<PAGE>

                       US SECURITIES & EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-QSB

(X) Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2001.

( ) Transition report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the transition period from             to          .

                         Commission File Number 0-24185

                         CENTRAL AMERICAN EQUITIES CORP.

           Florida                                       65-0636168
           (State or other jurisdiction of         (IRS Employer Identification
           incorporated or organization)           Number)

                         Hotel Alta, Alto de las Palomas
                              Santa Ana, Costa Rica
           (Mailing: POB 718/1260 Plaza Colonial, Escazu, Costa Rica)
                    (Address of Principal Executive Offices)

                               +011 (506) 282-4160
              (Registrant's telephone number, including area code)

         Securities registered under Section 12(b) of the Exchange Act:

                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                      Class A Common Stock, $.001 Par Value

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

    The number of shares outstanding of each of the issuer's classes of common
equity:

             14,739,268 Shares Class A Common Stock, $.001 par value

    (Number of shares outstanding of each of the Registrant's classes of common
stock.)

            Transitional Small Business disclosure format (check one)
                                YES [ X ] NO [  ]

                       DOCUMENTS INCORPORATED BY REFERENCE
Annual Report on Form 10-KSB of Registrant for the year ended December 31, 1998,
                                   1999, 2000


<PAGE>

                          PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL INFORMATION

Central American Equities Corp. (the "Company" or "CAE") is a US hospitality
company, based in Irvine, California and incorporated in the State of Florida.
The Company owns and operates hotels, restaurants, and real property in Costa
Rica. All CAE activities are related to the Company's hotels in Costa Rica, and,
as such, are reported as one operating segment (per FASB Statement No. 131).
Financial statements follow.





                                      -2-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                    Unaudited

                                     ASSETS

<TABLE>
<CAPTION>

                                                             March 31, 2001   December 31, 2000
                                                             --------------   -----------------
<S>                                                          <C>               <C>
Current assets
  Cash and cash equivalents                                  $     15,816      $     15,901
  Account receivable                                               78,974            37,073
  Inventory                                                        29,890            11,074
  Prepaid expenses                                                  5,818            14,704
                                                              -----------      ------------

                                                                  130,497            78,752
                                                              -----------       -----------
Buildings and equipment,
 Net of depreciation                                            7,086,219         7,870,851
                                                             ------------         ---------

Other assets
  Long-Term Assets                                                485,332                 0
  Other Assets                                                      4,801             4,801
                                                             ------------      ------------
                                                                  490,133             4,801

Total assets                                                 $  7,706,849      $  7,954,404
                                                             ============      ============

                      LIABILITY AND STOCKHOLDERS' EQUITY

Current liabilities
  Accounts payable                                           $    280,587      $    329,149
  Accrued expenses                                                154,004           113,600
                                                             ------------          --------

                                                                  434,591           442,749
                                                             ------------       -----------
Other liabilities
  Long term debt                                                  545,635           545,635
  Due to officers                                                 288,360           498,360
                                                             ------------       -----------

                                                                1,268,586         1,043,995

Stockholders' equity
 Common stock - $.001 par value; 20,000,000
   Authorized, 12,230,252 issued and outstanding                   14,739            14,739
 Preferred stock - $.001 par value; 1,000,000
   shares authorized, 0 issued and outstanding                         --                --
  Additional paid-in capital                                   10,149,816        10,149,816
  Unrealized gain on foreign exchange                              42,784            41,066
  Retained deficit                                             (3,769,076)       (3,737,961)
                                                             ------------      ------------

                                                                6,438,263         6,467,660

Total liabilities and stockholders' equity                   $  7,706,849      $  7,954,404
                                                             ============       ===========
</TABLE>


                 See Notes to Consolidated Financial Statements

                                      -3-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                      Consolidated Statement of Operations
                                    Unaudited
                   For the three month period ended March 31,

<TABLE>
<CAPTION>

                                                 2000            2001
                                            ------------     ------------

<S>                                         <C>              <C>
Revenues                                    $    514,281     $    346,626
                                            ------------     ------------

Cost of Services                                  81,332          139,360
                                            ------------     ------------

Gross Profit                                     432,949          207,265
                                            ------------     ------------

Operations
     General & Administrative                    273,522          176,860
     Depreciation                                 55,000           34.632
                                            ------------     ------------

