UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB

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(Mark one)
[X]  Annual Report Under Section 13 or 15(d) of The  Securities  Exchange Act of
     1934

For the fiscal year ended February 28, 2003

[_]  Transition Report Under Section 13 or 15(d) of The Securities  Exchange Act
     of 1934

For the transition period from ______________ to _____________

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Commission File Number: 000-31477

                     American Recreational Enterprises, Inc.
                     ---------------------------------------
        (Exact name of small business issuer as specified in its charter)

          Nevada                                             98-0224958
--------------------------                            --------------------------
  (State of incorporation)                             (IRS Employer ID Number)

                     2000 East 4th Avenue, Hialeah, FL 33010
                   -----------------------------------------
                    (Address of principal executive offices)

                                 (305) 887-0624
                   -----------------------------------------
                           (Issuer's telephone number)

                      3545 NW 71st Street, Miami, FL 33147
                   -----------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)
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Securities registered under Section 12 (b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

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

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of Company's knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended February 28, 2003 was $-0-

The aggregate market value of voting common equity held by  non-affiliates as of
May 19, 2003 was approximately $0.

As of May 19,  2003,  there were  25,360,007  shares of Common  Stock issued and
outstanding.

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



<PAGE>



<TABLE>
<CAPTION>
                     American Recreational Enterprises, Inc.

                                Index to Contents

                                                                                 Page
                                                                                Number
<S>        <C>                                                                  <C>
Part I

Item 1     Description of Business                                               3
Item 2     Description of Property                                              13
Item 3     Legal Proceedings                                                    13
Item 4     Submission of Matters to a Vote of Security Holders                  14

Part II

Item 5     Market for Company's Common Stock and Related Stockholders Matters   14
Item 6     Management's Discussion and Analysis or Plan of Operation            15
Item 7     Financial Statements                                                 17
Item 8     Changes in and Disagreements with Accountants
              on Accounting and Financial Disclosures                           17

Part III

Item 9     Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act                 18
Item 10    Executive Compensation                                               19
Item 11    Security Ownership of Certain Beneficial Owners and Management
              and Related Stockholder Matters                                   20
Item 12    Certain Relationships and Related Transactions                       20
Item 13    Exhibits and Reports on 8-K                                          20
Item 14    Controls and Procedures                                              21

Signatures                                                                      21
Certification                                                                   22
</TABLE>






<PAGE>



                  Caution Regarding Forward-Looking Information

Certain  statements  contained  in  this  annual  filing,   including,   without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-KSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.


                                     PART I

Item 1 - Description of Business

American  Recreational  Enterprises,  Inc. was incorporated on February 10, 1999
under  the laws of the  State of  Nevada.  The  Company  was  originally  in the
business of operating a multi media travel related  publishing  enterprise.  The
Company  marketed  travel-related  products  based on the  content  of its print
publications as well as its digital Internet magazine.  Products will included a
wide range of goods through it's online store, www.GreatestEscapesStore.com. The
Company  intended to develop  other travel  products to be sold and  distributed
through its on-line department store, two websites, www.GreatestEscapesStore.com
and www.LiteraryTrips.com, and other more traditional outlets.

Pursuant to an Agreement and Plan of Reorganization  dated October 12, 2000, the
Company acquired 100.0% of the issued and outstanding  shares of common stock of
Capstra Capital, Corp.(Capstra), a Washington corporation, from the shareholders
thereof in an exchange of an aggregate of 450,000  shares of common stock of the
Company and other consideration  consisting of cash and payments of certain fees
and  expenses  equal to $30,000 (the  Acquisition).  Immediately  following  the
Acquisition,  the Company  formed  Greatestescapes  (Washington)  Corp.(Subco) a
newly-formed  Washington  corporation  newly  formed  solely  for the  following
purpose as a  wholly-owned  subsidiary  of the  Company.  Subco then merged with
Capstra (the Merger).  The Acquisition was approved by the unanimous  consent of
the Board of Directors of Capstra and its  shareholders on October 12, 2000. The
Acquisition  was  effective  on October  12,  2000.  The Merger was  approved by
unanimous  consent of the respective Board of Directors of Subco and the Company
on October  12,  2000.  The Merger  was  effective  on  October  16,  2000.  The
Acquisition  and Merger is  intended  to qualify  as  reorganization  within the
meaning  of  Section  368(a)(1)(B)  of the  Internal  Revenue  Code of 1986,  as
amended.  Upon  effectiveness  of the Acquisition  and Merger,  pursuant to Rule
12g-3(a) of the General Rules and  Regulations  of the  Securities  and Exchange
Commission (the Commission),  the Company elected to become the successor issuer
to Capstra for reporting purposes under the Securities  Exchange Act of 1934 and
elected to report under the Act effective October 16, 2000.

On December 1, 2000, the Company entered into an agreement with it's controlling
shareholders  and officers whereby the officers would acquire all the assets and
operations of the Company in exchange for the assumption of liabilities  related
thereto.  Further, a controlling  shareholder surrendered 5,000 shares of common
stock to the Company for no consideration.  As a result of this transaction, the
Company had no assets, liabilities or operations.

                                                                               3

<PAGE>

On July 17, 2001, the Company changed it's name from Greatestescapes.com,  Inc.,
to American  Ammunition,  Inc.,  and approved  authorization  in its Articles of
Incorporation  to issue  50,000,000  shares,  par value of $0.001,  of preferred
stock of the Corporation upon such terms, conditions, privileges and limitations
as the Board of Directors deems  appropriate.  These two (2)  transactions  were
approved  by  the   shareholders   by  consent  and  the  Amended   Articles  of
Incorporation were filed with the State of Nevada on July 23, 2001. On that same
date, the Company also  authorized a reverse split of its common stock at a rate
of 1 for 200, with the proviso that no shareholder  holding more than 500 shares
of stock  have  their  stock  reduced  below  500  shares  of stock  and that no
shareholder holding less than 500 shares of stock have any such reduction in the
amount of stock owned by such  shareholder.  This reverse split is effective for
all  shareholders  of record on July 17, 2001, and was implemented on electronic
and other quotation  systems at the close of business on August 13, 2001.  After
the effect of the reverse split,  the Company had 110,007 shares of common stock
issued and outstanding, as rounded. The effect of the reverse split is presented
in the accompanying financial statements as of the first day of the first period
presented.

On July 20, 2001,  the Company  entered into a Share Exchange  Agreement,  to be
completed on or before August 31, 2001, whereby the Company would acquire 100.0%
of  the  issued  and  outstanding  capital  stock  of  F&F  Equipment,  Inc.  (a
privately-owned   Florida   corporation)   (F&F)  in  exchange  for   25,000,000
post-reverse  split  shares of common  stock of the  Company to effect a reverse
acquisition of F&F.

On August  31,  2001,  F&F and the  Company  agreed  that there was a failure of
consideration  on the part of one (1) or both of the  parties to the  Agreement.
F&F and the Company have agreed that it is in the best  interest of both parties
to void,  cancel and terminate the Agreement ab initio and to release any claims
F&F has  against  the Company as well as any claims that the Company has against
F&F in consideration of such release.

Subsequent to the termination of the F&F  transaction,  the Company changed it's
corporate name to American Recreational Enterprises, Inc.

On or about February 14, 2003, the Company sold 20,000,000 shares of restricted,
unregistered  common stock to Jorge Elias,  an unrelated  individual,  for gross
proceeds of $50,000 to support  short-term  working  capital  requirements.  The
Company relied upon Section 4(2) of the Securities Act of 1933, as amended,  and
Rule 506 of Regulation D promulgated  thereunder ('33 Act). This transaction did
not involve a public  offering  and was exempt from  registration  under the '33
Act. No underwriters were used in connection with this transaction.

Concurrent with the February 14, 2003 change in control, the Company initiated a
new business  plan.  On April 23, 2003,  the Company  formed a new  wholly-owned
subsidiary,  Lenders/Investors,  Inc. (a Florida corporation) for the purpose of
(a)  making  medium to high risk  unsecured  loans to third  party  individuals,
corporations  and/or other  entities;  (b) equity  investments  in  early-stage,
early-growth,  pre-IPO  companies  with a primary  objective  of both  long-term
appreciation  as well as short-term  profits;  and c) general asset  management.
Other general  business  services may be offered in the future;  however,  these
plans and services  have not been defined by  management as of the date of these
financial  statements.  There have been no business  transactions  conducted  by
Lenders/Investors, Inc.

The Company has very limited  capital,  and it is unlikely that the Company will
be able to take  advantage  of more  than one  such  business  opportunity.  The
Company intends to seek  opportunities  demonstrating the potential of long-term
growth as opposed to short-term  earnings.  However,  at the present  time,  the
Company has not identified any business opportunity that it plans to pursue, nor
has the Company  reached any  agreement  or  definitive  understanding  with any
person concerning an acquisition.

The Company  intends to either  develop it's new business  plan;  initiate other
business  plan(s) - either  related or  unrelated  to previous  ventures,  or to
locate and combine with an existing,  privately-held company which is profitable
or, in management's view, has growth potential,  irrespective of the industry in
which it is engaged.

In the event that a business combination  transaction is explored in the future,
it is  anticipated  that the  Company's  officers  and  directors  will  contact
broker-dealers  and other persons with whom they are acquainted who are involved
with corporate finance matters to advise them of the Company's  existence and to
determine if any  companies or  businesses  that they  represent  have a general
interest in considering a merger or acquisition with

                                                                               4

<PAGE>



a blind pool or blank check or shell entity. No direct discussions regarding the
possibility  of  merger  are  expected  to occur  in the  immediate  future.  No
assurance  can be given  that the  Company  will be  successful  in  finding  or
acquiring a desirable  business  opportunity,  given the limited  funds that are
expected to be available  for  acquisitions.  Furthermore,  no assurance  can be
given  that  any  acquisition,  which  does  occur,  will be on  terms  that are
favorable to the Company or its current stockholders.

