FORM 10-K

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                  [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

              For the fiscal year ended December 31, 2001.
                                       OR
            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

                               Commission File No. 1-8129.

                              US 1 INDUSTRIES, INC.
            (Exact name of registrant as specified in its charter)

Indiana
(State of Incorporation)
(I.R.S. Employer Identification No.)                 95-3585609
                                                     ----------

1000 Colfax, Gary, Indiana 46406
--------------------------
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (219) 944-6116
                                                    --------------

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

                                            Name of each exchange
Title of each class on which registered
-------------------   -----------------
Common Stock, no par value                    None

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

Indicate  by check  mark  whether  the  registrant  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange Act of
1934  during the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes _X_  No __


Indicate by check mark if disclosure of delinquent  filers pursuant to Item 405
of Regulation S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information statements
incorporated  by  reference  in Part III of this Form 10-K or any  amendment to
this Form 10-K. [X]

On March 13, 2002,  there were 10,618,224  shares of  registrant's  common
stock outstanding, and the aggregate market value of the voting stock held
by  non-affiliates  of the registrant was  approximately  $3,500,000.  For
purposes  of  the  forgoing  statement,  directors  and  officers  of  the
registrant have been assumed to be affiliates.

<PAGE>
                                    PART 1
Item 1.  Business.

     The registrant,  US 1 Industries,  Inc. (hereinafter referred to, together
with its subsidiaries, as "US 1" or the "Company"), through its subsidiaries is
an interstate  trucking company operating in 48 states.  The Company's business
consists  principally of a truckload  operation for which the Company obtains a
significant  percentage of its business  through  independent  sales agents who
then  arrange  with  independent  truckers  to haul the  freight to the desired
destination.
     US 1 was incorporated in California  under the name Transcon  Incorporated
on  March  3,  1981.  In  March  1994,  the  Company  changed  its name to US 1
Industries,  Inc.  In  February  1995,  the  Company was merged with an Indiana
corporation  for  purposes of  re-incorporation  under the laws of the state of
Indiana. The Company's  subsidiaries consist of Blue and Grey Transport,  Inc.,
an  Indiana  corporation,("BGT"),  Blue and Grey  Brokerage,  Inc.,  an Indiana
corporation,   ("BGB"),   Carolina   National   Logistics,   Inc.   an  Indiana
corporation,("CNL"),   Carolina  National  Transportation,   Inc.,  an  Indiana
corporation  ("CNT"),  Accu Scan Drug  Testing,  Inc.,  an Indiana  corporation
("ACCU"),  Keystone  Logistics,  Inc. an Indiana  corporation,  ("KYL"),  Unity
Logistics Inc., an Indiana Corporation,  ("UNL"), Gulf Line Brokerage, Inc., an
Indiana  corporation  ("GLB"),  Gulf  Line  Transportation,  Inc.,  an  Indiana
corporation ("GLT"), Keystone Lines,Inc. a California corporation ("Keystone"),
Cam  Transport,  Inc.,  an Indiana  corporation,("CAM"),  ERX,  Inc. an Indiana
Corporation ("ERX"),  Transport Leasing,  Inc, an Arkansas Corporation ("TLI"),
and TC Services,  Inc., a California  corporation ("TCS").  BGT, BGB, CAM, CNL,
CNT, GLB, GLT,ACCU, KYL,UNL,TLI and Keystone operate under authority granted by
the United States  Department of  Transportation  (the "DOT") and various state
agencies.
     The Company has entered  into an agreement  with certain key  employees of
Carolina National Transportation,  Inc. ("Carolina"), a wholly owned subsidiary
of the Company,  in which these  employees  will receive up to 40% ownership in
Carolina.  These key employees will earn the 40% ownership interest in Carolina
over a three  year  period  beginning  in the  year  following  which  Carolina
achieves  positive  retained  earnings,  contingent  upon certain  restrictions
(including  continued  employment at Carolina)  pursuant to the  agreement.  In
2001,  Carolina achieved positive retained  earnings.  As a result, the Company
will incur total  compensation  expense of $400,000 over the three-year vesting
period.  Beginning  in 2002,  a  minority  interest  will be  disclosed  on the
Company's financial statements. Net income for Carolina was $486,000,  $563,814
and $262,131 for the years ended 2001, 2000 and 1999, respectively.

Operations

     The Company carries  virtually all forms of freight  transported by truck,
except  bulk  goods,   including   specialized   trucking   services   such  as
containerized, refrigerated, and flatbed transportation. In addition, this year
the Company started a division that hauls over-size and over-weight loads.

     The Company is a non-asset based business,  contracting  with  independent
truckers who generally  own the truck they drive and sales agents.  The Company
pays the independent  truckers and agents a percentage of the revenue  received
from customers for the  transportation  of goods.  The expenses  related to the
operation of the trucks are the responsibility of the independent  contractors.
Consequently,  short-term  fluctuations  in operating  activity have less of an
impact on the  Company's  net income  than they have on the net income of truck
transportation  companies  that  bear  substantially  all  of  the  fixed  cost
associated  with the ownership of the trucks.  Like other truck  transportation
companies,  however,  US 1's revenues are affected by competition and the state
of the economy.

<PAGE>
     The Company's principal focus during 2001 was business growth. This growth
was achieved  through the continued  growth of existing  operations such as CNT
and Keystone.  New divisions  were added to these  subsidiaries,  such as a new
Keystone  division that  specialized  in over-sized  freight.  The Company also
started up new  operations  such as ERX. In  addition,  2001 was the first full
year of operations for CAM, an operation started in November 2000.

Marketing and Customers

     The Company conducts most of its business through a network of independent
sales agents who are in regular  contact with shippers at the local level.  The
sales agents have facilities and personnel to monitor and coordinate  shipments
and respond to shippers' needs in a timely manner.

     These agents are typically paid a commission of 6% to 10% of the Company's
revenues from its trucking operations.

     During 2001, the Company  utilized the services of  approximately 70 sales
agents.  One agent accounted for 8%, 13%, and 18% of the Company's  revenue for
the years ended  December 31, 2001,  2000, and 1999  respectively.  The Company
shipped  freight  for  approximately  1,000  customers  in 2001,  none of which
accounted for more than of 10% of the Company's total revenues.

Independent Contractors

     The independent  contractors  used by the Company must enter into standard
equipment  operating  agreements.   The  agreements  provide  that  independent
contractors  must  bear  many of the costs of  operations,  including  drivers'
compensation, maintenance costs, fuel costs, collision insurance, taxes related
to the ownership and operation of the vehicle,  licenses, and permits for which
they are paid 76% to 78% of the  charges  billed to the  customer.  The Company
requires  independent  contractors  to maintain  their  equipment  to standards
established  by the DOT,  and the  drivers  are  subject to  qualification  and
training  procedures  established  by the DOT. The Company is also  required to
have random drug testing,  enforce hours of service  requirements,  and monitor
maintenance of vehicles.  The resale value of used trucks has severely declined
during  the past  year.  This may  affect the  viability  and  success  for the
independent contractors and in turn, the Company.

Employees

     At December 31, 2001, the Company had approximately  ninety-five full-time
employees.  The Company's employees are not covered by a collective  bargaining
agreement.

Competition

    The trucking industry is highly competitive. The Company competes for
customers primarily with other nationwide carriers, some of which have
company-owned equipment and company drivers, and many, have greater volume and
financial resources. The Company also competes with private carriage conducted
by existing and potential customers. In addition, the Company competes with
other modes of transportation including rail.

     The  Company  also  faces  competition  for the  services  of  independent
trucking  contractors and sales agents. Sales agents routinely do business with
a number of carriers on an ongoing basis.  The Company has attempted to develop
a strong  sales agent  network by  maintaining  a policy of prompt  payment for
services rendered and providing advanced computer systems.

     Competition  is  based  on  several  factors;   principally  cost,  timely
availability of equipment and quality of service.

<PAGE>
Insurance

     The Company insures the trucks with liability  insurance coverage of up to
$2 million  per  occurrence  with a $5,000  deductible.  The  Company has cargo
insurance   coverage  of  up  to  $1,000,000  per  occurrence  with  a  $10,000
deductible.  The Company also maintains a commercial  general  liability policy
with a limit of  $1,000,000  per  occurrence  and no  deductible.  The  current
insurance  market is difficult with  significant  rate increases  expected that
could adversely affect the cost and the available coverage.

Independent Contractor Status

     From  time to  time,  various  legislative  or  regulatory  proposals  are
introduced  at the federal or state levels to change the status of  independent
contractors'  classification  to employees for either  employment  tax purposes
(withholding,  social  security,  Medicare  and  unemployment  taxes)  or other
benefits available to employees.  Currently, most individuals are classified as
employees or  independent  contractors  for employment tax purposes based on 20
"common-law"  factors rather than any definition  found in the Internal Revenue
Code or Internal Revenue Service regulations. In addition, under Section 530 of
the  Revenue  Act of 1978,  taxpayers  that  meet  certain  criteria  may treat
similarly  situated  workers as employees,  if they have received a ruling from
the Internal Revenue Service or a court decision affirming their treatment,  or
if they are following a long-standing recognized practice.

     Although  management  is unaware  of any  proposals  currently  pending to
change the employee/independent contractor classification, the costs associated
with  potential  changes,  if  any,  in  the  employee/independent   contractor
classification  could adversely  affect the Company's  results of operations if
the  Company  were  unable to  reflect  them in its fee  arrangements  with the
independent contractors and agent or in the prices charged to its customer.

Regulation

     The Company is a common and contract  motor  carrier  regulated by the DOT
and various state agencies.  Historically,  the Interstate  Commerce Commission
(the "ICC") and various state  agencies  regulated  motor  carriers'  operating
rights,  accounting  systems,  mergers  and  acquisitions,  periodic  financial
reporting,  and other  matters.  In 1995 federal  legislation  preempted  state
regulation of prices, routes, and services of motor carriers and eliminated the
ICC.  Several ICC functions were  transferred to the DOT.  Management  does not
believe that regulation by the DOT or by the states in their remaining areas of
authority  will  have a  material  effect  on  the  Company's  operations.  The
Company's  independent  contractor drivers also must comply with the safety and
fitness  regulations  promulgated by the DOT,  including those relating to drug
and alcohol testing and hours of service.

