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

                                   FORM 10-KSB

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

For  the  Fiscal  Year  ended  December  31,  2002

[   ]     TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE
ACT  OF  1934  For  the  transition  period  from  _____  to  _____

                             Commission File Number:
                                    333-75434

                              ONLINE HOLDINGS, INC.
           (Name of small business issuer as specified in its charter)

                 NEVADA                                84-1598154
    (State or other jurisdiction of     (I.R.S. Employer Identification Number)
     incorporation or organization)

                    5957 SOUTH BIRCH WAY LITTLETON, CO  80121
                    (Address of principal executive offices)

                                  303-257-1619
                           (Issuer's telephone number)

         SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:

                                      NONE

         SECURITIES REGISTERED UNDER SECTION 12(G) OF THE EXCHANGE ACT:

                          COMMON STOCK, $0.01 PAR VALUE

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

The  issuer's  revenue  for  its  most  recent  fiscal  year  was:  $6,800.

On  December  31,  2002 the aggregate market value of the voting stock of Online
Holdings,  Inc.  held  by non-affiliates was $-0-.  There is currently no public
market for the registrant's common stock.  Therefore, the aggregate market value
of  the  stock  is deemed to be $-0-.  At December 31, 2002 there were 6,850,000
shares  of  common  stock  of  the  registrant  outstanding,  par  value  $.001.

Documents  Incorporated  by  Reference:  None.

Transitional  Small  Business  Disclosure  Format:  Yes  [   ]  No  [  X  ]


<PAGE>

<TABLE>
<CAPTION>

                                             FORM  10-KSB
                                       ONLINE  HOLDINGS,  INC.
                                                INDEX

                                                                                             Page
<S>       <C>                                                                                 <C>
PART I .  Item 1.  Description of Business                                                      3

          Item 2.  Description of Property                                                      5

          Item 3.  Legal Proceedings                                                            5

          Item 4.  Submission of Matters to a Vote of Security Holders                          5

PART II.  Item 5.  Market for Common Equity and Related Stockholder Matters                     5

          Item 6.  Management's Discussion and Analysis or Plan of Operation                    6

          Item 7.  Financial Statements                                                         7

          Item 8.  Changes In and Disagreements with Accountants on Accounting and
          Financial Disclosure                                                                  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                              9

          Item 13.  Exhibits and Reports on Form 8-K                                            9

          Item 14.  Controls and Procedures                                                     9

          Signatures                                                                           10

          Certification                                                                        11

</TABLE>

(Inapplicable  items  have  been  omitted)


                                        2
<PAGE>

                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS

FORWARD-LOOKING  STATEMENT  NOTICE

When  used  in  this  report,  the  words "may," "will," "expect," "anticipate,"
"continue,"  "estimate,"  "project,"  "intend,"  and  similar  expressions  are
intended  to  identify  forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of  1934  regarding events, conditions, and financial trends that may affect the
Company's  future plans of operations, business strategy, operating results, and
financial  position.  Persons  reviewing  this  report  are  cautioned  that any
forward-looking  statements  are  not  guarantees  of future performance and are
subject to risks and uncertainties and that actual results may differ materially
from those included within the forward-looking statements as a result of various
factors.

OUR  HISTORY

Online  Holdings formed as a Nevada corporation on July 27, 2001.  We are in the
business  of  developing  and  marketing  easily maintained website systems.  In
addition  we  provide  managed  website  hosting, search engine placement, email
marketing  and  graphic  design.

We  operate  through  E-Site  Technologies,  Inc.,  our wholly owned subsidiary.
E-Site  was  founded  in  Colorado  on  January 26, 2000.  On August 2, 2001, we
exchanged  4,000,000  shares  of Online common stock for 10,000 shares of E-Site
Technologies.  This  represented  all  of  the  issued and outstanding shares of
E-Site.  As  a  result,  E-Site  became  a  wholly  owned  subsidiary  of Online
Holdings.

In  April  of  2002,  we  submitted a registration statement on Form SB-2 to the
Securities  and  Exchange Commission for the sale of a minimum of 480,000 shares
of  Common  Stock  and a maximum of 960,000 shares of Common Stock at a price of
$0.125  per share.  The registration became effective on May 14, 2002 and closed
on  July  13,  2002.  As  a  result  of  the  offering  650,000 shares were sold
generating  $81,250.

OUR  BUSINESS

Our  principal service is providing corporate communication website systems.  In
particular,  we  design  and  develop  corporate  websites that the end user can
easily  modify  without  needing  technical experience.  Our website systems are
designed  to  allow  our  clients  to  streamline  and  enhance  corporate
communications.

One  target  market we are focused on is publicly traded micro-cap companies and
private  companies  preparing to go public.  Our initial promotion will be aimed
at companies known to management or referred to us by our professional contacts.
We  anticipate  future  revenues  will be sufficient to enable us to broaden our
marketing  base  and reach a larger percentage of our target market.  Because of
the  special  market  characteristics, especially communication to the financial
community,  our  sales  strategy includes providing the features that investors,
analysts, advisors and other members of the financial community like to see in a
public  company's  Internet  strategy.  These  features  include:

     *    The  ability  to  list  historical  press releases and quickly add new
          press  releases  to  the  press  release  list;


                                        3
<PAGE>

     *    the  e-mail broadcaster allows press releases and other information to
          be  e-mailed  to shareholders, members of the financial community, and
          others  who  have  requested  to  be  informed  on the company through
          e-mail;

     *    the  ability  to  hyperlink  to  stock quotes, stock charts, and other
          financial  information;

     *    the  ability to have corporate profiles, business summaries, and other
          content  focused  on the financial community in the website and easily
          keep  this  information  current;  and

     *    the  ability  to have and easily update a calendar of financial events
          that  a  company  will  be  attending.

