written statement. It is
also required that disclosure be made as to the risks of investing in penny
stocks and the commissions payable to the broker-dealer, as well as current
price quotations and the remedies and rights available in cases of fraud in
penny stock transactions. Statements, on a monthly basis must be sent to the
investor listing recent prices for the penny stock and information on the
limited market.

     It is the registrant's intention to merge or acquire a registrant, which
would qualify it to be listed on the NASDAQ SmallCap Market. The initial listing
requirements are as follows: (1) net tangible assets of $4,000,000 or market
capitalization of $50,000,000 or net income in latest fiscal year or two of the
last three fiscal years of $750,000, (2) public float 1,000,000 shares with a
market value of $5,000,000, (3) minimum bid price of $4.00, (4) three market
makers, (5) 300 round lot (100 or more shares) shareholders, (6) an operating
history of one year or $50,000,000 market cap, and (7) corporate governance
standards must be in place. Subsequent to qualifying for listing the registrant,
in order to remain on the SmallCap Market, the registrant must maintain the
following; (1) net tangible assets of $2,000,000 or market capitalization of
$35,000,000 or net income in latest fiscal year or two of the last three fiscal
years of $500,000, (2) public float 500,000 shares with a market value of
$1,000,000, (3) minimum bid price of $1.00, (4) two market makers, (5) 300 round
lot (100 or more shares) shareholders, and (6) corporate governance standards
must be in place.

                                       4
<PAGE>
     The registrant may not qualify for the SmallCap market after a merger or
acquisition. In that case it's securities may be traded on the Over The Counter
Bulletin Board (OTCBB). This exchange differs from NASDAQ in that the
qualifications do not include minimum assets, revenues, number of shareholders,
market capitalization, number of shares in the public float and corporate
governance standards. To qualify for OTCBB the registrant must have a market
maker willing to list the securities on a bid and ask quotation and sponsor the
registrant for listing. All companies, including banks and insurance companies,
traded on the OTCBB must be fully reporting as of June 2000. The registrant may
also offer its securities on the National Quotation Bureau, Inc., commonly known
as the "pink sheets".

     It is the registrant's objective to become qualified for NASDAQ SmallCap
however; there is no assurance it will reach or maintain that objective. The
registrant may, after a merger or acquisition, commence trading on the OTC BB.

     HOLDERS. There are two (2) holders of the common equity of the registrant
at its year-end.

     DIVIDENDS. There have been no cash dividends declared to date and there are
no plans to do so. There are no restrictions that limit the ability to pay
dividends on common equity other than the dependency on the registrant's
revenues, earnings and financial condition.

ITEM 6. MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION

     During the next twelve months the registrant intended to locate, analyze,
acquire or merge with a targeted registrant. At this time, the registrant has
been involved in preliminary negotiations with a registrant regarding the
possibility of an acquisition or merger. The registrant will continue to solicit
targeted companies through the utilization of contacts in business and
professional communities. The registrant intends to solicit directly or may
engage consultants or advisors to assist it in reaching its objective. Payment
will be made to these consultants and advisors if a successful acquisition or
merger occurs because of their efforts. The payment may consist of cash or some
stock in the surviving entity or a combination of both.

     The satisfaction of the registrant's cash requirements for the next twelve
months will be met in that the registrant's principal shareholders, have agreed
to advance to the Registrant the additional funds needed for operations and
those amounts designated for costs associated with a search for and completion
of an acquisition. The principal shareholders have no expectation of
reimbursement of advanced costs unless the new owners of the Registrant decide
to pay all or a portion thereof. A limit as to the minimum or maximum amounts
advanced by the principal shareholders has not been set. The registrant will not
borrow funds to pay management, agents, consultants, advisors or promoters. The
Registrant will not merge with, acquire or purchase assets of an entity in which
the Registrant's officers, directors or shareholders or any affiliate or agent
hold an equity position or is an officer or director.

     The Registrant's business plan is to locate certain companies that may wish
to merge with the registrant in some fashion. This targeted registrant would
desire the perceived advantages of a merger with a public, reporting registrant.
The perceived advantages may enhance the registrant's ability to attract
investment, utilize securities for acquisition, provide liquidity and numerous
other benefits. No particular industry has been identified nor is this search
confined to a specific geographical area. It is not anticipated by management
that the Registrant will be able to participate in any more than one merger
because of its limited assets and resources.

     The registrant may merge or acquire a registrant in early stage development
needing additional capital to launch new products, increase marketing or improve
quality. The utilization of the public market may be beneficial in raising the
required capital.

                                       5
<PAGE>
     The registrant does not have nor will it acquire capital to supply targeted
companies. It is the position of management that it can present to the candidate
the opportunity to acquire controlling interest in a public registrant without
the substantial costs, both in time and money, of an initial public offering.
Management has performed only limited research in this area.