     The Company's operations are subject to various federal,  state, and local
environmental  laws and  regulations,  implemented  principally  by the EPA and
similar  state  regulatory  agencies,  governing  the  management  of hazardous
wastes,  other discharge of pollutants into the air and surface and underground
waters, and the disposal of certain  substances.  Management  believes that its
operations  are in compliance  with current laws and  regulations  and does not
know of any existing  condition  that would cause  compliance  with  applicable
environmental  regulations to have a material effect on the Company's  earnings
or competitive position.

<PAGE>
Environmental Regulation

     The Company owns property in Phoenix,  Arizona that was formerly leased to
Transcon  Lines  ("Lines")  as a terminal  facility,  where soil  contamination
problems  existed  or  are  known  to  exist  currently.   State  environmental
authorities   notified  the  Company  of  potential  soil   contamination  from
underground  storage tanks, and management has been working with the regulatory
authorities  to implement the required  remediation.  The  underground  storage
tanks were removed from the Phoenix  facility in February  1994.  Currently the
State environmental  authorities are requiring further testing of the property.
The Company  believes it is in  substantial  compliance  with state and federal
environmental  regulations  relative to the  trucking  business.  However,  the
Company is working  with  regulatory  officials  to  eliminate  any  sources of
contamination and determine extent of existing problems. Estimates of the costs
to complete the future remediation of approximately  $141,000 are considered in
the land valuation allowance in the Company's consolidated financial statements
at December 31, 2001 and 2000.

Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995

     The statements  contained in Item 1  (Description  of Business) and Item 6
(Management  Discussion  and  Analysis of  Financial  Condition  and Results of
Operation);  particularly  the  statements  under  "Future  Prospects"  contain
forward-looking  statements  that  are  subject  to  a  variety  of  risks  and
uncertainties.  The Company cautions readers that these risks and uncertainties
could  cause  the  Company's  actual  results  in 2002  and  beyond  to  differ
materially from those suggested by any forward-looking statements.  These risks
and uncertainties include,  without limitation,  a lack of historic information
for new operations on which expectations regarding their future performance can
be based,  general  economic and  business  conditions  affecting  the trucking
industry,  competition  from,  among  others,  national and  regional  trucking
companies that have greater financial and marketing resources than the Company,
the  availability  of  sufficient   capital,   and  the  Company's  ability  to
successfully attract and retain qualified owner operators and agents.

Item 2.  Properties

     The Company's  administrative  offices are at 1000 Colfax,  Gary, Indiana.
The  Company  leases its  administrative  offices on a month to month basis for
$3,000 per month from Mr. Michael E. Kibler, President, Chief Executive Officer
and a director  of the  Company,  and Mr.  Harold  Antonson,  Treasurer,  Chief
Financial Officer and a director of the Company.

     In addition,  the  Company's  subsidiaries  lease office space and land in
several locations throughout the United States, as summarized below:

<TABLE>
<CAPTION>
                               Approximate                           Lease
Subsidiary  City, State        Square Feet   Monthly Rent         Expiration

<S>         <C>                   <C>          <C>              <C>
CNT         Mt. Pleasant, SC      3,900        $ 5,800          June  30, 2004
KYL         South bend, IN        1,591          1,125          Oct.  31, 2002
CAM         Gulfport, MS          3,000          2,250          Nov.   1, 2003
ACCU        Fort Worth, TX          700            700          Feb.  29, 2004
KEY         Irving, TX          8 acres          7,500          June  30, 2003
KEY         Houston, TX          33,000          2,000          Jan.   1, 2003
KEY         Fort Smith, AK        1,500          4,567          April 30, 2002
KEY         Laredo, TX            1,200          3,500          month to month
TLI         Sebastian County,AK   2,500          1,000          March  7, 2003
KEY         Irving, TX            1,440            870          Nov.  25, 2003
</TABLE>
     Management  believes that the company's leased properties are adequate for
its current needs and can be retained or replaced at acceptable cost.

Item 3.  Legal Proceedings

     CAM Regional Transport and Laurel Mountain Leasing,  Inc. two unaffiliated
entities, filed a complaint against the Company in 1994 which alleges breach of
contract, claiming that Trailblazer  Transportation,  Inc., a subsidiary of the
Company which filed bankruptcy, failed to abide by a purchase agreement entered
into with CAM Regional  Transport,  Inc. and Laurel Mountain Leasing,  Inc. The
complaint seeks damages of $284,000 plus interest from November 1992.

<PAGE>
     The Company is currently involved in three other lawsuits; one of which is
a class  action  lawsuit,  as a result of an August  1999  incident  in which a
Carolina National  Transportation,  Inc. truck overturned leaking chemicals. It
is the Company's  position that it is not at fault.  The Company  contends that
the materials  inside the container were improperly  packaged by a third party,
that the  chemicals  which  leaked were not  harmful in nature,  and that those
persons alleging injuries were not harmed.  The Company is also involved in two
other  lawsuits  as a result of a chemical  leak that  occurred  in a container
hauled by a Carolina  National  Transportation,  Inc truck. It is the Company's
position that they are not at fault for this  incident  because they are merely
the shipper and a third  party had the  responsibility  to package the load for
safe transportation.  Should there be an unfavorable outcome in either of these
cases, the company's insurance carrier would provide coverage for any potential
loss in excess of $200,000 up to a limit of $1,000,000.

     At this time,  the Company and its legal  counsel are unable to assess the
outcome of these complaints. The Company intends to vigorously defend itself in
these matters.

     The Company is involved in other  litigation  in the normal  course of its
business.  Management  intends to vigorously defend these cases. In the opinion
of  management,  the  litigation  now pending will not have a material  adverse
effect on the consolidated financial position of the company.

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

     No matters were submitted to a vote of the Company's  shareholders  during
the fourth quarter of 2001.

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

     Shares of Common  Stock of the  Company  are listed and traded on the NASD
Electronic "bulletin board market" under the symbol USOO.

     The following  table sets forth for the period  indicated the high and low
sales prices per share of the Common Stock as reported  from NASDAQ  quotations
provided by North American Quotations and reflect inter-dealer prices,  without
retail  mark-up,   mark-down  or  commission  and  may  not  represent   actual
transactions.

<TABLE>
<CAPTION>
     Calendar Year                            High                        Low
-----------------------------------------------------------------------------
      2001
      ----
     <S>                                    <C>                         <C>
      First Quarter                           .2500                      .0900
      Second Quarter                          .3300                      .1300
      Third Quarter                           .3330                      .1300
      Fourth Quarter                         1.0500                      .1900

      2000
      First Quarter                           .3750                      .0500
      Second Quarter                          .2500                      .0620
      Third Quarter                           .3120                      .0620
      Fourth Quarter                          .1800                      .0625


</TABLE>

    As of January 31, 2002, there were 3,216 holders of record of Common Stock.

     The  Company  has  not  paid  any  cash  dividends  on its  Common  Stock.
Management does not anticipate  paying any dividends on the Common Stock in the
foreseeable  future,  and the Company's current credit agreement  prohibits the
payment of dividends.

<PAGE>
Item 6. Selected Financial Data

     The selected consolidated financial data presented below have been derived
from  the  Company's  consolidated   financial  statements.   The  consolidated
financial  statements for the years ended December 31, 2001, 2000 and 1999 have
been audited by the Company's independent  certified public accountants,  whose
report on such consolidated  financial statements is included herein under Item
8. The  information  set forth  below  should be read in  conjunction  with the
consolidated   financial   statements  and  notes  thereto  under  Item  8  and
"Management's  Discussion  and Analysis of Financial  Condition  and Results of
Operations."

<TABLE>
<CAPTION>
                                   (in thousands, except per share data)

                                      Fiscal Year Ended December 31,
                                       2001        2000        1999       1998     1997
                                       ----        ----        ----       ----     ----

<S>                                 <C>         <C>         <C>        <C>       <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues                   $72,110     $48,284     $32,334    $30,177   $25,422
Purchased transportation              55,609      37,627      24,846     23,417    19,676
Commissions                            6,597       4,344       3,052      3,178     2,361
Other operating costs and expenses     8,122       4,988       3,481      3,408     3,806


Operating income (loss)                1,782       1,325         954        174      (421)

Interest expense                         712         623         661        744       435

Income(loss) before income taxes       1,168         802         412        173      (803)

Income tax benefit                       400         800           0          0         0

Net income (loss)                      1,568       1,602         412        173      (192)

Income (loss) per common share
  Net Income before extraordinary items:
        Basic                          $0.14       $0.14       $0.03      $0.01    ($0.08)
        Diluted                        $0.14       $0.14       $0.03      $0.01    ($0.08)
  Extraordinary item
        Basic                          $0.00       $0.00       $0.00      $0.00     $0.06
        Diluted                        $0.00       $0.00       $0.00      $0.00     $0.06
  Net Income
        Basic                          $0.14       $0.14       $0.03      $0.01    ($0.02)
        Diluted                        $0.14       $0.14       $0.03      $0.01    ($0.02)

  Weighted average shares outstanding:
        Basic                        10,618,224 10,618,224  10,618,224 10,618,224 10,616,397
        Diluted                      10,618,224 10,618,224  10,618,224 10,618,224 10,616,397



BALANCE SHEET DATA:
  Total assets                        17,161       11,891       5,352      4,499     6,261
  Long-term debt, including
   current portion                     4,660        4,259       2,547      2,967     2,571
  Working capital                      2,039        1,720        (712)      (861)   (1,451)
  Shareholders' deficiency              (995)      (2,459)     (3,968)    (4,298)   (4,399)

OTHER DATA:
  Cash (used in) provided by
   operating activities                 (841)      (2,833)       (370)       490    (3,630)
  Cash (used in) provided by
   investing activities               (1,210)        ( 84)         74         58      (269)
  Cash provided by (used in)
   financing activities                2,374         2,916         296      (848)    3,971

</TABLE>

<PAGE>
Item 7.  Management's  Discussion and Analysis of Financial  Condition and
         Results of Operation.
Overview

     Purchased  transportation  represents the amount an independent contractor
is paid to haul freight and is primarily based on a  contractually  agreed-upon
percentage  of revenue  generated  by the haul for truck  capacity  provided by
independent  contractors.  Purchased transportation is the largest component of
operating  expenses and  increases or  decreases in  proportion  to the revenue
generated through  independent  contractors.  Commissions to agents and brokers
are primarily based on contractually agreed-upon percentages of revenue.