The  Company  does not foresee  that it will enter into a merger or  acquisition
transaction with any business with which its officers or directors are currently
affiliated. Should the Company determine in the future, contrary to the forgoing
expectations,  that a  transaction  with  an  affiliate  would  be in  the  best
interests  of the  Company  and its  stockholders,  the  Company is, in general,
permitted by Nevada law to enter into a transaction if: The material facts as to
the  relationship  or  interest  of the  affiliate  and as to  the  contract  or
transaction are disclosed or are known to the Board of Directors,  and the Board
in good faith  authorizes,  approves or ratifies the contract or  transaction by
the affirmative vote of a majority of the disinterested  directors,  even though
the disinterested directors constitute less than a quorum; or the material facts
as to the  relationship  or interest of the  affiliate and as to the contract or
transaction  are  disclosed  or are known to the  stockholders  entitled to vote
thereon, and the contract or transaction is specifically authorized, approved or
ratified  in  good  faith  by  vote  of the  stockholders;  or the  contract  or
transaction is fair as to the Company as of the time it is authorized,  approved
or ratified, by the Board of Directors or the stockholders.

Competition

The Company  expects to encounter  competition  in its new business plan to make
medium to high risk unsecured  loans to individuals,  corporations  and/or other
entities  or to invest in  early-stage,  early-growth,  pre-IPO  companies.  The
competition  may in part  come  from  business  development  companies,  venture
capital  partnerships and corporations,  small investment  companies,  brokerage
firms, and the like. Some of these types of organizations  are likely to be in a
better  position  than the Company  because they may be able to offer  immediate
access to  limited  amounts  of cash,  or for a variety  of other  reasons.  The
Company  also will  experience  competition  from other  public  companies  with
similar business purposes, some of which may also have funds available for use.

Employees

The  Company  is in the  development  stage  and  currently  has  no  employees.
Management of the Company expects to use consultants,  attorneys and accountants
as necessary,  and does not anticipate a need to engage any full-time  employees
so long as it is seeking and  evaluating  business  opportunities.  The need for
employees  and their  availability  will be  addressed  in  connection  with the
decision  whether  or  not  to  acquire  or  participate  in  specific  business
opportunities.

Risk Factors

Conflicts of Interest.  Certain  conflicts of interest exist between the Company
and its officers and directors. They have other business interests to which they
currently devote attention,  and are expected to continue to do so. As a result,
conflicts of interest may arise that can be resolved only through their exercise
of judgement in a manner which is consistent with their fiduciary  duties to the
Company. (See Management, Conflicts of Interest.)

It is  anticipated  that  the  Company's  principal  shareholders  may  actively
negotiate  or  otherwise  consent to the  purchase of a portion of their  common
stock as a condition to, or in connection with, a proposed merger or acquisition
transaction.  In this process, the Company's principal shareholders may consider
their own  personal  pecuniary  benefit  rather than the best  interest of other
Company  shareholders.  Depending  upon the  nature of a  proposed  transaction,
Company  shareholders other than the principal  shareholders may not be afforded
the opportunity to approve or consent to a particular transaction.

Possible Need for Additional Financing.  The Company has very limited funds, and
such funds,  may not be adequate to take  advantage  of any  available  business
opportunities.  Even if the  Company's  currently  available  funds  prove to be
sufficient to pay for its operations until it is able to acquire an interest in,
or complete a transaction with, a business opportunity,  such funds will clearly
not be sufficient to enable it to exploit the

                                                                               5

<PAGE>

opportunity.  Thus,  the ultimate  success of the Company will depend,  in part,
upon its availability to raise additional capital. In the event that the Company
requires modest amounts of additional capital to fund its operations until it is
able to complete a business acquisition or transaction, such funds, are expected
to be  provided  by the  principal  shareholders.  However,  the Company has not
investigated  the   availability,   source,  or  terms  that  might  govern  the
acquisition of the additional  capital which is expected to be required in order
to exploit a business  opportunity,  and will not do so until it has  determined
the level of need for such  additional  financing.  There is no  assurance  that
additional  capital will be available from any source or, if available,  that it
can be  obtained on terms  acceptable  to the  Company.  If not  available,  the
Company's  operations  will be limited to those  that can be  financed  with its
modest capital.

Regulation of Penny Stocks. The Company's securities, when available for trading
will be subject to a Securities and Exchange Commission rule that impose special
sales practice  requirements  upon  broker-dealers  who sell such  securities to
persons other than established customers or accredited investors. For purpose of
the rule, the phrase accredited  investor means, in general terms,  institutions
with assets in excess of $5,000,000, or individuals having a net worth in excess
of $1,000,000 or having an annual  income that exceeds  $200,000 (or that,  when
combined with a spouse's income, exceeds $300,000).  For transactions covered by
the rule, the broker dealer must make special suitability  determination for the
purchaser and receive the purchasers  written agreement to the transaction prior
to the sale.  Consequently,  the rule may affect the  ability of  broker-dealers
ability of broker-dealers  to sell the Company's  securities and ability of also
may affect the ability of purchasers  of the  Company's  securities to sell such
securities in any market that might develop therefor.

In addition,  the  Securities  and Exchange  Commission  has adopted a number of
rules to  regulate  penny  stocks.  Such rules  include  Rule  3a51-1  under the
Securities Act of 1933, an Rules 15g-1,  15g-2, 15g-3, 15g-4, 15g-5, 15g- 6, and
15g-7  under the  Securities  Exchange  Act of 1934,  as  amended.  Because  the
securities of the Company may constitute  penny stocks within the meaning of the
rules, the rules would apply to the Company and to its securities. The rules may
further affect the ability of the Company's shareholders to sell their shares in
any public market, which might develop.

Shareholders  should  be  aware  that,  according  to  Securities  and  Exchange
Commission  Release No.  34-29093,  the market for penny  stocks has suffered in
recent years form patterns of fraud and abuse. Such patterns include (i) control
of the market for the  security  by one or a few  broker-dealers  that are often
related  to  the  promoter  or  issuer;  (ii)  manipulation  of  prices  through
prearranged  matching  of  purchases  and sales and false and  misleading  press
releases;  (iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling broker- dealers; and (v)
the wholesale  dumping of the same  securities  by promoters and broker  dealers
after prices have been manipulated to a desired level,  along with the resulting
inevitable  collapse of those prices and with consequent  investor  losses.  The
Company's  management is aware of the abuses that have occurred  historically in
the penny stock market. Although the Company does not expect to be in a position
to dictate the behavior of the market or of broker  dealers who  participate  in
the market,  management will strive within the confines of practical limitations
to prevent the  described  patterns form being  established  with respect to the
Company's securities.

No  Operating  History.  The Company has no  operating  history,  revenues  from
operations  or assets.  The Company faces all of the risks of a new business and
the special risks inherent in the investigation,  acquisition, or involvement in
a new  business  opportunity.  The Company must be regarded as a new or start-up
venture with all of the unforeseen costs,  expenses,  problems, and difficulties
to which such ventures are subject.

No Assurance of Success or Profitability. There is no assurance that the Company
will acquire a favorable business opportunity. Even if the Company should become
involved in a business opportunity,  there is no assurance that it will generate
revenues  or  profits,  or that the market  price of the  Company's  outstanding
shares will be increased thereby.

Possible  Business Not Identified  and Highly Risky.  The Company has identified
it's business plan as (a) making  medium to high risk  unsecured  loans to third
party individuals, corporations and/or other entities; (b) equity investments in
early-stage,  early-growth,  pre-IPO  companies with a primary objective of both
long-term  appreciation  as well as  short-term  profits;  and c) general  asset
management. Other general business services may

                                                                               6

<PAGE>

be  offered in the  future;  however,  these  plans and  services  have not been
defined by management as of the date of these financial  statements.  There have
been no business transactions conducted by Lenders/Investors,  Inc. As a result,
it is only able to make general disclosures  concerning the risks and hazards of
acquiring a business opportunity,  rather than providing disclosure with respect
to specific risks and hazards relating to a particular business opportunity.  As
a general  matter,  prospective  investors  can  expect any  potential  business
opportunity to be quite risky.

Lack of  Diversification.  Because of the limited  financial  resources that the
Company  has, it is  unlikely  that the Company  will be able to  diversify  its
acquisitions or operations.  The Company's  probable  inability to diversify its
activities  into  more  than one area  will  subject  the  Company  to  economic
fluctuations within a particular business or industry and therefore increase the
risks associated with the Company's operations.

Other Regulation. A transaction made by the Company may be of a business that is
subject to  regulation  or licensing by federal,  state,  or local  authorities.
Compliance  with  such  regulations  and  licensing  can  be  expected  to  be a
time-consuming,  expensive process and may limit other investment  opportunities
of the Company.

Dependence upon Management;  Limited  Participation  of Management.  The Company
will be entirely  dependant upon the experience of its officers and directors in
seeking,  investigating,  and  acquiring  a  business  and in  making  decisions
regarding the Company's operations.  It is possible that, from time to time, the
inability  of such  persons to devote  their full time  attention to the Because
investors  will not be able to evaluate the merits of possible  future  business
acquisitions  by the  Company,  they should  critically  assess the  information
concerning the Company's officers and directors. (See Management.)

Lack of  Continuity  in  Management.  The  Company  does not have an  employment
agreement  with any of its officers or directors,  and as a result,  there is no
assurance  that they will  continue  to manage  the  Company in the  future.  In
connection with acquisition of a business opportunity,  it is likely the current
officers and  directors of the Company may resign.  A decision to resign will be
based  upon the  identity  of the  business  opportunity  and the  nature of the
transaction,  and is  likely  to  occur  without  the  vote  or  consent  of the
stockholders of the Company.