Total General & Administrative                   328,522          211,492
                                            ------------     ------------

Interest Expense                                  36,930           26,889
                                            ------------     ------------

Income taxes                                           0                0

NET INCOME (Loss)                           $     67,497     $    (31,115)
                                            ============     ============

Weighted Average share of
Common Stock Outstanding                      12,230,252       14,739,268
                                            ============     ============

Net Gain (Loss) per Common Share            $        .01     $       (.00)
                                            ============     ============

Net Gain (Loss) per Fully Diluted Share     $        .01     $       (.00)
                                            ============     ============
</TABLE>



                (See Notes to Consolidated Financial Statements)


                                      -4-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                        Unaudited Statements of Cash Flow
                      For the Three Months Ended March 31,

<TABLE>
<CAPTION>

                                                         2000          2001
                                                       --------      --------
<S>                                                    <C>           <C>
Cash flows from operating activities:
 Net Income                                            $ 67,497      $(31,115)

Adjustments to reconcile net loss to
  net cash provided by operating activities:
  Unrealized Loss on Foreign Exchange                      (405)        1,718
  Depreciation and amortization                          55,000        34,632
 Decrease (increase) in:
  Accounts receivable                                   (20,789)      (41,901)
  Inventory                                              (2,596)      (18,816)
  Prepaid expense and other                              20,978         8,886
 (Increase) decrease in:
  Accounts payable                                      (24,120)        6,106(1)
  Accrued expenses                                       36,920        40,404
                                                       --------      --------

Net cash used in operating activities:                   16,689           (86)
                                                       --------      --------

Cash flows from investing activities:
  Capital expenditures                                   (5,133)            0
                                                       --------      --------

Net cash used in investing activities                        --             0
                                                       --------      --------

Cash flows from financing activities:
  Proceeds from loans                                        --             0
  Proceeds from loans from officers                      25,190             0
                                                       --------      --------

Net cash provided by financing activities:                   --             0
                                                       --------      --------

Net increase (decrease) in cash                          36,746           (86)

Cash - beginning of period                               24,869        15,900
                                                       --------      --------

Cash - end of period                                   $ 61,615      $ 15,816
                                                       ========      ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest                                               $ 36,930      $ 26,869
Income Taxes                                                  0             0
</TABLE>

----------
Note: (1) Cash flow changes for accounts payable have been adjusted for a
non-cash change of $54,668. This amount was payable in salary owed to the CEO of
the Company and eliminated by the passage of title for Sunset Reef. See Note 7
of the Notes to Consolidated Financial Statements.

                 See Notes to Consolidated Financial Statements


                                      -5-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

Note 1   SUMMARY OF ACCOUNTING POLICIES
         NATURE OF BUSINESS
         Central American Equities Corp. and Subsidiaries (the "Company") was
         incorporated under the laws of the State of Florida on January 23,
         1996. The Company provides an integrated eco-vacation experience in
         Costa Rica, and is in the business of owning and operating hotels and
         real property in Costa Rica.

         In December of 1996, the Company entered into an agreement for the
         exchange of common stock ("Exchange Agreement") with Cal Tico, L.P.,
         Ecolodge Partners, L.P. and Marine Lodge Partners, L.P. (Partnership).
         Pursuant to the exchange agreement, the company issued 7,756,885 and
         3,099,392 shares of common stock to limited partners and the general
         partners, respectively, of the partnerships. In exchange for the
         shares, the partnership transferred all of their interests (i.e. 100%
         of the outstanding common stock) in the following Costa Rican
         corporations: Hoteleria Cal Tico, S.A.; Bandirma, S.A.; Sociedad
         Protectora De La Fuana y Flora Marintima De Mal Pais, S.F.; Ecoprojecto
         San Luis, S.A. and Confluencia, S.A.

         Cal Tico, L.P. was a California limited partnership that was formed in
         July 1992 to raise $2 million to purchase the land and construct Hotel
         Alta. Cal Tico, L.P. owns 100% of the stock in Hoteleria Cal Tico,
         S.A., a Costa Rican corporation. Hoteleria Cal Tico, S.A, owns the land
         and buildings at Hotel Alta.

