SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON DC 20549

                           FORM 10-K

[X]Annual Report pursuant to Section 13 or 15(d) of the Securities
                       Exchange Act of 1934.

            For the Fiscal Year Ended: October 31, 2000

                  Commission File No. 0-15076

                       VALUE HOLDINGS, INC.
           (Exact Name of Registrant as Specified in its Charter)

         Florida                   59-2388734
(State or Other Jurisdiction of    (IRS Employer
Incorporation or Organization)     Identification
                                    No)

   2307 Douglas Road, Suite 400, Miami FL            33145
 (Address of Principal Executive Office)          (Zip Code)

                         (305) 447-8801
          (Registrants Telephone Number Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

          Common Stock, Par Value $.0001 per share
                       (Title of Class)

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 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. [ ]

As of February 13, 2001 the aggregate market value of the voting
and non-voting common equity held by non-affiliates of the
registrant was $9,828,517

Number of shares outstanding as of February 13, 2001:  160,056,464



PART I

Item 1.   Business

We were initially incorporated as a Delaware corporation in 1986,
but reincorporated in the state of Florida in 1993.

On August 30, 1991, we, through newly-formed subsidiaries,
purchased the assets and operations of Seashells, Inc. and its
subsidiaries (the Seashells Assets). Seashells was organized as a
Florida corporation in June 1986 with a view towards operating a
chain of seafood restaurants in South Florida offering quality
seafood products at reasonable prices in a family style setting.
The name of the restaurants was changed to Cami s Seafood and Pasta
and in 1995 the day-to-day operations of the restaurants were
turned over to a third party management company, Camfam, Inc.
(formerly known as Family Steakhouses of Miami). We received a
license fee based upon gross sales of the restaurants. On June 30,
2000 we sold our entire interest in Cami s Seafood and Pasta to
Camfam, Inc., the third party operator. We decided to sell our
interest in Cami s in order to focus on the lumber and building
material distribution business. Cami s had become a non-core asset
representing less than 1% of revenues.

In February 1993, our shareholders approved the re-incorporation of
the Company from the State of Delaware to the State of Florida. A
merger to effect the reincorporation was completed on March 11,
1993.

In the fall of 1994 the Company retained a financial consultant to
advise it on the management and viability of the Company. As a
result of the consultant s advice, the Company decided to
restructure and change direction by becoming a holding company that
would acquire independent businesses with solid market niches.

In 1996 we acquired an interest in Forest Hill Capital Corporation,
a Canadian company that operated a chain of retail optical stores
across Canada. In 1998 we wrote off the investment due to the
closing of all the stores.

On February 25, 1999 Value Holdings, Inc., through its wholly owned
subsidiary corporation, Network Forest Products Limited, acquired
substantially all of the assets of John Ziner Lumber Limited, an
Ontario corporation. John Ziner Lumber Limited is involved in the
distribution and remanufacturing of lumber. Since then we have
acquired three other lumber businesses.

On June 30, 2000, we sold all our remaining interest in Cami s
Seafood and Pasta to Camfam, Inc., the unrelated third-party
management company that was operating the restaurants.




Network Forest Products

On February 25, 1999, the Company, through a wholly owned
subsidiary, Network Forest Products, acquired substantially all the
assets of John Ziner Lumber Limited, an Ontario corporation, for $
14,331,473. Financing for the transaction was provided by BNY
Financial Corporation- Canada, a subsidiary of the Bank of New
York. Value holdings has provided a guarantee to BNY Financial
Corporation - Canada securing the indebtedness of Network Forest
Products. BNY has since become GMAC Commercial Credit -- Canada.

Value Holdings owns all of the issued and outstanding Class A
common shares, the only shares with voting rights, of Network
Forest Products. Robert Ziner, formerly an executive with John
Ziner Lumber, and Chairman and former president of Network Forest
Products and Value Holdings, is the beneficial owner of 3,416,335
Series B Special shares of Network Forest Products, held by 1341125
Ontario Limited, which have no voting rights, but which are
exchangeable for 341,633,500 common shares of Value Holdings. They
are also redeemable by Network at $1 Canadian dollar per share.
Additionally, 5,253,147 Network Forest Products' Series A Preferred
shares were issued to John Ziner Lumber Limited as part of the
purchase price. The Series A Preferred shares are redeemable by
Network for $1 Canadian dollar per share plus any declared unpaid
dividends thereon, and bear cumulative dividend at the rate of 5%
per annum calculated annually and payable semi-annually.

LUMBER OPERATIONS

The acquisition of the Ziner assets made Network one of the three
largest wholesale distribution operations in Ontario based on
sales; selling lumber and building materials in Ontario, the United
States and the Caribbean. Network is the largest supplier to
southern Ontario's major general contractors and concrete forming
contractors. Through its acquisition of John Ziner Lumber Limited,
Network also sells its products into the United States and
Caribbean market either directly or through wholesale distributors
located in Toronto, Ontario and Quebec City, Quebec.

Network is one of the top three suppliers of cut-to-size wood
products in Ontario to major industrial users such as wooden
packaging (pallets,crates, boxes) operations.

Approximately 60% of our sales were to the United States and about
40% are in Canada. Subsequent to the end of the fiscal year, we
discontinued sales to the United States. Due to falling lumber
prices and exchange rate fluctuations sales to the United States
were no longer profitable. Instead we are concentrating our sales
efforts on the Canadian market.  The Canadian economy remains
strong with growth estimated by the Bank of Canada to be 4% per
year compared to 2% to 2.5% in the United States, as estimated by
the Federal Reserve. Additionally, more sales to Canada will keep
transportation costs lower and lower our foreign currency risk. We
expect that this decision will decrease revenues but increase
earnings.

LUMBER REMANUFACTURING

Network Forest manufactures lumber by cutting mill dimensions into
smaller pieces of higher grade and value. The remanufacturing
operation plays a very significant role in the Company s business,
especially with respect to increasing margins. The Company is
planning to construct a 25,000 square foot facility to increase its
remanufacturing production. Construction of the facility has not
yet begun pending funding and negotiation of strategic alliances.

LUMBER DISTRIBUTION

Network Forest Products is also a distributor of lumber and
building materials.  This involves the handling, storage, sorting
and shipping of lumber and building materials to construction and
industrial users in Canada and the United States.

The fluctuation in the price of lumber throughout the year may
cause Network s annual dollar sales volume to increase or decrease
based solely on these fluctuations.

COMPETITION

Network Forest Products main competitors in the Canadian market
are:

Alpa Group of Companies.

This is a major competitor, with 5 yards in the greater Toronto
area.

Rockett Lumber.

Located in Mississauga Ontario. Serves homebuilders only.

Tarpin Lumber.

Located in Barrie, Ontario. Serves homebuilders only.

Hanford Lumber.

Located in Rexdale, Ontario. Serves general contractors.


There is no product differentiation in the wholesale lumber
business. All pieces of the same size and grade of lumber are
considered commodity products and have the same characteristics and
essentially the same value.

Similarly, there is little or no differentiation between various
makes of the same building materials; competing products must meet
established government or industry standards.
The only differentiation possible are competitive pricing, flexible
payment terms, on-time delivery, and customer service and support.

Primarily the forces of competition in the marketplace establish
Network s selling prices. Internal operating efficiency plays a
large part in determining how competitively Network can price its
product in a given situation.

In cases where Network s price is equal to that of a competitor,
Network relies on its reputation in the industry to provide a
competitive advantage.

SALES ORGANIZATION

Marketing is carried on primarily through direct mail and
personalized sales contact in greater Toronto and the surrounding
area.

Network's sales staff consists of 5 commissioned individuals who
specialize in the residential building markets, and 5 commissioned
individuals focussed on industrial, general contractor and export
sales. At present all sales staff work out of Network s offices in
Toronto. They market by direct mail, phone, and personal contact.
Network belongs to trade associations related to their markets.

On January 12, 2000 Network announced the addition of four new
sales people who make up the Industrial Trade Division. This
Division concentrates on selling wood products to the crating,
packaging, remanufacturing, pallet and bed frame segments of the
industry.

HARRON HARDWARE AND BUILDING SUPPLIES

On February 3, 2000 Network Forest Products purchased 100% of the
outstanding shares of  471372 Ontario Limited which was doing
business as Harron Home Hardware ( Harron ) for $6.8 million.
Harron is a wholesale distributor of lumber and is located in
Moorefield, Ontario.  Harron also sells hardware and building
supplies. Prior to the acquisition Harron was a dealer for Home
Hardware, a Canadian hardware retailer.  Upon acquisition by
Network Forest Products, Harron canceled its dealership arrangement
with Home Hardware and entered into new agreements with Castle
Building Centers and Weber Supply. At that time it changed its name
to Harron Hardware and Building Supplies.

Harron has been recognized as the number 2 retailer affiliated with
Castle Building Centres and was ranked number 52 of the top 100
hardware retailers in Canada. The rankings were published in the
May 2000 issue of Hardware Merchandising Magazine.

CUTLER FOREST PRODUCTS AND SEABRIGHT WOOD FRABRICATORS LIMITED

On June 30, 2000 Network Forest Products, a subsidiary of Value
Holdings, Inc. purchased all of the assets of Cutler Forest
Products and 100% of the shares of Seabright Wood Fabricators,
located in Mississauga, Ontario. Cutler and Seabright had common
ownership with each other.

     Consideration for the transaction was $10,572,000. $2,557,000
of the purchase price was allocated to the satisfaction of
outstanding debts consisting primarily of a line of credit with
Toronto-Dominion Bank. The purchase price was provided by Network
Forest Products credit facility with GMAC Credit Corporation
(formerly BNY Financial Corporation -- Canada) which was increased
from $26 million to $38 million.

     Cutler Forest Products  primary business is the wholesale
supply of sheet and cut to size composite wood products including
melamine, particle board, medium density fiberboard and hardwood
plywood. Cutler provides both wood and materials for their
customer's manufacturing operations, and also provides both fully
and partially manufactured product. Cutler will box, bar code and
package as specified by the customer or ship product in bulk for
refinishing and final assembly. Cutler also distributes a laminate
called Nevamar. They are one of two distributors of this product in
Ontario.

     Seabright is a component manufacturer. Virtually of Seabright
s sales are to Cutler.

     Together Cutler s and Seabright s business encompasses the
following areas:
     (i)  The wholesale distribution of sheet and cut-to-size
composite wood products;
     (ii) manufacturing of subcomponents for other wood
manufacturers;
     (iii)     manufacturing of finished products
          (a)  kitchen cupboards
          (b)  bathroom vanities and
          (c)  shredder boxes
     (iv) distribution of Nevamar (a high pressure laminate used in
countertops and other surfaces); and
     (v)  a supplier to major building material retailers

     Cutler has approximately 1,500 customers with four customers
accounting for 20% of sales. Cutler's four largest customers are:
Home Depot, Ontario Store Fixtures, Revy Home Centres (Lansing) and
Ace Hardware.

GOVERNMENT REGULATION OF THE LUMBER INDUSTRY

The Canada-US Softwood Lumber Agreement

Despite progress made toward opening markets through multilateral
trade agreements, recent frictions over Canadian softwood lumber
exports to the United States illustrate that these agreements do
not always guarantee access to foreign markets. Allegations of
unfair subsidization through low stumpage fees have been made
against Canadian softwood lumber producers since the early 1980's.
In early 1996, an agreement was reached between the United States
and Canada to prevent further trade action by the US against
Canadian softwood lumber imports.

The Canada-US Softwood Lumber Agreement involving a restrictive
quota regime was announced on April 2, 1996. The five-year
agreement is the result of negotiations between the governments at
the federal and provincial level along with industry. The key
factors and terms of the agreement are as follows:

_ Only exports from British Columbia, Alberta, Ontario and Quebec
are affected.

_ Softwood lumber exports from the Atlantic Provinces,
Saskatchewan, Manitoba and the Territories are not affected.

_ Exports to the United States under 34.69 million m3 (cubic
meters) or 14.7 Billion Board Feet (BBF) are fee free.

_ The first 650 Million Board feet in excess of 14.7 BBF is subject
to a fee of $50 (US dollars) for each thousand board feet and $100
(US dollars) per thousand board feet for additional volumes.

_ Revenues collected from the export fee are collected by the
Canadian government and distributed to the provinces.

_ Exports may increase without fee for each quarter when the
average price exceeds $405 US per thousand board feet in the first
two years and $410 US for the last three years of the agreement.

The allocation of the softwood quota is company based. Firms in
British Columbia receive the largest share, with 59% of the quota;
Quebec receives 23%, Ontario 10.3% and 7.7% for Alberta. The
allocation was based on recent export shipments and was given to
primary producers and re-manufacturers. Wholesalers were not given
their own allocation but primary producers have provided written
assurances that their dealings with the wholesalers will be on a
business as usual basis.

The plan provides flexibility to accommodate normal market
adjustments such as growth and new entrants. Two percent has been
reserved for new entrants up to the end of 1999, so as to provide
export access for new mills which began production in the last two
years. New entrants include companies with verifiable investment
commitments to build by April 1, 1996 and those with major capital
investments made in new capacity since January 1995.