Indemnification of Officers and Directors. The Company's By-Laws provide for the
indemnification  of its,  directors,  officers,  employees,  and  agents,  under
certain  circumstances,  against  attorney's fees and other expenses incurred by
them in any  litigation  to  which  they  become  a  party  arising  from  their
association  with or activities on behalf of the Company.  The Company will also
bear  the  expenses  of  such  litigation  for any of its  directors,  officers,
employees, or agents, upon such persons promise to repay the Company therefor if
it is ultimately determined that any such person shall not have been entitled to
indemnification.   This  indemnification  policy  could  result  in  substantial
expenditures by the Company, which it may be unable to recoup.

Dependence upon Outside Advisors.  To supplement the business  experience of its
officers  and  directors,  the Company  may be  required to employ  accountants,
technical experts, appraisers,  attorneys, or other consultants or advisors. The
selection of any such advisors will, be made by the Company's officers,  without
any input by shareholders.  Furthermore, it is anticipated that such persons may
be  engaged  on an as needed  basis  without  a  continuing  fiduciary  or other
obligation to the Company.  In the event the officers of the Company consider it
necessary  to hire  outside  advisors,  they may elect to hire  persons  who are
affiliates, if those affiliates are able to provide the required services.

Competition.  The search for potentially  profitable  business  opportunities is
intensely  competitive.  The  Company  expects  to  be  at a  disadvantage  when
competing  with  many  firms  that  have  substantially  greater  financial  and
management  resources  and  capabilities  than the  Company.  These  competitive
conditions  will  exist  in  any  industry  in  which  the  Company  may  become
interested.

No Foreseeable Dividends. The Company has not paid dividends on its Common Stock
and does not anticipate paying such dividends in the foreseeable future.

No Public Market  Exists.  There is currently no public market for the Company's
common stock, and no assurance can be given that a market will develop or that a
shareholder will ever be able to liquidate his investment  without  considerable
delay, if at all. If a market should develop,  the price may be highly volatile.
Factors such

                                                                               7

<PAGE>

as those  discussed in this Risk Factors  section may have a significant  impact
upon the market price of the securities  offered hereby.  Owing to the low price
of  the  securities,   many  brokerage  firms  may  not  be  willing  to  effect
transactions in the securities.  Even if a purchasers  finds a broker willing to
effect  a  transaction  in  theses  securities,  the  combination  of  brokerage
commissions,  state  transfer  taxes,  if any, and any other  selling  costs may
exceed the selling price. Further, many leading institutions will not permit the
use of such securities as collateral for any loans.

Rule 144 Sales. Of the 25,360,007 presently  outstanding shares of the Company's
stock,  20,000,000  shares were issued on February 14, 2003 and 5,250,000 shares
were  issued on  September  1, 2001.  These  shares are  considered  "restricted
securities"  within the meaning of Rule 144 under the Securities Act of 1933, as
amended.  As restricted  shares,  these shares may be resold only pursuant to an
effective  registration statement or under the requirements of Rule 144 or other
applicable  state securities law. Rule 144 provides in essence that a person who
has held  restricted  securities  for a  prescribed  period,  may under  certain
conditions,  sell every three  months,  in brokerage  transactions,  a number of
shares  that does not exceed  the  greater  of 1.0% of a  company's  outstanding
common stock or the average weekly trading volume during the four calendar weeks
prior to sale. There is no limit on the amount of restricted securities that may
be sold by a non-affiliate after the restricted securities have been held by the
owner,  for a period of at least two years.  A sale under Rule 144,  or under an
other  exemption  from  the  Act,  if  available,   or  pursuant  to  subsequent
registrations  of common  stock of present  shareholders,  may have a depressive
effect upon the price of the Common Stock in may market that may develop.  As of
the date hereof,  the current owners have held 110,007 of the outstanding shares
of the common stock of the Company  thereof for a period of more than two years.
Accordingly,  such shares are currently  available for resale in accordance with
the provisions of Rule 144.

Blue Sky  Consideration.  Because the securities  registered  hereunder have not
been registered for resale under the Blue Sky laws of any state,  the holders of
such shares and persons who desire to purchase  them in any trading  market that
might  develop in the  future,  should be aware,  that there may be  significant
state  Blue Sky law  restrictions  upon the  ability  of  investors  to sell the
securities and of purchasers to purchase the securities.  Accordingly, investors
should  consider  the  secondary  market for the  Company's  securities  to be a
limited one.

Item 2 - Description of Property

The  Company  currently  maintains  a mailing  address at 2000 East 4th  Avenue,
Hialeah, FL 33010. The Company's telephone number there is (305) 887-0624. Other
than this mailing  address,  the Company does not  currently  maintain any other
office  facilities,  and does not  anticipate  the need for  maintaining  office
facilities at any time in the  foreseeable  future.  The Company pays no rent or
other  fees  for the use of the  mailing  address  as  these  offices  are  used
virtually full-time by other businesses of the Company's President.

It is  likely  that  the  Company  will not  establish  an  office  until it has
completed a business acquisition transaction,  but it is not possible to predict
what   arrangements  will  actually  be  made  with  respect  to  future  office
facilities.

Item 3 - Legal Proceedings

The  Company  is not a  party  to any  pending  legal  proceedings,  and no such
proceedings are known to be contemplated.

Item 4 - Submission of Matters to a Vote of Security Holders

The Company has not conducted any meetings of shareholders  during the preceding
quarter or periods subsequent thereto.


                                                                               8

<PAGE>

                                     PART II

Item 5 - Market for Company's Common Stock and Related Stockholder Matters

Market for Trading

The stock does not trade on any  exchange.  There is no known public  market for
this  security.  As  of  April  23,  2003,  the  Company  has  approximately  56
shareholders of record.

Common Stock

The Company's  Articles of  Incorporation  authorize the issuance of 200,000,000
shares of $0.001 par value Common  Stock.  Each record holder of Common Stock is
entitled to one vote for each share held on all matters  properly  submitted  to
the  stockholders  for their vote. The Articles of  Incorporation  do not permit
cumulative voting for the election of directors.

Holders of outstanding  shares of Common Stock are entitled to such dividends as
may be  declared  from time to time by the  Board of  Directors  out of  legally
available funds; and, in the event of liquidation,  dissolution or winding up of
the affairs of the Company,  holders are entitled to receive,  ratably,  the net
assets of the Company  available to stockholders  after  distribution is made to
the  preferred  stockholders,  if  any,  who are  given  preferred  rights  upon
liquidation.  Holders of outstanding  shares of Common Stock have no preemptive,
conversion or redemptive  rights.  All of the issued and  outstanding  shares of
Common Stock are,  and all  unissued  shares when offered and sold will be, duly
authorized,  validly issued, fully paid, and non-assessable.  To the extent that
additional  shares of the  Company's  Common  Stock  are  issued,  the  relative
interests of then existing stockholders may be diluted.

Transfer Agent

The transfer agent is Pacific Stock Transfer Company,  500 E. Warm Springs Road,
Suite 240, Las Vegas, Nevada 89119. Their telephone number is (702) 361-3033.

Reports to Stockholders

The Company  plans to furnish its  stockholders  with an annual  report for each
fiscal year ending February 28/29 containing financial statements audited by its
independent certified public accountants. In the event the Company enters into a
business  combination  with  another  Company,  it is the present  intention  of
management to continue furnishing annual reports to stockholders.  Additionally,
the Company may, in its sole discretion, issue unaudited annual or other interim
reports to its stockholders  when it deems  appropriate.  The Company intends to
comply with the periodic reporting  requirements of the Securities  Exchange Act
of 1934.

Dividend policy

No dividends  have been paid to date and the Company's  Board of Directors  does
not anticipate  paying  dividends in the foreseeable  future.  It is the current
policy to retain all earnings, if any, to support future growth and expansion.

Recent sales of unregistered securities

On or about March 12,  2001,  the Company  issued  1,250  shares of  restricted,
unregistered  common stock to Greg Labute, an unrelated  individual for investor
relations  services.  This transaction was valued at approximately  $2,500 which
approximated  the "fair value" of the Company's common stock based on the quoted
closing  price of the  Company's  common  stock  at the  date of the  respective
transaction.  The  Company  utilizes a discount  of  approximately  50.0% on the
quoted  closing  price  to  value  all  transactions  settled  with  restricted,
unregistered  common stock issued  pursuant to Rule 144 of the U. S.  Securities
and Exchange Commission.

                                                                               9

<PAGE>

On or about July  10,2001,  the  Company  issued  43,625  shares of  restricted,
unregistered  common stock to Julain Carlson (100,000 shares), R. Brian Buchanan
(200,000 shares),  Nathan Drage (350,000 shares), Shiraz Hussein (75,000 shares)
and Olympus  Business  (8,000,000  shares);  all either former officers or other
unrelated individuals, for professional services, compensation and reimbursement
of  expenses  paid on behalf of the  Company to preserve  the  corporate  entity
during the period from November 30, 2000 through June 30, 2001. This transaction
was valued at approximately  $160,000 which approximated the "fair value" of the
Company's common stock based on the quoted closing price of the Company's common
stock at the date of the respective transaction. The Company utilizes a discount
of  approximately  50.0% on the quoted  closing price to value all  transactions
settled with restricted,  unregistered  common stock issued pursuant to Rule 144
of the U. S. Securities and Exchange Commission.