         Ecolodge Partners, L.P. was formed in July 1993 to raise a total of
         $1.3 million in a private placement offering to purchase the land and
         construct the Ecolodge San Luis and Biological Station. Ecolodge
         Partners was a California limited partnership that own all of the stock
         in Ecoproyecto San Luis, S.A. and Confluencia San Luis, S.A., the two
         Costa Rican companies that own the Ecolodge land and buildings.

         MarineLodge Partners L.P. was formed in March 1995 to raise $1 million
         for the purchase and renovation of the Sunset Reef. MarineLodge
         Partners was a California limited partnership. MarineLodge Partners
         owned 100% of the stock in Bandirma, S.A. Bandirma owns: a)90% of the
         Sociedad Protectora De La Fauna y Flora Maritima de Mal Pais S.A., a
         Costa Rican corporation which owns the land and buildings at Sunset
         Reef, and b)100% of Muxia, S.A. which owns 100% of the land and
         buildings at Playa Carmen.

         BASIS OF CONSOLIDATION
         The consolidated financial statements include the consolidated accounts
         of Central American Equities Corp. and its subsidiaries. Hoteleria Cal
         Tico, S.A., Bandirma, S.A., Sociedad Protectora De La Fuana y Flora
         Marintima De Mal Pais, S.F., Ecoprojecto San Luis, S.A. and
         Confluencia, S.A. are held 100% by the Company. All intercompany
         transactions and accounts have been eliminated in consolidation.

         CASH AND CASH EQUIVALENTS
         For purposes of the statement of cash flows all certificates of
         deposits with maturities of 90 days or less, were deemed to be cash
         equivalents.


                                      -6-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         PROPERTY AND EQUIPMENT
         Property and equipment are recorded at cost less accumulated
         depreciation. Depreciation is computed provided using the straight-line
         method over the estimated useful lives of five for equipment, seven
         years for furniture and fixtures and forty years for buildings and
         improvements.

         Repairs and maintenance costs are expensed as incurred while additions
         and betterments are capitalized. The cost and related accumulated
         depreciation of assets sold or retired are eliminated from the accounts
         and any gain or losses are reflected in earnings.

         ESTIMATES
         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 disclosures of contingent assets and liabilities at the
         date of the financial statements and the reported amounts of revenues
         and expenses during the reporting period. Actual results could differ
         from those estimates.

         ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 123
         In 1997, the Company adopted Statement of Financial Accounting
         Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
         123"). SFAS 123 encourages, but does not require companies to record at
         fair value compensation cost for stock-based compensation plans. The
         Company has chosen to account for stock-based compensation using the
         intrinsic value method prescribed in Accounting Principles Board
         Opinion No. 25, "Accounting for Stock Issued to Employees" and related
         interpretations. Accordingly, compensation cost for stock options is
         measured as the excess, if any, of the quoted market price of the
         Company's stock at the date of the grant over the amount an employee
         must pay to acquire the stock. The difference between the fair value
         method of SFAS-123 and APB 25 is immaterial.

         ADOPTION OF STATEMENT OF POSITION 98-5
         In April 1998, the American Institute of Certified Public Accountants
         issued Statement of Position 98-5, Reporting the Costs of Start-Up
         Activities, which requires that costs related to start-up activities be
         expensed as incurred. Prior to 1998, the Company capitalized its
         organization costs. The Company adopted the provisions of the SOP in
         its financial statements for the year ended December 31, 1998. The
         effect of adoption of SOP 98-5 was to record a charge for the
         cumulative effect of an accounting change of $235,605 ($.02 per share),
         to expense costs that had been previously capitalized prior to 1998.

         ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 128
         In February 1997, the Financial Accounting Standards Board (FASB)
         issued Statement of Financial Accounting Standards No. 128, "Earnings
         per Share" (SFAS 128). SFAS 128 changes the standards for computing and
         presenting earnings per share (EPS) and supersedes Accounting
         Principles Board Opinion No. 15, "Earnings per Share." SFAS 128
         replaces the presentation of primary EPS with a presentation of basic
         EPS. It also requires dual presentation of basic and diluted EPS on the
         face of the income statement for all entities with complex capital
         structures and requires a reconciliation of the numerator and
         denominator of


                                      -7-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         the basic EPS computation to the numerator and denominator of the
         diluted EPS computation. SFAS 128 is effective for financial statements
         issued for periods ending after December 15, 1997, including interim
         periods. This Statement requires restatement of all prior-period EPS
         data presented.