Our  strategy  is  based  on the fact that we provide user friendly and powerful
Internet solutions that pay for themselves through decreased ongoing maintenance
costs  and  enhanced  corporate image.  Additionally, we intend to capitalize on
our  customer  service  and  support.

We  design  and develop websites with a back end administration interface.  This
provides the capability to easily add, delete or edit main navigation, secondary
navigation  as  well  as  virtually  any  page  in  the  website.

We  include  a  contact  management  database  feature  that allows for storing,
editing,  note  taking  and  retrieval  of  important contact data.  The data is
entered  into  the database from forms that are included in the website and from
the  back  end  administration  interface.  The  database  can be accessed via a
password  protected  login  screen  from  anywhere  there  is  Internet  access.
Different  levels  of  security  are  controlled through specifying the level of
access  a  user  is granted when they are initially authorized to use the system
through  the  issuance  of a username and password.  Clients have the ability to
access  the  data in the database or add information to the database from remote
locations.

The  e-mail  broadcaster  allows information to be e-mailed to any or all of the
contacts  in  the contact management database that have valid e-mail data.  This
feature is useful for keeping employees, customers, suppliers, shareholders, the
investment  community  and  other interested parties informed on the company via
e-mail.  Clients  can  reduce  expense and increase communication speed by using
e-mail  versus  traditional  mail.

We also have the ability to add E-commerce functionality to our website systems.
The  E-commerce  functionality  has  been  built  to  easily  integrate into the
existing  technology  that  we use to build websites.  This functionality allows
clients  to  sell  products  over  the  Internet  through  a simple and powerful
Internet solution.  Clients can easily add or change product images, pricing and
descriptions  without  having  technical  expertise.

We  believe  that  the  E-commerce  needs  of  clients  vary substantially.  Our
E-commerce  functionality has been structured so that changes can be easily made
in  order  to  accommodate  the  needs  of  our  clients.

In  addition  to  website  development,  we  offer:

     SEARCH  ENGINE  PLACEMENT.  We  implement  various  strategies  for getting
websites  listed  in  search  engines  and  increasing  search  engine rankings.

     E-MAIL  MARKETING.  We  design  e-mail  marketing campaigns.  We design the
look  and  feel of the message that is then e-mailed through various bulk e-mail
providers.


                                        4
<PAGE>

     GRAPHIC  DESIGN.  We  provide  graphic  design  for online and print media.

     MANAGED  WEBSITE  HOSTING.  We host client websites using state-of-the-art,
hosting infrastructure through an agreement with CyGen Technologies, Inc.  Under
the  current  agreement,  CyGen  is  responsible  for  maintaining  all  hosting
facilities  and  we pay $200 per month for each website system that CyGen hosts.
This  means that as new websites are hosted for us by CyGen, we will have to pay
CyGen  $200  per  month  for  each  additional  website  that  it  hosts.

We  plan  to  continually develop new services and enhance our existing services
based  on  client  needs  and  demand.

EMPLOYEES

Our  sole  officer  and director, Mr. Dennis Lairamore is our only employee.  He
currently  devotes  approximately  10 hours per week to conducting our business.
We  do not anticipate hiring additional employees until our operations expand to
a  degree  that  necessitates hiring auxiliary staff.  From August  2001 through
June 2002 we paid Mr. Lairamore a salary of $2,000 per month.  Mr. Lairamore has
not  received  any  salary  or  other  remuneration  since  June  of  2002.

ITEM  2.  DESCRIPTION  OF  PROPERTY

Our  president  provides  office  space  at  no  charge.  Our current operations
require minimal facilities and we believe our use of the office is of negligible
value.  We  anticipate  that this arrangement will continue until our operations
demand  additional  space.

ITEM  3.  LEGAL  PROCEEDINGS

Management  is  not  aware  of  any  other  current or pending legal proceedings
involving  Online  Holdings  or  our  officers  and  directors.

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

No  matters  were  submitted  to  a  vote  of security holders during the period
covered  by  this  report.


                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

There  is  currently  no  public  market  for  our  common  stock.

As  of  December  31,  2002,  there were approximately 48 shareholders of record
holding  6,850,000  shares  of  common  stock.  The  holders of common stock are
entitled to one vote for each share held of record on all matters submitted to a
vote  of stockholders. Holders of the common stock have no preemptive rights and
no  right  to convert their common stock into any other securities. There are no
redemption  or  sinking  fund  provisions  applicable  to  the  common  stock.

We  have  not  paid,  nor declared, any dividends since its inception and do not
intend  to  declare  any dividends in the foreseeable future. Our ability to pay
dividends  is  subject  to  limitations imposed by Nevada law. Under Nevada law,
dividends  may  be  paid  to  the  extent that a corporation's assets exceed its
liabilities  and  it  is  able  to pay its debts as they become due in the usual
course  of  business.


                                        5
<PAGE>

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

RESULTS  OF  OPERATIONS  FOR  YEARS  ENDED  DECEMBER  31,  2002  AND  2001

Online  Holdings  generated  $6,800  in  revenue from continuing website hosting
accounts  during  the  year  ended  December 31, 2002.  However, cost of revenue
during  this  period was $10,380 and operating expenses were $32,122.  Operating
expenses  in 2002 consisted largely of legal and accounting fees associated with
our  public  offering  and  ongoing  reporting  costs.  Other  expenses  in 2002
included  executive  compensation  of  $12,000.