     The officers and directors of the registrant will undertake the
responsibility of finding and analyzing new business opportunities. They will
perform this task individually and possibly with the help of other consultants
and agents. The agents or consultants will not receive a cash fee from the
registrant said fee will have to be assumed by the target registrant. The
officer is experienced in the analysis of companies and will be able to
determine the existence of the primary requirements of a good business structure
consisting of financial, management, products, distribution, need for further
research and development, growth potential and other material requirements. The
registrant will have total discretion in determining the type of registrant best
suited for a business combination.

     The registrant will be subject to all the reporting requirements of the
Securities Exchange Act. Said Act requires, among other things, that a reporting
registrant file its audited financial statements. The registrant will not merge
or acquire a registrant that does not have or will not have audited financials
within a reasonable period of time, to meet the requirements of the Exchange
Act. If the merger candidate is unable to produce audited financial statements
within sixty days from the filing of the 8 K announcing the consummation of the
merger or said financial statements fail to comply with the Exchange Act, the
closing documents will provide for the dissolution of the transaction.

     A target registrant may want to establish a public trading market for its
securities. It may desire to avoid what it perceives to be an adverse
consequence of undertaking its own public offering. It is possible to meet this
objective by entering into a transaction with the registrant. The adverse
consequences may be perceived to be, loss of control, substantial expense and
loss of time attempting to conclude an underwriting or the inability to retain
an underwriter with acceptable terms

     A business candidate may have pre-existing agreements with outside
advisors, attorneys and accountants and the continuation of those agreements may
be required before the candidate will agree to close a transaction with the
registrant. These existing agreements may be a factor in the determination by
the registrant to go forward.

     The conclusion of a business transaction will most likely result in the
present shareholders no longer being in control of the registrant. Management of
the registrant probably will not have the expertise in the business of the new
entity, which will result in the resignation of the present management.

     The acquisition or merger usually results in the issuance of restricted
securities as consideration. If the negotiations resulted in the requirement for
registered securities to be issued, the surviving registrant would have to bear
the burden of registering the shares. There can be no assurance that that these
newly registered shares would be sold into the market depressing the market
value.

     A merger with another registrant will significantly dilute the percentage
of ownership the present shareholders now enjoy. The amount of dilution will
depend on the number of shares issued which in term could depend on the assets
and liabilities of the merging registrant. This is not to say that other factors
may not enter into this determination.

                                       6
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

     The Financial Statement of the registrant are filed as a part of this
Annual Report. See index to the financial statements on Page F-1.

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

     There have been no changes of Accountants or disagreements with the
registrants Accountants on accounting and financial matters.

                                    PART III

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

     The issuer has two officers and director.

          Name                Age         Positions and Offices Held
          ----                ---         --------------------------
     Carl P. Ranno            61          President and Director
     Edward A. Barth          43          Secretary and Director

     There are no agreements that a Director will resign at the request of
another person and the above named Directors are not acting on behalf of nor
will act on behalf of another person.

     The following is a brief summary of the Directors and Officers including
their business experiences for the past five years.

     Carl P. Ranno received a degree in Economics from Xavier University in
Cincinnati, OH and his Juris Doctor from the University of Detroit School of
Law. Mr. Ranno spent many years in the practice of law, which included the
fields of litigation as well as mergers and acquisitions. He maintains his
license to practice law in the State of Michigan and is admitted to practice in
the state federal courts located in Michigan, the Sixth Circuit Court of
Appeals, the US Tax Court and the US Supreme Court. Mr. Ranno advises companies
as to legal issues and as well as strategic planning and mergers and
acquisitions.

     From 1992 to 1996 he was the president of Pollution Controls International
Corp. which marketed and manufactured a patented after market automotive
environmental product. The operating subsidiary was voluntarily placed in
Bankruptcy in 1996. Ultimately, the parent merged with another company and Mr.
Ranno has no further contact with it.

     Mr. Barth received a Bachelor of Science degree in civil engineering
technology from Youngstown State University. He has been employed by the City of
North Canton, Ohio as well as the Michael Baker Engineering Corporation. In 1990
he returned to his family's construction business where he currently serves as
President of Barth Construction Co., Inc. Mr. Barth is a member of the National
Institute of Engineering Technologies and American Society of Certified
Engineering Technicians.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     The Officers, Directors and those beneficially owning more than 10% of
small business registrant's class of equity securities registered under Section
12 of the Exchange Act, shall file reports of ownership and any change in
ownership with the Securities and Exchange Commission. Copies of these reports
are to be filed with the registrant.

     Based upon a review of these reports the registrant has concluded that
Forms 13-D has been prepared.