Network purchases lumber that is within the quota. The company has
not experienced any material change in its business due to the
operation of this agreement nor does the company expect that the
agreement will have a material effect on its business in the
future.

Collective Bargaining Agreement

Network is party to a Collective Agreement between it and the
Teamsters Local Union No. 230 which is affiliated with the
International Brotherhood of Teamsters. The agreement is for a two
year term which ended March 17, 2000. The agreement has recently
been renegotiated and renewed for an additional two years. The
agreement covers all employees of Network except foremen, those
above the rank of foremen, office and sales staff, and those
employed on a part-time basis. Union membership is required of all
other full time employees. The Agreement contains a grievance
procedure which could subject Network to arbitration proceedings in
accordance with the Labour Relations Act (Ontario) should a dispute
with an employee not otherwise be resolved.

During the term of the Agreement the parties have agreed that there
will be no strikes and no lock-outs. The Agreement also covers
other aspects such as benefits, wage rates, paid holidays and
vacations.


SUPPLIERS

We are not dependent upon any one supplier. Should any supplier no
longer be able to supply us with product, there are several other
suppliers who can replace them.

We had a total of 294 employees as of the year end. There were 277
full time employees and 17 part-time employees. These employees
work for Value Holdings and its subsidiaries.

Subsequent to the year end in conjunction with the elimination of
sales to the our US distributor, we discontinued the night shift at
our Toronto lumber operation. This resulted in the elimination of
21 employee positions.

CAMI S SEAFOOD AND PASTA RESTAURANT

In 1991 we purchased the assets of Seashells restaurants, a budget
seafood restaurant chain located in South Florida. The restaurants
subsequently changed their name to Cami s Seafood and Pasta. Since
1995, we have licensed the restaurants to Camfam, Inc. which ran
the restaurants and paid us a fee of approximately 3% of gross
revenue. However, on June 30, 2000 we sold all the Cami s assets to
Camfam for $1.3 million. As part of the sale we held a note from
Camfam for $180,000 bearing an interest rate of 15% per annum. That
note was paid in full on December 31, 2000. We no longer have any
connection to the restaurants. We decided to divest ourselves of
the restaurants as revenue from the restaurants amounted to less
than 1% of our gross revenue and it had become a non-core business,
unrelated to our lumber and building material distribution
business.


Item 2.   Properties.

Network Forest Products is located in the northern portion of the
City of Scarborough, near the intersection of Steeles Avenue East,
and Kennedy Road. The site has ready access to major provincial
highways 401 and 404. A Canadian National Railways spur having a
capacity for 12 rail cars services the site.

Network leases its buildings and approximately 14 acres of land.
Ten acres and the buildings are leased from an affiliated company
partially owned by one of the shareholders. Four acres are leased
from a third party. The lease is for a term of five years at a cost
of $21,400 (Canadian Dollars) per month. Production space occupies
approximately 16,000 square feet. Offices account for a further
6,000 sq. ft.

Value Holdings maintains executive offices at 2307 Douglas Road,
Suite 400, Miami, Florida. The office is maintained by the
Company s chief financial officer.

Harron owns two parcels of land located on Maudsely Street in
Mooresfield, Ontario. These parcels include a retail store, lumber
yard and a storage building.

Cutler Forest Products and Seabright Wood Fabricators operate out
of two leased buildings located in Mississagua, Ontario, near
Toronto. These buildings comprise approximately 90,000 square feet.
Cutler and Seabright have lease obligations on this property
through 2003.

Item 3.   Legal Proceedings.

We are currently involved in the following litigation:

     Value Holdings v. Rachlin, Cohen & Holtz. (Case No. 98-11413,
Miami-Dade County, Florida) We are suing our former auditors on
various legal theories related to their resignation prior to
completion of their audit of our financial statements for the
fiscal year ended February 29, 1996.

     Network Forest Products v. Clinton Yourth and Kinfonetics
Technology Inc. (Case No. 00-CU-190067 Toronto, Canada). We are
suing the company that was developing and was to install an
accounting and inventory control system for our Network Forest
Products Ltd., subsidiary. The Defendant has asserted a
counterclaim against us for work allegedly done for the company.
The company is aggressively pursuing this claim and vigorously
defending the counterclaim.






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

No matters were submitted to a vote of securities holders during
our fourth quarter.


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

Our  Common Stock is currently traded in the over-the-counter
market. The Company s Common Stock was traded on the NASDAQ Small
Cap market from November 20, 1992 until August 9, 1996 when the
stock of the Company was removed therefrom. The following table
sets forth the high and low bid quotations for the Common Stock for
the last two fiscal years. These over-the-counter market quotations
reflect prices between dealers and do not include retail mark-ups,
mark-downs or commissions and may not necessarily represent actual
transactions.

Common Stock                                      High   Low
-------------                                     ----   ---
November 1, 1997 - January 31, 1998               $.02   $.005
February 1, 1998 - April 30, 1996                 $.03   $.005
May 1, 1998 - July 31, 1998                       $.0625 $.001
August 1, 1998 - October 31, 1998                 $.01   $.001
November 1, 1998 - January 31, 1999               $.01   $.005
February 1, 1999 - April 30, 1999                 $.08   $.005
May 1, 1999 - July 31, 1999                       $.15   $.04
August 1, 1999 - October 31, 1999                 $.22   $.125
November 1, 1999 - January 31, 2000               $.225  $.09
February 1, 2000 - April 30, 2000                 $.74   $.18
May 1, 2000 - July 31, 2000                       $.42   $.20
August 1, 2000 - October 31, 2000                 $.24   $.11
November 1, 2000 - January 31, 2001               $.14   $.075

On February 13, 2001, the closing bid price of the Common Stock as
quoted on the OTC Bulletin Board was $0.08.

Due to the Company s financial condition and inability to file its
10-K on time for Fiscal 1996 the Company was delisted from the
NASDAQ Small Cap Market.

As of October 31, 2000, the Common Stock was held by approximately
1,500 stockholders of record. The Company believes that the number
of beneficial owners of the Company s Common Stock is in excess of
5,000 individuals.

The Company has never declared any cash dividend on its shares of
Common Stock. The Board of Directors may declare dividends on its
Common Stock from time to time, although it does not at present
have any intention to do so.

The Company is obligated to pay dividends of $0.10 per share on its
outstanding shares of Series A Preferred Stock.
As of October 31, 2000, 20 Market Makers were actively posting bid
and ask prices for the Company s common shares on the OTC Bulletin
Board.


Item 6.   Selected Financial Data

The table set forth below is a comparison of selected financial
data for our last five fiscal years. Until 1997 our fiscal year
ended on the last day of February. However, in order to align with
a significant unconsolidated subsidiary, we changed our fiscal year
end to October 31. Thus, we have reported a transition period from
March 1, 1997 through October 31, 1997 and have had a fiscal year
end of October 31 since then.


            1996(for   1997(for   1997(for   1998(for    1999(1)
            the fiscal the fiscal the fiscal the fiscal
            year ended year ended year ended year ended
            Feb 29,    Feb 28,    Oct 31,    Oct 31,
            1996)      1997)      1997)      1998)
            --------- ---------- ---------- ---------- -----------
Revenue     1,683,606  1,631,827   338,666     149,329  45,711,611
Net Income
 (Loss)    (1,704,169)(1,976,584)1,018,815  (2,896,745)    743,365
Earnings
 Per share       (.07)      (.03)      .01        (.05)        .01
Total Assets  251,937  3,684,251 3,553,862     750,886  24,428,015
Long-Term
Obligations 1,037,875    287,874   287,875   1,037,874   1,349,305


                2000(2)
             -----------
Revenue      114,210,782

Net Income
 (Loss)        1,960,566
Earnings
 Per share           .01

Total Assets
Long-Term     47,414,337
Obligations      384,445


(1) In February 1999 we acquired the assets of John Ziner Lumber
Limited. The revenues reflected are those derived from the lumber
operations from the date of acquisition through the end of the
fiscal year. Net income for 1999 has been restated to account for
the issuance of shares for consulting agreements. Licensing fee
revenue is not reflected in this number as the assets relating to
the licensing agreement associated with the Cami s Seafood and
Pasta restaurants were sold in June 2000 (see Item 1 Business.).
(2) The revenue figure for Fiscal 2000 does not include licensing
fees as the license agreement and related assets were sold in June
2000 (see Item 1 Business.).


Item 7.   Management Discussion and Analysis and Results of
Operations

Lumber Sales

On February 25, 1999, the Company, through a wholly owned
subsidiary, acquired substantially all the assets of John Ziner
Lumber Limited, an Ontario company involved in the distribution
and remanufacturing of lumber. The Company intends to use the
acquired assets in the same type of business.

On January 19, 2000, the company, through a wholly owned
subsidiary, acquired 471372 Ontario Limited D/B/A/ Harron Home
Hardware & Building Supplies and 8979137 Ontario Limited, a holding
Company. Both companies are Canadian Corporations. Harron's
operations consisted of sales of hardware and lumber to both retail
and contractors.

On June 30, 2000, the Company, through a wholly owned subsidiary,
acquired Cutler Forest Products, a Canadian partnership that was in
the panel and wood products wholesale industry; and acquired
Seabright Wood Fabricators, a Canadian Corporation that
manufactures wood product components.

For the year ended October 31, 2000 lumber sales were $114,210,782,
compared to $45,711,611 for the year ended in 1999 and $0 for the
year ended in 1998. Proforma sales for the years ended October 31,
2000, 1999 and 1998, respectively, taking into consideration the
lumber operations as if the acquisitions had taken place at the
beginning of each year, would be $132,764,053, $91,154,026, and
$55,333,245. The increase in sales is due to acquisitions,
increasing demand and more aggressive selling efforts.

COSTS AND EXPENSES

Cost of sales - Lumber

Cost of sales of lumber for the years ended October 31, 2000, 1999
and 1998, respectively, were $97,355,443 or 85% of sales,
$39,417,806 or 86% of sales and $0. Cost of sales of lumber for the
years ended in 2000, 1999 and 1998, on a pro-forma basis, taking
into consideration the lumber operation as if the acquisition had
taken place at the beginning of each year, would be $112,482,077 or
85% of sales, $76,107,716 or 83% of sales, and $48,735,019 or 88%
of sales respectively.




Selling, General and Administrative

Selling, general and administrative expenses for the years ended
October 31, 2000 were $12,628,712 compared to $4,544,848 for the
year ended in 1999 and $340,062 for the year ended in 1998. The
increase was due to the expenses of the lumber operations acquired
in 2000 and 1999.  Proforma selling, general and administrative
expenses for the years ended October 31, 2000, 1999 and 1998,
taking into consideration the lumber operation as if acquired at
the beginning of each year would be $15,042,758, $10,306,225, and
$8,203,059 respectively. The increase of 2000 over 1999 would be
consistent with the increase in sales. Additionally, expenses for
1999 have been restated to reflect a charge of $250,000 related to
certain consulting agreements effective in 1999 but which had not
previously been expensed.

Depreciation and amortization

Depreciation for the years ended October 31, 2000, 1999 and 1998
was $369,827, $213,117 and $52,979. Increase in depreciation in
2000 over 1999 relates to the assets acquired from Harron, Cutler
and Seabright. Increase in depreciation for the year 1999 over 1998
relates to the assets acquired from John Ziner Lumber Limited.
Depreciation for 1998, which related to the assets remaining from
the Restaurant operations have been reclassed to discontinued
operations as this activity was disposed of in 2000 (See Income
from Discontinued Operations below).

Amortization of intangible assets for the years ended October 31,
2000, 1999 and 1998 was $579,660, $396,715 and $0 respectively. The
increase in 2000 over 1999 was due to the amortization of
intangible assets resulting from the acquisition of Harron, Cutler
and Seabright; the increase in 1999 over 1998 was due to the
amortization of intangible assets resulting from the acquisition of
John Ziner Lumber Limited. Amortization of intangible assets in
1998, which related to goodwill from Restaurant operations have
been reclassed to discontinued operations as this activity was
disposed of in 2000 (See Income from Discontinued Operations
below).

Pro-forma depreciation and amortization for the years ending in
2000, 1999 and 1998, giving effect to the acquisitions at the
beginning of each year would be $1,387,495, $1,399,462 and
$1,145,592, respectively.

Interest expense

Interest expense for the years ended October 31, 2000, 1999 and
1998 was $2,752,599, $823,095 and $83,343 respectively. The
increase in 2000 and 1999 was due primarily to interest on debt
incurred in connection to the acquisitions.

Pro-forma interest expense for the years ended October 31, 2000,
1999 and 1998, giving effect to the acquisitions at the beginning
of each year would be $3,431,294, $2,394,962 and $2,274,610
respectively. Increase in pro-forma interest for the year ending in
2000 over 1999 and 1998 would be consistent with the increase in
volume of sales.


Other Income

Interest and other income

Interest and other income for the year ended October 31, 2000, 1999
and 1998 was $418,890, $419,377 and $11,173. For 2000 and 1999 it
consisted mainly of interest on accounts receivable and earned
discounts from the Lumber operations, and interest on notes
receivable. In 1998 interest income was $11,173, consisting on
interest on note receivable from affiliate.