On or about September 1, 2001 (previously  erroneously  reported as September 1,
2002 due to an inadvertent  clerical error,  the Company issued 5,250,000 shares
of restricted, unregistered common stock to Andres Fernandez (2,000,000 shares),
J. A. Fernandez,  Sr. (500,000 shares), Maria Fernandez (500,000 shares), Emilio
D. Jara (500,000 shares), Jorge Elias (500,000 shares), Brad Curtsinger (500,000
shares),  Charles Adams (500,000 shares) and Wellington  Capital Corp.  (250,000
shares),   all  either  current   management  or  other  related  and  unrelated
individuals  as  compensation  related  to the  proposed  transaction  with  F&F
Equipment,  Inc.  This  transaction  was valued at  approximately  $5,250  which
approximated  the "fair value" of the Company's common stock based on the quoted
closing  price of the  Company's  common  stock  at the  date of the  respective
transaction.  The  Company  utilizes a discount  of  approximately  50.0% on the
quoted  closing  price  to  value  all  transactions  settled  with  restricted,
unregistered  common stock issued  pursuant to Rule 144 of the U. S.  Securities
and Exchange Commission.

On or about February 14, 2003, the Company sold 20,000,000 shares of restricted,
unregistered common stock to Jorge Elias, an unrelated individual, for gross
proceeds of $50,000 to support short-term working capital requirements. The
Company relied upon Section 4(2) of the Securities Act of 1933, as amended, and
Rule 506 of Regulation D promulgated thereunder ('33 Act). This transaction did
not involve a public offering and was exempt from registration under the '33
Act. No underwriters were used in connection with this transaction.

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

General

On December 1, 2000,  the Company  entered  into an  agreement  with it's former
controlling  shareholders and officers whereby the former officers would acquire
all the assets and  operations of the Company in exchange for the  assumption of
liabilities  related thereto.  Further,  a controlling  shareholder  surrendered
5,000 shares of common stock to the Company for no consideration. As a result of
this transaction, the Company had no assets, liabilities or operations.

On July 20, 2001,  the Company  entered into a Share Exchange  Agreement,  to be
completed on or before August 31, 2001, whereby the Company would acquire 100.0%
of the  issued  and  outstanding  capital  stock  of F & F  Equipment,  Inc.  (a
privately-owned   Florida   corporation)   (F&F)  in  exchange  for   25,000,000
post-reverse  split  shares of common  stock of the  Company to effect a reverse
acquisition  of F&F. On August 31, 2001,  F&F and the Company  agreed that there
was a failure of  consideration on the part of one (1) or both of the parties to
the  Agreement.  F&F and the Company have agreed that it is in the best interest
of both parties to void,  cancel and  terminate  the  Agreement ab initio and to
release  any claims F&F has  against  the Company as well as any claims that the
Company has against F&F in consideration of such release.

On February 14, 2003, concurrent with a change in control, the Company initiated
a new business plan. On April 23, 2003,  the Company  formed a new  wholly-owned
subsidiary,  Lenders/Investors,  Inc. (a Florida corporation) for the purpose of
(a)  making  medium to high risk  unsecured  loans to third  party  individuals,
corporations  and/or other  entities;  (b) equity  investments  in  early-stage,
early-growth,  pre-IPO  companies  with a primary  objective  of both  long-term
appreciation  as well as short-term  profits;  and c) general asset  management.
Other general  business  services may be offered in the future;  however,  these
plans and services have not been defined by

                                                                              10

<PAGE>



management  as of  the  date  of  this  filing.  There  have  been  no  business
transactions conducted by Lenders/Investors, Inc.

Results of Operations

The  Company had no revenues  for the years  ended  February  28, 2003 and 2002,
respectively.

During the year ended  February  28,  2003,  the Company  incurred  expenses for
professional fees and EDGAR filing services of approximately $7,425. These costs
were directly  related to curing the Company's  deficiencies  in filing periodic
reports as required by the Securities Exchange Act of 1934.

During the year  ended  February  28,  2002,  the  Company  recognized  non-cash
expenses  of  approximately  $168,000,  which  were  paid with the  issuance  of
restricted,  unregistered  shares of the  Company's  common  stock,  for various
professional  services,  compensation of former  employees and  reimbursement of
various expenses paid on behalf of the Company to preserve the corporate entity.

Future expenditure levels are expected to be nominal,  generally for the purpose
of maintaining  the Company's  stockholder  records and filing  requirements  to
comply with the Securities Exchange Act of 1934 and for initiating the Company's
current business plan, as discussed previously.

The  Company  does not  expect  to  generate  any  meaningful  revenue  or incur
operating  expenses for purposes  other than  fulfilling  the  obligations  of a
reporting  company  under The  Securities  Exchange Act of 1934 unless and until
such time that the Company's operating subsidiary begins meaningful operations.

Liquidity and Capital Resources

At February 28, 2003 and 2002, respectively,  the Company had working capital of
approximately $45,350 and $-0-.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant  stockholders  to provide  additional  future funding.
Should this pledge fail to provide financing, the Company has not identified any
alternative  sources.  Consequently,   there  is  substantial  doubt  about  the
Company's ability to continue as a going concern.

The  Company's  need for  capital  may  change  dramatically  as a result of the
implementation of it's current business plan.

Regardless of whether the  Company's  cash assets prove to be inadequate to meet
the Company's  operational needs, the Company might seek to compensate providers
of services by issuances  of stock in lieu of cash.  For  information  as to the
Company's  policy in regard to payment  for  consulting  services,  see  Certain
Relationships and Transactions.

Item 7 - Index to Financial Statements

The required financial statements begin on page F-1 of this document.


Item 8 -  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
          Financial Disclosures

None


                                                                              11

<PAGE>

                                    PART III

Item 9  -  Directors,   Executive  Officers,   Promoters  and  Control  Persons;
           Compliance with Section 16(a) of the Exchange Act

The directors and executive officers serving the Company are as follows:

     Name       Age           Position Held and Tenure
-------------  -----     -------------------------------------
Jorge Elias     38       President, Chief Executive Officer
                         Chief Financial Officer and Director

The  director  named  above  will  serve  until the next  annual  meeting of the
Company's  stockholders  or until  their  successors  are duly  elected and have
qualified.   Directors  will  be  elected  for  one-year  terms  at  the  annual
stockholders meeting.  Officers will hold their positions at the pleasure of the
board of directors,  absent any  employment  agreement,  of which none currently
exists or is contemplated.  There is no arrangement or understanding between any
of the  directors  or officers of the Company and any other  person  pursuant to
which any director or officer was or is to be selected as a director or officer,
and there is no arrangement,  plan or understanding as to whether non-management
shareholders  will exercise their voting rights to continue to elect the current
directors to the Company's board. There are also no arrangements,  agreements or
understandings  between   non-management   shareholders  that  may  directly  or
indirectly participate in or influence the management of the Company's affairs.

The directors and officers will devote their time to the Company's affairs on an
as needed  basis,  which,  depending  on the  circumstances,  could amount to as
little as two hours per month, or more than forty hours per month, but more than
likely  encompass  less than ten hours per  month.  There are no  agreements  or
understandings  for any  officer or director to resign at the request of another
person,  and none of the officers or directors  are acting on behalf of, or will
act at the direction of, any other person.

Biographical Information

Jorge Elias, Sole Officer and Director

Jorge Elias, age 38,  currently  serves as sole officer and director.  Mr. Elias
has served in each of these  capacities  since April 2003. Since 1988, Mr. Elias
has been and  continues  to be the  Director  of  Marketing  and Sales for Elias
Fabrica,  Inc. located in Hialeah,  Florida. In that capacity, he is responsible
for budgeting,  marketing and sales,  employee and vendor relations,  hiring and
supervision of personnel.  Mr. Elias attended St. Thomas University in Miami, FL
between 1987 and 1991, where he earned a Bachelor of Arts degree in Management.

Indemnification of Officers and Directors.

The  Company's  By-Laws  provide  for the  indemnification  of  its,  directors,
officers, employees, and agents, under certain circumstances, against attorney's
fees and other expenses  incurred by them in any litigation to which they become
a party  arising  from their  association  with or  activities  on behalf of the
Company.  The Company will also bear the expenses of such  litigation for any of
its directors,  officers,  employees,  or agents,  upon such persons  promise to
repay the Company  therefor if it is ultimately  determined that any such person
shall not have been entitled to  indemnification.  This  indemnification  policy
could result in substantial  expenditures by the Company, which it may be unable
to recoup.

Conflicts of Interest

None of the  officers of the Company will devote more than a portion of his time
to  the  affairs  of  the  Company.  There  will  be  occasions  when  the  time
requirements of the Company's business conflict with the demands of the officers
other  business and investment  activities.  Such conflicts may require that the
Company attempt to employ additional  personnel.  There is no assurance that the
services of such persons  will be  available  or that they can be obtained  upon
terms favorable to the Company.

                                                                              12

<PAGE>



The officers,  directors and principal  shareholders of the Company may actively
negotiate for the purchase of a portion of their common stock as a condition to,
or in connection with, a proposed merger or acquisition transaction,  if any. In
the event that such a transaction  occurs,  it is anticipated that a substantial
premium may be paid by the purchaser in  conjunction  with any sale of shares by
the Company's officers, directors and principal shareholders made as a condition
to, or in connection  with, a proposed  merger or acquisition  transaction.  The
fact that a substantial  premium may be paid to members of Company management to
acquire their shares  creates a conflict of interest for them and may compromise
their state law fiduciary duties to the Company's other shareholders.  In making
any such sale,  members of Company  management  may consider  their own personal
pecuniary  benefit  rather  than  the  best  interests  of the  Company  and the
Company's other shareholders,  and the other shareholders are not expected to be
afforded  the  opportunity  to  approve or  consent  to any  particular  buy-out
transaction involving shares held by members of Company management.

It is not currently anticipated that any salary,  consulting fee, or finders fee
shall be paid to any of the Company's directors or executive officers, or to any
other affiliate of the Company except as described under Executive  Compensation
below.