         ADOPTION OF STATEMENT OF ACCOUNTING STANDARD NO. 128
         As it relates to the Company, the principal differences between the
         provisions of SFAS 128 and previous authoritative pronouncements are
         the exclusion of common stock equivalents in the determination of Basic
         Earnings Per Share and the market price at which common stock
         equivalents are calculated in the determination of Diluted Earnings Per
         Share.

         Basic earnings per common share is computed using the weighted average
         number of shares of common stock outstanding for the period. Diluted
         earnings per common share is computed using the weighted average number
         of shares of common stock and dilutive common equivalent shares related
         to stock options and warrants outstanding during the period.

         The adoption of SFAS 128 had no effect on previously reported loss per
         share amounts for the year ended December 31, 1997. For the years ended
         December 31, 1999 and 1998, primary loss per share was the same as
         basic loss per share and fully diluted loss per share was the same as
         diluted loss per share. A net loss was reported in 1998 and 1997, and
         accordingly, in those years the denominator was equal to the weighted
         average outstanding shares with no consideration for outstanding
         options and warrants to purchase shares of the Company's common stock,
         because to do so would have been anti-dilutive. Stock options for the
         purchase of 357,500 shares at December 31, 1998 were not included in
         loss per share calculations, because to do so would have been
         anti-dilutive.

         REVENUE RECOGNITION
         The Company records revenue at the point of service and maintains its
         corporate records for both financial statement and tax return purposes
         on the accrual method of accounting.

         FOREIGN EXCHANGE
         Assets and liabilities of the Company, which are denominated in foreign
         currencies, are translated at exchange rates prevailing at the balance
         sheet date. Revenues and expenses are translated at average rates
         throughout the year.

         FAIR VALUE OF FINANCIAL INSTRUMENTS
         The carrying amount of the Company's financial instruments, which
         principally include cash, note receivable, accounts payable and accrued
         expenses, approximates fair value due to the relatively short maturity
         of such instruments.

         The fair value of the Company's debt instruments are based on the
         amount of future cash flows associated with each instrument discounted
         using the Company's borrowing rate. At December 31, 2000 and 1999,
         respectively, the carrying value of all financial instruments was not
         materially different from fair value.

         INCOME TAXES
         The Company has net operating loss carryovers of approximately $3.5
         million as of December 31, 2000, expiring in the years 2012 through
         2013. However, based upon present Internal Revenue regulations
         governing the utilization of net operating loss carryovers where


                                      -8-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         the corporation has issued substantial additional stock, most of this
         loss carryover may not be available to the Company.

         The Company adopted Statement of Financial Accounting Standards (SFAS)
         No. 109, Accounting for Income Taxes, effective July 1993. SFAS No.109
         requires the establishment of a deferred tax asset for all deductible
         temporary differences and operating loss carryforwards. Because of the
         uncertainties discussed in Note 2, however, any deferred tax asset
         established for utilization of the Company's tax loss carryforwards
         would correspondingly require a valuation allowance of the same amount
         pursuant to SFAS No. 109. Accordingly, no deferred tax asset is
         reflected in these financial statements.

Note 2 - GOING CONCERN

         As shown in the accompanying financial statements, the Company incurred
         a small net loss during the three month period ended March 31, 2001.

         The Company has received additional financing, continues to control
         expenses, and evaluates the ongoing performance of the Company's
         assets. The ability of the Company to continue as a going concern is
         dependent on the success of application and techniques. The financial
         statements do not include any adjustments that might be necessary if
         the Company is unable to continue as a going concern.

Note 3 - PROPERTY AND EQUIPMENT

         As of March 31, 2001 plant and equipment consisted of the following:

<TABLE>
<S>                                                                   <C>
         Land                                                         $1,445,344
         Buildings                                                     6,670,904
         Machinery and equipment                                         129,963
         Furniture and fixtures                                          382,180
         Computer equipment                                               92,116
                                                                      ----------
                                                                       8,720,507
         Less accumulated depreciation                                   884,288
         Less loss of asset                                              750,000
                                                                      ----------

                                                                      $7,086,219
                                                                      ==========
</TABLE>

 Note 4 -NOTES PAYABLE

         The Company has $481,376 outstanding against a $500,000 line of credit
         with Commerce Overseas Bank, which bears interest at the prime rate
         plus 3%. Interest only is payable on the last day of each month.
         Principal payments were to begin on January 10, 2000 in monthly
         installments of $38,462, however, payments are being renegotiated. The
         funds advanced under this line of credit were utilized to supplement
         cash flow for operating expenses and construction costs. The note is
         collateralized by property of the Company.