Other (Charges)

During the year ended October 31, 1999 the Company adjusted the
carrying value of its investment in Forest Hill Capital
Corporation(FHCC) to market based on the current trading prices of
the stock in the Canadian Stock Exchange (See note 4). The write
down resulted in a Charge to income of $1,758,094. Additionally,
the Company established a reserve of $571,000 and corresponding
charge to income in that same year for the balance of the
investment in FHCC, based on the Company s estimate of
recoverability of its investment.

Equity in losses of unconsolidated subsidiaries of $(210,728) for
1998, represented the equity in losses of Forest Hill Capital Corp,
a Company that operated a chain of retail stores throughout Canada.
The Company had a 28% interest in Forest Hill Capital Corp. (FHCC)
at October 31, 1998 and accounted for its investment by the
equity-method of accounting. On October 31, 1998 the Company
wrote-off its investment in FHCC due to the closing of all the
stores (See Other Charges).

Provision for income taxes

Provision for income taxes for the year ended October 31, 2000 of
$48,652, represents income tax payable to the Canadian tax
authorities on the combined net income of the lumber operations of
$22,839, plus income tax payable on the U.S. operations net of
benefit of net operating loss carry-forward. Provision for income
taxes for the year ended October 31, 1999 of $85,659, represents
income tax payable to the Canadian tax authorities on the combined
net income of the lumber operation. For the year ended October 31,
1998 no provision or credit for income taxes have been provided for
because realization of such income tax benefits was not reasonable
assured. As of October 31, 2000 we had net operating loss carry
forwards for income tax purposes of approximately $6,700,000 that
expire at various years through 2011.

Income from Discontinued Operations

The Company received licensing fees on six restaurants under a
licensing agreement that called for monthly licensing fees of
ranging from 3% to 6% less an advertising allowance. On June 30,
2000, the Company sold its license to the Company that was
operating the restaurants for $1,330,000. Net gain on the
disposition of the license agreement was approximately $1,130,833.
Operating results for discontinued operations for the years ended
October 31, 2000, 1999 and 1998 are as follows:

                                2000         1999        1998
                             --------     --------     --------

  Licensing fee income      $ 215,703    $ 354,328    $ 348,434
  Administrative expenses      35,082       24,810       12,594
  Depreciation                   -0-          -0-        56,128
  Amortization                 85,000      170,000      198,946
  Interest                    160,667       25,908       25,908
                            ---------     --------     --------
  Operating income (loss)     (65,046)     133,610       54,858
  Income tax provision           -0-       (40,083)     (16,480)
                            ---------     --------     --------
  Net income (loss) from
   discontinued operations  $ (65,046)   $  93,527    $  38,378
                            =========    =========    =========


Capital Expenditures and Depreciation

During the year ended October 31, 2000 the Company acquired
substantially all of the assets of Harron, Cutler and Seabright
(See Item 1 above). During the year ended October 31, 1999 the
Company acquired Substantially all of the assets of John Ziner
Lumber (See Item 1 above).

Fixed assets acquired in these transactions amounted to:

                                     2000         1999
                                   -------      --------
      Harron Hardware          $   748,526         --
      Cutler                       258,435         --
      Seabright                  1,166,734         --
      Ziner Lumber                   --       $  869,062

Additionally, the Company acquired an additional $582,080 in
property and equipment for the lumbers operation during fiscal
1999.

Liquidity and Capital Resources

The following table presents a summary of the Registrant s cash
flows for the last three fiscal years:

                         Year ended    Year ended    Year Ended
                         October 31,   October 31,   October 31,
                            2000          1999          1998
                       ----------------------------------------
 Net cash provided
 (required) by
 operating activities  $(9,425,460) $(5,930,885)  $  (329,137)
 Net cash provided
 (used) by investing
 activities              (6,967,658)    (796,384)      (26,800)
 Net cash provided
 (used) by financing
 activities              16,569,232    6,423,148       335,475
 Currency exchange         (130,334)     335,965           -0-
                        -----------   ----------    ----------
 Net increase
 (decrease) in cash    $     45,780 $     31,844   $   (20,462)
                        ===========   ==========    ==========


The financial resources of the Registrant have been provided by
cash  flows from financing activities.

In fiscal year ended October 31, 2000 and 1999 the Registrant s
operating activities generated a negative cash flow of $(9,425,460)
and $(5,930,885), respectively, mainly due to the increase in
accounts receivable and inventory from the lumber operations. In
fiscal 1998, operating generated a negative cash flow of
$(329,137), mainly due to the reduction in accrued expenses and
other assets.

Net cash used by investing activities in fiscal years ended October
31, 2000, 1999 and 1998 was $(6,967,658), $(796,384) and $(26,800)
respectively. Cash used in fiscal 2000 was mainly for the
acquisitions of Harron, Cutler and Seabright s assets and goodwill;
cash used in 1999 was mainly for the acquisition of Ziner Lumber s
assets and goodwill.

Net cash provided by financing activities in fiscal years ended in
2000, 1999 and 1998 was $16,569,232, $6,423,148  and $335,475,
respectively. In fiscal year ended October 31, 2000, net cash
provided by financing activity was mainly from bank financing and
the issuance of convertible debentures. In 1999, cash provided from
financing activities was mainly from bank financing. In fiscal
1998, net cash provided by financing activities was from
stockholders and related party loans.

The Registrant s current objective is to grow through the
acquisition of other profitable businesses. The Company also plans
to continue raising funds from private placements of its common
stock.


Foreign Currency Adjustments
Our main operations and approximately 40% of our sales come from
Canada. We purchase our inventory from Canadian suppliers and
therefore deal mostly in Canadian dollars. During the year we had
a foreign currency loss of $128,916. In fiscal 1999 we had a gain
on foreign currency translation of $335,965. We do not use any
derivative instruments or otherwise hedge against foreign currency
fluctuations.  We do not anticipate engaging in any foreign such
hedging transactions in Fiscal 2001.

Fourth Quarter Adjustments

Due to the acquisitions made during the year, and in particular the
acquisition of Cutler Forest Products and Seabright Wood
Fabricators in the fourth quarter of fiscal 2000, and the continued
decline in commodity lumber prices, we had to make significant
fourth quarter adjustments to our general ledger. These adjustments
were made in conjunction with the consolidation of the various
accounting systems used by the acquired companies. Management is
addressing these issues and has implemented new procedures and
installed a new accounting software program.

Acquisitions

During the year we announced our intent to purchase ABS
Woodworking. At this time we are negotiating with the principals of
ABS with respect to the completion of a Phase II environmental
review of their property. We believe that completion of that review
is necessary prior to completing the transaction. We have no
obligation to go forward with the acquisition at this time.

2001 Lumber Sales

Subsequent to the end of the fiscal year, we discontinued sales to
the distributor who sold our wholesale product in the U.S. Due to
falling lumber prices and exchange rate fluctuations these sales to
the United States were no longer profitable. Instead we are
concentrating our sales efforts on the Canadian market. Our
Canadian trading division continues to make sales into the United
States (See Item 1. Business) The Canadian economy remains strong
with growth expected to be 4% per year compared to 2% to 2.5% in
the United States. We expect that this decision will decrease
revenues but increase earnings.

Item 8.   Financial Statements and Supplementary Data.

     The financial statements are attached hereto on Pages F-1
through F-

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

On January 24, 2000 we filed a report on Form 8-K notifying of our
change in accounts. There were no disagreements with our prior
accountants. The independent certified public accounting firm for
the Company, Infante, Lago & Co., was dismissed due to the
departure of Jesus Lago, the partner in charge of the Company's
audit.  The dismissal was necessary in order for the Company to
retain Berkovits & Company, P.A., now known as Berkovits, Lago &
Co., LLP, as the Company s independent certified public accountants
in which Mr. Jesus Lago has become a partner.  The dismissal became
effective January 10, 2000.


PART II

Item 10.  Directors and Executive Officers of the Registrant.

As of February 15, 2001 the following people were the officers and
directors of Value Holdings.

Name                     Age            Position

Robert Ziner             46             Chairman of the Board (1)

Lawrence Maker           54             CEO, President (2)

Ida Ovies                43             Chief Financial Officer

Alison Cohen             34             Secretary, Director

David Stone                             Director (3)

Tom Hazel                               Director (3)

John Balatinecz                         Director (3)


(1)  Mr. Ziner became Chairman of the Board on January 1, 2001,
when Lawrence Maker was name CEO and President of Value Holdings
and Network Forest Products.

(2)  Mr. Maker became CEO and President of Value Holdings and
Network Forest Products on January 1, 2001.

(3) Appointed a director of Value Holdings on January 12, 2000.


Robert Ziner became Chairman of the Board on January 1, 2001. He
was named President of the Company in February 1999.  Prior to that
time Mr. Ziner was an executive with John Ziner Lumber Limited
responsible for all aspects of the business.

Mr. Maker is a chartered accountant by profession, however he has
spent his working career in industry, primarily involved in supply
chain management within the wholesale distribution industry.  Mr.
Maker left his post of vice president, marketing and procurement at
Unisource Canada, Inc., a subsidiary of Georgia-Pacific
Corporation, one of the world's leading manufacturers and
distributors of building products and a leading producer of pulp
and paper.  Mr. Maker has experience in integrating acquired
companies having integrated Adelco Supply into Unisource in 1997
and most recently integrating the logistics of Xerox brand paper
businesses into Unisource. Mr. Maker has been a member of the
Unisource Canada, Inc. Executive Committee and a driving force in
articulating the company s future in e-commerce.

Alison Rosenberg Cohen was named President of the Company in
September 1991 and had served in such capacity until May 1995 when
she stepped down to become Vice President of Marketing and Anthony
Pallante became president of the Company. On December 3, 1996, upon
Mr. Pallante s resignation as president of the Company, Ms. Cohen
was elected as interim president. She stepped down to become
Secretary of the Company when Mr. Ziner was named President in
February 1999. She was elected a Director of the Company in June
1990. From 1988-1991 Ms. Cohen held various positions with the
Company and with its predecessor, Seashells, Inc. Ms. Cohen
graduated from the University of Miami in 1988 with a B.S. in
advertising and marketing. She is the daughter of Leonard
Rosenberg, a former officer and director of, and now a consultant,
to the Company.

Ida Ovies has been the Chief Financial Officer of the Company since
1994. Ms. Ovies received a BA in Accounting in 1979, from the
University of Puerto Rico in San Juan, Puerto Rico. Ms. Ovies also
received a Master of Science and Taxation in 1983 from the Florida
International University in Miami, Florida. Ms. Ovies is a licensed
CPA and is a member of the American Institute of Certified Public
Accountants and the Florida Institute of Certified Public
Accountants. Ms. Ovies has over twenty
years of practice in both public and private accounting.


Dr. John Balatinecz is a Emeritus Professor of wood science and
forest products and a member of the faculty at the University of
Toronto.  He holds a Ph.D. in wood science from the University of
Toronto.  Dr. Balatinecz has written more  than 100 papers and is
the holder of two patents dealing with the production of recycle
composition paper flakeboard..  He was previously a member of the
board of directors of Green Forest Lumber Corporation.

David Stone is an attorney practicing in Toronto in the areas of
commercial litigation and corporate law.  He is a member of the
Ontario Bar and received his law degree from the University of
Victoria. Mr. Stone is also an honors graduate of the Canadian
Securities Institute. Mr. Stone is the brother-in- law of Value
Holding s chairman Robert Ziner.

Tom P. Hazel is president of the Hazell Underwriting Group, an
insurance firm in Midland, Ontario. A graduate of Waterloo College,
Mr. Hazell has more than 35 years of business experience. Mr.
Hazell is involved with a number of insurance industry groups and
is the president of the Huronia Estate Planning Council and the
past president of the Institute of Chartered Life Underwriters &
Chartered Financial Consultants of Canada.

Item 11.  Executive Compensation

The following table sets forth certain information with respect to
compensation for services paid by the Company for the past three
fiscal years to or on behalf of the Company s executive officers
who were executive officers at October 31, 2000.


Name       Annual Compensation  Long Term Compensation
And        -------------------  -----------------------
Prin
 Cipal                          Awards         Payouts
Position
-----------------------------------------------------------------
      Year Salary Bonus Other   Restric Securit LPTI    All other
                        Annual  ted     ies     Payouts Compensat
                        Compens Stocks  underly ($)     ion ($)
                        tion    Awards  ing
                        ($)             Options
                                        /SARS(#)
      ---- ------ ----- ------  ------- -------- ------ ---------
Robert
Ziner
Presi
 dent/2000 201,952
CEO(1)1999 175,000

Lyon
Wexler
COO (2)2000  61,707
1999 48,761

Ida
Ovies
CFO    2000  20,793
1999 16,175
1998   18,200

Alison
Cohen
Secret
 ary   2000  46,000
1999 22,000
       1998  38,675



(1)  Mr. Ziner was president and CEO of Value Holdings and Network
Forest Products during Fiscal 2000. He resigned as president and
CEO on January 1, 2001 and assumed the role of Chairman of the
Board of Value Holdings. Mr. Ziner originally joined the company
upon the acquisition of the Ziner Lumber assets in February 1999.
The compensation stated in the table is paid to Integrated
Directions, an Ontario corporation of which Mr. Ziner is a
beneficial owner.