For  the  year  ended  December  31,  2001, revenues were $25,000.  All revenues
resulted  from  website  development  contracts  and  ongoing  website  hosting
accounts.  Cost  of revenues during 2001 was $23,045 and operating expenses were
$17,562.  Expenses  during  2001  were  largely  attributable  to  legal  and
professional costs associated with commencing operations as a public company and
acquiring  a subsidiary in August of 2001. We also paid $10,000 in salary to our
sole  officer  and  director  in  2001.

As  a result of these factors, we realized a net loss of $35,702 during the year
ended  December  31,  2002  compared to a net loss of $15,607 for the year ended
December  31,  2001.

LIQUIDITY  AND  CAPITAL  RESOURCES

At  December  31, 2002, total assets consisted of $25,807 in cash remaining from
our  public  offering.  We  had  no  liabilities  at  December  31,  2002.
Stockholders'  deficit  totaled  $25,807  for  the  year ended December 31, 2002
compared  to $2,715 at December 31, 2001.  Cumulative stockholders' deficit from
inception  on  January  26,  2000  through  December  31,  2002  is  $55,417.

In  April  of  2002,  we  submitted a registration statement on Form SB-2 to the
Securities  and  Exchange Commission for the sale of a minimum of 480,000 shares
of  Common  Stock  and a maximum of 960,000 shares of Common Stock at a price of
$0.125  per  share.  The  registration  became effective on May 14, 2002 and the
closed  on  July 13, 2002.  As a result of the offering 650,000 shares were sold
generating  $81,250.  As of December 31, 2002, the Company has incurred expenses
in  the  amount of approximately $17,000 relating to the Registration Statement.
Expenses include legal fees, accounting fees, escrow fees, filing fees, printing
and  transfer  agent  costs.  The  Company  originally  estimated expenses to be
$20,000.  There were no underwriters discounts, commissions or finders fees.   A
table detailing the use of proceeds through December 31, 2002 is provided below.

<TABLE>
<CAPTION>

USE OF PROCEEDS                                         AMOUNT
<S>                                                   <C>

Debt Repayment . . . . . . . . . . . . . . . . . . .  $21,575.00
Accrued Wages. . . . . . . . . . . . . . . . . . . .  $13,543.00
Legal Costs. . . . . . . . . . . . . . . . . . . . .  $14,436.24
Payment to Cygen for Vibrant Health project. . . . .  $ 2,445.00
Payment to Cygen for additional software programming  $ 2,500.00
Auditors Fees. . . . . . . . . . . . . . . . . . . .  $ 1,500.00
Tranfer Agent Expenses . . . . . . . . . . . . . . .  $   725.00
State of Nevada Corporate Filing Fees. . . . . . . .  $   235.00
Unemployment Insurance . . . . . . . . . . . . . . .  $   192.51
Office Expenses. . . . . . . . . . . . . . . . . . .  $   290.49
Bookkeeping. . . . . . . . . . . . . . . . . . . . .  $   130.00
Postage. . . . . . . . . . . . . . . . . . . . . . .  $    31.54
Desktop Software . . . . . . . . . . . . . . . . . .  $   304.75

TOTAL PROCEEDS EXPENDED. . . . . . . . . . . . . . .  $57,908.53

BALANCE OF PROCEEDS REMAINING. . . . . . . . . . . .  $23,341.47
</TABLE>


                                        6
<PAGE>

We believe that our current cash needs can be met with cash on hand and revenues
from  ongoing  operations.  If we do not generate sufficient revenue to continue
operations,  we  may  raise  additional  capital  by selling common stock of the
Company  or  entering  into  debt  financing  agreements.

PLAN  OF  OPERATION

We  intend  to continue improving our website systems to retain existing clients
and  to  attract  new  accounts.  We  also  hope  to  broaden our client base by
targeting micro-cap public companies and incipient public companies in marketing
our  services.  We  are  also  exploring the possibility of becoming listed on a
public exchange which we believe would benefit our company and shareholders.  We
intend to continue complying with our disclosure and reporting requirements as a
public  company.  To  demonstrate  our  commitment  to  operating  in a fair and
ethical  manner, we have recently adopted a Code of Ethics and Corporate Conduct
that  is  attached  as  an  exhibit  to  this  report.

ITEM  7.  FINANCIAL  STATEMENTS

Our  financial  statements  appear  at the end of this report beginning with the
Index  to  Financial  Statements  on  page  12.

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

None.


                                    PART III

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

The  following  table sets forth the name, age, position and office term of each
executive  officer  and  director  of  the  Company.

<TABLE>
<CAPTION>

NAME              AGE                       POSITIONS                       SINCE
<S>               <C>  <C>                                                  <C>

Dennis Lairamore   34  Chief Executive Officer and Chief Financial Officer   2001
</TABLE>

The  following  is  a brief summary of the business experience of Mr. Lairamore:

DENNIS  LAIRAMORE,  PRESIDENT  AND  DIRECTOR.  Mr. Lairamore holds a Bachelor of
Science  degree  in  Accounting from the University of Northern Colorado.  Since
January  1999  he  has  been  president  of  D.L. International, LLC where he is
involved  in investor relations, capital formation and strategic positioning for
companies.  Mr.  Lairamore is also the President and CEO of E-Site Technologies,
Inc.,  a  subsidiary  of  Online Holdings, Inc.  He has held that position since
January  2000.  In  October  2000,  Mr.  Lairamore became General Partner of 1st
Accredited  Venture Capital, LLLP.  Previously, Mr. Lairamore was Assistant Vice


                                        7
<PAGE>

President  of Investments for Kirkpatrick Pettis from July 1996 to January 1999.
From  November  1992  to  July  1996  he  worked  for  Dean Witter as an Account
Executive.

