Gundaker/Jordan American Holdings Inc – ‘10KSB’ for 12/31/01

On:  Monday, 4/15/02   ·   For:  12/31/01   ·   Accession #:  1012709-2-565   ·   File #:  0-18974

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Jordan American Holdings                              30    142K 
 2: EX-23.1     Auditor's Consent                                      1      5K 

10KSB   —   Jordan American Holdings
Document Table of Contents

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 U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-KSB

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2001
 -------------------------------------------
Commission File Number 0-18974

Jordan American Holdings, Inc.
------------------------------

      Florida                                   65-0142815
      -------                                   ----------
(State or other jurisdiction                     (I.R.S. Employer 
of incorporation or organization)               Identification Number)

333 W. Vine Street, Suite 206                                       
 Lexington, KY                                   40507
 -------------                                   -----
(Address of principal executive offices)                  (Zip Code)        

Registrant's telephone number, including area code:  (859) 254-2240             

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE               
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:                     

 Common Stock, $.001 par value
 -----------------------------

Check  whether the  Company  (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 Company was required to file such
reports), and (2) has been subject to filing requirements for the past 90 days. 
Yes [X]  No [ ]                                                                 

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

The Company's revenues for fiscal year 2001 were $426,556.  The aggregate market
value of the voting and non-voting  common equity held by  non-affiliates of the
Company is $152,780 based on the closing price of $0.03 as of February 26, 2002,
multiplied by 5,092,683 shares of common stock.                                 

As of February 26, 2002, the Company had a total of 14,217,266  shares of common
stock outstanding.                                                              

--------------                                                                  
*Affiliates  for the  purpose  of this item  refer to the  officers,  directors,
and/or persons or firms owning 5% or more of the Company's common stock, both of
record and beneficially.                                                        

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 DOCUMENTS INCORPORATED BY REFERENCE

The following documents are incorporated by reference:                          
Portions of Proxy Statements for 2002 Annual Meeting - Part III       

 INDEX

PART 1                                                                      PAGE
Item 1.  Description of Business                                               2
Item 2.  Description of Properties                                             6
Item 3.  Legal Proceedings                                                     6
Item 4.  Submission of Matters to a Vote of Security Holders                   7

PART II                                                                         

Item 5.  Market for Common Equity and Related Stockholder Matters              7
Item 6.  Management's Discussion and Analysis                                  8
Item 7.  Financial Statements                                                 10
Item 8.  Changes In and Disagreements with Accountants on Accounting            
            and Financial Disclosure                                          10

PART III                                                                        

Item 9.  Directors, Executive Officers, Promoters and Control Persons;          
            Compliance with Section 16(a) of the Exchange Act                 10
Item 10. Executive Compensation                                               10
Item 11. Security Ownership of Certain Beneficial Owners and Management       10
Item 12. Certain Relationships and Related Transactions                       10
Item 13. Exhibits and Reports on Form 8-K                                     11

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PART I

ITEM 1. BUSINESS                                                                

General                                                                         
-------                                                                         

     Jordan  American  Holdings,  Inc.  ("JAHI"  or the  "Company"),  a  Florida
corporation   incorporated   in  1989,  is  a  diversified   company  with  four
wholly-owned  subsidiaries providing a range of financial products and services,
including   investment   advisory   services,   broker/dealer  and  mutual  fund
distribution  services,  mutual fund  administrative and transfer agent services
and tax and business services.  Investment advisory services are offered through
Equity Assets Management,  Inc. ("EAM"). IMPACT Financial Network, Inc. ("IFNI")
offers brokerage  services and mutual fund  distribution  services.  Mutual fund
administrative   and  transfer  agent   services  are  offered   through  IMPACT
Administrative  Services,  Inc. ("IASI".) IMPACT Tax & Business  Services,  Inc.
(`ITABS") offers a full range of accounting, tax and business services.         

Developments during the fiscal year 2001 within the investment advisory company,
the  broker/dealer  company,  the mutual fund servicing  company and the tax and
business   services   company  are  described  in  the  section  below  entitled
"Operations."                                                                   

W. Neal Jordan was removed as Chairman of the Board of Directors of the Company,
as President and as Chief Executive Officer and Chief Investment Officer on June
4, 2001 by a majority vote of the Board of Directors of the Company. Mr. Charles
R. Clark  succeeded  Mr.  Jordan as Chairman of the Board of Directors and Chief
Investment  Officer.  Mr. A.J.  Elko  succeeded  Mr.  Jordan as Chief  Executive
Officer and President.                                                          

During the fiscal year ended  December 31, 2001, the Company was not involved in
any  bankruptcy,  receivership  or  similar  proceedings  or any other  material
reclassifications, mergers or consolidations, and the Company did not acquire or
dispose of any material amount of assets during such year.                      

Operations                                                                      
----------                                                                      

     JAHI historically conducted its investment advisory business under the name
Equity Assets Management.  In 2000, JAHI formed EAM as a wholly-owned subsidiary
and moved its investment advisory business into EAM.                            