Although  management  has no current  plans to cause the Company to do so, it is
possible  that the  Company  may enter  into an  agreement  with an  acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's  current  stockholders  to the  acquisition  candidate  or  principals
thereof,  or to other individuals or business entities,  or requiring some other
form of payment to the Company's current  stockholders,  or requiring the future
employment  of specified  officers  and payment of salaries to them.  It is more
likely  than  not  that  any  sale  of  securities  by  the  Company's   current
stockholders  to an  acquisition  candidate  would  be at a price  substantially
higher than that  originally paid by such  stockholders.  Any payment to current
stockholders  in the context of an  acquisition  involving  the Company would be
determined  entirely by the largely  unforeseeable  terms of a future  agreement
with an u0nidentified business entity.

Item 10 - Executive Compensation

Currently,  management  of the  Company  requires  less  than four (4) hours per
month.  Accordingly,  no officer or director has received any compensation  from
the Company  since the  inception  of the  Company.  Until the Company  acquires
additional  capital,  it is not  anticipated  that any officer or director  will
receive compensation from the Company.

The Company has no stock option, retirement, pension, or profit-sharing programs
for the  benefit of  directors,  officers or other  employees,  but the Board of
Directors may recommend adoption of one or more such programs in the future.

<TABLE>
<CAPTION>
                                                                             Long-Term
                                           Annual Compensation        Compensation Awards        Payouts
                                          --------------------       ---------------------      --------
                                         (1)            Other       Restricted    Securities                    All
                                       Salary/         Annual          Stock      Underlying      LTIP         Other
Name/Title                    Year       Bonus      Compensation      Awards     Options/SARs    Payouts    Compensation
--------------------------- -------- ------------ ----------------- ----------- --------------- --------- ----------------
<S>                           <C>        <C>            <C>            <C>           <C>          <C>         <C>
Jorge Elias                   2002       $-0-           $-0-           $-0-          $-0-         $-0-        $-0-
Sole Officer and Director     2001       N/A             N/A            N/A           N/A          N/A         N/A
                              2000       N/A             N/A            N/A           N/A          N/A         N/A
</TABLE>

(1) All other  compensation  includes certain health and life insurance benefits
paid by the Company on behalf of its employees.

(2) Mr. Elias will not be compensated  until the Company receives funding in the
amount of  $100,000.00  or more and the Board of Directors  thereafter  approves
reasonable compensation.

                                                                              13

<PAGE>

Item 11 - Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of the date of this  Registration  Statement,
the  number of  shares of Common  Stock  owned of  record  and  beneficially  by
executive officers, directors and persons who hold 5% or more of the outstanding
Common Stock of the Company.  Also included are the shares held by all executive
officers and directors as a group.

     Name and address            Number of SharesBeneficially Owned   % of Class
------------------------------   ----------------------------------  -----------
Jorge Elias                              20,000,000                       78.86%
     2000 East 4th Avenue
     Hialeah FL 33010

Andres F. Fernandez                      2,000,000                         7.89%
     3545 N. W. 71st Street
     Miami FL 33147

All Directors and                        20,000,000                       78.86%
Executive Officers (2 persons)

Item 12 - Certain Relationships and Related Transactions

The  Company  currently  maintains  a mailing  address at 3000 East 4th  Avenue,
Hialeah,  FL 33010. The Company's  telephone number there is 305-887-0624.  This
address is maintained  and controlled by Jorge Elias,  the Company's  President.
Other than this mailing  address,  the Company does not  currently  maintain any
other office facilities, and does not anticipate the need for maintaining office
facilities at any time in the  foreseeable  future.  The Company pays no rent or
other  fees  for the use of the  mailing  address  as  these  offices  are  used
virtually full- time by other businesses of the Company's President.

Item 13 - Exhibits and Reports on Form 8-K

Exhibits
<TABLE>
<S>      <C>
2.1      Merger Agreement between the Company and Capstra Capital Corp. [2]
2.2      Share Exchange Agreement between American Ammunition, Inc. and F & F Equipment, Inc.
         as finalized on August 31, 2001 [3]
3(i).1   Articles of Incorporation of Greatestescapes.com [1]
3(i).2   Certificate of Amendment to Articles of Incorporation of Greatestescapes.com, Inc.
         filed July 23, 2001.    [3]
3(i).3   Articles of Incorporation of Lenders / Investors, Inc. [5]
3(ii).1  Bylaws of Greatestescapes.com [1]
3 (ii).2 Bylaws of Lenders / Investors, Inc. [5]
10.1     Intellectual Property Assignment between the Company and Kick Start Publishing [1]
10.2     Public Relations Agreement between the Company and Kathleen Carney & Associates [1]
10.3     Distribution Agreement between the Company and WORDS Distributing [1]
10.4     Supplier Agreement between the Company and Organic Buckwheat Pillow Products of
         Canada & USA   [1]
10.5     Supplier Agreement between the Company and Microsoie, Inc. [1]
10.6     Supplier Agreement between the Company and Ulysses Press [1]
10.7     Supplier Agreement between the Company and SunDreamer [1]
10.8     Supplier Agreement between the Company and Attart Industries, Inc. [1]
10.9     Agreement to Void, Cancel and Terminate Stock Exchange Agreement. [4]
99.1     Certification pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
</TABLE>

                                                                              14

<PAGE>


[1]  Incorporated herein by reference to the Company's Registration Statement on
     Form 10-SB filed September 6, 2000.
[2]  Incorporated  herein by reference to the Company's  Current  Report on Form
     8-K filed October 18, 2000.
[3]  Incorporated  herein by reference to the Company's  Current  Report on Form
     8-K filed September 5, 2001.
[4]  Incorporated  herein by reference to the Company's  Current  Report on Form
     8-K filed October 2, 2001.
[5]  Incorporated  herein by reference to the Company's  Current  Report on Form
     8-K, filed April , 2003.

Reports on Form 8-K

April 23, 2003  Announcement of private  placement sale of 20,000,000  shares of
common stock to Jorge Elias and  establishment of new  wholly-owned  subsidiary,
Lenders / Investors, Inc.

Item 14 - Controls and Procedures

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of  the  Company's   management,   including  the  Company's
President,  Chief Executive Officer and Chief Financial Officer. Based upon that
evaluation, the Company's President, Chief Executive Officer and Chief Financial
Officer  concluded  that the Company's  disclosure  controls and  procedures are
effective.  There have been no  significant  changes in the  Company's  internal
controls or in other factors, which could significantly affect internal controls
subsequent to the date the Company carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information  required to be disclosed in Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive  Officer and Chief Financial  Officer as appropriate,  to allow timely
decisions regarding required disclosure.

--------------------------------------------------------------------------------

                                   SIGNATURES

In accord with Section 13 or 15(d) of the  Securities  Act of 1933,  as amended,
the Company  caused  this report to be signed on its behalf by the  undersigned,
thereto duly authorized.

                     American Recreational Enterprises, Inc.

Dated: May 19, 2003                             By:      /s/ Jorge Elias
                                                   ---------------------------
                                                                   Jorge Elias
                                                      Chief Executive Officer,
                                          Chief Financial Officer and Director

In accordance with the Securities Exchange Act of 1934, as amended,  this report
has been signed below by the  following  persons on behalf of the Company and in
the capacities and on the date as indicated.


Dated: May 19, 2003                             By:      /s/ Jorge Elias
                                                   ---------------------------
                                                                   Jorge Elias
                                                      Chief Executive Officer,
                                          Chief Financial Officer and Director

                                                                              15

<PAGE>






                                                                              16

<PAGE>


       Certification Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

In connection with the Annual Report of American Recreational Enterprises,  Inc.
(Registrant)  on Form 10-KSB for the year ended February 28, 2003, as filed with
the  Securities  and Exchange  Commission,  on the date hereof,  I, Jorge Elias,
Chief Executive and Chief Financial Officer of the Company,  certify to the best
of my knowledge, that:

1. I have reviewed  this Annual  Report on Form 10-KSB of American  Recreational
Enterprises, Inc. for the year ended February 28, 2003.

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

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

4. The registrant's other certifying officers, if any, and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this Annual Report is being prepared;
     b) evaluated the effectiveness of the Registrant's  disclosure controls and
procedures  as of a date  within 90 days prior to the filing date of this Annual
Report (the "Evaluation Date"); and
     c) presented in this Annual Report our conclusions  about the effectiveness
of the  disclosure  controls and  procedures  based on our  evaluation as of the
Evaluation Date;

5. The  Registrant's  other certifying  officers,  if any, and I have disclosed,
based on our most recent evaluation,  to the Registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent functions):

     a) all  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  Registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
Registrant's auditors any material weaknesses in internal controls; and
     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the Registrant's internal controls; and

6. The Registrant's other certifying  officers,  if any, and I have indicated in
this Annual  Report  whether or not there were  significant  changes in internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


/s/ Jorge Elias                                              Dated: May 19, 2003
----------------------------------
Jorge Elias
Chief Executive Officer and
Chief Financial Officer



                                                                              17

<PAGE>



<TABLE>
<CAPTION>
                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                                    Contents

                                                                                Page

<S>                                                                             <C>
Report of Independent Certified Public Accountants                              F-2

Financial Statements
   Balance Sheets
     as of February 28, 2003 and 2002                                           F-3

   Statements of Operations
     for the years ended February 28, 2003 and 2002 and
     for the period from February 10, 1999 (date of inception)
       through February 28, 2003                                                F-4

   Statement of Changes in Shareholders' Equity (Deficit) for the years ended
     February 28, 2003 and 2002 and for the period February 10, 1999 (date of
     inception)
       through February 28, 2003                                                F-5

   Statements of Cash Flows
     for the years ended February 28, 2003 and 2002 and
     for the period February 10, 1999 (date of inception)
       through February 28, 2003                                                F-6

   Notes to Financial Statements                                                F-7
</TABLE>




                                                                             F-1

<PAGE>


S. W. HATFIELD, CPA
certified public accountants

Member:    Texas Society of Certified Public Accountants
           Press Club of Dallas



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


Board of Directors and Stockholders
American Recreational Enterprises, Inc.