         Notes payable as of March 31, 2001 are as follows:

         Note payable to sole shareholder dated July 21, 2000
         with interest at 21% due                                       42,300

         Note payable to sole shareholder dated November 30, 2000
         with interest at 6% due on                                    132,700


                                      -9-
<PAGE>

                CENTRAL AMERICAN EQUITIES CORP. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

         Note payable to sole shareholder dated September 15, 2000
            with interest at 6% due on                                 149,660

         Note payable to sole shareholder dated July 15, 2000 with
            interest at 6% due on                                        6,000

Note 5 - COMMITMENTS
         The Company leases land under an agreement for a term from June 15,
         1998 to June 14, 2001. The Company has an option to buy this property
         for $283,040 if purchased on June 15, 2001. Minimum rentals in the next
         year are as follows:

<TABLE>
<CAPTION>

                  December 31,                            Amount
                  ------------                            ------

<S>                                                       <C>
                  2001                                    7,500
                                                       --------

                                                       $  7,500
                                                       ========
</TABLE>

Note 6 - BUSINESS COMBINATION

         On December 6, 1996 the Company entered into an agreement for the
         exchange of common stock ("Exchange Agreement") with Cal Tico, L.P.,
         Ecolodge Partners, L.P. and Marine Lodge Partners, L.P.
         ("Partnership"). Pursuant to the exchange agreement, the Company issued
         7,756,885 and 3,099,392 shares of common stock to the limited partners
         and the general partners, respectively, of the partnerships. In
         exchange for the shares, the partnership transferred all of their
         interests (i.e. 100% of the outstanding common stock) in the following
         Costa Rican corporations: Hotelera Cal Tico, S.A.; Bandirma, S.A.;
         Sociedad Protectora De La Fuana y Flora Marintima De Mal Pais, S.F.;
         Ecoprojecto San Luis, S.A. and Confluencia, S.A. The acquisition has
         been accounted for as a purchase transaction and, accordingly, the fair
         value of the Company's stock that was issued was allocated to assets
         and liabilities based on the estimated fair value as of the acquisition
         date.

Note 7 - LOSS OF ASSET

         On January 5, 2001, the title for Sunset Reef Marine Hotel passed to
         Rosenmiller and Caggiano. At such date the Company entered into an
         agreement with the option to purchase Sunset Reef Marine Hotel for
         $271,000. The option will expire February 5, 2002. The Company has also
         reached an agreement to rent Sunset Reef Marine Hotel at the rate of
         $1,000 per month until February 5, 2002. Finally, if the option to
         purchase is not exercised or extended, any amounts received from the
         sale of the property beyond the amounts due to Rosenmiller and Caggiano
         plus fees and interest will be paid to the Company.



                                      -10-
<PAGE>



ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS

The following is management's discussion and analysis of significant factors
which have affected the Company's financial position and operations during the
three month period ended March 31, 2001.

OVERVIEW

Central American Equities Corp. (the "Company" or "CAE") is a US hospitality
company, based in Irvine, California and incorporated in the State of Florida on
January 23, 1996. The Company specializes in providing high-quality food and
lodging in unique natural settings in Costa Rica. The company is in the business
of owning and operating hotels and restaurants and real property in Costa Rica.
All CAE activities are related to the Company's hotels in Costa Rica, and, as
such, are reported as one operating segment (per FASB Statement No. 131).

CAE includes among its assets in Costa Rica two hotels: Hotel Alta in Santa Ana
(a suburb of the capital city of San Jose), Ecolodge San Luis and Biological
Station (in the San Luis Valley near the world famous Monteverde Cloud Forest).
It rents Hotel Sunset Reef on the Pacific Ocean in Mal Pais adjacent to the
protected Cabo Blanco Reserve (see Item 3 and Note 7 from the financial
statements). CAE also owns La Luz Restaurant (located in Hotel Alta), Restaurant
Playa Carmen (on the beach near Sunset Reef), and a reservation, travel planning
and marketing operation located within Hotel Alta. The Company has approximately
75 full and part-time employees.