     A majority of the insurance and claims expense is based on a percentage of
revenue and, as a result,  will increase or decrease,  on a consolidated  basis
with the Company's revenue.  Potential  liability  associated with accidents in
the trucking industry is severe and occurrences are  unpredictable.  A material
increase  in  the  frequency  or  severity  of  accidents  or  the  unfavorable
development of existing claims could adversely  affect the Company's  operating
income.

     Salaries,  wages,  fringe  benefits,  and  other  operating  expenses  are
principally  non-variable  expenses  and  therefore  will  not  typically  vary
directly as a percentage of the Company's revenue.

     The  following  table set forth the  percentage  relationships  of expense
items to revenue for the periods indicated:
<TABLE>
<CAPTION>
                                                    Fiscal Years
                                                --------------------------
                                                  2001      2000     1999
                                                 ------    ------   ------
<S>                                               <C>      <C>      <C>
Revenue                                           100.0%   100.0%   100.0%
Operating expenses:
    Purchased transportation                       77.1     77.9     76.8
    Commissions                                     9.1      9.0      9.4
    Insurance and claims                            3.3      3.2      3.3
    Salaries, wages and fringe benefits             3.5      3.6      3.9
    Other operating expenses                        4.5      3.6      3.6
                                                 -------   ------   ------
     Total operating expenses                      97.5     97.3     97.0
                                                  ------   ------   ------
Operating income                                    2.5      2.7      3.0

</TABLE>

General

     The Company has entered  into an agreement  with certain key  employees of
Carolina National Transportation,  Inc. ("Carolina"), a wholly owned subsidiary
of the Company,  in which these  employees  will receive up to 40% ownership in
Carolina.  These key employees will earn the 40% ownership interest in Carolina
over a three  year  period  beginning  in the  year  following  which  Carolina
achieves  positive  retained  earnings,  contingent  upon certain  restrictions
(including  continued  employment at Carolina)  pursuant to the  agreement.  In
2001,  Carolina achieved positive retained  earnings.  As a result, the Company
will incur total  compensation  expense of $400,000 over the three-year vesting
period.  Beginning  in 2002,  a  minority  interest  will be  disclosed  on the
Company's financial statements. Net income for Carolina was $486,000,  $563,814
and $262,131 for the years ended 2001, 2000 and 1999, respectively.

<PAGE>
Critical Accounting Policies and Estimates

     Our  financial   statements  reflect  the  selection  and  application  of
accounting policies which require management to make significant  estimates and
assumptions.  We  believe  that the  following  are  some of the more  critical
judgment areas in the  application  of our  accounting  policies that currently
affect our financial condition and results of operations.

     Preparation of the  consolidated  financial  statements in accordance with
accounting   principles  generally  accepted  in  the  United  States  requires
management to make estimates and assumptions  affecting the reported amounts of
assets, liabilities, revenues, and expenses and related contingent liabilities.
On an on-going  basis,  the Company  evaluates its estimates,  including  those
related to revenues,  bad debts, income taxes and contingencies and litigation.
The Company bases its estimates on historical  experience  and on various other
assumptions that are believed to be reasonable under the circumstances.  Actual
results  may  differ  from  these  estimates  under  different  assumptions  or
conditions.

     Revenue  for  freight in  transit is  recognized  upon  delivery.  Amounts
payable for purchased  transportation,  commissions  and insurance  expense are
accrued when the related revenue is recognized.

     Deferred  income  taxes  are  recognized  for  the  tax   consequences  of
"temporary  differences" by applying enacted  statutory tax rates applicable to
future years to differences  between the financial  statement  carrying amounts
and the tax basis of existing assets and liabilities. At December 31, 2001, the
Company's  deferred  tax  asset  consists  principally  of net  operating  loss
carryforwards. The Company's deferred tax asset has been reduced by a valuation
allowance to the extent such benefits are not expected to be fully utilized.


2001 Compared to 2000

     Revenue for the 2001 fiscal year was $72.1  million,  an increase of $23.8
million,  or 49.3%,  over  revenue for the 2000 fiscal  year.  The increase was
attributable  to  continued  growth at Carolina  National  Transportation,  the
opening of a new  operation  that  specializes  in over-size  loads at Keystone
Lines,  the addition of new inter modal  operations at Keystone Lines,  the new
operations of Transport Leasing, Inc. and ERX Transportation.

     Purchased  transportation was 77.1% of revenue in 2001 compared with 77.9%
in 2000. Purchased  transportation has decreased .8% as a percentage of revenue
for the year ended  December  31,  2001,  compared  to the year ended  December
31,2000. In 2000, the Company imposed a fuel surcharge on their customers. This
surcharge was payable 100% to the owner  operators.  Due to the slight decrease
in fuel costs in 2001, this component of revenue has reduced  relative to total
revenue. The corresponding  purchased  transportation has also decreased.  Thus
purchased transportation as a percentage of revenue has decreased. In addition,
in 2001,  the  Company  started a new  operation  that  hauls  over-dimensional
freight  using  Company  owned  trailers at a lower over all cost of  purchased
transportation.

     Commissions  to agents were 9.1% of revenue in 2001  compared with 9.0% in
2000.  The  increase in  commissions  is offset  partially  by the  decrease in
purchased transportation.

     Insurance and claims  increased  slightly in 2001 compared to 2000 at 3.3%
of revenue for 2001 verses 3.2% of revenue for 2000.

     Salaries,  wages and fringe benefits were 3.5% of revenue in 2001 and 3.6%
in 2000. The slight decrease in salaries,  wages and fringe benefit expenses as
a percentage  of revenue was due to  increased  productivity  and  economies of
scale.

<PAGE>
     Other  operating  expenses  were 4.5% of revenue in 2001 and 3.6% in 2000.
One factor  that  substantially  increased  other  operating  expenses  in 2001
compared to 2000 was an increase in depreciation expense.  Depreciation expense
increased by 0.3% of revenue in 2001 compared to 2000. During 2001, the Company
had capital expenditures of $1.2 million, relating primarily to the purchase of
trailers for new operations.  This increase in depreciation  partially  offsets
the decrease of purchased  transportation  in 2001 as a percentage  of revenue.
Another  factor  contributing  to the  increase in  operating  expenses  was an
increase in bad debt expense.  The company's  bad debt expense  increased  0.3%
from 0.4% of revenue to 0.7% of revenue due to the adverse  affect of customers
filing  bankruptcy.  Collections  are an ongoing  challenge  with  today's soft
economy and the company continually focuses on this area.

     Based on the changes in revenue and expenses  discussed  above,  operating
income increased by $456,631 from $1,325,409 in 2000 to $1,782,040 in 2001.

     Interest expense  increased to $0.71 million in 2001 from $0.62 million in
2000.  Although the Company's line of credit  interest rate is lower,  the loan
balance is higher due to  additional  borrowings  needed to fund the  Company's
growth. The net effect was an increase in interest expense.

     As a result of the  factors  outlined  above,  income  before  income  tax
benefit was $1,167,517 in 2001 compared to $801,671 in 2000.

     The Company has net operating loss  carry-forwards  of  approximately  $55
million at December  31, 2001.  These  carry-forwards  are  available to offset
taxable income in future years and  substantially  all of these  carry-forwards
will expire in the years 2003 through  2010.  The Company  recognized an income
tax  benefit  of  $400,000  in 2001  compared  to  $800,000  in 2000.  Based on
profitability  in recent  years,  the Company  initially  reduced its valuation
allowance for its deferred tax assets by $800,000 in 2000. A continuing  upward
trend in  profitability  resulted  in an  additional  $400,000  decrease in the
valuation allowance during 2001. At December 31, 2001, the Company has realized
a net deferred tax asset of $1,200,000.  The Company believes it is more likely
than not that this amount will be  realized as a result of  anticipated  future
taxable  income to be generated.  Due to the  uncertainty  of the remaining tax
asset, a valuation allowance has been maintained for the remaining deferred tax
asset at December 31, 2001.

     Net income in 2001 was $1,567,517 compared with $1,601,671 in 2000. Income
available to common shareholders was $1,464,661,  or $0.14 per common share, in
2001 compared with $1,509,099 or $0.14 per common share, in the prior year.

<PAGE>
2000 Compared to 1999

     Revenue for the 2000 fiscal year was $48.2  million,  an increase of $15.9
million,  or 49.3%,  over  revenue for the 1999 fiscal  year.  The increase was
attributable  to  continued  growth at Carolina  National  Transportation,  the
operations of a new agent who specialized in over-size loads at Keystone Lines,
expansion of Keystone Logistics, Inc. and the startup of two new Companies, CAM
Transport, Inc. and Unity Logistics, Inc.

     Purchased  transportation was 77.9% of revenue in 2000 compared with 76.8%
in 1999. Purchased transportation has increased 1.1% as a percentage of revenue
for the year ended  December  31,  2000,  compared  to the year ended  December
31,1999.  Due to the increase in diesel fuel  prices,  the Company has begun to
bill  their  customers  a fuel  surcharge  that is  reimbursable  to the  owner
operator at 100%.  Because this portion of the revenue is reimbursed at 100% to
the owner  operator,  the purchased  transportation  as a percentage of revenue
will increase.

     Commissions  to agents were 9.0% of revenue in 2000  compared with 9.4% in
1999 primarily due to contracts  with newer agents being  negotiated at a lower
percentage rate.

     Insurance  and claims were 3.2% of revenue in 2000  compared  with 3.3% in
1999  primarily  due to a decrease  in claims  relative to revenue and a slight
decrease in liability insurance rates.

     Salaries,  wages and fringe benefits were 3.6% of revenue in 2000 and 3.9%
in 1999. The slight decrease in salaries,  wages and fringe benefit expenses as
a percentage of revenue was due to the Company's  continued  efforts to control
overhead costs coupled with the increase in revenue.  Other operating  expenses
were 3.6% of revenue in 2000 and 3.6% in 1999.

     Based on the changes in revenue and expenses  discussed  above,  operating
income increased by $371,550 from $953,859 in 1999 to $1,325,409 in 2000.

     Interest  expense  decreased  slightly to $0.62 million in 2000 from $0.66
million in 1999.  Although the Company's new lender is charging  lower interest
rates,  the loan balance is higher due to  continued  Company  growth.  The net
effect was a small decrease in interest expense.

     Non-operating income (expense),  exclusive of interest expense,  decreased
from  $118,547 in 1999 to $99,252 in 2000. In 1999,  other income  (expense) is
comprised  of a  write-off  of net  payables  from  fiscal  years 1996 and 1997
relating to  revisions  of  estimates of amounts due from or payable to drivers
and agents. In 2000, the amount is primarily  attributable to a refund from the
state of Alabama  for  permits  paid in prior  years that was  reversed  by the
courts and refunded to the Company.