                                       7
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION

     The registrant's officers and directors do not and have not receive
compensation for services rendered to the registrant nor has any compensation
been accrued. They will not participate in any finders' fees however; They will
receive some benefits as a beneficial owner of the registrant upon a merger or
acquisition taking place. Furthermore, there are no stock option plans, pension
plans, insurance coverage or other benefit programs adopted by the registrant.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth each person known by the Company to be the
beneficial owner of more than 5% of the Common Shares (the only class of voting
securities) of the Company all directors individually and all directors and
officers of the Company as a group. Each person has sole voting and investment
power with respect to the shares as indicated.

        Name and Address               Amount of Beneficial           Percentage
      of Beneficial Owner                   Ownership                  of Class
      -------------------                   ---------                  --------
     Carl P. Ranno                          1,000,000                   50.0%
     2816 East Windrose Dr
     Phoenix, AZ 85032

     Edward A. Barth                        1,000,000                   50.0%
     5046 East Blvd. N. W.
     Canton, OH 44718

     All Executive Officers and             2,000,000                    100%
     Directors as a Group (2 persons)

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     There are no parents of this small business registrant.

     There are and have been no transactions with promoters.

     There were no material underwriting discounts and commissions upon the sale
of securities by the registrant where any of the specified persons was or is to
be a principal underwriter or is a controlling person or member of a firm that
was or is to be a principal underwriter.

     There were no transactions involving the purchase or sale of assets other
than in the ordinary course of business.

ITEMS 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          3.1       Articles of Incorporation with Amendments filed with the
                    Form 10SB on July 26, 2000 and incorporated by reference

          3.2       By Laws filed with the Form 10SB on July 26, 2000 and
                    incorporated by reference

          3.3       Computation per share earnings filed with Form 10SB on
                    July 26, 2000 and incorporated by reference and in current
                    financial statements.

     (b)  Reports on Form 8-K

          Not Applicable

                                       8
<PAGE>
                                 SIGNATURE PAGE

     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.

                                     C AND E HOLDINGS, INC..


May 31, 2001                         By: /s/ Carl P. Ranno
                                         ---------------------------------------
                                         Carl P. Ranno, President and Director



                                     By: /s/ Edward A. Barth
                                         ---------------------------------------
                                         Edward A. Barth, Secretary and Director

                                       9
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

To the Stockholders
C and E Holdings, Inc.
Phoenix, Arizona

     We have audited the accompanying balance sheet of C and E Holdings, Inc. as
of February 28, 2001 and the related statements of income (loss),  stockholders'
equity,  and cash flows for the period  beginning March 7, 2000  (inception) and
ended February 28, 2001. These financial  statements are the  responsibility  of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.

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

     In our opinion,  the financial statements referred to above present fairly,
in all material respects, the financial position of C and E Holdings, Inc. as of
February 28, 2001 and the results of its  operations  and its cash flows for the
period  beginning  March 7, 2000  (inception)  and ended  February  28,  2001 in
conformity with generally accepted accounting principles in the United States of
America.

                                     /s/ Hobe & Lucas

Independence, Ohio
April 24, 2001

                                      F-1
<PAGE>
                             C AND E HOLDINGS, INC.
                                  BALANCE SHEET
                                FEBRUARY 28, 2001


                                     ASSETS

CURRENT ASSET

     Cash                                                               $   286
                                                                        -------
 .
         Total Assets                                                   $   286
                                                                        =======

                              STOCKHOLDERS' EQUITY

Preferred stock - 10,000,000 shares authorized,
  zero shares issued and outstanding, $.001 par value                   $    --

Common stock - 25,000,000 shares authorized
  2,000,000 shares issued and outstanding, $.001 par value                2,000

Additional paid-in capital                                                4,254

Retained (deficit)                                                       (5,968)
                                                                        -------

     Total Stockholders' Equity                                         $   286
                                                                        =======

                See accompanying notes to financial statements.

                                      F-2
<PAGE>
                             C AND E HOLDINGS, INC.
                           STATEMENT OF INCOME (LOSS)
          FOR THE PERIOD BEGINNING MARCH 7, 2000 (INCEPTION) AND ENDED
                                FEBRUARY 28, 2001


GENERAL AND ADMINISTRATIVE EXPENSES
  Bank service charges                                                  $   107
  Licenses and fees                                                         293
  Organization and legal costs                                            5,254
  Office expense                                                            314
                                                                        -------
                                                                          5,968
                                                                        -------

(Loss) before provision for income taxes                                 (5,968)

Provision for income taxes                                                  -0-
                                                                        -------

Net (Loss)                                                              $(5,968)
                                                                        =======

Net (Loss) per common share - Basic                                     $ (.003)
                                                                        =======

                See accompanying notes to financial statements.