(2)  Mr. Wexler retired as the COO of Network Forest Products
effective October 1, 2000. Mr. Wexler originally joined the company
upon the acquisition of the Ziner Lumber assets in February 1999.
The compensation stated in the table is paid to King Capital, an
Ontario corporation of which Mr. Wexler is a beneficial owner.

Item 12. Security Ownership of Certain Beneficial Owners

The following table sets forth the number of shares of the Company
s Common Stock beneficially owned as of October 31, 2000 by (i) the
owners of more than five percent (5%) of the Company s Common
Stock, (ii) the number of shares of Common Stock owned by each
director and officer, and (iii) the number of shares of Common
Stock owned by all officers and directors as a group:

Name and Address of       Number of Shares of       Percentage of
Beneficial Owner (1)         Common Stock           Common Stock
- -------------------       -------------------       -------------

Lawrence Maker                  2,000,000                  *

Robert Ziner (2)               25,000,000               15.6%

Lyon Wexler    (5)             12,200,000                7.6%

Alison Rosenberg Cohen (3)        790,000                0.005%

Ida Ovies (4)                      50,000                0.0003%

Tom Hazell                        350,000                0.0022%

David Stone                             0                0

John J. Balatinecz                      0                0

All Executive Officers and
Directors as a Group            28,190,000              17.4%

*Pursuant to Mr. Makers employment agreement, Mr. Maker is entitled
to 2,000,000 shares of Value Holdings  common stock. Those shares
have not yet been issued to Mr. Maker. Upon issuance they would
constitute approximately 1.1% of the total outstanding shares. This
number additionally does not include 10,000,000 options for common
shares to which Mr. Maker is entitled but which have not yet been
issued.

(1) The address for all officers and directors of the Company is
c/o Value Holdings, Inc., 2307 Douglas Road, Ste 400, Miami,
Florida 33145.
(2) Mr. Ziner is a beneficial owner of 1341125 Ontario Limited
which owns 3,416,335 Class B Shares of Network Forest Products
Limited, a wholly owned subsidiary of the Company.  Pursuant to an
agreement between the Company and 1341125 Ontario Limited dated
February 19, 1999, 1341125 Ontario Limited may exchange these Class
B shares of Network Forest Products for not more than 341,633,500
common shares of the Company. 1341125 Ontario Limited has not
exchanged any Class B shares for Common shares of the Company
pursuant to this agreement.

(3) Includes 400,000 shares of Common Stock beneficially owned by
Alison Rosenberg Cohen and 390,000 options to purchase shares of
Common Stock which are immediately exercisable.

(4) Represents 50,000 options to purchase shares of Common Stock
which are immediately exercisable.

(5)  Lyon Wexler was the Chief Operating Officer of our subsidiary,
Network Forest Products Limited. Robert Ziner, by agreement, has
the right to vote the shares held by Mr. Wexler. Mr. Wexler retired
from the company effective October 1, 2000.

Item 13.  Certain Relationships and Related Transactions.

During fiscal 1999, 12,650,971 shares of Common Stock were issued
in connection with conversions of certain debts owed by the
Company. One such debt was in the amount of $29,122 owed to Liberty
Consulting Ltd. ( Liberty ), a shareholder of the Company. In
connection with the conversion of such debt, the Company issued
Liberty 832,057 shares of Common Stock. A debt of $218,000
representing unpaid dividends owed to Holograph Investment Corp.
was converted to 6,228,571 shares of Common Stock. Holograph owns
750,000 shares of our Series A Preferred Stock, which is
convertible to shares of common stock. Additionally, a debt of
$195,662 representing accrued consulting fees owed to Gemini
Integrated Financial Services Corp. ( Gemini ) was converted into
5,590,343 shares of Common Stock.

Renee Rosenberg and Jonathan Leinwand are shareholders of Gemini.
Mrs. Rosenberg is the mother of Alison Cohen, a director and
secretary of the Company, and Mr. Leinwand is Mrs. Cohen s
brother-in-law. Mr. Leinwand also acts as legal counsel to the
Company. All the conversions were made on
April 30, 1999.

Network leases its buildings and approximately 14 acres of land.
Ten acres and the buildings are leased from an affiliated company
partially owned by one of the shareholders. Four acres are leased
from a third party. The lease is for a term of five years at a cost
of $14,000 per month.

Network Forest Products, a wholly owned subsidiary, issued a note
payable to John Ziner Lumber Limited, as part of the purchase price
of the Ziner assets as noted above. The outstanding balance on this
note is $552,621.

On August 10, 2000 we sold a convertible debenture to Roycap, Inc.,
and on October 11, 2000 we sold a convertible debenture to Capbanx
Corp. Both debentures were for $1 million each. Pursuant thereto we
have filed a registration statement with the Securities and
Exchange Commission to register the common shares underlying the
debentures. We have received comments back from the SEC and intend
to refile an amended registration statement.

An additional convertible debenture for $450,000 was sold to
Capbanx in January 2001. The securities underlying this debenture
have not yet been registered.


PART IV

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

(a)  1. Financial Statements.

        (i) Report of Independent Certified Public Accountants;

       (ii) Consolidated Balance Sheets as of October 31, 2000

      (iii) Consolidated Statements of Operations for the
          year ended October 31, 2000, October 31,
            1999;

       (iv) Consolidated Statement of Stockholders  Equity for the
          year ended October 31, 2000, October 31, 1999;

       (v) Consolidated Statements of Cash Flows for year ended
October 31, 2000, October 31, 1999;

       (vi) Notes to Consolidated Financial Statements.

      2. Financial Statement Schedules.

            None.

        (b) Reports on Form 8-K

1. On September 6, 2000 we filed on Form 8-K disclosing the
purchase of Cutler Forest Products and Seabright Wood Fabricators
and attached the material purchase agreements thereto.
2. On October 24, 2000 we filed on Form 8-K providing the financial
data required by Item 7 of the form as it related to our purchase
of Cutler Forest Products and Seabright Wood Fabricators.


3.   Exhibits required by Item 601 of Regulation S-K

          3.   Articles of Incorporation, as amended (Incorporated
by reference to the Company's Form 8-K dated March
           19, 1993, filed with the Commission on March 22, 1993).

3.1  Bylaws of the Company, as amended (Incorporated by rerence to
the Company s Form 10-K for the fiscal year ended February 28,
1993).


 10% Convertible Debenture (Incorporated by reference to the
Company's Registration Statement on Form SB-2 as filed with the
Commission on November 15, 2000, File No. 333-50250) (SB-2)

 Roycap Registration Rights Agreement (SB-2)

 Roycap General Security Agreement (SB-2)

 Warrant to Purchase 5,000,000 Shares of Common Stock (SB-2)

 Capbanx 10% Convertible Debenture (SB-2)

 Capbanx Registration Rights Agreement (SB-2)

 Capbanx General Security Agreement (SB-2)

10.1 Asset Purchase Agreement dated February 22, 1999 between
Network Forest Products, John Ziner Lumber Limited and Value
Holdings, Inc. (Incorporated by reference to the Company's Form 8-K
filed March 4, 1999) (March 4, 1999 8-K)

10.2 Exchange Agreement dated February 22, 1999 between Robert
Ziner and Value Holdings, Inc. (March 4, 1999 8-K)

10.3 Guarantee dated February 22, 1999 by Value Holdings, Inc., in
favor of BNY Financial Corporation -- Canada. (March 4, 1999 8-K)

10.4 Purchase Agreement between Network Forest Products and Harvey
Harron, Sandra Lee Harron and Jeffrey Harron, as the shareholders
of 471372 Ontario Limited d/b/a Harron Home Hardware (Incorporated
by reference to the Company s Form 8-K filed February 23, 2000)

10.5 Asset Purchase Agreement dated February 11, 2000 between Value
Holdings, 1392298 Ontario Limited, Cutler Forest Products Treefield
Holdings Limited, A Corporation Incorporated Under The Laws Of The
Province Of Ontario ( Treefield );Divadale Holdings Limited,
Ruislip Holdings Inc., T.M.&C. Holdings Ltd., Victor Drevnig, Keith
Withers, Peter Engel, and Richard Drevnig (Incorporated by
reference to the Company s Form 8-K filed August 18, 2000 (August
18, 2000 8-K)

10.6 Share Purchase Agreement dated February 11, 2000 between Value
Holdings, Inc., 1392298 Ontario Limited, Cutler Forest Products,
Fred Cain, Treefield Holdings Limited, Divadale Holdings Limited,
Ruislip Holdings Inc., T.M.&C. Holdings Ltd., Victor Drevnig, Keith
Withers, Peter Engel, and Richard Drevnig. (August 18, 2000 8-K)

10.7   Amending Agreement dated August 10, 2000 between Value
Holdings, Inc., 1392298 Ontario Limited, Cutler Forest Products,
Fred Cain, Treefield Holdings Limited, Divadale Holdings Limited,
Ruislip Holdings Inc., T.M.&C. Holdings Ltd., Victor Drevnig, Keith
Withers, Peter Engel, and Richard Drevnig. (August 18, 2000 8-K)

10.8 Financial statements for Cutler Forest Products (incorporated
by reference to the Company s Form 8-K/A filed October 24, 2000):

(i)Audited Consolidated Balance Sheet at December
31, 1999
(ii) Audited Consolidated Statement of Income for the year ended
December 31, 1999 and unaudited Consolidated Statement of Income
for the year ended December 31, 1998
          (iii) Audited Consolidated Statement of Partner s Equity
          for the year ended December 31, 1999
(iv) Audited Consolidated Statement of Cash Flows for the year
ended December 31, 1999 and unaudited Consolidated Statement of
Cash Flows for the year ended December 31,1998
(v)Summary of significant accounting policies and notes to
consolidated financial statements

10.9 Financial statements for Seabright Wood Fabricators
(incorporated by reference to the Company's Form 8-K/A filed
October 24, 2000):

               (i)  Audited Balance Sheet at December 31, 1999
(ii) Audited Statement of Income and Retained Earnings for the year
ended December 31, 1999 and unaudited Statement of Income for the
year ended December 31,1998
(iii)Audited Statement of Cash Flows for the year ended December
31, 1999 and unaudited Statement of Cash Flows for the year ended
December 31, 1998
(iv) Audited Schedule of Cost of Sales and General and
Administrative Expenses for the year ended December 31,1999 and
unaudited Schedule of Cost of Sales and General and Administrative
Expenses for the year ended December 31, 1998
(v)Summary of significant accounting policies and notes to
consolidated financial statements





























                          VALUE HOLDINGS, INC.

                   CONSOLIDATED FINANCIAL STATEMENTS

            FOR THE YEARS ENDED OCTOBER 31, 2000 AND 1999
































                         VALUE HOLDINGS, INC.
                             CONTENTS



                                                            PAGE



REPORT OF INDEPENDENT AUDITORS'                                 1

CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets                                                  2

Statements of Operations                                        3

Statements of Stockholders' Equity                              4

Statements of Cash Flows                                     5 - 6

Notes to Consolidated Financial Statements                  7 - 23






























                                  -i-


REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Stockholders
Value Holdings, Inc. and subsidiaries
Coral Gables, Florida

We have audited the accompanying consolidated balance sheets of
Value Holdings, Inc. and  subsidiaries as of October 31, 2000 and
1999, and the related consolidated statements of operations,
stockholders  equity and cash flows for the years ended October 31,
2000 and 1999.  These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these consolidated financial statements
based on our audits.  The statements of operations, stockholders
equity, and cash flows of Value Holdings, Inc. and subsidiaries for
the year ended October 31, 1998, were audited by other auditors
whose report dated January 19, 1999, on those statements included
an explanatory paragraph that described an uncertainty relating to
the Company's ability to continue as a going concern.

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

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Value Holdings, Inc. and subsidiaries at
October 31, 2000 and 1999, and the consolidated results of its
operations and its cash flows for the years ended October 31, 2000
and 1999 in conformity with accounting principles generally
accepted in the United States.