All  officers  hold  their positions at the will of the Board of Directors.  All
directors  hold  their  positions  for  one  year  or until their successors are
elected  and  qualified.

ITEM  10.  EXECUTIVE  COMPENSATION

From August 2001 through June 2002 we paid our sole officer and director, Dennis
Lairamore  a  salary  of  $2,000  per month.  We are not currently providing any
compensation  to  Mr.  Lairamore.  A summary compensation table for the previous
three  years  is  provided  below.

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                                          OTHER ANNUAL
NAME AND PRINCIPAL POSITION  YEAR  SALARY ($)  BONUS ($)  COMPENSATION
<S>                          <C>   <C>         <C>        <C>

Dennis Lairamore. . . . . .  2002      12,000        -0-           -0-
  Chief Executive Officer .  2001      10,000        -0-           -0-
  Chief Financial Officer .  2000         -0-        -0-           -0-
</TABLE>

In  July  of  2001  we adopted a long-term stock incentive plan.  At the date of
this  report,  we  have  not  issued  any  options  under the plan.  We have not
established any pension, profit sharing or insurance programs for the benefit of
our  employees.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT.

The  following  table  sets  forth  as  of  December  31,  2002,  the  name  and
shareholdings  of  each  person known to us that either directly or beneficially
holds  more  than  5%  of  our 6,850,000 issued and outstanding shares of common
stock, par value $.001.  The table also lists the name and shareholdings of each
director  and  of  all  officers  and directors as a group.  Except as otherwise
indicated, the persons named in the table have sole voting and dispositive power
with  respect  to  all  shares beneficially owned, subject to community property
laws  where  applicable.

<TABLE>
<CAPTION>

NAME AND ADDRESS                              NUMBER OF SHARES    % OF SHARES
                                              BENEFICIALLY OWNED
<S>                                           <C>                 <C>

Dennis Lairamore (1) . . . . . . . . . . . .           5,000,000       72.99 %
5957 South Birch Way
Littleton, CO 80121

Libco Equities, Inc. . . . . . . . . . . . .             416,000        6.07 %
William R. Davidson, Pres.
RR# 1 Carvel
Alberta, Canada

Fortune Seekers, Inc.. . . . . . . . . . . .             404,000         5.89%
Gary J. McAdam, Pres.
14 Red Tail Drive
Highlands Ranch, CO 80126

Officers and Directors as a Group: 1 person
                                                       5,000,000       72.99 %

(1)  Officer and Director
</TABLE>


                                        8
<PAGE>

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

We  have entered into a sublicense agreement with 1st Accredited Venture Capital
LLLP  allowing  us  to  use  their technology in our website systems.  Under the
agreement,  1st  Accredited receives either co-ownership of the client's account
or  a  website development fee.  During the year ended December 31, 2001 we paid
$14,000  to  1st  Accredited  to  develop  and  host  a  website  for one of our
customers.  Dennis  Lairamore,  our  president  and  primary shareholder, is the
general  partner  of  1st  Accredited.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

<TABLE>
<CAPTION>

EXHIBITS:

EXHIBIT NUMBER  TITLE                                                LOCATION
<C>             <S>                                                  <C>

          99.1  Certification of Chief Executive Officer and Chief.  Attached
                 Financial Officer Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002

          99.2  Online Holdings Code of Ethics and Business Conduct  Attached
</TABLE>

REPORTS  ON  FORM  8-K:

No  reports on Form 8-K were filed by Online Holdings during the last quarter of
the  period  covered  by  this  report.

ITEM  14.  CONTROLS  AND  PROCEDURES

Within  the  90-day  period  prior  to the date of this report, we evaluated the
effectiveness  and  operation of our disclosure controls and procedures pursuant
to  Rule  13a-14  of  the  Securities  Exchange  Act  of  1934.  Based  on  that
evaluation,  our  Chief  Executive  Officer  and  Chief  Financial  Officer have
concluded that our disclosure controls and procedures are effective.  There have
been  no  significant  changes  in internal controls or other factors that could
significantly affect internal controls subsequent to the date we carried out our
evaluation.


                                        9
<PAGE>

                                   SIGNATURES

In  accordance  with  the  Exchange Act, the registrant caused this report to be
signed  on  its  behalf  by  the  undersigned  thereunto  duly  authorized.

                                   ONLINE  HOLDINGS,  INC.


Date:  March  31,  2003            By:/s/ Dennis  Lairamore
                                   ----------------------------------
                                   Dennis  Lairamore
                                   CEO  and  Chief  Financial  Officer


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.



Date:  March  31,  2003             By:/s/ Dennis  Lairamore
                                    -----------------------
                                    Dennis  Lairamore
                                    Director


                                       10
<PAGE>
                                  CERTIFICATION

I,  Dennis Lairamore, the Chief Executive Officer and Chief Financial Officer of
Online  Holdings,  Inc.  (the  "Company"),  certify  that:

1.  I  have  reviewed  this  annual  report  on  Form  10-KSB  of  the  Company;

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

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

4.  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  us  by  others  within  those entities,
     particularly  during  the  period  in  which  this  annual  report is being
     prepared;

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

     c)  presented in this annual report our conclusions about the effectiveness
     of the disclosure controls and procedures based on our evaluation as of the
     Evaluation  Date;

5.  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 annual report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal  controls  subsequent  to  the  date  of  our  most  recent evaluation,
including  any  corrective  actions  with regard to significant deficiencies and
material  weaknesses.