                                      F-3
<PAGE>
                             C AND E HOLDINGS, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY
               FOR THE PERIOD BEGINNING MARCH 7, 2000 (INCEPTION)
                           AND ENDED FEBRUARY 28, 2001

<TABLE>
<CAPTION>
                                  Common Stock
                             -----------------------   Additional                    Total
                               Issued                   Paid-in     Accumulated   Stockholders'
                               Shares      Par Value    Capital       Deficit        Equity
                             ---------     ------        ------       -------        -------
<S>                          <C>             <C>         <C>          <C>            <C>
Issuance of Common Stock     2,000,000     $2,000       $4,254       $     0         $ 6,254

Net (Loss)                          00         00           00        (5,968)         (5,968)
                             ---------     ------       ------       -------         -------

Balance, February 28, 2001   2,000,000     $2,000       $4,254       $(5,968)        $   286
                             =========     ======       ======       =======         =======
</TABLE>

                 See accompanying notes to financial statements.

                                      F-4
<PAGE>
                             C AND E HOLDINGS, INC.
                             STATEMENT OF CASH FLOWS
          FOR THE PERIOD BEGINNING MARCH 7, 2000 (INCEPTION) AND ENDED
                                FEBRUARY 28, 2001


Net Income (loss)                                                       $(5,968)
Non-cash operating expenses                                               3,127
                                                                        -------

        Net Cash Used in Operating Activities                            (2,841)
                                                                        -------
Cash Flows from Financing Activities:
  Proceeds from issuance of common stock                                  3,127
                                                                        -------

                                                                          3,127
                                                                        -------

Net Increase in Cash                                                        286

Cash - March 7, 2000                                                          0
                                                                        -------

Cash - February 28, 2001                                                $   286
                                                                        =======
Supplemental Disclosure of Cash Flows Information:
  Interest paid                                                         $     0
                                                                        =======
  Taxes paid                                                            $     0
                                                                        =======


Supplemental disclosure of Noncash Investing and Financing Activities:
March 7, 2000

1,000,000 shares of common stock were issued in exchange for legal services
amounting to $3,127.

                See accompanying notes to financial statements.

                                      F-5
<PAGE>
                             C AND E HOLDINGS, INC.
                         NOTES TO FINANCIAL STATEMENTS
                               FEBRUARY 28, 2001


NOTE 1 - ORGANIZATION AND OPERATIONS

     C and E Holdings, Inc. ("Company") was incorporated under the laws of the
State of Nevada on March 7, 2000. The company's primary business purpose is to
develop a publicly held holding company with the intention of acquiring
operating subsidiaries.

NOTE 2 - ESTIMATES

     The preparation of 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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.

NOTE 3 - FAIR VALUE OF FINANCIAL STATEMENTS

     The carrying amount of cash approximates the fair value reported in the
balance sheet.

NOTE 4 - INCOME TAXES

     Income taxes on continuing operations include the following:

     Currently payable                                                  $   --
     Deferred                                                               --
                                                                        ------

         Total                                                          $   --
                                                                        ======

     A reconciliation of the effective tax rate with the statutory U.S. income
tax rate is as follows:

                                                               % of      Pretax
                                                              Income     Amount
                                                              ------     ------
     Income taxes per statement of income                     $   -0-        0%
     Tax rate differences resulting from:
       Surtax exemption                                        (1,134)     (19)%
       Income (loss) for financial reporting purpose
        without tax expense or benefit (unavailable
        for carryback against prior income taxes paid)           (895)     (15)%
                                                              -------      ----

     Income taxes at a statutory rate                         $(2,029)     (34)%
                                                              =======      ====

                                      F-6
<PAGE>
                             C AND E HOLDINGS, INC.
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                               FEBRUARY 28, 2001


NOTE 4 - INCOME TAXES (CONTINUED)

     The Company's deferred tax assets and liabilities at February 28, 2001:

     Deferred tax asset                                                   $ 630
     Valuation allowance                                                   (630)
     Deferred tax liability                                                  --
                                                                          -----
                                                                          $  --
                                                                          =====

     Deferred taxes are provided for temporary differences in deducting expenses
for financial statement and tax purposes. The principal source for deferred tax
assets is the difference in methods for recovering organization costs.

NOTE 5 - LOSS PER COMMON SHARE

     Income per common share is based on the weighted average number of shares
outstanding which was 2,000,000 for the period beginning March 7, 2000
(Inception) and ended February 28, 2001.

NOTE 6 - RELATED PARTY TRANSACTIONS

     A stockholder owning 50% of the outstanding shares of the Company provided
legal services amounting to $3,127 in connection with the organization of the
Company in exchange for his shares.

                                      F-7