     The Company has net operating loss  carry-forwards  of  approximately  $57
million at December  31, 2000.  These  carry-forwards  are  available to offset
taxable income in future years and  substantially  all of these  carry-forwards
will  expire  in  the  years  2003  through   2010.   Based  on  the  company's
profitability in recent years, at December 31, 2000, the Company has realized a
net deferred tax asset of $800,000. The Company believes it is more likely than
not that this amount will be realized as a result of anticipated future taxable
income to be generated.  Due to the  uncertainty  of the remaining tax asset, a
valuation allowance has been maintained for the remaining deferred tax asset at
December 31, 2000.

     Net income in 2000 was $1,601,671  compared with $411,897 in 1999.  Income
before Income Tax Benefit was $ 801,671 in 2000 compared with 411,897 in 1999 a
95% increase.  Income available to common shareholders was $1,509,099, or $0.14
per common share, in 2000 compared with $329,611, or $0.03 per common share, in
the prior year.

<PAGE>
Liquidity and Capital Resources

     During fiscal 2001, the Company's financial position continued to improve.
The Company had a net  deficiency  in  shareholders'  equity of $1.0 million at
December 31, 2001  compared  with $2.5  million at December  31, 2000.  Working
capital at December 31, 2001 was $2.0  million  compared to $1.7 million at the
end  of  2000.   This  increase  in  working   capital  is  due  to  continuing
profitability.

     Net cash used in  operating  activities  decreased  $2.0 million from $2.8
million for the year ended December 31, 2000 to $0.8 million for the year ended
December 31, 2001. In 2001, accounts receivable increased $2.6 million compared
to $5.1 million during 2000,  resulting in a $2.5 million  decrease in net cash
used in operating activities. While revenues grew significantly for 2001 as the
Company continued to add new agents and expand operations, growth in the fourth
quarter of 2001  slowed in  comparison  to the fourth  quarter of 2000 due to a
soft economy. Other accounts receivable increased $1.0 million in 2001 compared
to $0.3 million in 2000  resulting in a $0.7 million  increase in net cash used
by operating  activities.  The increase in other receivables is attributable to
increased driver advances resulting from the growth of operations,  an increase
in loans provided to agents and a $0.2 receivable due from Enterprise Trucking,
an entity affiliated through common ownership.

     Net cash used in investing  activities was $1.2 million for the year ended
December  31, 2001  compared to net cash used in investing  activities  of $0.1
million  for the year  ended  December  31,  2000.  Net cash used in  investing
activities  during  2001  related to the  Company's  investment  in  additional
equipment, consisting primarily of trailers.

     Net cash provided by financing activities decreased $0.5 million from $2.9
million for the year ended December 31, 2000 to $2.4 million for the year ended
December 31, 2001.  The cash provided by financing  activities is primarily due
to a net increase in the Company's line of credit of $2.5 million,  an increase
in the equipment line of credit of $0.8 million, an increase in other long term
debt of $0.2  million,  offset  by a  decrease  in the bank  overdraft  of $0.5
million,  and a decrease  in  shareholder  loans of $0.3  million.  The overall
increase  in debt is due to  financing  required to fund the  Company's  growth
which resulted in an increase in the accounts receivable balance as well as the
purchase of additional equipment.

     The Company had a $5.5  million  line of credit that  matured on September
28, 2001. This revolving line of credit was amended effective October 15, 2001,
increasing  the line to $7.0  million and  extending  the  maturity  date until
October 1, 2003.  Advances  under this  revolving line of credit are limited to
70% of eligible  accounts  receivable  and bear interest at the prime rate plus
0.25% (5.0% at December  31,  2001).  The  interest  rate is based upon certain
financial  covenants  and may range from prime to prime plus .5%. The Company's
accounts receivable,  property,  and other assets collateralize  advances under
the  agreement.  Borrowings  up to $1  million  are  guaranteed  by  the  Chief
Executive Officer and Chief Financial  Officer of the Company.  At December 31,
2001, the outstanding borrowings on this line of credit were $6.8 million.

     The  Company  also has 2  additional  equipment  loans  to fund  equipment
purchases.  At  December  31,  2001,  the Company  has  $137,000 of  additional
borrowing  availability  under these  equipment loans which may be used to fund
additional  equipment  purchases.  The outstanding  balance on these loans bear
interest at the prime rate in effect plus 1% per annum.  The principal  balance
of these equipment  lines are payable based on a five year  amortization of the
outstanding  balance with any remaining unpaid balance due in October 2003. The
outstanding  balance under these equipment  loans totaled  $827,401 at December
31,  2001 and are  collateralized  by the  related  equipment  funded  by these
borrowings.

<PAGE>
     These lines of credit are subject to  termination  upon various  events of
default,  including  failure to remit  timely  payments of  interest,  fees and
principal, any adverse change in the business of the Company or failure to meet
certain financial  covenants.  Financial  covenants include:  minimum net worth
requirements,   total  debt  service   coverage  ratio,   capital   expenditure
limitations,   and  prohibition  of  additional   indebtedness   without  prior
authorization.

Environmental Liabilities

     The Company is not a party to any Super-fund litigation and otherwise does
not have any known environmental  claims against it. However,  the Company does
have one property  where soil  contamination  problems  existed or are known to
exist  currently.   The  Company  has  preliminarily  evaluated  its  potential
liability as this site and believes that it has reserved  appropriately for its
remediation or that the fair market value of the property  exceeds its net book
value  by an  amount  in  excess  of  any  remediation  cost.  There  can be no
assurance,  however, that the cost of remediation would not exceed the expected
amounts.  The  Company  continues  to  monitor  soil  contamination  and may be
required to remediate the property in the near future.

Inflation

     Changes  in freight  rates  charged by the  Company to its  customers  are
generally  reflected in the cost of purchased  transportation  and  commissions
paid by the  Company  to  independent  contractors  and  agents,  respectively.
Therefore,  management  believes that future  operating  results of the Company
will be affected  primarily by changes in volume of business.  However,  due to
the highly  competitive  nature of the truckload motor carrier industry,  it is
possible  that future  freight rates and cost of purchased  transportation  may
fluctuate, affecting the Company's profitability.

Recently Issued Accounting Standards

     In July 2001, the Financial  Accounting and Standards  Board(FASB)  issued
Statements of Financial  Accounting  Standards No. 141("SFAS  141"),  "Business
Combinations" and No. 142("SFAS 142"),  "Goodwill and Other Intangible Assets".
SFAS 141 requires that all business combinations  initiated after June 30, 2001
be  accounted  for  under  a  single  method-the  purchase  method.  Use of the
pooling-of-interest  method  is no longer  permitted.  SFAS 142  requires  that
goodwill no longer be  amortized  to  earnings,  but  instead be  reviewed  for
impairment upon initial  adoption of the Statement and on an annual basis going
forward. The amortization of goodwill will cease upon adoption of SFAS 142. The
provisions  of SFAS 142 will be  effective  for fiscal  years  beginning  after
December  15,  2001.  The  Company is  required  to adopt SFAS 142 in the first
quarter of fiscal year 2002.  The Company  believes  that the  adoption of thse
standards will have no material  impact on its financial  statements or results
of operations.

     In October 2001,  the  Financial  Accounting  and Standards  Board("FASB")
issued  Statement  of  Financial  Accounting  Standards  No.  144("SFAS  144"),
"Accounting  for the  Impairment  or Disposal of Long-Lived  Assets",  which is
effective for fiscal years  beginning on or after December 15, 2001 and interim
periods  within  those fiscal  periods.  SFAS 144  supercedes  FASB 121 and APB
Opinion No. 30. However, it retains the requirement of Opinion No. 30 to report
discontinued  operations separately from continuing operations and extends that
reporting  to a component  of an entity  that  either has been  disposed of (by
sales, by abandonment, or in a distribution to owners) or is classified as held
for  sale.  SFAS 144  addresses  financial  accounting  and  reporting  for the
impairment of certain  long-lived assets to be disposed of. Management does not
expect  the  adoption  of SFAS 144 to have a material  impact on the  Company's
financial position or results of operations.

<PAGE>
Item 7a. Quantitative and Qualitative Disclosures about Market Risk

     The  Company  has a  revolving  line of credit  with a bank,  which  bears
interest at the prime rate plus .25% (5.00% at December 31, 2001). The interest
rate is based on certain financial  covenants and may range from prime to prime
plus .5%. In addition, the company has certain equipment  lines-of-credit which
bear interest at the prime rate plus 1%. The Company also has subordinated debt
with related parties which bears interest at rates ranging from prime + .75% to
prime plus 1%.

Item 8.  Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors of
US 1 Industries, Inc.
Gary, Indiana

     We have  audited  the  accompanying  consolidated  balance  sheets of US 1
Industries,  Inc.  and  Subsidiaries  as of December  31, 2001 and 2000 and the
related consolidated statements of income,  shareholders' deficiency,  and cash
flows for each of the three years in the period ended  December  31,  2001.  We
have  also  audited  the  schedule  listed  in the  accompanying  index.  These
financial  statements  and schedule  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an opinion on these  financial
statements and schedule based on our audits.

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

     In our opinion,  the consolidated  financial  statements referred to above
present  fairly,  in all  material  respects,  the  financial  position of US 1
Industries,  Inc.  and  Subsidiaries  at December  31,  2001 and 2000,  and the
results of their operations and their cash flows for each of the three years in
the period ended  December 31, 2001 in conformity  with  accounting  principles
generally accepted in the United States.

     Also  in our  opinion,  the  schedule  presents  fairly,  in all  material
respects, the information set forth therein.