We have  audited  the  accompanying  balance  sheets  of  American  Recreational
Enterprises,  Inc. (a Nevada  corporation and a development stage enterprise) as
of February  28,  2003 and 2002 and the related  statements  of  operations  and
comprehensive loss, changes in shareholders' equity (deficit) and cash flows for
each of the years  ended  February  28,  2003 and 2002 and for the  period  from
February 10, 1999 (date of inception) through February 28, 2003, respectively. .
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 audits.

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  audits  provide  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  American   Recreational
Enterprises,  Inc.  as of  February  28,  2003 and 2002 and the  results  of its
operations  and its cash flows for each of the years ended February 28, 2003 and
2002 and for the period  from  February  10,  1999 (date of  inception)  through
February  28,  2003,   respectively,   in  conformity  with  generally  accepted
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note C to the
financial statements, the Company has no viable operations or significant assets
and is dependent upon  significant  shareholders to provide  sufficient  working
capital to maintain the integrity of the corporate entity.  These  circumstances
create  substantial  doubt  about the  Company's  ability to continue as a going
concern and are discussed in Note C. The financial statements do not contain any
adjustments that might result from the outcome of these uncertainties.


                                                         /s/ S. W. Hatfield, CPA
                                                --------------------------------
                                                             S. W. HATFIELD, CPA
Dallas, Texas
April 23, 2003


                      Use our past to assist your future sm
(secure mailing address)                   (overnight delivery/shipping address)
P. O. Box 820395                               9002 Green Oaks Circle, 2nd Floor
Dallas, Texas  75382-0395                               Dallas, Texas 75243-7212
214-342-9635 (voice)                                          (fax) 214-342-9601
800-244-0639                                                      SWHCPA@aol.com

                                                                             F-2

<PAGE>



<TABLE>
<CAPTION>
                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)
                                 Balance Sheets
                           February 28, 2003 and 2002

                                                                February 28,      February 28,
                                                                    2003              2002
                                                              ----------------  -----------------
<S>                                                           <C>               <C>
     ASSETS
Current Assets

   Cash on hand and in bank                                   $         45,350  $               -
                                                              ----------------  -----------------

   Total Current Assets                                                 45,350  $               -
                                                              ----------------  -----------------

Total Assets                                                  $         45,350  $               -
                                                              ================  =================


     LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Liabilities
   Current Liabilities
     Accounts payable - trade                                 $          2,775  $               -
                                                              ----------------  -----------------

     Total Current Liabilities                                           2,775                  -
                                                              ----------------  -----------------


Commitments and Contingencies


Shareholders' Equity (Deficit)
   Preferred stock - $0.001 par value
     50,000,000 shares authorized.
     None issued and outstanding                                             -                  -
   Common stock - $0.001 par value.
     200,000,000 shares authorized.
     25,360,007 and 5,360,007 shares
       issued and outstanding, respectively                             25,360              5,360
   Additional paid-in capital                                          684,668            654,668
   Deficit accumulated during the development stage                   (667,453)          (660,028)
                                                              ----------------  -----------------

   Total Shareholders' Equity (Deficit)                                 42,575                  -
                                                              ----------------  -----------------

   Total Liabilities and Shareholders' Equity (Deficit)       $         45,350  $               -
                                                              ================  =================
</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-3

<PAGE>



<TABLE>
<CAPTION>
                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)
                 Statements of Operations and Comprehensive Loss
                   Years ended February 28, 2003 and 2002 and
                Period from February 10, 1999 (date of inception)
                           through February 28, 2003


                                                                                                   Period from
                                                                                                February 10, 1999
                                                                                               (date of inception)
                                                                Year ended        Year ended          through
                                                               February 28,      February 28,       February 28,
                                                                   2003               2002              2003
                                                              ----------------  --------------  -------------------
<S>                                                            <C>              <C>              <C>
Revenues                                                       $           -    $           -    $           -
                                                               -------------    -------------    -------------

Expenses
   General and administrative expenses                                 7,425          167,861           175,286
                                                               -------------    -------------    -------------

     Total operating expenses                                          7,425          167,861          175,286
                                                               -------------    -------------    -------------

Loss from continuing operations
   before provision for income taxes                                  (7,425)        (167,861)        (175,286)

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

Loss before discontinued operations                                   (7,425)        (167,861)        (175,286)

Discontinued operations
   Gain on final settlement and disposition of assets
     and operations, net of income taxes                                   -                -           74,933
   Income from operations of discontinued subsidiary,
     net of income taxes                                                   -                -         (566,052)
                                                               -------------    -------------    -------------

Net Loss                                                             (7,425)         (167,861)        (666,405)

Other Comprehensive Income
   Foreign currency translation effect
     upon dissolution of operations                                        -                -           (1,048)
                                                               -------------    -------------    -------------

Comprehensive Loss                                             $      (7,425)   $    (167,861)   $    (667,453)
                                                               =============    =============    =============


Earnings per share of common stock
   outstanding computed on net loss -
   basic and fully diluted
     From continuing operations                                $       (0.00)   $       (0.06)   $       (0.08)
     From discontinued operations                                      (0.00)           (0.00)           (0.22)
                                                               -------------    -------------    -------------
       Totals                                                  $       (0.00)   $       (3.63)   $       (0.30)
                                                               =============    =============    =============

Weighted-average number of shares
   outstanding - basic and fully diluted                           6,181,925        2,667,737        2,220,306
                                                               =============    =============    =============
</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-4

<PAGE>



<TABLE>
<CAPTION>
                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)
                  Statement of Changes in Shareholders' Equity
                     (Deficit) Period from February 10, 1999
                 (date of inception) through February 28, 2003

                                                                                              Deficit
                                                                                             accumulated
                                                                 Additional    Other         during the
                                               Common Stock      paid-in     comprehensive   development
                                             Shares     Amount   capital        income            stage      Total
                                          ----------------------------------------------------------------------------

<S>                                       <C>        <C>         <C>         <C>             <C>            <C>
Shares issued on February 10, 1999         4,460,000 $   4,460   $   17,840  $        -      $        -     $  22,300
   Effect of rounding on
     July 2001 reverse split              (4,407,748)   (4,408)       4,408           -               -             -
Net loss for the period                            -         -            -           -         (25,818)      (25,818)
                                          ---------- ---------   ----------  ----------      ----------     ---------
Balances at February 28, 1999                 52,252        52       22,248           -         (25,818)       (3,518)

Issuance of common stock                       3,308         4      250,071           -               -       250,075
Foreign currency translation effects               -         -            -       1,048               -         1,048
Net loss for the year                              -         -            -           -        (250,680)     (250,680)
                                          ---------- ---------   ----------   ---------      ----------     ---------
Balances at February 29, 2000                 55,560        56      272,319       1,048        (276,498)       (3,075)

Issuance of common stock                       9,572         9      219,783           -               -       219,792
Foreign currency translation effects               -         -            -      (1,048)              -        (1,048)
Net loss for the year                              -         -            -           -        (215,669)     (215,669)
                                          ---------- ---------   ----------   ---------      ----------     ---------
Balances at February 28, 2001                 65,132        65      492,102           -        (492,167)            -

Stock issued for professional fees         5,294,875     5,295      162,566           -               -       167,861
Net loss for the period                            -         -            -           -        (167,861)     (167,861)
                                          ---------- ---------   ----------   ---------      ----------     ---------
Balances at February 28, 2002              5,360,007     5,360      654,668           -        (660,028)            -

Sale of common stock                      20,000,000    20,000       30,000           -               -        50,000
Net loss for the period                            -         -            -           -          (7,425)       (7,425)
                                          ---------- ---------   ----------   ---------      ----------     ---------
Balances at February 28, 2003             25,360,007 $  25,360   $  684,668   $       -      $ (667,453)    $  42,575
                                          ========== =========   ==========   =========      ==========     =========
</TABLE>


The accompanying notes are an integral part of these financial statements.
                                                                             F-5

<PAGE>



<TABLE>
<CAPTION>
                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)
                            Statements of Cash Flows
                     Years ended February 28, 2003 and 2002
   Period from February 10, 1999 (date of inception) through February 28, 2003


                                                                                                   Period from
                                                                                                February 10, 1999
                                                                                               (date of inception)
                                                                Year ended       Year ended          through
                                                               February 28,     February 28,      February 28,
                                                                   2003              2002              2003
                                                              ----------------------------------------------------
<S>                                                             <C>             <C>              <C>
Cash Flows from Operating Activities
   Net income (loss) for the period                             $   (7,425)     $   (167,861)    $   (667,453)
   Adjustments to reconcile net loss
     to net cash provided by operating activities
       Noncash effect of disposition of
         discontinued operations                                         -                 -          (45,892)
       Depreciation                                                      -                 -            1,751
       Foreign currency translation                                      -                 -            2,096
       Common stock issued for professional fees                         -           167,861           172,361
       (Increase) Decrease in
         Current assets of discontinued operations                       -                 -                 -
       Increase (Decrease) in
         Accounts payable - trade                                    2,775                 -             2,775
         Current liabilities of discontinued operations                  -                 -                 -
                                                               -----------      ------------     -------------
Net cash used in operating activities                               (4,650)                -          (534,362)
                                                               -----------      ------------     -------------

Cash Flows from Investing Activities
   Cash used to acquire other assets of
     discontinued operations                                             -                 -            (9,220)
                                                               -----------      ------------     -------------
Net cash used in investing activities                                    -                 -            (9,220)
                                                               -----------      ------------     -------------

Cash Flows from Financing Activities
   Advances from affiliates and related parties                          -                 -            51,265
   Proceeds from sales of common stock                              50,000                 -           537,667
                                                               -----------      ------------     -------------
Net cash provided by financing activities                           50,000                 -           588,932
                                                               -----------      ------------     -------------

Increase (Decrease) in Cash                                         45,350                 -            45,350
Cash at beginning of period                                              -                 -                 -
                                                               -----------      ------------     -------------

Cash at end of period                                          $    45,350      $          -     $      45,350
                                                               ===========      ============     =============

Supplemental Disclosure of
   Interest and Income Taxes Paid
     Interest paid for the year                                $         -      $           -    $           -
                                                               ===========      ============     =============
     Income taxes paid for the year                            $         -      $           -    $           -
                                                               ===========      ============     =============
</TABLE>

The accompanying notes are an integral part of these financial statements.
                                                                             F-6

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                          Notes to Financial Statements


Note A - Organization and Description of Business

American  Recreational  Enterprises,  Inc. was incorporated on February 10, 1999
under  the laws of the  State of  Nevada.  The  Company  was  originally  in the
business of operating a multi media travel related  publishing  enterprise.  The
Company  marketed  travel-related  products  based on the  content  of its print
publications as well as its digital Internet magazine.  Products will included a
wide range of goods through it's online store, www.GreatestEscapesStore.com. The
Company  intended to develop  other travel  products to be sold and  distributed
through its on-line department store, two websites, www.GreatestEscapesStore.com
and www.LiteraryTrips.com, and other more traditional outlets.