The accompanying financial statements have been prepared assuming
that the Company willcontinue as a going concern. As discussed in
Note 12 to the financial statements, the Company is currently in
default of certain provisions under the revolving credit facility.
The Company is negotiating with the financial institution in an
effort to restructure the terms of the financial covenants or the
credit facility. The Company received the confirmation from the
financial institution which waived the events of default based on
the financial statements for fiscal year ended October 31, 2000,
and os of November 30, and December 31, 2000, and indicated that
they have agreed to enter into good faith negotiations, in an
effort to reset the financial covenants which will be acceptable to
both parties. At this time, these negotiations have not been
finalized and the Company has not cured the events of default,
which raises substantial doubt about its ability to continue as a
going concern. In the opinion of management, the Company will
prevail in resolving the events of default and restructuring the
terms of the credit facility. The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

January 29, 2001














































                  VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET


                                       October 31,    October 31,
                                         2000            1999
                                      -----------     -----------

                            ASSETS

CURRENT ASSETS
Cash                                 $     77,624   $      31,844
Marketable securities                     336,697         211,058
Accounts receivable, net of allowance
 for doubtful accounts of $1,098,936
 and $551,574 in 2000 and 1999,
 respectively                          12,875,097       9,600,213
Inventory                              18,087,741       6,952,896
Prepaid expenses and other assets         354,560         339,978
Income taxes receivable                   139,230           -0-
                                      -----------     -----------
   TOTAL CURRENT ASSETS                31,870,949      17,135,989
                                      -----------     -----------
PROPERTY AND EQUIPMENT, net of accumulated
 Depreciation of $475,587 and $217,152
 in 2000 and 1999, respectively         2,925,227       1,255,772
                                      -----------     -----------
OTHER ASSETS
Costs in excess of net assets of
 businesses acquired, net of
 accumulated amortization             10,003,763        5,446,987
Note receivable                        1,715,897          204,304
Note receivable affiliate                130,400          130,400
Deposit and other assets                 768,101          254,563
                                     -----------      -----------
   TOTAL OTHER ASSETS                 12,618,161        6,036,254
                                     -----------      -----------
   TOTAL ASSETS                    $  47,414,337   $   24,428,015
                                     ===========      ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Accounts payable and accrued
  expenses                         $   8,698,549   $    4,612,107
 Note payable financial institutions  22,224,956       11,302,050
 Current portion long term debt        5,611,649          315,539
 Note payable-affiliate                  132,231          323,481
 Notes payable and advances
  from stockholders                       10,751          312,337
                                    ------------      -----------
   TOTAL CURRENT LIABILITIES          36,678,136       16,865,514

DEFERRED GAIN ON SALE                     86,251           86,251
DEFERRED INCOME TAXES                    131,631             -0-
LONG-TERM DEBT,INCLUDING CAPITALIZED
 LEASE OBLIGATIONS, NET OF CURRENT
 PORTION                                 384,445        1,349,305
CONVERTIBLE DEBENTURES                 2,000,000             -0-
                                     -----------       ----------
                                      39,280,463       18,301,070
                                     -----------       ----------
PREFERRED SECURITIES OF SUBSIDIARY     5,703,607        5,703,607
                                     -----------       ----------
                 LIABILITIES AND STOCKHOLDERS  EQUITY

STOCKHOLDERS EQUITY
Series A preferred stock, par value
 $.0001; 20,000,000 shares
 authorized; 750,000 issued and
 outstanding at October 31,
 1999 at liquidation value              750,000          750,000
Common stock, par value $.0001;
 900,000,000 shares authorized;
 issued and outstanding 158,956,464
 and 108,857,039 in 2000 and 1999,
 respectively                            15,895            10,885
Capital in excess of par             15,341,325        14,751,595
Accumulated deficit                 (13,438,057)      (15,206,535)
Accumulated comprehensive income       (126,896)          221,892
Deferred consulting agreement              -0-            (47,499)
Dividends on preferred stock           (112,000)          (57,000)
                                    -----------       -----------
TOTAL STOCKHOLDERS  EQUITY            2,430,267           423,338
TOTAL LIABILITIES AND STOCKHOLDERS  -----------       -----------
EQUITY                            $  47,414,337    $   24,428,015
                                    ===========       ===========



















The accompanying notes are an integral part of these financial
statements
               VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF OPERATIONS
                        Years ended October 31,

                             2000            1999           1998
                         ----------     -----------    -----------
Sales, net            $ 114,210,782    $ 45,711,611     $
Cost of sales            97,355,443      39,417,806            -0-
                        -----------      ----------      ----------
Gross profit             16,855,339       6,293,805            -0-
                        -----------      ----------      ----------
Operating expenses
 Selling, general and
  administrative         12,628,712       4,544,848         340,062
  Depreciation              369,827         213,117            -0-
  Amortization,
   intangible assets        579,660         396,715            -0-
                        -----------      ----------      ----------
Total operating expenses 13,578,199       5,154,680         340,062
                        -----------      ----------      ----------
Operating income (loss)   3,277,140       1,139,125       (340,062)
                        -----------      ----------      ---------
Other income (expense)
 Interest and other
  income                    418,890         419,377          11,173
 Interest expense        (2,752,599)       (823,095)       (83,343)
 Provision for losses
  in affiliates                -0-             -0-        (571,000)
 Write down of investment
  in affiliate                 -0-             -0-      (1,758,094)
 Equity loss in unconsol.
  subsidiary                   -0-             -0-        (210,278)
                        ----------       ---------      ----------
Total other income      (2,333,709)       (403,718)     (2,611,542)
      (expenses)        ----------       ---------      ----------
Income (Loss) before
 discontinued operations   894,779         609,755      (2,935,124)

(Loss) income from license
 agreement, net of taxes   (65,046)        133,610          38,378
Gain on disposal of license
 agreement, net of tax   1,130,833            -0-             -0-
                        ----------      ----------       ---------
Total income from
 dsicontinued operations 1,065,787         133,610          38,378
                        ----------      ----------      ----------
Net income (loss)     $  1,960,566     $   743,365     $(2,896,746)
                       ===========      ==========      ==========
Earnings (loss) per common share
 Basic earnings       $        .01     $       .01    $      (.05)
                       ===========      ==========     ==========
 Diluted earnings     $        .01     $       .01    $         -
                       ===========      ==========     ===========
Average shares outstanding
 Basic                 158,048,006      100,892,590      63,030,642
 Diluted               205,473,090      109,152,090            -

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

















































                 VALUE HOLDINGS, INC, AND ITS SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
               Common Stock   Preferred  Capital in  Accumulated
              Shares  Amount    Stock   Excess of Par  Deficit

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

Balance -
November 1,
 1997       56,806,068 $ 5,680 $ 750,000 $13,859,016 $(12,747,379)

Issuance of
 common
 stock      35,500,000   3,550      -0-      351,450         -0-
Dividends
 accrued        -0-       -0-       -0-        -0-           -0-
Deferred
 consulting
 agreement      -0-       -0-       -0-        -0-           -0-
Net loss        -0-       -0-       -0-        -0-    (2,896,746)
         ----------- --------- --------- -----------  -----------
Balance -
October 31,
 1998     92,306,068  $  9,230   750,000 14,210,466  (15,644,125)
Issuance of
 common
 stock    16,550,971     1,655      -0-     541,129      218,000
Dividends
 accrued        -0-       -0-       -0-        -0-          -0-
Dividends
 paid           -0-      -0-        -0-        -0-      (87,775)
Foreign currency
 translation
 adjustment     -0-      -0-        -0-        -0-          -0-
Deferred
 consulting
 agreement      -0-      -0-        -0-        -0-          -0-
Net income, as
 restated       -0-      -0-        -0-        -0-       743,365
        ----------  -------  ---------  ----------- ------------
Balance -
 October 31,
 1999   108,857,039 $ 10,885 $ 750,000 $14,751,595 $(15,206,535)

Reconcile
 shares
 issued in
 prior
 year     (1,100,000)    (110)     -0-         110         -0-
Shares
 issued for
 services     50,000        5       -0-      7,495         -0-

Shares issued
 in connection
 with consulting
 agreement 50,000,000    5,000      -0-     245,000        -0-
Shares issued
 for acquisition
 -Cutler      862,069       86   252,844       -0-         -0-
Shares issued
 for acquisition
 -Seabright   287,356       29    84,281       -0-         -0-
Dividends
 accrued         -0-       -0-      -0-        -0-         -0-
Dividends
 paid            -0-       -0-      -0-        -0-     (192,088)
Foreign curreny
 translation
 adjustment      -0-       -0-      -0-        -0-         -0-
Unrealized losses
 on marketable
 securities      -0-       -0-      -0-        -0-         -0-
Deferred consulting
 agreement       -0-       -0-      -0-        -0-         -0-
Net income       -0-       -0-      -0-        -0-    1,960,566
          -----------   -------  -------- ---------- -----------
Balance -
 October 31,
 2000     158,956,464 $ 15,895 $ 750,000 $15,341,325 $(13,438,057)
         ============  =======  ========  ==========  ===========




The accompanying notes are an integral part of the financial
statements.





















                  VALUE HOLDINGS, INC, AND ITS SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

               Deferred    Dividends    Cummulative    Total
               Consulting  On Preferred Translation
               Agreements     Stock     Adjustment
               ----------  ------------ ------------- ----------
Balance -
November 1,
 1997          $  -0-     $ (125,000)  $    (3,372) $  1,738,945

Issuance of
 common
 stock            -0-           -0-           -0-        355,000
Dividends
 accrued          -0-         (75,000)        -0-        (75,000)
Deferred
 consulting
 agreement     (156,731)         -0-          -0-       (156,731)
Net loss           -0-           -0-          -0-     (2,896,746)
              ----------   ----------   -----------  -----------
Balance -
October 31,
 1998          (156,731)   $ (200,000) $    (3,372) $ (1,034,532)
Issuance of
 common
 stock             -0-        218,000         -0-        542,784
Dividends
 accrued           -0-       (162,775)        -0-       (162,775)
Dividends
 paid              -0-         87,775         -0-           -0-
Foreign currency
 translation
 adjustment        -0-           -0-       225,264       225,264
Deferred
 consulting
 agreement      109,232          -0-          -0-        109,232
Net income, as
 restated          -0-           -0-          -0-        743,365
             -----------  -----------  -----------  ------------
Balance -
 October 31,
 1999           (47,499)     (57,000)      221,892       423,338
Reconcile
 shares
 issued in
 prior
 year               -0-         -0-           -0-           -0-
Shares
 issued for
 services           -0-         -0-           -0-          7,500


Shares issued
 in connection
 with consulting
 agreement          -0-         -0-           -0-         250,000
Shares issued
 for acquisition
 -Cutler            -0-         -0-           -0-         252,930
Shares issued
 for acquisition
 -Seabright         -0-         -0-           -0-          84,310
Dividends
 accrued            -0-     (247,088)         -0-        (247,088)
Dividends
 paid               -0-      192,088          -0-            -0-
Foreign curreny
 translation
 adjustment         -0-         -0-        (208,978)     (208,978)
Unrealized losses
 on marketable
 securities         -0-         -0-        (139,810)     (139,810)
Deferred consulting
 agreement        47,499        -0-            -0-         47,499
Net income          -0-         -0-            -0-      1,960,566
              ----------  ----------    -----------    -----------
Balance -
 October 31,
 2000       $       -0-  $ (112,000)   $  (126,896)  $  2,430,267
             ==========   =========     ==========    ===========




The accompanying notes are an integral part of the financial
statements.





















                   VALUE HOLDINGS, INC. AND ITS SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                            Years Ended October 31,

                               2000        1999         1998
                              ------      ------       ------
Cash flows from operating
 activities:
 Net income (loss)         $ 1,960,566 $  743,365  $(2,896,746)
 Adjustment to reconcile
  net income (loss) from
  operations to net cash
  (used in) operations:
   Write-off of fixed and
   intangible assets relating
   to licensing agreement         -0-     130,463        -0-
   Write-off investment
    unconsol. subsidiary          -0-       3,994        -0-
   Shares issued for services    7,500       -0-         -0-
   Gain on sale of licensing
    agreement               (1,145,833)      -0-         -0-
   Provision for doubtful
   accounts                    547,362    541,502        -0-
   Write down marketable
    securities                 144,488      3,259        -0-
   Write down obsolete
    inventory                     -0-      74,911        -0-
   Loss on disposition
    capital asset                 -0-       5,926        -0-
   Deferred income taxes       131,631     40,180        -0-
   Depreciation                369,827    213,117     52,979
   Amortization, intangible
    assets and goodwill        563,161    424,854    202,168
   Amortization consulting
    agreements                  47,499    179,232   (156,731)
   Equity in earnings of
    unconsol. subsidiary          -0-        -0-     210,278
   Write-down investment in
    equity-method Investee        -0-        -0-   1,758,094
   Provision for losses in
    affiliate                     -0-        -0-     571,000
   Expenses paid by issuance
    of common stock               -0-        -0-     355,000
 Changes in operating assets
  and liabilities
  (Increase) decrease in current
   assets:
    Accounts receivable     (3,822,246) (6,165,871)   (1,170)
    Marketable securities     (270,127)   (214,317)     -0-
    Inventory              (11,134,845) (3,257,510)     -0-
    Prepaid expenses and
     other assets             (716,653)   (242,481)  (10,835)

   Income taxes receivable    (139,230)       -0-       -0-
  Increase(decrease) in current
   liabilities:
    Accounts payable         4,031,440   1,690,034   (14,316)
    Accrued liabilities           -0-        1,609   (67,888)
    Other                         -0-     (103,152) (330,970)
                            ----------  ---------- ---------
Net cash used in operating
 activities                 (9,425,460) (5,930,885) (329,137)
                            ----------  ----------  --------
Cash flows from investing
 activities:
  Acquisition of property
   and equipment           (2,039,282)   (582,080)     -0-
  Sale of license agreement 1,330,000        -0-       -0-
  Goodwill acquired        (4,746,783)       -0-       -0-
  Increase in Notes
   Receivable              (1,511,593)   (204,304)     -0-
  Advances to related
   companies                     -0-      (10,000)  (26,800)
                           ----------   ---------  --------
Net cash used in financing
 activities                (6,967,658)   (794,384)  (26,800)
                          -----------   ---------  --------