BDO Seidman, LLP

Chicago, Illinois
March 11, 2002

<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000


<TABLE>
<CAPTION>
ASSETS

                                                       2001           2000
                                                       ----           ----
CURRENT ASSETS:
<S>                                                 <C>          <C>
 Cash                                               $  322,060   $        0
 Accounts receivable-trade, less allowance for
    doubtful accounts of $524,000 and $209,000
    respectively                                    11,946,382    9,911,436
 Other receivables, including receivables due
    from affiliated entities of $359,000 and
    $62,000 in 2001 and 2000, respectively           1,374,835      382,057
 Deposits                                               44,200       40,450
 Prepaid expenses                                      544,143      309,897
 Current Deferred tax asset                            600,000      400,000
                                                   ------------  ----------
      Total current assets                          14,831,620   11,043,840

FIXED ASSETS:
   Equipment                                         1,542,945      335,402
   Less accumulated depreciation and amortization     (250,954)     (68,797)
                                                   ------------  ----------
      Net fixed assets                               1,291,991      266,605
                                                   ------------  ----------
ASSETS HELD FOR SALE:
   Land                                                195,347      195,347
   Valuation allowance                                (141,347)    (141,347)
                                                  -------------  -----------
      Net assets held for sale                          54,000       54,000
Non-current Deferred tax asset                         600,000      400,000
Other Assets                                           383,786      126,461
                                                  -------------  -----------
TOTAL ASSETS                                       $17,161,397  $11,890,906
                                                  =============  ===========


<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>


<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2001 AND 2000


<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' DEFICIENCY

                                                      2001           2000
                                                      ----           ----
CURRENT LIABILITIES:

<S>                                               <C>            <C>
   Revolving line of credit                       $6,765,999     $4,271,104
     Current portion of long-term debt               399,190        232,792
   Accounts payable                                3,609,666      2,621,107
   Bank overdraft                                          0        522,201
   Accrued expenses                                  251,859        244,446
   Insurance and claims                              629,796        418,450
   Accrued compensation                               79,545         33,891
   Accrued interest                                  974,039        836,019
   Fuel and other taxes payable                       82,228        143,796
                                                 -----------    -----------
      Total current liabilities                   12,792,322      9,323,806
                                                 -----------    -----------
LONG-TERM DEBT TO RELATED PARTIES                  4,260,668      4,026,210

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK:
    Authorized 5,000,000 shares; no par value,
    Series A shares issued and outstanding:
    2001 and 2000 - 1,094,224 Capitalized
    dividend $0.094
    Preference as to Liquidation $0.094 per share  1,102,968      1,000,112
SHAREHOLDERS' DEFICIENCY:
   Common stock, authorized 20,000,000 shares;
    no par value; shares issued and
    outstanding:
    2001 and 2000 - 10,618,224                    40,844,296     40,844,296
   Accumulated deficit                           (41,838,857)   (43,303,518)
                                                 -----------    -----------
   Total shareholders' deficiency                   (994,561)    (2,459,222)
                                                 -----------   ------------
TOTAL LIABILITIES AND SHAREHOLDERS'
    DEFICIENCY                                   $17,161,397   $11,890,906
                                                 ===========  =============
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>

<PAGE>
                    US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENT OF INCOME
                  YEARS ENDED DECEMBER 31, 2001, 2000, AND 1999


<TABLE>
<CAPTION>
                                                2001           2000           1999

<S>                                         <C>            <C>            <C>
OPERATING REVENUES                          $72,109,813    $48,284,013    $32,333,528
OPERATING EXPENSES:Purchased transportation  55,609,408     37,626,623     24,846,421
   Commissions                                6,596,625      4,343,529      3,052,406
   Insurance and claims                       2,350,254      1,553,892      1,070,564
   Salaries, wages, and other                 2,502,848      1,719,291      1,248,089
   Other Operating expenses                   3,268,638      1,715,269      1,162,189
                                              ---------      ---------     -----------
            Total operating expenses         70,327,773     46,958,604     31,379,669
                                             ----------     ----------     ----------
OPERATING INCOME                              1,782,040      1,325,409        953,859
NON OPERATING INCOME (EXPENSE):
    Interest income                               6,058         19,003          9,840
    Interest expense                           (712,381)      (622,990)      (660,509)
    Other income, net                            91,800         80,249        108,707
                                                 ------       --------     ----------
      Total non operating (expense)            (614,523)      (523,738)      (541,962)

NET INCOME BEFORE INCOME TAXES                1,167,517        801,671        411,897
    Income tax benefit                          400,000        800,000              0
                                               --------        -------     ----------
NET INCOME                                    1,567,517      1,601,671        411,897
DIVIDENDS ON PREFERRED SHARES                   102,856         92,572         82,286
                                               --------      ---------     ----------
NET INCOME AVAILABLE TO COMMON SHARES       $ 1,464,661    $ 1,509,099    $   329,611
                                              =========      =========     ==========


Basic and Diluted Net Income
Per Common Share                                  $0.14          $0.14          $0.03

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
   - BASIC AND DILUTED                       10,618,224     10,618,224     10,618,224

<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>

<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIENCY
                  YEARS ENDED DECEMBER 31, 2001, 2000, and 1999

<TABLE>
<CAPTION>
                              Common Stock          Accumulated
                          Shares         Amount       Deficit        Total
<S>     <C>              <C>           <C>          <C>           <C>
January 1, 1999          10,618,224    40,844,296   (45,142,228)  (4,297,932)
Dividends on Preferred Stock                            (82,286)     (82,286)
Net Income                                              411,897      411,897
 Balance at              __________   ___________    ___________   __________
  December 31, 1999      10,618,224    40,844.296   (44,812,617)  (3,968,321)
Dividends on Preferred Stock                            (92,572)     (92,572)
Net Income                                            1,601,671    1,601,671
                         ----------   -----------   -----------   ----------
Balance at               10,618,224   $40,844,296   (43,303,518)  (2,459,222)
  December 31, 2000
Dividends on Preferred Stock                           (102,856)    (102,856)
Net Income                                            1,567,517    1,567,517
                         ----------   -----------    ----------   ----------
Balance at               10,618,224   $40,844,296  $(41,838,857) $  (994,561)
  December 31, 2001      ==========   ===========   ===========   ==========

<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>

<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
<TABLE>
<CAPTION>
                                                        2001          2000           1999
CASH FLOWS FROM OPERATING ACTIVITIES:

<S>                                                 <C>           <C>            <C>
  Net income                                        $ 1,567,517   $ 1,601,671    $ 411,897
Adjustments to reconcile net income to net
  cash used in operating activities:
    Depreciation and amortization                       184,608        26,818       30,795
    Provision for bad debt                              519,949       186,233       49,027
    Deferred Income Tax benefit                        (400,000)     (800,000)           0
    Loss on disposal of equipment                             0         3,609       30,177
    Changes in operating assets and liabilities:
      Accounts receivable-trade                      (2,554,895)   (5,124,833)    (979,907)
      Other receivables                                (992,778)     (276,287)     (46,116)
      Prepaid expenses                                 (234,246)     (147,724)      18,553
      Deposits & other assets                          (261,075)     (157,666)     (29,744)
      Accounts payable                                  988,559     1,279,973     (104,755)
      Accrued expenses                                    7,413        28,941       32,105
      Insurance and claims                              211,346       213,858       23,068
      Accrued interest                                  138,020       222,452      220,684
      Accrued compensation                               45,654        16,577         (277)
      Fuel and other taxes payable                      (61,568)       93,848      (25,747)
                                                       ---------   -----------    ---------
         Net cash used in operating
          activities                                   (841,496)   (2,832,520)    (370,240)
                                                       ---------   -----------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to fixed assets                          (1,209,994)      (92,500)      (5,183)
  Proceeds from sale of fixed assets                          0         8,885       79,358
                                                       --------       -------     --------
        Net cash (used in) provided by investing
         activities                                  (1,209,994)      (83,615)      74,175
                                                     -----------      --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under line of credit                 2,494,895     1,193,498      630,745
  Proceeds from Long term debt                        1,049,094       158,052            0
  Principal payments of long-term debt                 (331,672)     (121,808)     (64,277)
  Net(repayments of)proceeds from shareholder loans    (316,566)    1,509,911    (355,718)
  (Decrease) Increase in bank overdraft                (522,201)      176,482       85,315
                                                       ---------      -------     --------
          Net cash used in financing
         activities                                   2,373,550     2,916,135      296,065
                                                       --------      --------     --------

NET INCREASE IN CASH                                    322,060             0            0

CASH, BEGINNING OF YEAR                                                     _            _
                                                       --------       -------     ---------
CASH, END OF YEAR                                      $322,060      $      0     $      0
                                                       --------      --------     ---------
--------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION--
  Cash paid during year for interest                   $574,361      $400,538     $439,825

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
  FINANCING ACTIVITIES
  Note payable incurred for purchase of equipment      $      0      $165,435     $      0

The Company recorded $102,856, $92,572, and $82,286 in 2001,2000, and
1999 respectively, for dividends on preferred stock.

<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
</TABLE>

<PAGE>
                      US1 INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2001, AND 2000

1.         OPERATIONS
     The  Company  is  primarily  an  interstate  truckload  carrier of general
commodities,  which uses independent agents and owner-operators to contract for
and haul  freight for its  customers in 48 states with a  concentration  in the
Southeastern  United  States.  One agent  accounted for 8%, 13%, and 18% of the
Company's  revenue  in 2001,  2000,  and  1999,  respectively.  No other  agent
represented more than 10% of sales for the years ended December 31, 2001, 2000,
and 1999.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
     Principles of Consolidation--The consolidated financial statements include
the accounts of US 1 Industries,  Inc. and its  subsidiaries.  All  significant
intercompany accounts and transactions have been eliminated.

     Revenue  Recognition--Revenue  for freight in transit is  recognized  upon
delivery.  Amounts  payable  for  purchased  transportation,   commissions  and
insurance expense are accrued when the related revenue is recognized.

     Fixed  Assets--Fixed  assets are stated at cost and depreciated  using the
straight-line  method over the  estimated  useful lives of the related  assets,
which range from three to eight years.

     Assets Held for Sale--Such  assets comprise real estate,  not required for
the Company's  operations,  which is carried at the lower of historical cost or
estimated net realizable value. See Note 12.

     Long-Lived  Assets  -  The  Company  assesses  the  realizability  of  its
long-lived  assets  in  accordance  with  statement  of  Financial   Accounting
Standards No. 121 "Accounting  for the Impairment of Long-Lived  Assets and for
Long-Lived Assets to be disposed of."

     Accounting   Estimates--The   preparation   of  financial   statements  in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions  that affect the reported  amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
financial  statements and the reported  amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.

<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     YEARS ENDED DECEMBER 31, 2000, AND 1999

     Income   Taxes--Deferred   income  taxes  are   recognized   for  the  tax
consequences of "temporary differences" by applying enacted statutory tax rates
applicable  to future  years to  differences  between the  financial  statement
carrying  amounts  and the tax bases of  existing  assets and  liabilities.  In
addition,  the amount of any future tax  benefits  are  reduced by a  valuation
allowance to the extent such benefits are not expected to be fully utilized.