March  31,  2003                   By:/s/ Dennis  Lairamore
                                   -----------------------------
                                   Dennis  Lairamore
                                   Chief  Executive  Officer
                                   Chief  Financial  Officer


                                       11
<PAGE>

<TABLE>
<CAPTION>

         INDEX  TO  FINANCIAL  STATEMENTS
         --------------------------------

                                                   Page
                                                   ----
<S>                                                <C>
Independent Auditors' Report. . . . . . . . . . .    13

Consolidated Financial Statements

  Consolidated Balance Sheets . . . . . . . . . .    14

  Consolidated Statements of Operations . . . . .    15

  Consolidated Statement of Stockholders' Deficit    16

  Consolidated Statements of Cash Flows . . . . .    17

Notes to Consolidated Financial Statements. . . .    18
</TABLE>


                                       12
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


The  Board  of  Directors  and  Stockholders
Online  Holdings,  Inc.  and  Subsidiaries
Littleton,  Colorado

We  have audited the accompanying consolidated balance sheet of Online Holdings,
Inc.  and Subsidiaries (a Development Stage Company) as of December 31, 2002 and
the  related  consolidated  statements  of operations, stockholders' deficit and
cash  flows  for  the years ended December 31, 2002 and 2001 and cumulative from
January  26,  2000  (inception)  through  December 31, 2002.  These consolidated
financial  statements  are  the responsibility of the Company's management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

We conducted our audits 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  audits  provide  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 Online Holdings,
Inc.  and  Subsidiaries  as  of  December  31,  2002  and  the  results of their
operations  and  their cash flows for the years ended December 31, 2002 and 2001
and cumulative from inception to December 31, 2002 in conformity with accounting
principles  generally  accepted  in  the  United  States  of  America.

The  accompanying  consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As shown in the consolidated
financial  statements,  the  Company  is  in the development stage.  The planned
principal  operations  have commenced, but there has been no significant revenue
therefrom.  This  condition raises substantial doubt about the Company's ability
as  a  going  concern.  The  financial statements do not include any adjustments
that  might  result  from  the  outcome  of  the  uncertainty.



/s/Ehrhardt  Keefe  Steiner  &  Hottman  PC
--------------------------------------------
February  3,  2003
Denver,  Colorado


                                       13
<PAGE>

<TABLE>
<CAPTION>


                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                           CONSOLIDATED BALANCE SHEETS
                                DECEMBER 31, 2002


<S>                                                       <C>
                                     ASSETS
Current assets
 Cash. . . . . . . . . . . . . . . . . . . . . . . . . .  $ 25,807

Deferred offering costs. . . . . . . . . . . . . . . . .         -
                                                          ---------

Total assets . . . . . . . . . . . . . . . . . . . . . .  $ 25,807
                                                          =========

                              STOCKHOLDERS' DEFICIT

Stockholders' deficit
 Preferred stock, authorized 5,000,000 shares, $.001 par  $      -
 value; none issued or outstanding
 Common stock, authorized 100,000,000 shares, $.001 par.     6,850
value; 6,850,000 and 6,200,000 shares issued and
outstanding at December 31, 2002 and 2001, respectively
 Additional paid-in capital. . . . . . . . . . . . . . .    74,374
 Deficit accumulated during the development stage. . . .   (55,417)
                                                          ---------
       Total stockholders' deficit . . . . . . . . . . .    25,807
                                                          ---------

Total stockholders' deficit. . . . . . . . . . . . . . .  $ 25,807
                                                          =========

</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                       14
<PAGE>

<TABLE>
<CAPTION>

                       ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                            (A DEVELOPMENT STAGE COMPANY)

                        CONSOLIDATED STATEMENTS OF OPERATIONS


                                                                         Cumulative
                                                                            from
                                                                         January 26,2000
                                                                         (inception)
                                                 For the Years Ended      through
                                                     December 31,        December 31,
                                               ------------------------
                                                  2002         2001         2002
                                               -----------  -----------  ---------------
<S>                                            <C>          <C>          <C>
Revenues. . . . . . . . . . . . . . . . . . .  $    6,800   $   25,000   $   31,800

Cost of revenues. . . . . . . . . . . . . . .      10,380       23,045       33,425
                                               -----------  -----------  ---------------
                                                   (3,580)       1,955       (1,625)

Operating expenses. . . . . . . . . . . . . .      32,122       17,562       50,684
                                               -----------  -----------  ---------------

Net loss. . . . . . . . . . . . . . . . . . .  $  (35,702)  $  (15,607)  $  (52,309)
                                               ===========  ===========  ===============

Earnings (loss) per share - basic and diluted  $   (0.006)  $   (0.003)  $   (0.008)
                                               ===========  ===========  ===============

Weighted average shares outstanding - . . . .   6,539,058    6,062,162    6,539,058
                                               ===========  ===========  ===============
 basic and diluted
</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                       15
<PAGE>

<TABLE>
<CAPTION>

                            ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                                (A DEVELOPMENT STAGE COMPANY)

                       CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT


                                                                           Deficit
                                                                         Accumulated
                                                           Additional    During the       Total
                                   Common Stock             Paid-In      Development   Stockholders'
                                Shares        Amount        Capital         Stage        Deficit
                             ------------  ------------  --------------  -----------  --------------
<S>                          <C>           <C>           <C>             <C>          <C>
                                        -  $          -  $            -  $      -      $      -
Balance, January 26, 2000
 (inception)

Issuance of common stock. .        10,000         1,000               -         -         1,000
for cash