Cash flows from financing
 activities:
 Proceeds from convertible
  debentures                2,000,000       -0-         -0-
 Proceeds (repayments)
  stockholders borrowings  (1,247,773)    (115,553)   58,518
  Proceeds from related
  party                          -0-          -0-    304,707
 Repayment of borrowings
  from affiliates            (191,250)        -0-       -0-
 Dividends paid              (192,088)     (87,775)     -0-
 Proceeds (payments) debt,
  net of currency exchange 16,200,343    6,626,476  (27,750)
                           ----------   ---------- --------
Net cash provided by
 financing activities      16,569,232    6,423,148  335,475
                           ----------   ---------- --------
Net increase (decrease)
 in cash prior to effect
 of exchange rate on cash     176,114     (304,121) (20,462)

Effect of exchange rate
 on cash                     (130,334)     335,965     -0-
                            ---------    --------- --------
Increase (decrease) in
 cash                          45,780       31,844   (20,462)
Cash at beginning of year      31,844         -0-     20,462
                            ---------    ---------  --------
Cash at end of year       $    77,624  $    31,844 $   -0-
                            =========    =========  ========

Supplemental disclosure of cash flow
 information:

Cash paid during the year
 for interest             $ 3,075,287 $  743,112   $  35,246
Cash paid for taxes            91,009       -0-         -0-

Non-cash investing and
 financing activities
 Stock issued for consulting
  services:
  Officer/stockholder/
   director               $      -0-   $  250,000  $ 355,000
  Other                         7,500        -0-        -0-
 Stock issued for dividends      -0-      218,000       -0-
 Stock issued for
  acquisitions                337,240        -0-        -0-
 Subsidiary stock issued for
  acquisition                    -0-    5,832,536       -0-
 Acquisitions of subsidiaries
  Liabilities assumed      (8,248,496) (7,626,758)      -0-
 Fair value of assets
  acquired                  8,248,496   7,626,758       -0-


The Company had no cash equivalents at October 31, 2000, 1999 and
1998.


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






















              VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Value Holdings, Inc. (the  Company ) and its Subsidiaries are in
the business of acquiring businesses with the goal of building
well-run independent subsidiaries with solid market niches.  The
Company is currently focusing on the acquisition and consolidation
of industrial businesses that remanufacture wood and distribute
lumber and general building materials.  The Company conducted
operations in both the U.S. and Canadian markets.

Until June 1, 1995, the Company operated a chain of seafood
restaurants ( Cami s, the Seafood Place or  Cami s ) primarily in
South Florida (Dade and Broward Counties).  On that date, the
Company licensed the operations of the restaurants to an
independent operator.  On June 13, 2000, the license agreement for
the operations of Cami's, the Seafood Place was sold which resulted
in a gain from disposition (See Note 3).

At October 31, 1998, the Company had a 28% interest in Forest Hill
Capital Corporation ( FHCC ).  FHCC operated a chain of retail
optical stores throughout Canada.  The Company had been accounting
for its investment in FHCC under the equity method of accounting
for long-term investments (See Note 7).  During October 1998, the
Company wrote off its investment in Forest Hill Capital due to the
closing of all its stores and the resultant loss was included in
the statement of operations for the year ended October 31, 1998.

On February 25, 1999, Network Forest Products Limited ( Network )
a wholly owned Ontario subsidiary of the Company, acquired
substantially all the assets of John Ziner Lumber Limited ( Ziner
Lumber ), an Ontario corporation involved in the distribution of
lumber and composite wood products and the remanufacturing of
lumber (See Note 2).

On January 19, 2000, Network acquired 100% of the outstanding stock
of Harron Home Hardware and Building Supplies ( Harron ), an
Ontario corporation that provides lumber and building products to
the retail sector and to developers on a wholesale basis (See Note
2).

On June 30, 2000, Network acquired certain assets and assumed
certain liabilities of Cutler Forest Products ( Cutler ), an
Ontario corporation, involved in the wholesale distribution of
sheet and cut to size composite wood products, and all the
outstanding shares of Seabright Wood Fabricators ( Seabright ), an
Ontario corporation, a manufacturer of composite wood products (See
Note 2).  Cutler and Seabright were both under common control at
the date of acquisition.

              VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
          (CONTINUED)


Principles of Consolidation

The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries.  All significant
intercompany balances and transactions are eliminated in
consolidation.

Use of Estimates

The preparation of financial statements in accordance with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reported
period.  Actual results could differ from those estimates.
Estimates that are particularly susceptible to change in the near
term include the evaluation of the recoverability of goodwill and
other intangible assets.

Revenue Recognition Policy

Revenue is recognized upon shipment of lumber or related building
materials to customers.

Inventory

Inventory is primarily composed of raw materials and is stated at
the lower of cost or market, using the first-in, first-out method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost.  Major renewals
and improvements are capitalized while maintenance and repairs,
which do not extend the lives of the respective assets, are
expensed when incurred.  Depreciation is computed over the
estimated useful lives of the assets using the straight-line
method.

Useful lives for property and equipment are as follows:
     Vehicles                           3 years
     Computer equipment                 3 years
     Plant equipment                3 - 5 years
     Buildings and improvements   10 - 12 years

The cost and accumulated depreciation for property, plant and
equipment sold, retired, or otherwise disposed of are relieved from
        VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
          (CONTINUED)

the accounts, and the resulting gains or losses are reflected in
income.

Costs in Excess of Net Assets of Business Acquired

Costs in excess of net assets of businesses acquired ( goodwill )
represents the unamortized excess of the cost of acquiring a
business over the fair value of the identifiable net assets
received at the date of acquisition.  Such goodwill is being
amortized on the straight-line method over 20 years. At October 31,
2000 and 1999, accumulated amortization was $540,315 and $928,850,
respectively.

It is the Company's policy to evaluate the recoverability of
goodwill and other intangible and long-lived assets on a periodic
basis, based primarily on estimated future net cash flows generated
by the assets giving rise to the goodwill, intangibles and other
long-lived assets, and the estimated recoverable values of these
assets.  Such estimated future net cash flows take into
consideration management's plans with regard to future operations
and represent management's best estimate of expected future
results.  In the opinion of management, the results of the
projected future operations are considered adequate to recover the
Company s investment in the goodwill and other long-lived assets.

Acquisition Costs

Acquisition costs, primarily consisting of financing costs are
being amortized on a straight-line basis over their estimated
useful lives of 3 years, and are included in other assets.

Reclassification

Certain amounts in the 1999 and 1998 consolidated financial
statements have been reclassified to conform with the current year
presentation.

Concentration of Credit Risk

Financial instruments that can potentially subject the Company to
concentration of credit risk consist primarily of accounts
receivable.  The Company's trade receivables reflect a broad
customer base in both the United States and Canada.  The Company
routinely assesses the financial strength of its customers.  As a
consequence, concentrations of credit risk are limited.  Sales to
one United States customer exceeded 20% of total sales for the year
ended October 31, 2000 (See Note 23).

            VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
          (CONTINUED)

Fair Value of Financial Instruments

The fair value of long-term debt is based on current rates at which
the company could borrow funds with similar remaining maturities,
and the carrying amount approximates fair value.

Translation of Foreign Currency
The accounts of the Company s Canadian subsidiary are translated in
accordance with Statement of Financial Accounting Standards No. 52
( Foreign Currency Translation ), which require that foreign
currency assets and liabilities be translated using the exchange
rates in effect at the balance sheet date. Results of operation are
translated using the average exchange rates prevailing throughout
the period. The effect of unrealized exchange rate fluctuations on
translating foreign currency assets and liabilities into U.S.
dollars are accumulated as the cumulative translation adjustment in
shareholders' equity. Realized gains and losses from foreign
currency translations are included in other comprehensive income
for the period.  Fluctuations arising from intercompany
transactions that are of a long-term nature are accumulated as
cumulative translation adjustments.

Marketable Securities

Marketable securities are classified as available-for-sale and are
recorded at market value.  Net unrealized gains and losses on
marketable securities available-for-sale are credited or charged to
Other Comprehensive Income (See Note 4)

Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued
Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities, which is required to be adopted in years
beginning after June 15, 2000.  Because of the Company's minimal
use of derivatives, management does not anticipate that the
adoption of the new Statement will have a significant effect on
earnings or the financial position of the Company.

NOTE 2.   BUSINESS ACQUISITIONS

On February 25, 1999, Value Holdings, Inc., through a wholly owned
subsidiary, Network Forest Products Limited ("Network"), acquired
substantially all the assets and operations of John Ziner Lumber
Limited, an Ontario corporation.  The acquisition was accounted for
by the purchase method of accounting.  The operations of the
Company for the year ended October 31, 1999 include the operations
of Ziner Lumber.  The purchase price of this acquisition was
            VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.   BUSINESS ACQUISITIONS (CONTINUED)


$14,331,473 of which $5,355,837 was allocated to goodwill and is
being amortized over 20 years.  Payment for the acquisition
included 2,247,589 Series B special shares and 3,456,018 series A
preferred shares of stock in Network.  The Series B special shares
and Series A preferred shares are redeemable at the option of
Network.  The series B shares have no voting rights but are
exchangeable for a certain number of common shares of stock of
Value Holdings Inc., at the Company's option.

On January 19, 2000, Network completed the acquisition of 471372
Ontario Limited D/B/A Harron Home Hardware & Building Supplies (
Harron ) and 879137 Ontario Limited, a holding company ( Holdings
).  Both companies are Canadian corporations.  Harron's operations
consisted of sales of hardware and lumber to the retail and
contractor trades.  The acquisitions, recorded under the purchase
method of accounting, included the purchase of all the outstanding
shares of common stock of Harron and Holdings at a combined
purchase price of approximately $6,816,000.  A portion of the
purchase price has been allocated to assets acquired and
liabilities assumed based on estimated fair market value at the
date of acquisition while the balance of approximately $1,132,000
was recorded as goodwill and is being amortized over 20 years on a
straight-line basis.

On June 30, 2000, 1392298 Ontario Limited, a wholly owned
subsidiary of Network, completed the acquisition of Cutler Forest
Products ( Cutler ), a Canadian partnership that was in the panel
and wood products wholesale industry.  The acquisition, recorded
under the purchase method of accounting, included the purchase of
all the assets and liabilities of Cutler at a purchase price of
approximately $10,572,000 including 862,069 shares of the Company's
stock valued at approximately $253,000 or approximately $0.29 per
share.  A portion of the purchase price has been allocated to
assets acquired and liabilities assumed based on estimated fair
market value at the date of acquisition while the balance of
approximately $3,694,000 was recorded as goodwill and is being
amortized over 20 years on a straight-line basis.

On June 30, 2000, 1392298 Ontario Limited, a wholly owned
subsidiary of Network, completed the acquisition of Seabright Wood
Fabricators Limited ("Seabright"), a Canadian corporation that
manufactures wood product components.  The acquisition was recorded
using the purchase method of accounting, included the purchase of
all the outstanding shares of common stock of Seabright for a
purchase price of approximately $2,408,000 including 287,356 shares
of the Company's stock valued at approximately $84,300 or
approximately $0.29 per share.  A portion of the purchase price has
            VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.   BUSINESS ACQUISITIONS (CONTINUED)
been allocated to assets acquired and liabilities assumed based on
estimated fair market value at the date of acquisition while the
balance of approximately $1,056,000 was recorded as goodwill and is
being amortized over 20 years on a straight-line basis.

The operating results of these acquired businesses have been
included in the consolidated statements of operations from the
dates of acquisition.

Summarized pro-forma results of operation for the years ended
October 31, 2000, 1999 and 1998, giving effect as if the
transactions occurred on November 1, 1997, are presented as
follows:

                         2000         1999          1998
                        ------       ------        ------
     Revenues       $132,764,053 $ 91,154,026  $ 55,333,245
     Net Income
      (loss)        $  1,901,394 $  1,161,969  $( 7,483,774)
     Earnings (loss)
      per share     $       0.01 $       0.01  $(      0.07)


NOTE 3.   DISCONTINUED OPERATIONS

On June 13, 2000, the Company sold the license agreement for the
operations of Cami's to CamFam, Inc., an unrelated third party that
was operating the restaurants, for $1,330,000.  Proceeds from the
sale were $1,150,000 in cash and a promissory note of $180,000.
The net gain on the disposition of Cami's license agreement was
approximately $1,130,000.  Operating results of the discontinued
operations are as follows:
                               Year ended October 31,
                          2000         1999         1998
                         -----        ------       ------
Licensing fee income  $ 215,703    $  354,328   $  348,434

Income from discontinued
 operations before
 income taxes        $1,065,787    $  133,610   $   54,858

Income tax provision,
 net of tax benefits
 from utilization of
 loss carryforwa     $     -       $     -      $   16,480

Net (loss) income
 from discontinued
 operations         $1,065,787     $  133,610   $   38,378

            VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 4.   MARKETABLE SECURITIES
At October 31, 2000 and 1999, marketable equity securities held for
current uses are classified as current assets.  Accumulated net
unrealized losses on marketable equity securities are charged to
Other Comprehensive Income.