Pursuant to an Agreement and Plan of Reorganization  dated October 12, 2000, the
Company acquired 100.0% of the issued and outstanding  shares of common stock of
Capstra  Capital,   Corp.  (Capstra),   a  Washington   corporation,   from  the
shareholders  thereof in an exchange of an aggregate of 450,000 shares of common
stock of the Company and other consideration  consisting of cash and payments of
certain  fees and  expenses  equal to  $30,000  (the  Acquisition).  Immediately
following  the  Acquisition,  the Company  formed  Greatestescapes  (Washington)
Corp.(Subco) a newly-formed  Washington  corporation newly formed solely for the
following purpose as a wholly-owned subsidiary of the Company. Subco then merged
with Capstra (the Merger). The Acquisition was approved by the unanimous consent
of the Board of Directors of Capstra and its  shareholders  on October 12, 2000.
The  Acquisition  was effective on October 12, 2000.  The Merger was approved by
unanimous  consent of the respective Board of Directors of Subco and the Company
on October  12,  2000.  The Merger  was  effective  on  October  16,  2000.  The
Acquisition  and Merger is  intended  to qualify  as  reorganization  within the
meaning  of  Section  368(a)(1)(B)  of the  Internal  Revenue  Code of 1986,  as
amended.  Upon  effectiveness  of the Acquisition  and Merger,  pursuant to Rule
12g-3(a) of the General Rules and  Regulations  of the  Securities  and Exchange
Commission (the Commission),  the Company elected to become the successor issuer
to Capstra for reporting purposes under the Securities  Exchange Act of 1934 and
elected to report under the Act effective October 16, 2000.

On December 1, 2000, the Company entered into an agreement with it's controlling
shareholders  and officers whereby the officers would acquire all the assets and
operations of the Company in exchange for the assumption of liabilities  related
thereto.  Further, a controlling  shareholder surrendered 5,000 shares of common
stock to the Company for no consideration.  As a result of this transaction, the
Company had no assets, liabilities or operations.

On July 17, 2001, the Company changed it's name from Greatestescapes.com,  Inc.,
to American  Ammunition,  Inc.,  and approved  authorization  in its Articles of
Incorporation  to issue  50,000,000  shares,  par value of $0.001,  of preferred
stock of the Corporation upon such terms, conditions, privileges and limitations
as the Board of Directors deems  appropriate.  These two (2)  transactions  were
approved  by  the   shareholders   by  consent  and  the  Amended   Articles  of
Incorporation were filed with the State of Nevada on July 23, 2001. On that same
date, the Company also  authorized a reverse split of its common stock at a rate
of 1 for 200, with the proviso that no shareholder  holding more than 500 shares
of stock  have  their  stock  reduced  below  500  shares  of stock  and that no
shareholder holding less than 500 shares of stock have any such reduction in the
amount of stock owned by such  shareholder.  This reverse split is effective for
all  shareholders  of record on July 17, 2001, and was implemented on electronic
and other quotation  systems at the close of business on August 13, 2001.  After
the effect of the reverse split,  the Company had 110,007 shares of common stock
issued and outstanding, as rounded. The effect of the reverse split is presented
in the accompanying financial statements as of the first day of the first period
presented.


                                                                             F-7

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note A - Organization and Description of Business - Continued

On July 20, 2001,  the Company  entered into a Share Exchange  Agreement,  to be
completed on or before August 31, 2001, whereby the Company would acquire 100.0%
of the  issued  and  outstanding  capital  stock  of F & F  Equipment,  Inc.  (a
privately-owned   Florida   corporation)   (F&F)  in  exchange  for   25,000,000
post-reverse  split  shares of common  stock of the  Company to effect a reverse
acquisition of F&F.

On August  31,  2001,  F&F and the  Company  agreed  that there was a failure of
consideration  on the part of one (1) or both of the  parties to the  Agreement.
F&F and the Company have agreed that it is in the best  interest of both parties
to void,  cancel and terminate the Agreement ab initio and to release any claims
F&F has  against  the Company as well as any claims that the Company has against
F&F in consideration of such release.

Subsequent to the termination of the F&F  transaction,  the Company changed it's
corporate name to American Recreational Enterprises, Inc.

On February 14, 2003, concurrent with a change in control, the Company initiated
a new business plan. On April 23, 2003,  the Company  formed a new  wholly-owned
subsidiary,  Lenders/Investors,  Inc. (a Florida corporation) for the purpose of
(a)  making  medium to high risk  unsecured  loans to third  party  individuals,
corporations  and/or other  entities;  (b) equity  investments  in  early-stage,
early-growth,  pre-IPO  companies  with a primary  objective  of both  long-term
appreciation  as well as short-term  profits;  and c) general asset  management.
Other general  business  services may be offered in the future;  however,  these
plans and services  have not been defined by  management as of the date of these
financial  statements.  There have been no business  transactions  conducted  by
Lenders/Investors, Inc.


Note B - Preparation of Financial Statements

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of February 28/29.

The Company's  business plan was never fully  implemented  or  operational  and,
accordingly,  has never fully commenced operations.  Accordingly, the Company is
considered to be in the  development  stage as it has  generated no  significant
operating revenues and has incurred cumulative operating losses of approximately
$667,500.

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.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented



                                                                             F-8

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note C - Going Concern Uncertainty

On December 1, 2000, the Company entered into an agreement with it's controlling
shareholders  and officers whereby the officers would acquire all the assets and
operations of the Company in exchange for the assumption of liabilities  related
thereto.  Further, a controlling  shareholder surrendered 5,000 shares of common
stock to the Company for no consideration.  As a result of this transaction, the
Company had no assets, liabilities or operations.

On July 20, 2001,  the Company  entered into a Share Exchange  Agreement,  to be
completed on or before August 31, 2001, whereby the Company would acquire 100.0%
of the  issued  and  outstanding  capital  stock  of F & F  Equipment,  Inc.  (a
privately-owned   Florida   corporation)   (F&F)  in  exchange  for   25,000,000
post-reverse  split  shares of common  stock of the  Company to effect a reverse
acquisition  of F&F. On August 31, 2001,  F&F and the Company  agreed that there
was a failure of  consideration on the part of one (1) or both of the parties to
the  Agreement.  F&F and the Company have agreed that it is in the best interest
of both parties to void,  cancel and  terminate  the  Agreement ab initio and to
release  any claims F&F has  against  the Company as well as any claims that the
Company has against F&F in consideration of such release.

Accordingly, the Company has been virtually dormant since November 30, 2000.

On February 14, 2003, concurrent with a change in control, the Company initiated
a new business plan. On April 23, 2003,  the Company  formed a new  wholly-owned
subsidiary,  Lenders/Investors,  Inc. (a Florida corporation) for the purpose of
(a)  making  medium to high risk  unsecured  loans to third  party  individuals,
corporations  and/or other  entities;  (b) equity  investments  in  early-stage,
early-growth,  pre-IPO  companies  with a primary  objective  of both  long-term
appreciation  as well as short-term  profits;  and c) general asset  management.
Other general  business  services may be offered in the future;  however,  these
plans and services  have not been defined by  management as of the date of these
financial  statements.  There have been no business  transactions  conducted  by
Lenders/Investors, Inc.

The  Company's  continued  existence is  dependent  upon its ability to generate
sufficient cash flows from operations to support its daily operations as well as
provide sufficient resources to retire existing liabilities and obligations on a
timely basis.

The  Company  anticipates  that  future  sales of equity  securities  may occur.
However,  there  is no  assurance  that  the  Company  will be  able  to  obtain
additional  funding through the sales of additional  equity  securities or, that
such funding, if available, will be obtained on terms favorable to or affordable
by the Company.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the corporate entity.  However, no formal commitments or arrangements to advance
or loan funds to the Company or repay any such advances or loans exist. There is
no legal obligation for either management or significant stockholders to provide
additional future funding.

While the Company is of the opinion that good faith  estimates of the  Company's
ability to secure additional  capital in the future to reach our goals have been
made, there is no guarantee that the Company will receive  sufficient funding to
sustain operations or implement any future business plan steps.



                                                                             F-9

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note D - Summary of Significant Accounting Policies

1.   Cash and cash equivalents

     For  Statement of Cash Flows  purposes,  the Company  considers all cash on
     hand  and  in  banks,  including  accounts  in  book  overdraft  positions,
     certificates of deposit and other highly-liquid investments with maturities
     of three months or less, when purchased, to be cash and cash equivalents.

2.   Foreign Currency Translation

     Through November 30, 2000, the Company  maintained  certain  operating cash
     accounts in Canadian  financial  institutions.  Amounts recorded in foreign
     currency are translated into U.S. dollars as follows:

     1.   Current  assets and  current  liabilities,  at the rate of exchange in
          effect at the balance sheet date;
     2.   Expenses at the average rate of exchange for the period.