Net loss. . . . . . . . . .             -             -               -    (1,000)       (1,000)
                             ------------  ------------  --------------  -----------  --------------

Balance, December 31, 2000.        10,000         1,000               -    (1,000)            -

Issuance of common stock. .     3,990,000         3,000               -    (3,108)         (108)
in connection with reverse
acquisition

Issuance of common stock. .     2,200,000         2,200          10,800         -        13,000
for cash

Net loss. . . . . . . . . .             -             -               -   (15,607)      (15,607)
                             ------------  ------------  --------------  -----------  --------------

Balance, December 31, 2001.     6,200,000         6,200          10,800   (19,715)       (2,715)

Issuance of common stock. .       650,000           650          63,574         -        64,224
for cash

Net loss. . . . . . . . . .             -             -               -   (35,702)      (35,702)
                             ------------  ------------  --------------  -----------  --------------

Balance, December 31, 2002.     6,850,000  $      6,850  $       74,374  $(55,417)     $ 25,807
                             ============  ============  ==============  ===========  ==============

</TABLE>

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                       16
<PAGE>

<TABLE>
<CAPTION>

                      ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                        Cumulative
                                                                           from
                                                                        January 26,
                                                                           2000
                                                                        (inception)
                                                  For the Years Ended     through
                                                      December 31,       December 31,
                                                    2002       2001        2002
                                                  ---------  ---------  -------------
<S>                                               <C>        <C>        <C>
Cash flows from operating activities
 Net loss. . . . . . . . . . . . . . . . . . . .  $(35,702)  $(15,607)  $(52,309)
                                                  ---------  ---------  -------------
Changes in assets and liabilities
 Accounts payable. . . . . . . . . . . . . . . .      (895)       895          -
 Accrued expenses. . . . . . . . . . . . . . . .    (1,453)     1,453          -
                                                  ---------  ---------  -------------
                                                    (2,348)     2,348          -
                                                  ---------  ---------  -------------
       Net cash used by operating activities . .   (38,050)   (13,259)   (52,309)
                                                  ---------  ---------  -------------

Cash flows from investing activities
 Liability assumed in acquisition. . . . . . . .         -       (108)      (108)
                                                  ---------  ---------  -------------
       Net cash used in investing activities . .         -       (108)      (108)
                                                  ---------  ---------  -------------

Cash flows from financing activities
 Deferred offering costs . . . . . . . . . . . .    (6,638)   (10,388)   (17,026)
 Proceeds from note payable. . . . . . . . . . .         -     20,000     20,000
 Principal payments on notes payable . . . . . .   (20,000)         -    (20,000)
 Proceeds from issuance of common stock. . . . .    81,250     13,000     95,250
                                                  ---------  ---------  -------------
       Net cash provided by financing activities    54,612     22,612     78,224
                                                  ---------  ---------  -------------

Net increase in cash . . . . . . . . . . . . . .    16,562      9,245     25,807

Cash, beginning of period. . . . . . . . . . . .     9,245          -          -
                                                  ---------  ---------  -------------

Cash, end of period. . . . . . . . . . . . . . .  $ 25,807   $  9,245   $ 25,807
                                                  =========  =========  =============
</TABLE>

     Supplemental  disclosure  of  non-cash  investing  activities:

          During  the  year  ended December 31, 2001, the Company entered into a
          merger  agreement,  which  has  been  accounted  for  as  a  reverse
          acquisition.

          During  the  year  ended December 31, 2002, deferred offering costs of
          $17,026  were  netted  against  proceeds  from  the issuance of common
          stock.


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                       17
<PAGE>

                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE  1  -  ORGANIZATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-----------------------------------------------------------------------------

Online  Holdings,  Inc.  and Subsidiaries (the "Company"), was incorporated July
27,  2001  in  the state of Nevada.  The Company is organized for the purpose of
developing  and  marketing  easily  maintained  website  systems.  The  Company
operates  through  its  wholly  owned  subsidiary,  E-Site Technologies, Inc., a
Colorado  corporation  that  was  incorporated  January  26,  2000.

The  Company  is a development stage company that has had only a small amount of
revenue  from  operations  since inception, which raises substantial doubt about
the entity's ability to continue as a going concern.  There is no assurance that
the  Company  will  generate  revenue  or  earn  profit  in  the  future.

Reorganization
--------------

In  August  2001,  Online Holdings, Inc. (Online) acquired all of the issued and
outstanding  common shares of E-Site Technologies, Inc. (E-Site) in exchange for
4,000,000  shares  of common stock of Online.  For financial reporting purposes,
the  business  combination  was accounted for as an additional capitalization of
the  Company  (a  reverse  acquisition  with E-Site as the acquirer).  E-Site is
considered  the  surviving entity.  The historical financial statements prior to
the merger are those of E-Site.  At the time of the merger, Online had no assets
and  a  net  book value of $(108) and after the transaction, E-Site shareholders
held  81%  of  the  common  stock  of  the  Company.

Principles  of  Consolidation
-----------------------------

The  consolidated  financial statements include the accounts of Online Holdings,
Inc.  and  its wholly owned subsidiary, collectively referred to as the Company.
All  significant  intercompany  transactions  and balances have been eliminated.

Concentrations  of  Credit  Risk
--------------------------------

The  Company  grants credit in the normal course of business to customers in the
United  States.  The  Company periodically performs credit analysis and monitors
the  financial  condition  of  its  customers  to  reduce  credit  risk.

Revenue  Recognition
---------------------

Website  design  revenue is recognized when all material services and conditions
related  to the design and performance of the website have been performed by the
Company  and  accepted  by  the  customer.  Retainers  received  up front by the
Company,  if any, are recorded as customer deposits and recognized as revenue as
described  above.