     Reclassifications  -  Certain  amounts  in the  2000  and  1999  financial
statements have been restated to conform with 2001 presentation.

     Earnings Per Common  Share--The  Company computes earnings per share under
Statement of Financial  Accounting  Standards No. 128 "Earnings Per Share." The
statement required presentation of two amounts,  basic and diluted earnings per
share.  Basic  earnings  per share are computed by dividing  loss  available to
common  stock  holders  by the  weighted  average  common  shares  outstanding.
Dilutive earnings per share would include all common stock  equivalents.  There
are no common stock equiviliants at December 31, 2001, 2000, or 1999.

     Business Segments - Statement of Financial  Accounting  Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information"  requires
public  enterprises to report certain  information about reporting  segments in
financial  statements.  The Company  presents  its  operations  in one business
segment.

     Recently  Issued  Accounting  Standards  - In  July  2001,  the  Financial
Accounting and Standards  Board(FASB) issued Statements of Financial Accounting
Standards No. 141("SFAS 141"), "Business Combinations" and No. 142("SFAS 142"),
"Goodwill  and Other  Intangible  Assets".  SFAS 141 requires that all business
combinations  initiated  after June 30,  2001 be  accounted  for under a single
method-the purchase method. Use of the pooling-of-interest  method is no longer
permitted.  SFAS 142 requires that goodwill no longer be amortized to earnings,
but instead be reviewed for impairment  upon initial  adoption of the Statement
and on an annual basis going forward.  The  amortization of goodwill will cease
upon  adoption of SFAS 142. The  provisions  of SFAS 142 will be effective  for
fiscal years  beginning  after  December  15, 2001.  The Company is required to
adopt SFAS 142 in the first quarter of fiscal year 2002.  The Company  believes
that the  adoption  of these  standards  will  have no  material  impact on its
financial position or results of operations.

     In October 2001,  the  Financial  Accounting  and Standards  Board("FASB")
issued  Statement  of  Financial  Accounting  Standards  No.  144("SFAS  144"),
"Accounting  for the  Impairment  or Disposal of Long-Lived  Assets",  which is
effective for fiscal years  beginning on or after December 15, 2001 and interim
periods  within  those fiscal  periods.  SFAS 144  supercedes  FASB 121 and APB
Opinion No. 30. However, it retains the requirement of Opinion No. 30 to report
discontinued  operations separately from continuing operations and extends that
reporting  to a component  of an entity  that  either has been  disposed of (by
sales, by abandonment, or in a distribution to owners) or is classified as held
for  sale.  SFAS 144  addresses  financial  accounting  and  reporting  for the
impairment of certain  long-lived assets to be disposed of. Management does not
expect  the  adoption  of SFAS 144 to have a material  impact on the  Company's
financial position or results of operations.

<PAGE>
                     US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
                     YEARS ENDED DECEMBER 31, 2000, AND 1999


3. REDEEMABLE PREFERRED STOCK

     The Series A preferred  shares are  non-voting,  and earn dividends at the
rate of $0.094 per share per annum  (increasing by $0.0094 January 1 thereafter
until redeemed)  payable  quarterly on the first day of February,  May, August,
and November.

     The Series A preferred stock is redeemable at the option of the Company or
the holders at any time.

     As of December 31, 2001, Series A cumulative preferred stock dividends are
in arrears by $555,855.  The  Company's  current line of credit  prohibits  the
payment of dividends.

     On February  19,  2002,  the  Company's  board of  directors  approved the
conversion  of all of the  outstanding  Series  A  redeemable  preferred  stock
(1,094,224  shares) plus all accrued  dividends,  into 1,000,000  shares of the
Company's common stock. The following shows proforma  earnings per common share
assuming  the  preferred  stock  had been  converted  as of the  earliest  date
presented:
<TABLE>
<CAPTION>
                                                        2001    2000    1999
                                                        ----    -----   -----
<S>                                                    <C>      <C>     <C>
Basic and Diluted Net Income per common share          $0.13    $0.14   $0.03
</TABLE>

4.  RELATED PARTY TRANSACTIONS

     One  of  the  Company's  subsidiaries  provides  safety,  management,  and
accounting services to companies  controlled by the Chief Executive Officer and
Chief Financial Officer of the Company.  These services are priced to cover the
cost of the  employees  providing  the  services.  Revenues  related  to  those
services was  approximately  $68,000,  $124,000 and $78,000 in 2001,  2000, and
1999,  respectively.  $359,000 and $62,000 due from entities affiliated through
common  ownership  is included in other  receivables  at December  31, 2001 and
2000, respectively.

     The Company  has an  investment  of  $126,461  in American  Inter-Fidelity
Exchange  ("AIFE"),  an entity which provides the Company with truck  liability
insurance.  The Company  exercised no control over the operations of AIFE. As a
result,  the Company has recorded its  investment in AIFE under the cost method
of accounting for these periods.

     Under the cost method, the investment in AIFE is reflected at its original
amount and income is  recognized  only to the extent of  dividends  paid by the
investee. There were no dividends declared by AIFE for the years ended December
31, 2001, 2000 and 1999.

     A director of the company also manages an  affiliated  insurance  carrier,
Indiana  Truckers  Exchange (ITE). For the years ended December 31, 2001, 2000,
and 1999,  cash paid for  related  party  insurance  premiums  and  deductibles
amounted to $1,313,522,  $729,434, and $532,586, respectively. The Company also
has long term notes payable to AIFE and ITE as described in Note 8.

     The Company has notes payable due to its Chief  Executive  Officer,  Chief
Financial  Officer,  and August  Investment  Partnership,  an entity affiliated
through common ownership, as described in Note 7.

<PAGE>
                         US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


5.  LEASES

     The Company's  administrative  offices are at 1000 Colfax,  Gary, Indiana.
The  Company  leases its  administrative  offices on a month to month basis for
$3,000 per month from Mr. Michael E. Kibler, President, Chief Executive Officer
and a director  of the  Company,  and Mr.  Harold  Antonson,  Treasurer,  Chief
Financial Officer and a director of the Company.

     In addition,  the  Company's  subsidiaries  lease office space and land in
Mississippi,  Texas,  Indiana, and Arkansas under operating leases ranging from
one to three years.

     Rent  expense  under these  operating  leases was  $227,000,  $111,000 and
$69,000 for the years ended 2001,2000, and 1999 respectively.


    Future commitments under these operating leases are as follows:

<TABLE>
<S>                  <C>   <C>
                     2002  $271,000
                     2003   156,000
                     2004    36,200
                           $463,000

</TABLE>

6. BANK LINE OF CREDIT


 The Company had a $5.5 million  line of credit that  matured on September  28,
 2001.  This revolving line of credit was amended  effective  October 15, 2001,
 increasing  the line to $7.0 million and  extending  the  maturity  date until
 October 1, 2003.  Advances  under this revolving line of credit are limited to
 70% of eligible accounts  receivable.  The interest rate is based upon certain
 financial  covenants  and may range from prime to prime plus .5%.  At December
 31, 2001, the interest rate charged on this line of credit was prime plus .25%
 (5.0%).  The  Company's  accounts  receivable,   property,  and  other  assets
 collateralize  advances under the  agreement.  Borrowings up to $1 million are
 guaranteed by the Chief Executive  Officer and Chief Financial  Officer of the
 Company.  At December 31, 2001,  the  outstanding  borrowings  on this line of
 credit were $6.8 million.


     This line of credit is  subject  to  termination  upon  various  events of
default,  including  failure to remit  timely  payments of  interest,  fees and
principal, any adverse change in the business of the Company or failure to meet
certain financial  covenants.  Financial  covenants include:  minimum net worth
requirements,   total  debt  service   coverage  ratio,   capital   expenditure
limitations,   and  prohibition  of  additional   indebtedness   without  prior
authorization.

<PAGE>
                   US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

7. LONG-TERM DEBT

Long-term debt at December 31, 2001 and 2000 comprises:

<TABLE>
<CAPTION>

                                                       2001           2000
<S>                                                 <C>            <C>
Note payable to the Chief Executive Officer
 And Chief Financial Officer, interest at prime
 + .75%, interest only payments required,
 principal balance due October, 2003                $2,725,509     $3,042,075


Mortgage note payable to the Chief Executive
 Officer and Chief Financial Officer collateralized
 by land, interest at prime + .75%, interest only
 payments required, principal balance due
 July  2004                                            500,000        500,000

Note payable to August Investment Partnership,
 interest at prime + .75%, interest only payments
 required, principal balance due October  2003         250,000        250,000

Mortgage note payable to August Investment
 Partnership, interest at prime + .75%, interest
 only payments required, principal balance due
 October 2003                                          100,000        100,000

Mortgage note payable to ITE,
 Monthly payments of $2,850 including
 Interest at 9% through March 2002                       7,249         39,217

Mortgage note payable to AIFE,
 monthly payments of $2,150 including
 interest at 9% through March 2002                       5,536         29,646
------------------------------------------------------------------------------

Subtotal - related party debt                       $3,588,294      $3,960,938


Equipment loan, collateralized by equipment,
 monthly payments of $12,537 including interest
 at prime plus 1% (5.75% at December 31, 2001)
 through September, 2003 with a balloon payment
 of $401,000 due in October 2003.                      664,489         82,860


Note payable, IPF Cargo Insurance
 monthly payments of $24,561.94 including
 interest at 4.70% through August 2002                 192,227              0

Note payable, cargo insurance premium financing,
 monthly payments of $18,376 including
 interest at 11% through September 2001                      0        141,124

Equipment line (total availability under this line
 is $300,000 until April 2002), collateralized by
 equipment, interest rate at prime + 1%, principal
 payment of $2,715(based on five year amortization of
 principal balance)beginning in April 2002 through
 September 2003 with a balloon payment of $114,000
 due in October 2003.                                  162,912              0


Note payable, collateralized by equipment,
 monthly payments of $2,077 including
 interest at 9.55% through April 2004                    51,936         70,899

</TABLE>

<PAGE>

                      US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
            <S>                                           <C>            <C>

                  Other                                              0          3,181
                                                             ---------      ---------
                 Total debt                                  4,659,858      4,259,002
            Less current portion                               399,190        232,792
                                                             ---------      ---------
            Total long-term debt                           $ 4,260,668    $ 4,026,210
                                                            ==========      =========
</TABLE>

Interest expense on related party notes was approximately $280,000, $342,500,
and $261,000 for the years ended December 31, 2001, 2000, and 1999,
respectively.