Marketable securities at October 31, 2000 and 1999 were as follows:

                       2000                     1999
            ------------------------  ---------------------------
            Market         Unrealized Market          Unrealized
            Value   Cost     Loss     Value    Cost      Gain
            ------ ------- ---------  ------- ------- ---------
Equity
securities $336,697 $476,507$(139,810) $211,058 $206,380 $4,678

No marketable securities were sold during the years ended October
31, 2000 and 1999.

NOTE 5.   ACCOUNTS RECEIVABLE

Accounts receivable consists primarily of trade receivables from
the lumber and wood composite sales. These receivables are
collected in Canadian currency and are subject to fluctuations in
the exchange rate.  The Company does not use any hedging
instruments (derivatives) and treats such fluctuations as an SFAS
No. 52 issue.

NOTE 6.   INVENTORIES

Inventories at October 31, 2000 and 1999 are summarized as follows:

                                      2000              1999
                                     ------            ------

Finished products                $ 17,846,448       $ 6,952,896
Raw materials and
 work-in-process                      241,293              -
                                  -----------         ---------
                                 $ 18,087,741       $ 6,952,896
                                  ===========        ==========









            VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7.   INVESTMENTS IN AFFILIATED COMPANIES

Investments in affiliated companies at October 31, 1999 consisted
of:

a) Forest Hill Capital Corporation                $   468,248
b) Virilite Neutracutical Corporation                  68,746
c) 660407 Alberta, Ltd.                                38,000
                                                    ---------
                                                      574,994
   Less: Provision for losses                     (   574,994)
                                                    ---------
                                             $             -
                                                    =========

At October 31, 1998 the Company had a 28% interest in Forest Hill
Capital Corporation ( FHCC ), a company that operated a chain of
retail optical stores throughout Canada.  The Company had been
accounting for its investment by the equity method of accounting.
At February 28, 1997, the Company adjusted its investment in Forest
Hill Capital Corporation to market based on the trading prices of
the stock on the Canadian Exchange.  After FHCC closed all its
stores, the investment in FHCC was written off due to the
uncertainty regarding the ultimate recovery of the investment.

Due to the uncertainty regarding the ultimate recovery of the
Company's investments in affiliated companies, on October 31 1998,
the Company established a loss reserve of $571,000 for these
investments.

NOTE 8. PROPERTY, PLANT AND EQUIPMENT

The Company s property, plant and equipment at October 31, 2000 and
1999 consist of the following:

                                   2000                 1999
                                  ------               ------
Plant and equipment            $ 2,300,247        $ 1,295,636
Building and improvements          242,263               -
Computers                          165,760             47,057
Vehicles                           223,275             30,972
Leasehold improvements             469,539             99,259
                                 ---------          ---------
                                 3,401,084          1,472,924
Less accumulated depreciation      475,857            217,152
                                 ---------          ---------
      Total                    $ 2,925,227        $ 1,255,772
                                ==========         ==========


            VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Depreciation expense for the years ended October 31, 2000, 1999 and
1998 amounted to $369,827, $213,117 and $52,979, respectively.
Depreciation expense includes the amortization of capital leases.
During the quarter ending January 31, 1999, the Company wrote-off
the net carrying value of restaurant fixed assets totaling $24,711.

Included in property, plant and equipment are the following assets
held under capital leases:

                                  2000              1999
                                 ------            ------
Plant and equipment         $       -        $    483,325
Less accumulated
 amortization                       -              96,665
                              ---------        ----------
      Total                 $       -        $    386,660
                              =========        ==========

NOTE 9.   COSTS IN EXCESS OF NET ASSETS ACQUIRED (GOODWILL)

It is the Company s policy, as discussed in Note 1, to evaluate
periodically the recoverability of goodwill.  On June 1, 1995, the
Company entered into a licensing agreement effective as of June 1,
1995, whereby it licensed the operations of its restaurant
facilities to an independent operator who is involved as a joint
venture partner.  Under the terms of the agreement the Company was
to receive a monthly license fee ranging from 3% to 6% based upon
monthly revenues of the restaurants ranging from $100,000 to over
$200,000.  The licensing agreement was for an initial term of five
years, with an option on the part of the licensee to renew the
agreement for an additional five years.  As a result of this change
in method of utilizing its restaurant facilities, the Company
re-evaluated the recoverability of goodwill.  Such goodwill was
evaluated based upon management's estimate of the amount of
licensing fees reasonably expected to be received over the initial
term of the licensing agreement.  This agreement was renewed on
March 1, 1997 and was to expire on March 1, 2002.  The licensing
agreement was sold to an unrelated third party on June 13, 2000.

On February 25, 1999, the Company through a wholly owned subsidiary
purchased the assets and operations of Ziner Lumber (See Note 2).
The resulting acquisition created goodwill in the amount of
$5,355,837 and is being amortized over 20 years.

On January 19, 2000, Network completed the acquisition of Harron
(See Note 2).  The resulting acquisition created goodwill in the
amount of approximately $1,132,000 and is being amortized over 20
years.

             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.   COSTS IN EXCESS OF NET ASSETS ACQUIRED (GOODWILL)
(CONTINUED)

On June 30, 2000, 1392298 Ontario Limited, a wholly owned
subsidiary of Network completed the acquisition of Cutler (See Note
2).  The resulting acquisition created goodwill in the amount of
approximately $3,694,000 and is being amortized over 20 years.

On June 30, 2000, 1392298 Ontario Limited, a wholly owned
subsidiary of Network completed the acquisition of Seabright (See
Note 2).  The resulting acquisition created goodwill in the amount
of approximately $1,056,000 and is being amortized over 20 years.

Amortization of goodwill was $343,080, $387,484 and $170,000 for
the years ended October 31, 2000, 1999 and 1998, respectively.

NOTE 10.  NOTES RECEIVABLE

Notes receivable includes advances made to an unrelated Ontario,
Corporation, 1299126 Ontario, Inc. 1299126 Ontario, Inc., owned by
an unrelated third party developer, is a holding company created
for the purpose of accepting cash advances made by the Company in
connection with a tentative arrangement for the construction and
development of five residential real estate projects.  The cash
advances, which approximated $ 1,581,000 including accrued interest
at October 31, 2000 are included in notes receivable in the
accompanying balance sheet at October 31, 2000.  These advances
bear interest at a rate of 12%, and are collateralized by a
security agreement dated September 1, 2000.  In connection with
making the advances, and as part of the security agreement, the
Company has required 1299126 Ontario, Inc. to secure any present
and future advances whether direct or indirect, primary or
secondary, fixed or contingent, sole, joint or several, now
existing or arising thereafter, including any additional monies
advanced.  Since 1299126 Ontario, Inc. is owned by the developer
and the accounting for the real estate projects are maintained by
the project, the Company, as further security for the advances,
required that the president of 1299126 Ontario, Inc. and the
individual projects enter into a trust agreement for the benefit of
1299126 Ontario, Inc.  Such trust agreement specifies that the
trustee, in this case the individual projects which have been
incorporated pursuant to the laws of the Province of Ontario, agree
that it will not transfer, sell, assign, convey, encumber or
otherwise deal with the subject projects in any manner unless and
until it has received the consent of 1299126 Ontario, Inc.  The
Company also had mortgage receivables on various properties,
approximating $375,000 that are now part of the notes receivable
balance, that have expired but have not been formally discharged.



             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.  NOTES RECEIVABLE

Sales of lumber and related materials to this developer
approximated $300,000 and $86,000, during the years ended October
31, 2000 and 1999, respectively, and are included in accounts
receivable.

NOTE 11.  DEPOSITS AND OTHER ASSETS

At October 31, 2000 and 1999 deposits and other assets consisted of
the following:
                                  2000           1999
                                 ------         ------
Deferred financing costs      $ 959,065      $ 195,996
Deposits                           -           102,152
                               --------       --------
                                959,065        298,148
Accumulated amortization       (190,964)       (43,585)
                               --------       --------
                              $ 768,101      $ 254,563
                               ========       ========

NOTE 12.  NOTE PAYABLE, TO FINANCIAL INSTITUTION

Note payable to financial institution consists of a revolving
credit facility that provides for a maximum line of credit of
$50,000,000 Canadian (or approximately $32,760,000 US at October
31, 2000), which includes both direct loans and letters of credit.

Availability under the facility is based on a formula of eligible
accounts receivable and inventory.  Direct borrowings bear interest
at the Canadian prime rate plus 1.25% (8.75% at October 31, 2000).
Borrowings under the terms of the facility are collateralized by
all the current and future assets of Network and its subsidiaries
and a $75,000,000 Canadian (approximately $49,140,000 US) debenture
by Network and each of its subsidiaries.  The facility is
guaranteed by the company and expires on July 15, 2003.

The facility contains financial covenants, including but not
limited to, tangible net worth, working capital ratio and fixed
charge coverage ratio.  Network is required to pay a fee of .25%
per annum on the unused portion of the total facility and certain
other administrative costs.

The Company is currently in default of certain provisions under
their revoilving credit facility. The Company has entered into
negotiations ith the financial institution in an effort to
restructure the terms of the financial covenants or the credit
facility. The Company received the confirmation from the financial
institution which waived the events of default based on the
financial statements for fiscal year ended October 31, 2000, and os
           VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.  NOTE PAYABLE, TO FINANCIAL INSTITUTION (CONTINUED)

of November 30, and December 31, 2000, and indicated that they have
agreed to enter into good faith negotiations, in an effort to reset
the financial covenants which will be acceptable to both parties.
At this time, these negotiations have not been finalized and the
Company has not cured the events of default, which raises
substantial doubt about its ability to continue as a going concern.
In the opinion of management, the Company will prevail in resolving
the events of default and restructuring the terms of the credit
facility.At this time, the Company has not cured the events of
default nor have they finalized renegotiating the terms and
conditions of their credit facility, which raises substantial doubt
about its ability to continue as a going concern.

At October 31, 2000 letters of credit amounting to $393,000 were
outstanding.  At October 31, 2000, approximately $917,000 was
available under the terms of this facility.


NOTE 13.  NOTES PAYABLE AND ADVANCES FROM STOCKHOLDERS

Notes payable and advances from stockholders at October 31, 2000
and 1999 consist of:
                                    2000            1999
                                   ------          ------
Advances from stockholders    $    10,751      $   21,742
Notes payable to various
 stockholders; interest at
 12% in 1999, unsecured (a)           -           290,595
                                ---------        --------
                              $    10,751      $  312,337
                                =========        ========

(a) During the year ended October 31, 2000 the Company repaid these
notes plus accrued interest of approximately $423,000 from the
proceeds from the sale of the license agreements.














             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14.  LONG-TERM DEBT

Long-term debt at October 31, 2000, and 1999 consist of the
following:

                                      2000          1999
                                    -------       --------
Term loan from financial
institution, bears interest
at prime plus 2.25%.  monthly
payments of $150,000 (Canadian),
plus interest, matures June 30,
2001                            $ 5,463,104  $    300,781

Note payable to Ziner Lumber
(See Notes 2 and 6) bears
interest at 15%, monthly
payments of $16,667 (Canadian)
plus interest for 60 months,
collateralized by the assets
of Network                           502,301      658,312

Notes payable, stockholders             -         287,875

Various - with interest rates
ranging from 3.9% to 10.75% per
annum, payable in varying amounts
and expiring at various times
through October 2003, secured
by certain equipment                 30,689             -

Obligation under capital leases -
monthly payments of $20,381
(Canadian) to December 1, 2002,
collateralized by the related
equipment                               -          417,876
                                  ----------     ---------
                                   5,996,094     1,664,844
Less current portion               5,611,649       315,539
                                  ----------     ---------
Total long term debt             $   384,445   $ 1,349,305
                                  ==========     =========








             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14.  LONG-TERM DEBT (CONTINUED)

Annual maturities of long-term debt at October 31, 2000 and for
each of the succeeding five years are summarized as follows:

          Year Ending October 31:

           2001               $ 5,611,649
           2002                   139,828
           2003                   135,432
           2004                   109,185
           Total              $ 5,996,094

NOTE 15.  CONVERTIBLE DEBENTURES

In August and October 2000 the Company received the proceeds of
$2,000,000 by issuing two convertible debentures in the amount of
$1,000,000.  The debentures are payable two years from the date of
issuance or August 10, 2002 and October 11, 2002, respectively, and
bear interest at 10% per annum, payable quarterly.  The debentures
are convertible into common stock at the lower of $0.14 per share
or 85% of the average closing bid price of the stock for the five
lowest of the twenty two consecutive trading days immediately prior
to the trading day on which written notice of the exercise of the
conversion right is transmitted.  The conversion privilege cannot
be utilized prior to the date which is 90 days from when the SEC
registration statement becomes effective (which registers the
securities underlying the conversion feature).  The registration
has not become effective, therefore the value of the beneficial
interest conversion feature cannot be measured at October 31, 2000.




