Website  hosting  fees  are  recognized  when  earned  on  a  monthly  basis.


                                       18
<PAGE>

                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Income  Taxes
--------------

Deferred  income taxes result from temporary differences.  Temporary differences
are  differences  between  the  tax  basis  of  assets and liabilities and their
reported  amounts  in  the  financial  statements that will result in taxable or
deductible  amounts  in future years.  The measurement of deferred tax assets is
reduced,  if  necessary,  by  the  amount  of  any  tax  benefits that, based on
available  evidence,  are  not  expected  to  be  realized.

Use  of  Estimates
------------------

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  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.

Basic  Earnings  Per  Share
---------------------------

The  Company  has  adopted  the  provisions of Statement of Financial Accounting
Standards  No.  128,  Earning  Per  Share  (SFAS 128).  SFAS 128 established new
definitions  for calculating and disclosing basic and diluted earning per share.
Basic  earnings  per  share are based upon the weighted average number of shares
outstanding  as  defined  in  SFAS  128.  No  diluted  earnings  per  share  are
presented,  as  there  are  no  potential  dilutive  common  shares.

Comprehensive  Income
---------------------

The  Company  adopted  Statement of Financial Accounting Standard No. 130 ("SFAS
130"),  Comprehensive Income.  There were no components of comprehensive income;
consequently,  no separate statement of comprehensive income has been presented.

Fair  Value  of  Financial  Instruments
---------------------------------------

The  carrying  amount  of  cash  approximates  fair  value due to the short-term
maturity  of  these  instruments.

Recently  Issued  Accounting  Pronouncements
--------------------------------------------

In  June  2001,  the  FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations."  SFAS  No. 143 requires the fair value of a liability for an asset
retirement  obligation to be recognized in the period in which it is incurred if
a  reasonable  estimate  of  fair  value  can  be  made.  The  associated  asset
retirement  costs  are  capitalized  as  part  of  the  carrying  amount  of the
long-lived  asset.  SFAS No. 143 is effective for years beginning after June 15,
2002.  The Company believes the adoption of this statement will have no material
impact  on  its  consolidated  financial  statements.


                                       19
<PAGE>

                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Recently  Issued  Accounting  Pronouncements  (continued)
---------------------------------------------------------

In  August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of Long-Lived Assets."  SFAS 144 requires that those long-lived assets
be  measured  at  the lower of carrying amount or fair value, less cost to sell,
whether  reported  in  continuing  operations  or  in  discontinued  operations.
Therefore,  discontinued operations will no longer be measured at net realizable
value  or  include amounts for operating losses that have not yet occurred. SFAS
144  is  effective  for  financial  statements issued for fiscal years beginning
after  December  15,  2001 and, generally, are to be applied prospectively.  The
Company  believes  that  the  adoption  of  this statement will have no material
impact  on  its  consolidated  financial  statements.

In  April  2002, the FASB issued SFAS No. 145, "Rescission of FASB No. 4, 44 and
64,  Amendment  of  FASB No. 13, and Technical Corrections."  SFAS rescinds FASB
No.  4  "Reporting Gains and Losses from Extinguishments of Debt Made to Satisfy
Sinking-Fund  Requirements."  This  statement  also  rescinds  SFAS  No.  44
"Accounting  for  Intangible  Assets  of Motor Carriers" and amends SFAS No. 13,
"Accounting for Leases".  This statement is effective for fiscal years beginning
after  May 15, 2002.  The Company does not expect the adoption of this statement
to  have  a  material  effect  on  the  Company's  financial  statements.

In  June  2002,  the  FASB issued SFAS No. 146, "Accounting for Costs Associated
with  Exit  or  Disposal  Activities."  SFAS  No.  146  addresses accounting and
reporting  for  costs  associated with exit or disposal activities and nullifies
Emerging  Issues  Task  Force Issue No. 94-3, "Liability Recognition for Certain
Employee  Termination  Benefits  and  Other Costs to Exit an Activity (Including
Certain  Costs  Incurred  in  a  Restructuring)."  SFAS  No. 146 requires that a
liability  for a cost associated with an exit or disposal activity be recognized
and  measured  initially at fair value when the liability is incurred.  SFAS No.
146  is  effective  for  exit  or  disposal  activities that are initiated after
December  31,  2002,  with  early application encouraged.   The Company does not
expect the adoption of this statement to have a material effect on the Company's
financial  statements.

In  November  2002,  the  FASB  published  interpretation  No,  45  "Guarantor's
Accounting  and  Disclosure  requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of  Others."  The  Interpretation  expands  on the
accounting  guidance  of  Statements No. 5, 57, and 107 and incorporates without
change  the provisions of FASB Interpretation No. 34, which is being superseded.
The  Interpretation  elaborates on the existing disclosure requirements for most
guarantees, including loan guarantees such as standby letters of credit. It also
clarifies  that  at  the  time  a  company  issues a guarantee, the company must
recognize  an  initial  liability  for  the  fair value, or market value, of the
obligations  it  assumes under that guarantee and must disclose that information
in  its  interim  and  annual financial statements.  The initial recognition and
initial measurement provisions apply on a prospective basis to guarantees issued
or  modified  after  December  31,  2002,  regardless  of the guarantor's fiscal
year-end.  The  disclosure  requirements in the Interpretation are effective for
financial  statements  of  interim  or  annual periods ending after December 15,
2002.  The  Company  is  currently  evaluating  what effect the adoption of this
statement will have on the Company's financial statements.  The Company does not
expect the adoption of this statement to have a material effect on the Company's
financial  statements.