Scheduled maturities of the long-term debt at December 31, 2000 are due as
follows:
<TABLE>
<S>                  <C>                <C>
                     2002               $    399,190
                     2003                  3,752,525
                     2004                    508,143
                                          $4,659,858
                                          ==========
</TABLE>
8.       INCOME TAXES

    The composition of taxes on income (benefit) is as follows:
<TABLE>
<CAPTION>
Current                               2001        2000        1999
---------                             -----       ----        ----
<S>                                 <C>        <C>        <C>
  Federal                           $397,000    $273,000   $140,000
  State                               70,000      48,000     25,000
  Utilization of net operating loss (467,000)   (321,000)  (165,000)
  carry-forward
  Adjustment of valuation allowance (400,000)   (800,000)         0
  -----------------------------------------------------------------------------

  Income tax expense (benefit)     $(400,000)  $(800,000)  $      0
  -----------------------------------------------------------------------------

    The Company and its subsidiaries file a consolidated federal income tax
    return. Deferred income taxes consist of the following:

  December 31,                       2001        2000         1999
  -----------------------------------------------------------------------------

  Total deferred tax assets, relating
   principally to net operating
  loss carry-forwards            $22,261,000  $22,728,000  $23,049,000
  -----------------------------------------------------------------------------
                                  22,216,000   22,728,000   23,049,000
  Less valuation allowance       (21,061,000) (21,928,000) (23,049,000)
  -----------------------------------------------------------------------------
  Total net deferred tax asset   $ 1,200,000  $   800,000  $         0
  -----------------------------------------------------------------------------

</TABLE>
     At December 31, 2001 and 2000, the Company has realized a net deferred tax
asset of $1,200,000 and $800,000, respectively as it is more likely than not
that this amount will be realized as a result of anticipated future taxable
income to be generated by the Company. Due to the uncertainty of realization, a
valuation allowance has been maintained for the remaining deferred tax asset at
December 31, 2001.
    The Company has net operating loss carry-forwards of approximately $55
million at December 31, 2001. These carry-forwards are available to offset
taxable income in future years and substantially all of these carry-forwards
will expire in the years 2003 through 2010.

<PAGE>
                  US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


9.  COMMITMENTS AND CONTINGENCIES

          CAM  Regional  Transport  and  Laurel  Mountain  Leasing,  Inc.  two
     unaffiliated  entities,  filed a  complaint  against  the Company in 1994
     which   alleges   breach   of   contract,   claiming   that   Trailblazer
     Transportation, Inc., a subsidiary of the Company which filed bankruptcy,
     failed to abide by a purchase  agreement  entered  into with CAM Regional
     Transport,  Inc. and Laurel  Mountain  Leasing,  Inc. The complaint seeks
     damages of $284,000 plus interest from November 1992.

          The Company is currently involved in three additional lawsuits;  one
     of  which  is a class  action  lawsuit,  as a result  of an  August  1999
     incident  in  which  a  Carolina  National  Transportation,   Inc.  truck
     overturned leaking chemicals. It is the Company's position that it is not
     at fault.  The Company  contends that the materials  inside the container
     were  improperly  packaged by a third  party,  that the  chemicals  which
     leaked  were not  harmful in  nature,  and that  those  persons  alleging
     injuries  were not  harmed.  The  Company is also  involved  in two other
     lawsuits  as a result of a chemical  leak that  occurred  in a  container
     hauled  by a  Carolina  National  Transportation,  Inc  truck.  It is the
     Company's  position that they are not at fault for this incident  because
     they are merely the shipper and a third party had the  responsibility  to
     package the load for safe transportation.  Should there be an unfavorable
     outcome in either of these cases, the company's  insurance  carrier would
     provide  coverage  for any  potential  loss in excess of $200,000 up to a
     limit of $1,000,000.

          At this time, the Company and its legal counsel are unable to assess
     the outcome of these complaints. The Company intends to vigorously defend
     itself in these matters.

          The Company is involved in other  litigation in the normal course of
     its business. Management intends to vigorously defend these cases. In the
     opinion  of  management,  the  litigation  now  pending  will  not have a
     material  adverse effect on the  consolidated  financial  position of the
     Company.

          The Company has entered into an agreement with certain key employees
     of Carolina National  Transportation,  Inc. ("Carolina"),  a wholly owned
     subsidiary of the Company,  in which these  employees  will receive up to
     40%  ownership  in  Carolina.  These  key  employees  will  earn  the 40%
     ownership  interest in Carolina over a three year period beginning in the
     year  following  which  Carolina  achieves  positive  retained  earnings,
     contingent upon certain  restrictions  (including continued employment at
     Carolina) pursuant to the agreement.  In 2001, Carolina achieved positive
     retained earnings. As a result, the Company will incur total compensation
     expense of $400,000  over the  three-year  vesting  period.  Beginning in
     2002, a minority  interest will be disclosed on the  Company's  financial
     statements.  Net income for Carolina was $486,000,  $563,814 and $262,131
     for the years ended 2001, 2000 and 1999, respectively.

          The Company  carries  insurance  for public  liability  and property
     damage, and cargo loss and damage through various programs. The Company's
     insurance  liabilities  are  based  upon the best  information  currently
     available  and are subject to revision  in future  periods as  additional
     information  becomes  available.  Management  believes it has  adequately
     provided for insurance claims.

<PAGE>
                  US 1 INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


10.  ENVIRONMENTAL MATTERS

          The  Company  owns  a  piece  of  property  in  Phoenix  where  soil
     contamination   problems  exist.   The  Company  has  been  working  with
     regulatory officials to eliminate new contamination sources and determine
     the extent of existing  problems.  Estimates  of the cost to complete the
     future  remediation of approximately  $141,000 are considered in the land
     valuation allowance at December 31, 2001 and 2000.

11.  SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>

        (In thousands, except per share data)                    Net
                                                   Net          Income
                   Operating     Operating        Income        (loss)
                   Revenue        Income          (loss)       per share
                                                           (basic and diluted)
        ----------------------------------------------------------------------
        <S>       <C>             <C>            <C>              <C>
        2001
                   $72,110        $1,782         $1,568            $0.14
        ----------------------------------------------------------------------
        Quarters:
         Fourth     20,695           716            847             0.07
         Third      18,427           429            318             0.03
         Second     17,537           305            211             0.02
         First      15,451           332            192             0.02
        ----------------------------------------------------------------------
        2000
                   $49,055        $1,325         $1,602            $0.14
        ----------------------------------------------------------------------
        Quarters:
         Fourth     15,671           482          1,161             0.10
         Third      12,761           324            189             0.02
         Second     11,593           282            170             0.01
         First       9,030           237             82             0.01
        ----------------------------------------------------------------------
        1999
                   $32,334        $  954           $412            $0.03
     -------------------------------------------------------------------------
       Quarters:
        Fourth       8,666           261            185             0.02
        Third        8,078           233             78             0.00
        Second       8,198           279            106             0.01
        First        7,392           181             43             0.00
     -------------------------------------------------------------------------

</TABLE>
          In the fourth quarter of 2001, the company  reduced its deferred tax
     asset valuation allowance by $400,000.


<PAGE>
                              US 1 INDUSTRIES, INC.
                        VALUATION AND QUALIFYING ACCOUNTS
                   YEARS ENDED DECEMBER 1, 1998,1999 AND 2000

                                   Schedule II
<TABLE>
<CAPTION>
                                  Balance At     Charged to      Write-Offs,
                                 Beginning of    Costs and     Retirements &     Balance At
                                    Year          Expenses       Collection      End of Year
                                 ____________    __________    _____________     ___________
<S>                              <C>             <C>           <C>               <C>
         Description


Year Ended December 31, 1999

Allowance for Doubtful Accounts
   Receivable                    $ 95,000        $ 49,027        $ 77,027         $ 67,000


Year Ended December 31, 2000

Allowance for Doubtful Accounts
   Receivable                    $ 67,000        $186,233        $ 44,233         $209,000


Year Ended December 31, 2001

Allowance for Doubtful Accounts
   Receivable                   $209,000        $519,949        $204,949          $524,000

</TABLE>

Item 9. Changes in and Disagreements with Accountants' on Accounting and
           Financial Disclosure.

         None.

<PAGE>

                                   PART III


Item 10.  Directors and Executive Officers of the Registrant.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The executive officers of the company as of March 15, 2001 were as follows
<TABLE>
<CAPTION>
NAME                       AGE          POSITION
----                       ---          --------
<S>                         <C>         <C>
Michael E. Kibler           61          President, Chief Executive Officer,
                                        and Director
Harold E. Antonson          62          Chief Financial Officer, treasurer,
                                        and Director
Lex Venditti                49          Director
Robert I. Scissors          68          Director
Gage Blue                   31          Director
Brad James                  46          Director
</TABLE>

Name                          Office and Experience
_____                         _____________________

Michael E. Kibler                Mr. Kibler is President and Chief Executive
                              Officer of the Company  and has  held these
                              positions since September 13, 1993.  He also has
                              been President of Enterprise Truck Lines, Inc.,
                              an interstate trucking company engaging in
                              operations similar to the Company's, since 1972.

Harold E. Antonson            Mr. Antonson is Chief Financial Officer of the
                              Company, a position he has held since March
                              1998. Mr. Antonson is a certified public
                              accountant.  Prior to joining the Company, he
                              was Secretary/Treasurer of American
                              Inter-fidelity Exchange.  Mr Antonson is also a
                              partner in August Investment Partnership.  Mr.
                              Antonson was elected a director and Treasurer of
                              the Company in November 1999.

Lex Venditti                  Mr. Venditti has served as a Director of the
                              Company since 1993.  Mr. Venditti has been the
                              General Manager of American Interfidelity, an
                              insurance reciprocal located in Indiana that is
                              the subject of an order of rehabilitation by the
                              Indiana Department of Insurance, since 1995.

Robert Scissors               Mr. Scissors has been a Director of the Company
                              since 1993.  Mr. Scissors  began his career in
                              the Insurance Industry  in 1957.  Later, in
                              1982, Mr. Scissors joined a brokerage firm
                              called Alexander/Alexander where he worked until
                              retiring in 1992.  Mr. Scissors currently serves
                              as an insurance consultant and broker.
<PAGE>
Directors and Executive Officers of the Registrant (continued)



Gage Blue                     Mr. Blue was elected Director in 1999.  Mr. Blue
                              is Vice President of Operations for Carolina
                              National, a subsidiary of US1 Industries, which
                              began operations in 1996.  Mr. Blue has held the
                              position of Vice President of Operations since
                              December 1996.