             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15.  CONVERTIBLE DEBENTURES (CONTINUED)

In addition, warrants were issued to one debenture holder to
purchase 5,000,000 shares of common stock at $0.14 per share.  This
warrant expires two years from the issue date or October 10, 2002.
This debenture holder was also provided with a warrant to purchase
an additional $1,000,000, 10% debenture that includes warrants to
purchase 250,000 shares of common stock at $0.14 per share.  This
warrant to purchase an additional debenture expires 30 days after
the date the registration statement becomes effective.

In January 2001, the Company received proceeds of $450,000 from the
issuance of a convertible debenture.  The debenture is payable on
February 1, 2003 and bears interest at 10% per annum payable
quarterly.  The debenture is convertible into the Company's common
stock at the lower of $0.05 per share or 85% of the average closing
bid price of the stock for the five lowest of the twenty-two
consecutive trading days immediately preceding the trading day on
which written notice of the exercise of the conversion right is
transmitted.  The conversion privilege cannot be utilized prior to
the date on which the registration statement registering the
securities underlying the debentures is declared effective by the
SEC.  A registration statement with regard to this debenture and
the securities underlying it has not been filed with the SEC.  The
debt associated with this debenture has not been reflected in the
accompanying balance sheet as of October 31, 2000.


NOTE 16.  LEASE COMMITMENTS

The Company has operating leases covering trucks, buildings, and
the use of land.  These leases run from 24 to 60 months.  There are
no renewal options for these leases.  The lease for the building is
from a related party.

Future minimum lease payments under operating leases at October 31,
2000 are as follows:

               2001      $     909,127
               2002            839,965
               2003            826,659
               2004            704,682
               2005            461,931
                         $   3,742,364







             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.  RELATED PARTY TRANSACTIONS

The Company has a note payable to Capbanx Corporation of $132,231
and $323,481 at October 31, 2000 and 1999, respectively.  Capbanx
is related to a Director of the Company.  The note bears interest
at 15% and was due on December 15, 2000.  The note was repaid in
January 2001.

Network Forest Products Limited, a wholly-owned subsidiary of the
Company issued a note payable to John Ziner Lumber Limited, as part
of the purchase price of the acquisition.  At October 31, 2000 and
1999 the balance of this obligation was $502,301 and $658,312,
respectively.  The note bears interest at 15% and requires monthly
payments over a 60 month term.  Interest paid on this obligation
approximated $88,000 and $67,000 during the 2000 and 1999,
respectively.  Additionally, the Company leases a building from a
company that is owned by the Ziner family.

Acquisition costs of $196,000 in connection with the purchase of
Ziner Lumber were paid to a related party during 1999.  This
related party also received approximately $200,000 and $117,000 for
management fees during 2000 and 1999, respectively.

Rent paid to a company owned by certain officers of Network's
subsidiary totaled approximately $117,500 and -0- in 2000 and 1999,
respectively.

At October 31, 2000, 1999 and 1998, the Company had accrued
consulting fees in the amounts of $-0-, $-0- and $136,278,
respectively, due to Gemini Integrated Financial Services Corp.
which is an entity owned by the former President of the Company.

During 2000, the Company issued 50,000,000 common shares to various
related parties in connection with a consulting agreement entered
into in 1999 as part of the acquisition of Ziner.
















             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18.  INCOME TAXES

The income tax provision for operations in 2000 and 1999 consist of
the following:

                     2000             1999            1998
                   -------          -------         -------
Current:
Federal        $    25,813       $      -         $      -
State                 -                 -                -
Foreign             58,050           86,839              -
Loss
 carryforward         -                -            (16,480)
                ----------        ---------         -------
                    83,863           86,839         (16,480)
Deferred:
 Foreign          (35,211)           38,813            -
                ---------         ---------         -------
              $    48,652        $  125,652       $ (16,480)
                ==========        =========        ========

The Company s effective tax rate on income (loss) differs from the
statutory federal tax rate as follows:

                             2000         1999        1998
                            ------       ------      ------
Statutory federal
tax rate                     34.0%       34.0%       34.0%
State taxes, net of
federal benefit               3.6         3.6         3.6
Other net                     1.2        12.6          -
Loss carryforward        (   36.4)   (   37.6)   (   37.6)
                            -----      ------      ------
Effective tax rate            2.4%       12.6%          -%
                            =====      ======      ======
The tax effect of temporary differences that give rise to
significant portions of the deferred tax assets and liabilities at
October 31, 2000 and 1999 consisted of the following:

                                         2000          1999
                                       -------       -------
 Deferred tax assets (liabilities)
 Net operating loss carryfowards    $ 2,388,787  $ 3,400,000
 Other                                   (3,378)         -
 Property basis differences            (217,040)         -
                                     ----------   ----------
 Sub total                            2,168,369     3,400,000
 Less: Valuation allowane            (2,300,000)   (3,400,000)
                                     ----------    ----------
 Total net deferred tax liabilities $  (131,631)  $      -
                                     ==========    ==========
             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 18.  INCOME TAXES (CONTINUED)

At October 31, 2000 the Company had net operating loss carry
forwards for income tax purposes of approximately $6,700,000 that
expire at various years to 2011.

NOTE 19.  EARNINGS PER SHARE

Earnings per share for the years ended October 31, 2000, 1999 and
1998 were calculated as follows:

                       Income        Shares       Per-Share
For the Year Ended  (Numerator)   (Denominator)    Amount
 October 31, 2000

Income before effect
of preferred stock
 dividend           $ 1,960,566        -
Less: Preferred
stock dividend       (  247,088)       -
                    -----------
Basic EPS             1,713,478    158,048,006   $    0.01
                                                  ========
Income available to
common stockholders

Effects of Dilutive Securities
Warrants                 -          11,717,792
Convertible debentures   -          33,707,792
Convertible preferred
 stock                   -           1,999,500
                     ----------    -----------
Diluted EPS
Income available to
common stockholders
and assumed
conversions         $ 1,713,478   205,473,090     $    0.01
                     ==========   ===========      ========

                       Income        Shares       Per-Share
For the Year Ended  (Numerator)   (Denominator)    Amount
 October 31, 1999

Income before effect
of preferred stock
dividend            $   743,365          -
Less: Preferred
stock dividend      (   162,775)         -
                     ----------

             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19.  EARNINGS PER SHARE (CONTINUED)

Basic EPS               580,590    100,892,590    $    0.01

Income available to
common stockholders

Effects of Dilutive Securities
Warrants                  -         6,260,000
Convertible
preferred stock           -         1,999,500
                    ----------   ------------
Diluted EPS
Income available to
common stockholders
and assumed
conversions        $   580,590    109,152,590     $    0.01
                     =========   ============      ========

                       Income        Shares       Per-Share
For the Year Ended  (Numerator)   (Denominator)    Amount
 October 31, 1998


Loss before effect
of preferred stock
dividend           $(2,896,746)         -
Less: Preferred
stock dividend       (  75,000)         -
                    ----------     -----------
Basic EPS
Loss to common
stockholders       $(2,971,746)     63,030,642    $   (0.05)
                    ==========     ===========      =======

For the year ended October 31, 1998 the effects of common stock
equivalents were anti-dilutive and therefore have not been
presented.

NOTE 20.  COMMON STOCK, WARRANTS AND STOCK OPTIONS

Warrants Outstanding

In connection with consulting agreements entered into in February
1993 and February 1994, the Company issued warrants to purchase a
total of 250,000 shares of common stock at a price of $.75 per
share, exercisable until February 1998 and February 1999. The
warrants that were exercisable in February 1998 and 1999 expired.



             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20.  COMMON STOCK, WARRANTS AND STOCK OPTIONS (CONTINUED)

In addition, in connection with a bonus plan for the Company's
former president, the Company issued a warrant to purchase 50,000
shares of common stock at an exercise price of $.75 per share.  The
warrant, which was exercisable until February 1999, expired.

During the year ended February 28, 1995, the Company issued
warrants to purchase an aggregate of 910,000 shares of common stock
in connection with various loans made to the Company, including
140,000 shares to the Company's former president.  These warrants
are exercisable for a period of five years at an exercise price of
$0.1875 per share.

On February 23, 1995, the Company issued warrants to several groups
to purchase an aggregate of 5,350,000 shares of common stock,
exercisable for five years at an exercise price of $.25 per share:

     Service warrants                           3,750,000
     Service warrants to stockholder              500,000
     Directors' warrants                          500,000
     Employee warrants                            350,000
     Other warrants including 200,000 to a former
        president                                 250,000
                                                ---------
                                                5,350,000
                                                ---------
Stock Option Plan

On March 30, 1994, the Board of Directors adopted the 1994 Employee
Stock Option Plan, subject to shareholder approval.  A maximum of
1,000,000 shares of commons stock are reserved for award under this
plan.  The plan provides, among other things, that the exercise
price of an incentive stock option shall be at least 110% of the
fair market value at date of grant of granted to a 10% shareholder,
and 100% of the fair market value at date of grant to any other
person. No shares have been issued under the terms of this plan.


NOTE 21.  PREFERRED STOCK

On July 29, 1994, the stockholders approved an amendment to the
Articles of Incorporation that provides, among other things, that
the authorized capital stock is to consist of 20,000,000 shares of
preferred-series A stock having a par value of $.0001 per share and
180,000,000 shares of common stock having a par value of $.0001 per
share. The Board of Directors is authorized to provide for the
issuance of shares of preferred stock in series, and to establish,
from time to time, the number of shares to be issued in each series
and to determine and fix the designations, powers, preferences and
rights of the shares of each such series.
             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 21.  PREFERRED STOCK (CONTINUED)

The Company entered into a Preferred Stock Purchase as of December
30, 1993, which provides for the sale and issuance of 750,000
shares of Series A Preferred Stock for $750,000.  The Series A
Preferred Stock shall, among other things, be entitled to cash
dividends at the rate of $.10 per annum, which shall accrue and be
cumulative from the issue date and be payable quarterly, commencing
on September 30th 1994; shall be entitled to $1.00 per share plus
any accrued and unpaid dividends upon liquidation; may be called by
the Company, commencing one year from the issue date, at a
redemption price of $1.00 per share plus any accrued and unpaid
dividends; and commencing one year from issue date, each share may,
at the option of the holder, be converted into 2 2/3 shares of
common stock.

As of October 31, 2000 and 1999, dividends were in arrears on the
preferred stock amounting to approximately $112,000 and $57,000,
respectively.

NOTE 22.  LITIGATION

The Company was involved in a lawsuit filed in June 1994 in the
Circuit Court for Dade County, Florida in which the plaintiff
alleged that the Company's wholly-owned subsidiary, Cami Restaurant
Corp. and certain indirect wholly-owned subsidiary corporations of
the Company breached a certain agreement for and failed to make
payments on a promissory note given in connection with the purchase
of certain assets by Cami Restaurant Corp. in 1991.  The plaintiff
sought damages in excess of $4,600,000 interest and attorney's
fees, as well as an order declaring the purchase of assets void.
This case was settled in June 1997 for $75,000 and the transfer of
300,000 shares of restricted stock of the Company.  The 300,000
shares of restricted stock were cancelled in June of 1998 and were
reissued on November 27, 1998.

The Company was also involved in a claim for breach of lease
against Cami Restaurant Corporation and for breach of guarantee
against the Company. Cami Restaurant Corp. and the Company had
filed counterclaims, and the case was settled for $15,000 and
500,000 shares of stock in 1998.

The Company is subject to certain litigations, which arise, in the
ordinary course of business. In the opinion of management, the
outcome of these matters is not expected to have a material effect
on the Company's financial position or results of operations.




             VALUE HOLDINGS, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 23.  SUBSEQUENT EVENTS

Subsequent to year end, Network ceased selling to its United States
lumber export division.  Export sales to the United States
approximated $56,000,000 in 2000, or approximately 49% of the sales
reported in the accompanying statements of operations for the year
ended October 31, 2000.  This decision was due to eroding profit
margins on the type of lumber being exported to the United States.

Subsequent to year end the Company entered into a five year
employment agreement with the current President of the Company, as
defined.  The agreement stipulates an annual salary approximating
$150,000, plus a bonus incentive of up to 80% of the base salary as
determined by calculations and financial objectives described in
the employment agreement.  The agreement also granted the option to
purchase up to 10,000,000 common shares of the Company at an
exercise price of $0.08 per share for a period of five years from
the grant date.

NOTE 24.  PRIOR PERIOD ADJUSTMENT

The accompanying financial statements for the year ended October
31, 1999 have been restated to correct an error in connection with
a consulting agreement that was entered into in 1999.  The Company
did not recognize a liability incurred for services rendered.  The
effect of the restatement was to decrease net income for the year
ended October 31, 1999 by $250,000.  The tax effect of the
restatement was not calculated because it was not deemed
significant.