                                       20
<PAGE>

                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Recently  Issued  Accounting  Pronouncements  (continued)
---------------------------------------------------------

In  December  2002,  the  FASB  issued  SFAS No. 148 "Accounting for Stock-Based
Compensation-Transition  and  Disclosure".  This  statement amends SFAS No. 123,
"Accounting  for  Stock-Based  Compensation"  to  provide alternative methods of
transition  for  an  entity that voluntarily changes to the fair value method of
accounting  for  stock-based  compensation.  In  addition,  SFAS  148 amends the
disclosure  provision of SFAS 123 to require more prominent disclosure about the
effects  of  an entity's accounting policy decisions with respect to stock-based
employee  compensation  on  reported  net  income.  The  effective date for this
Statement  is  for fiscal years ended after December 15, 2002.  The Company does
not  expect  the  adoption  of  this  statement to have a material effect on the
Company's  financial  statements.


Note  2  -  Related  Party  Transactions
----------------------------------------

The  Company has entered into a sublicense agreement with 1st Accredited Venture
Capital  LLLP ("1st Accredited") to use certain technology used in the Company's
website  system solutions.  The President and primary stockholder of the Company
is  the general partner of 1st Accredited.  As part of the sublicense agreement,
1st  Accredited  receives  either  co-ownership  of a clients contact management
database  or  a fee of $20,000.  For the years ended December 31, 2002 and 2001,
the  Company paid $0 and $14,000, respectively, to 1st Accredited to develop and
host  a  website  for  a  customer  of  the  Company.


Note  3  -  Income  Taxes
-------------------------

The  Company  recognizes  deferred  tax  liabilities and assets for the expected
future  tax  consequences  of  events  that  have been included in the financial
statements  or  tax returns.  Deferred tax liabilities and assets are determined
based  on the difference between the financial statement and tax basis of assets
and  liabilities using the enacted tax rates in effect for the year in which the
differences  are expected to reverse.  The measurement of deferred tax assets is
reduced,  if  necessary,  by  the  amount  of  any  tax  benefits that, based on
available  evidence,  are  not  expected  to  be  realized.

Financial  statement  and  tax  return  temporary differences and carryforwards,
which  give rise to a significant portion of deferred tax assets and liabilities
are  as  follows:

<TABLE>
<CAPTION>

                                            December 31,
                                         ------------------
                                           2002      2001
                                         --------  --------
<S>                                      <C>       <C>
Loss carryforwards. . . . . . . . . . .  $ 7,846   $ 2,490
Valuation allowance . . . . . . . . . .   (7,846)   (2,490)
                                         --------  --------

Net deferred tax assets and liabilities  $     -   $     -
                                         ========  ========
</TABLE>


                                       21
<PAGE>

                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note  3  -  Income  Taxes  (continued)
--------------------------------------

No  tax  consequences have been recognized in the statement of operations due to
the  Company  generating  taxable  losses.  A  valuation  allowance  has  been
established, which offsets any deferred tax asset or deferred benefit due to the
Company  not  yet  demonstrating that utilization of deferred tax assets will be
realized.  As  of  December  31,  2002,  the  company  has  net  operating  loss
carry-forwards  for  tax  purposes of approximately $52,000.  If not used, these
carry-forwards  will  expire  between  2020  and  2022.

The  following is a reconciliation of income taxes at the Federal Statutory rate
with  income  taxes  recorded  by  the  Company.

<TABLE>
<CAPTION>

                                                December 31,
                                                ------------
                                                2002   2001
                                                -----  -----
<S>                                             <C>    <C>
Computed income taxes at the statutory rate. .    15%    15%
State income taxes, net of Federal tax benefit     3      3
Valuation allowance. . . . . . . . . . . . . .   (18)   (18)
                                                -----  -----

                                                   -%     -%
                                                =====  =====
</TABLE>

Note  4  -  Stockholders'  Equity
---------------------------------

Common  Stock
-------------

The  company  completed its public offering in July of 2002.  The Company issued
650,000  shares  of  $0.001  par  value  common  stock  at $0.125 per share.  In
connection with the public offering, the Company paid offering costs of $17,026,
which  were  netted  against  the  proceeds  received.


Note  5  -  2001  Stock  Incentive  Plan
----------------------------------------

The  Company applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"), and related interpretations in accounting
for  all  stock  option  plans.

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS  123"),  requires  the  Company  to  provide  pro  forma
information regarding net income as if compensation cost for the Company's stock
option  plans had been determined in accordance with the fair value based method
prescribed  in  SFAS  123.  To  provide  the required pro forma information, the
Company estimates the fair value of each stock option at the grant date by using
the  Black-Scholes  option-pricing  model.


                                       22
<PAGE>

                     ONLINE HOLDINGS, INC. AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note  5  -  2001  Stock  Incentive  Plan  (continued)
-----------------------------------------------------

In August 2001, the Company adopted the 2001 Long-Term Stock Incentive Plan (the
"Plan"),  which  provides  for  the  grant to employees, officers, directors and
consultants  stock  options  or  stock  appreciation  rights  ("SAR")  up  to an
aggregate  of  2,500,000  shares  of  common stock, consisting of both incentive
stock  options and non-qualified options.  The exercise price is determined by a
committee  elected  by  the  board of directors at the time the Option or SAR is
granted  at  an exercise price of not less than 100% of the fair market value of
the  common  stock,  on the date of grant.  To date no options or SARs have been
granted  under  the  Plan.


                                       23
<PAGE>