All Company facilities, except for Restaurant Playa Carmen, were open and
operating by the beginning of 1998 (the first full year of operations). During
the three month period ended March 31, 2001, the Company rented out the 100-seat
restaurant at Playa Carmen.

RESULTS OF OPERATIONS --- THREE MONTH PERIOD ENDED MARCH 31, 2001

The last three months of 2000 and the first three months of 2001 represented a
time of strategic regrouping for the Company. Although the Company went public
in August 2000, it was unable to raise funds necessary for working capital or
expansion through the sale of stock during the subsequent six-month period. As a
consequence, limited cash flow required the Company to reduce expenditures,
including reductions in personnel, advertising, and marketing. At the end of
December 2000 and the beginning of January 2001, additional staff reductions
were made in management including the contracting out of internal accounting
services. (Because severance settlements were made during this three-month
period, the full effects of the cuts will not be reflected in the statement of
operations until the second quarter of 2001).

A reduction in marketing, coupled with a slowing of the American economy (the
vast majority of tourists to the Company's hotels come from the United States)
and an increase in competition from other hotels and restaurants, affected
occupancy at the Company's hotels during the three-month period ended March 31,
2001. Compared to the same three-month period in 2000, in 2001, growth in
occupancy at Sunset Reef was flat and at Hotel Alta, occupancy declined slightly
(particularly in February and March). Competitive pressure from several recently
opened restaurants in the Santa Ana-Escazu area also contributed to a decline in
restaurant revenues at Restaurante La Luz (in Hotel Alta). Significantly,
continued declines in occupancy


                                      -11-
<PAGE>

and revenue at Ecolodge San Luis over the last 6 to 12 months have caused the
Company to evaluate its ability to make a profit on this facility.

FUTURE COMPANY DIRECTIONS: CREATION OF THE DIVISION OF GAMING AND ENTERTAINMENT

Management took several steps to try to strengthen the Company during the first
three months of 2001. Of greatest significance, during March 2001, the Company
created the division of gaming and entertainment to explore opportunities in
supplying services to the internet gaming industry. Internet gaming is legal in
Costa Rica. The recent passage of legislation legalizing certain types of
internet gaming in Nevada appears to signal a new era of growth for the gaming
industry in which the Company, with its ties in Costa Rica, could participate.

During the first three months of 2001, the Company also continued merger
discussions with Health Care Merger Corporation (formerly Centracan), that had
been initiated during the previous quarter. Although a merger with HMC remains a
future possibility, the Company currently considers the cost of such a merger
high and, as a result, discussions have not progressed.

COMPARISON OF STATEMENT OF OPERATIONS FOR THE PERIODS ENDED MARCH 31, 2001 AND
2000

The following is management's discussion and analysis of significant differences
in the Company's financial position and operations (See Item 1 - Financial
Statements).

During the three month period ended March 31, 2001, total sales revenue were
$346,626, a decline of approximately $168,000 from the same period in 2000.
During the three-month period ended March 31, 2001, total operational expenses
(cost of services and operational costs) were $316,220. This represents a
decline in expenses of approximately 11% from the same period in 2000. The
decline can be attributed primarily to decreases in labor costs. During the
three-month period ended March 31, 2001, the Company earned about $4000 (before
depreciation of about $35,000 and including interest costs of about $27,000).
The net loss, after depreciation, was $31,115.

Total assets for the Company declined by approximately $248,000. The balance
sheet reflects the loss of a Company asset. In November 1999, the Company agreed
to a note in the amount of $210,000 payable to a director of the Company, O.
Fred W. Rosenmiller. The note was collateralized by Company property, Sunset
Reef Marine Hotel. At the time of the agreement, the Company also used the
Sunset Reef property as collateralization for salary past due for the President
of the Company, Michael Caggiano, in the amount of $54,668 (see Item 3).

On January 5, 2001, title for Sunset Reef Marine Hotel passed to Rosenmiller and
Caggiano. In addition, on January 5, 2001, the Company reached an agreement with
Rosenmiller and Caggiano that allowed the Company the option to purchase the
Sunset Reef Marine Hotel at the amount of the debt plus fees (total of
approximately $264,668). This option will expire on February 5, 2002. The
Company also reached an agreement with Rosenmiller and Caggiano to rent Sunset
Reef Marine Hotel through February 5, 2002 at a rate of $1000 per month.
Rosenmiller and Caggiano further agreed that, if after the expiration of the
option it was not extended, any amounts received from the sale of the property
beyond the amounts owed to Rosenmiller and Caggiano plus fees and interest,
would be paid to the Company.