     Gains or losses  arising  from the  translation  of  foreign  currency  are
     accounted for as other  comprehensive  income shown as a separate component
     of stockholders' deficit.

3.   Income Taxes

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At February 28, 2003 and 2002, respectively,  the deferred tax asset
     and deferred  tax  liability  accounts,  as recorded  when  material to the
     financial  statements,  are entirely  the result of temporary  differences.
     Temporary  differences  represent  differences in the recognition of assets
     and  liabilities  for  tax  and  financial  reporting  purposes,  primarily
     accumulated depreciation and amortization,  allowance for doubtful accounts
     and vacation accruals.

     As of February  28, 2003 and 2002,  respectively,  the  deferred  tax asset
     related to the Company's net operating loss carryforward is fully reserved.
     Due to the provisions of Internal Revenue Code Section 338, the Company may
     have no net  operating  loss  carryforwards  available to offset  financial
     statement or tax return  taxable  income in future periods as a result of a
     change in control  involving 50 percentage points or more of the issued and
     outstanding securities of the Company.

4.   Earnings (loss) per share

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance,   whichever  is  later.   As  of  February  28,  2003  and  2002,
     respectively, the Company had no warrants and/or options outstanding.



                                                                            F-10

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note E - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Interest  rate risk is the risk  that the  Company's  earnings  are  subject  to
fluctuations  in interest  rates on either  investments  or on debt and is fully
dependent  upon  the  volatility  of  these  rates.  The  Company  does  not use
derivative instruments to moderate its exposure to interest rate risk, if any.

Financial  risk  is  the  risk  that  the  Company's  earnings  are  subject  to
fluctuations in interest rates or foreign exchange rates and are fully dependent
upon the  volatility  of  these  rates.  The  Company  does  not use  derivative
instruments to moderate its exposure to financial risk, if any.


Note F - Discontinued Operations

As  discussed  in Note A, the  Company  disposed  of all  operating  activities,
effective  at the close of  business on November  30,  2000.  The results of the
Company's  operations  for the  respective  periods  presented are reported as a
component  of   discontinued   operations  in  the   statements  of  operations.
Additionally,  the respective gain or loss incurred on the sale of the Company's
operations  are  also  presented  separately  as  a  component  of  discontinued
operations.

Summarized results of operations for the disposed  operations for the year ended
February 28, 2001 is as follows:

     Net sales                                  $    13,257
                                                ===========
     Operating income (loss)                    $  (289,554)
                                                ===========
     Loss from discontinued operations          $  (215,669)
                                                ===========


During Fiscal 2001, various entities  affiliated with the Company's  controlling
shareholders  and/or  officers  advanced  the Company  approximately  $51,000 to
support  operations,  settle  outstanding  trade  accounts  payable  and provide
working capital. These advances were repayable upon demand and were non-interest
bearing. These liabilities were assumed by the Company's officers on December 1,
2000 as a result of the transfer of the Company's assets and operations.



                (Remainder of this page left blank intentionally)


                                                                            F-11

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note G - Income Taxes

The components of income tax (benefit)  expense for the years ended February 28,
2003 and 2002 and the period from February 10, 1999 (date of inception)  through
February 28, 2003, respectively, are as follows:

                                                            Period from
                                                         February 10, 1999
                                                        (date of inception)
                         Year ended       Year ended          through
                        February 28,      February 28,       February 28,
                            2003              2002              2003
                        ---------------------------------------------------
       Federal:
         Current              $     -          $     -           $     -
         Deferred                   -                -                 -
                              -------          -------            ------
                                    -                -                 -
                              -------          -------            ------
       State:
         Current                    -                -                 -
         Deferred                   -                -                 -
                              -------          -------            ------
                                    -                -                 -
                              -------          -------            ------

         Total                $     -          $     -           $     -
                              =======          =======           =======

As a result of  various  changes  in  control,  the  Company  has a nominal  net
operating loss carryforward for income tax purposes.  If not utilized,  this net
operating  loss  carryforward  will  begin to expire  in 2022.  The  amount  and
availability  of  any  net  operating  loss  carryforwards  may  be  subject  to
limitations set forth by the Internal  Revenue Code.  Factors such as the number
of shares ultimately issued within a three year look-back period;  whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the  Company  all  enter  into  the  annual   computation  of  allowable  annual
utilization of the carryforwards.

The Company's income tax expense (benefit) for the years ended February 28, 2003
and 2002 and the period  from  February  10,  1999 (date of  inception)  through
February 28, 2003, respectively,  differed from the statutory federal rate of 34
percent as follows:

<TABLE>
<CAPTION>
                                                                                                   Period from
                                                                                                February 10, 1999
                                                                                               (date of inception)
                                                                Year ended       Year ended          through
                                                               February 28,     February 28,       February 28,
                                                                   2003              2002              2003
                                                            ------------------------------------------------------
<S>                                                            <C>              <C>              <C>
Statutory rate applied to income before income taxes           $   (2,500)      $   (57,000)     $   (226,900)
Increase (decrease) in income taxes resulting from:
     State income taxes                                                 -                 -                 -
     Other, including reserve for deferred tax asset
       and application of net operating loss carryforward           2,500            57,000           226,900
                                                               ----------       -----------      ------------

         Income tax expense                                    $        -       $         -      $          -
                                                               ==========       ===========      ============
</TABLE>

                                                                            F-12

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note G - Income Taxes - Continued

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of February 28, 2003 and 2002, respectively:

                                              February 28,   February 28,
                                                2003              2002
                                             ---------------------------
       Deferred tax assets
         Net operating loss carryforwards     $     -          $ 1,800
         Less valuation allowance                   -           (1,800)
                                              -------          -------

         Net Deferred Tax Asset               $     -          $     -
                                              =======          =======

During the years ended  February 28, 2003 and 2002, the reserve for the deferred
current tax asset increased  (decreased) by  approximately  $(1,800) and $1,800,
respectively.


Note H - Preferred Stock

On July  17,  2001,  the  Company  approved  authorization  in its  Articles  of
Incorporation  to issue  50,000,000  shares,  par value of $0.001,  of preferred
stock of the Corporation upon such terms, conditions, privileges and limitations
as the Board of  Directors  deems  appropriate.  This  action was filed with the
State of Nevada on July 23, 2001.  As of February 28, 2003 and 2002,  there were
no shares of preferred stock issued and outstanding.


Note I - Common Stock Transactions

On July 17, 2001, the Company  authorized a reverse split of its common stock at
a rate of 1 for 200, with the proviso that no shareholder  holding more than 500
shares of stock have their stock  reduced  below 500 shares of stock and that no
shareholder holding less than 500 shares of stock have any such reduction in the
amount of stock owned by such  shareholder.  This reverse split is effective for
all  shareholders  of record on July 17, 2001, and was implemented on electronic
and other quotation  systems at the close of business on August 13, 2001.  After
the effect of the reverse split,  the Company had 110,007 shares of common stock
issued and outstanding, as rounded. The effect of the reverse split is presented
in the accompanying financial statements as of the first day of the first period
presented.

On or about April 2, 1999,  the Company  issued  approximately  3,300  shares of
common  stock to 16 existing  shareholders  for cash  proceeds of  approximately
$99,250  under an  offering  exempt  for  registration  pursuant  to Rule 504 of
Regulation D of the U. S. Securities and Exchange Commission.

On or about June 14,  1999,  the Company  issued  approximately  3,000 shares of
common  stock to 9 existing  shareholders  for cash  proceeds  of  approximately
$150,825 under an exemption from  registration  specified by Regulation S of the
U. S. Securities and Exchange Commission.



                                                                            F-13

<PAGE>



                     American Recreational Enterprises, Inc.
                        (a development stage enterprise)

                    Notes to Financial Statements - Continued


Note I - Common Stock Transactions - Continued

On October  12,  2000,  the  Company  issued  2,250  shares to  acquire  all the
outstanding  shares of common  stock of  Capstra  Capital  Corp.,  a  Washington
corporation, from the shareholders of Capstra, as per agreement.

On or about March 12,  2001,  the Company  issued  1,250  shares of  restricted,
unregistered  common stock to an  unrelated  individual  for investor  relations
services. This transaction was valued at approximately $2,500 which approximated
the "fair value" of the Company's common stock based on the quoted closing price
of the Company's common stock at the date of the respective transaction.

On or about July 10,  2001,  the Company  issued  43,625  shares of  restricted,
unregistered  common stock to various former officers and other  individuals for
professional services, compensation and reimbursement of expenses paid on behalf
of the Company to preserve the corporate  entity during the period from November
30, 2000 through June 30, 2001.  This  transaction  was valued at  approximately
$160,000 which approximated the "fair value" of the Company's common stock based
on the quoted  closing  price of the  Company's  common stock at the date of the
respective transaction.

On  or  about  September  1,  2001,  the  Company  issued  5,250,000  shares  of
restricted,  unregistered  common  stock to  current  management  and  others as
compensation related to the proposed  transaction with F&F Equipment,  Inc. This
transaction  was valued at  approximately  $5,250 which  approximated  the "fair
value" of the  Company's  common stock based on the quoted  closing price of the
Company's common stock at the date of the respective transaction.

On or about February 14, 2003, the Company sold 20,000,000 shares of restricted,
unregistered  common  stock to an  unrelated  individual  for gross  proceeds of
$50,000 to support short-term working capital  requirements.  The Company relied
upon Section 4(2) of the  Securities  Act of 1933,  as amended,  and Rule 506 of
Regulation D promulgated  thereunder ('33 Act). This transaction did not involve
a public  offering  and was  exempt  from  registration  under  the '33 Act.  No
underwriters were used in connection with this transaction.



                                                                            F-14