Brad James                    Mr. James is the President of Seagate
                              Transportation Services, Inc.  Mr. James
                              graduated from Bowling Green University with a
                              Bachelors Degree in Science in Business
                              Administration.  He has been in the trucking
                              industry since 1977.
                              Mr. James was elected Director of the Company in
                              1999.


Item 11.  Executive Compensation

    The following Summary Compensation Table sets forth compensation paid by the
Company during the years ended December 31, 2001, 2000 and 1999 to its Chief
Executive Officer. No other officer earned in excess of $ 100,000.
<TABLE>
                       Summary Compensation Table

<CAPTION>
                              Annual Compensation
Name and Position        Year          Salary       Bonus         Other
-----------------        ----          ------       -----         -----
<S>                      <C>           <C>             <C>           <C>
Michael Kibler           2001          33,048          0             0
President                2000          33,048          0             0
                         1999          33,048          0             0
</TABLE>

<PAGE>
Item 12.  Security Ownership of Certain Beneficial Owners and Management.

Security Ownership of Management

    The following table sets forth the number and percentage of shares of Common
Stock that as of March 15, 2001 are deemed to be beneficially owned by each
director of the company and director nominee, by each executive officer of the
Company and by all directors and executive officers of the company as a group
<TABLE>
<CAPTION>
                              Number of Shares of
                              Common Stock
Name and position             Beneficially Owned        Percentage of Class
-----------------             ------------------        -------------------
<S>                                  <C>                 <C>
Michael E Kibler                     3,489,507 (1,2)      32.9%
Director, President and
Chief Executive Officer

Robert I. Scissors,                     36,770               0
Director

Lex L. Venditti                         20,000               0
Director


Harold E. Antonson                   3,489,507  (1,2,3    32.9%
Chief Financial Officer,
Treasurer and Director

All Directors and Executive
Officers                             3,735,919            35.2%
</TABLE>

(1)     As partners of August Investment Partnership (AIP), Messrs. Kibler and
        Antonson, may be deemed to be beneficial owners of 3,067,840 shares of
        common stock owned by AIP
(2)     As Director of Eastern Refrigerated Express Inc, )an entity under
        common control) Messrs. Kibler, Antonson may be deemed to be beneficial
        owner of 366,667 Shares of Common Stock owned by Eastern.

(3)    Mr. Antonson disclaims beneficial ownership of 197,500 shares of Common
       Stock owned by American Inter-Fidelity Exchange, of which Mr Antonson is
       Secretary and Treasurer

Security Ownership of Certain Beneficial Owners

     The following  table sets forth the number and  percentage of shares of
Common Stock beneficially owned as of March 15, 2001 by any person who is
known to the  Company  to be the  beneficial  owner of more  than five percent
of the outstanding shares of Common Stock:
<TABLE>
<CAPTION>
                              Number of Shares of
Name and Address of           Common Stock                Percentage
Beneficial Owner              Beneficially Owned          of Class
----------------              ------------------          --------
<S>                           <C>                          <C>
Harold E. Antonson            3,489,507  (1,2,3)           32.9%
8400 Louisiana Street
Merrillville, IN 46410

August Investment Partnership 3,067,840                    28.9%
8400 Louisiana Street
Merrillville, IN 46410
</TABLE>


<PAGE>
Security Ownership of Certain Beneficial Owners and Management (continued)

<TABLE>
<S>                           <C>                         <C>
Michael Kibler                3,489,507  (1,3)             33.0%
8400 Louisiana Street
Merrillville, IN 46410


John K. Lavery                3,438,507  (1,3)             32.4%
8400 Louisiana Street
Merrillville, IN 46410
</TABLE>

(1)  As partners of AIP, Messrs. Kibler, and Antonson, and Lavery may be deemed
     to be beneficial owners of the shares of Common Stock owned by AIP.

(2)  Mr. Antonson disclaims beneficial ownership of 197,500 shares of Common
     Stock owned by American Inter-Fidelity Exchange, of which Mr. Antonson is
     Secretary and Treasurer.

(3)  As directors of Eastern Refrigerated Express, Inc. Messrs. Antonson,
     Kibler and Lavery may be deemed to be beneficial owners of 366,667 shares
     of Common Stock owned by Eastern.

Item 13.  Certain Relationships and Related Transactions.

     The company leases office space for its  headquarters  in Gary,  Indiana,
for $3,000 per month from Michael E. Kibler, the president and Chief Executive
Officer  and a director  of the  Company,  and Harold E.  Antonson,  the Chief
Financial Officer, treasurer and a director of the Company. Messrs. Kibler and
Antonson own the property as joint tenants.

     One  of the  Company's  subsidiaries  provides  safety,  management,  and
accounting  services  to  companies  controlled  by the  President  and  Chief
Financial Officer of the Company.  These services are priced to cover the cost
of the employees  providing the services.  Revenues  related to those services
was  approximately  $67,000,  $124,000  and $78,000 in 2001,  2000,  and 1999,
respectively.  $359,000 and $62,000 due from entities  affiliated under common
ownership  is  included in other  receivables  in the  Company's  consolidated
financial statements at December 31, 2001 and 2000, respectively.

     One  of  the  Company's  insurance  providers,   American  Inter-Fidelity
Exchange (AIFE) is managed by a Director of the Company and the Company has an
investment  in the  Provider.  In  addition,  the  Director  also  manages  an
affiliated  insurance carrier,  Indiana Truckers Exchange (ITE). For the years
ended December 31, 2001,  2000, and 1999 cash paid for related party insurance
premiums and  deductibles  amounted to  $1,313,522,  $729,434,  and  $532,586,
respectively.  The Company also has long term notes payable to AIFE and ITE as
described in Note 8 to the consolidated financial statements.

     The Company has notes payable due to its Chief Executive  Officer,  Chief
Financial  Officer,  and August Investment  Partnership,  an entity affiliated
through common ownership, as described in Note 7 to the consolidated financial
statements.

<PAGE>

                                 PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)(1)   Financial Statements:

         Reports of Independent Certified Public Accountants              14

         Consolidated Balance Sheets as of December 31, 2001
          and 2000                                                 15 and 16

          Consolidated Statements of Income for the years ended           17
          December 31, 2001, 2000, and 1999

          Consolidated Statements of Shareholders' Deficiency             18
          for the years ended December 31, 2001, 2000,and 1999

          Consolidated Statements of Cash Flows                           19
          for the years ended December 31, 2001, 2000, and 1999

          Notes to Consolidated Financial Statements                 20 - 27

(a)(2)    Financial Statement Schedules:

            Schedule of Valuation and Qualifying Accounts                 28

     Other schedules are not included because of the absence of the conditions
under which they are required or because the required  information is included
in the consolidated financial statements or notes thereto.

(a)(3)    List of Exhibits

     The  following  exhibits,   numbered  in  accordance  with  Item  601  of
Regulation S-K, are filed as part of this report:

Exhibit   3.1 Articles of Incorporation of the Company.  (incorporated  herein
          by reference to the Company's Proxy Statement of November 9, 1993).

Exhibit   3.2 By-Laws of the Company. (incorporated herein by reference to the
          Company's Annual Report on Form 10-K for the year ended December 31,
          1994).

Exhibit   10.1 Loan and Security  Agreement with FIRSTAR and Carolina National
          Transportation  Inc., Keystone Lines, Inc., Gulfline Transport Inc.,
          and US1 Industries, Inc.(by reference to the Company's Form 10-Q for
          the quarterly period ended March 31, 2000 filed on May 22, 2000).

Exhibit   10.2 Loan  agreements  with August  Investment  Partnership and US 1
          Industries.

Exhibit   10.3 Loan  agreements with Michael  Kibler/Harold  Antonson and US 1
          Industries.

Exhibit   10.4 First Amendment of Loan and Security Agreement with FIRSTAR and
          Carolina  National  Transportation  Inc.,  Keystone Lines,  Gulfline
          Transport  Inc.,  and US1  Industries,  Inc.  (by  reference  to the
          Company's  Form 10-Q for the  quarterly  period  ended June 30, 2000
          filed on August 14,  2000)Loan  agreements  with  AIFE/ITE  and US 1
          Industries.

Exhibit   10.5 Second  Amendment of Loan and Security  Agreement  with FIRSTAR
          and Carolina National  Transportation Inc., Keystone Lines, Gulfline
          Transport Inc., Five Star Transport,  Inc., Cam Transport, Inc., and
          US1 Industries, Inc. (by reference to the Company's Annual report on
          Form 10-K for the year ended December 31, 2000).

Exhibit   10.6 Third Amendment of Loan and Security Agreement with FIRSTAR and
          Carolina  National  Transportation  Inc.,  Keystone Lines,  Gulfline
          Transport Inc., Five Star Transport,  Inc., Cam Transport, Inc., and
          US1  Industries,  Inc. (by reference to the Company's  Form 10-Q for
          the  quarterly  period ended March 31, 2001 filed on May 15,  2001).
          (a)(3) List of Exhibits (continued)

<PAGE>
Exhibit   10.7 Third Amendment of Loan and Security Agreement with FIRSTAR and
          Carolina  National  Transportation  Inc.,  Keystone Lines,  Gulfline
          Transport Inc., Five Star Transport,  Inc., Cam Transport, Inc., and
          US1  Industries,  Inc. (by reference to the Company's  Form 10-Q for
          the quarterly  period ended  September 30, 2001 filed on November 9,
          2001).

b)       Reports on Form 8-K

NONE


<PAGE>


                               SIGNATURES

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

                                    US 1 INDUSTRIES, INC.

Date:_________________              By:  _________________________
                                         Michael E. Kibler
                                         President & Chief Executive Officer
                                        (Principal Executive Officer)


Date:_________________              By:  _________________________
                                         Harold Antonson
                                         Chief Financial Officer & Treasurer
                                         (Principal Financial &
                                          Accounting Officer)

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


Date:_________________                    _________________________
                                          Michael E. Kibler, Director

Date:_________________                    _________________________
                                          Robert I. Scissors, Director

Date:_________________                    _________________________
                                          Lex L. Venditti, Director

Date:_________________                    _________________________
                                          Gage Blue, Director

Date:_________________                    _________________________
                                          Brad James, Director

Date:_________________                    _________________________
                                          Harold Antonson, Director