                                      -12-
<PAGE>

These transactions are recorded on the balance sheet as follows: (a) Sunset
Reef, valued at $750,000, is removed as an asset and (b) $485,332, (the 750,000
value of Sunset Reef less the amount owed to Rosenmiller and Caggiano) is added
to the balance sheet as a long-term asset. Additionally, debt to officers is
reduced by $210,000. Accounts payable is also reduced.

LIQUIDITY AND CAPITAL RESOURCES

The Company had relied on sales of shares of common stock to fund operations and
make capital improvements. Through March 31, 2001, operations had resulted in
losses and the Company has limited cash liquidity and capital resources. During
this period, capitalization was not sufficient to fund necessary expenses and
management sought and succeeded in acquiring loans for working capital from
officers.

The Company has had limited, albeit improving, cash liquidity and capital
resources . To the extent that the funds generated by revenues are insufficient
to fund CAE's activities, it will be necessary to raise additional funds. In the
short-term the Company will continue to seek loans from investors and other
sources. The Company is in the process of renegotiating its current bank loan
including attempting to increase the principle and the repayment period.
Short-term plans also include raising additional funds through the sale of
equity.

                           PART II: OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

ACTIONS IN COSTA RICAN LABOR COURT

At this time there are actions against Central American Equities in the Costa
Rican Labor Court that have been brought by former employees who had been
dismissed by the Company due to poor performance or insubordination. These
employees dispute the reason for their dismissal and, as such, claim they are
entitled to additional monetary compensation. The Company considers these
actions to be routine litigation that is incidental to the business (as defined
under Reg. ss.228.103). It is anticipated that any contingent liability stemming
from these claims would be immaterial to the Company.

ITEM 2. CHANGES IN SECURITIES

The Company did not sell or issue any securities of any kind during the three
month period that ended on March 31, 2001.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

In November 1999, the company agreed to a note in the amount of $210,000 payable
to a director of the Company, O. Fred W. Rosenmiller. The note was
collateralized by Company property, Sunset Reef Marine Hotel. At the time of the
agreement, the Company also used the


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<PAGE>

Sunset Reef property as collateralization for salary past due for the President
of the Company, Michael Caggiano, in the amount of $54,668. The note was due on
November 1, 2000.

On January 5, 2001, title for Sunset Reef Marine Hotel passed to Rosenmiller and
Caggiano. In addition, on January 5, 2001, the Company reached an agreement with
Rosenmiller and Caggiano that allowed the Company the option to purchase the
Sunset Reef Marine Hotel at the amount of the debt plus fees (total of
approximately $271,000). This option will expire on February 5, 2002. The
Company also reached an agreement with Rosenmiller and Caggiano to rent Sunset
Reef Marine Hotel through February 5, 2002 at a rate of $1000 per month.
Rosenmiller and Caggiano further agreed that, if after the expiration of the
option it was not extended, any amounts received from the sale of the property
beyond the amounts owed to Rosenmiller and Caggiano plus fees and interest,
would be paid to the Company.

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

The Company submitted no matter to a vote of its security holders during the
period ended March 31, 2001.

ITEM 5.  OTHER INFORMATION

There is no other information that the Company believes is necessary to include
in this report.

ITEM 6.  EXHIBITS AND REPORTS

Exhibits and reports filed herewith: none.



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<PAGE>

VERIFICATION SIGNATURES

In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this registration to be signed on its behalf by the
undersigned, thereunto duly authorized.

CENTRAL AMERICAN EQUITIES CORP.




BY: Michael N. Caggiano, President/CEO

MICHAEL N. CAGGIANO, President/CEO


CENTRAL AMERICAN EQUITIES CORP.




BY: Richard Wm. Talley, Director

RICHARD WM, TALLEY, DIRECTOR



CENTRAL AMERICAN EQUITIES CORP.




BY: Paul King, Director

PAUL KING, DIRECTOR


CENTRAL AMERICAN EQUITIES CORP.




BY: F.O. Rosenmiller, Director

F.O. ROSENMILLER, DIRECTOR



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