EAM is an  investment  advisory  firm  that  specializes  in the  management  of
accounts, the majority of which are held by semi-affluent individual clients and
billed on an incentive fee basis,  containing equity securities of United States
public companies.  EAM manages  investment  portfolios for individuals,  trusts,
corporate pension plans, other corporate accounts, foundations and mutual funds.
In 2001,  EAM planned,  with respect to its product  line,  to offer  additional
mutual fund  products,  including an insurance  series  developed for a variable
annuity product.  These additional products were developed but never distributed
primarily  due to the  removal of W. Neal  Jordan  from his  position  as Senior
Portfolio Manager for EAM.                                                      

     Incentive based advisory fees on assets under management for  semi-affluent
investors provide the largest portion of the Company's  revenues,  but have been
declining since 2000. The Company  believes that this trend may continue through
2002 and  beyond.  A  semi-affluent  investor  generally  has a total  net worth
greater than $1 million and less than $10 million. The assets of these and other
clients have recently  been  declining  primarily due to investment  performance
results achieved within the individual accounts. For the year ended December 31,
2001 no single client provided more than 5% of the                              

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Company's  consolidated  revenues.  Accordingly,  the loss of any single  client
would not have a  material  adverse  effect on the  Company's  total  investment
management business.                                                            

     The investment objective of the individually held portfolios is significant
capital  appreciation or growth.  EAM is compensated for its management of these
accounts through two primary methods. EAM receives a fixed advisory fee based on
the value of assets under  management or an incentive  based  advisory fee based
upon the account's annual performance results, or a combination of the two.     

     EAM  managed  180  individual  accounts  with assets  under  management  of
approximately  $19 million at December  31,  2001,  down from $38 million at the
prior  year-end.  Approximately  30% of the  assets  under  management  in these
accounts pay the fixed percentage of assets fee of approximately  1.9% annually.
Approximately 70% of the assets under management in these accounts are billed on
an incentive  fee basis,  whereby the Company  normally  receives 20% of the net
realized and unrealized gains,  including dividends and interest, in the account
following each year of management.                                              

     Exceptional  management  performance  results  in the  incentive  fee based
accounts may cause  substantial  revenues for the Company while poor performance
in  the  same  accounts  may  yield  little  or no  revenues  for  the  Company.
Additionally,  because  incentive  fee based  contracts  are billed on an annual
basis for each respective client, there may be a delay in billing revenue for as
long as eleven months from the time when actual account performance results were
achieved.  Thus,  performance  in  these  accounts  may or may not  benefit  the
revenues of the Company for nearly one year after such performance  results were
achieved,  depending on the billing cycle of respective  clients and the results
of  investments  held in the  portfolio  during the interim  period prior to the
calculation of the billing.                                                     

     The  Company  also  manages  the  Impact   Total  Return   Portfolio   (the
"Portfolio"),  a mutual fund with assets under management of approximately  $6.6
million at December 31, 2001. The Company receives a management fee of 1.25% per
annum  calculated on the Portfolio's  average daily net assets.  Of this amount,
the Company pays a sub-advisor  .60% per annum of the Portfolio's  average daily
net assets for selecting the securities for the Portfolio.                      

The Company operates a registered broker-dealer,  IMPACT Financial Network, Inc.
("IFNI"),  which is a wholly owned-subsidiary of the Company and a member of the
National  Association of Securities  Dealers,  Inc.  ("NASD") and the Securities
Investor Protection Corporation ("SIPC").                                       

     Approximately 90% of EAM's individually managed accounts maintain brokerage
accounts with IFNI for assets placed under EAM's management. IFNI is compensated
for  securities  transactions  on behalf of the  Company's  managed  accounts by
receipt of commissions for orders executed through Pershing & Co., a division of
Donaldson,  Lufkin,  & Jenrette,  a  securities  corporation.  Pershing & Co., a
member  of  SIPC,  acts  as  clearing  firm  and  custodian  and  processes  all
confirmations  and monthly  statements  for EAM clients who choose to hold their
accounts  with IFNI.  Clients  may decide to custody  their  accounts at another
brokerage institution of their own choosing.                                    

     IFNI also serves as the national  distributor  for the  Portfolio and other
Impact  Funds.  IFNI  receives  a fee from the  various  funds in  exchange  for
marketing and  distributing  the Funds. The fee varies according to the class of
shares  distributed.  It is used to pay for marketing and distribution  expenses
related to the mutual fund, including sales commissions.                        

     Management  believes  that IFNI will continue to be a source of revenue for
the Company primarily through the commissions earned on securities transactions.

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     The Company operates a mutual fund servicing company, Impact Administrative
Services, Inc. ("IASI"), which is a wholly owned subsidiary of the Company and a
registered  transfer  agent with the  Securities  and Exchange  Commission  (the
"SEC")  and  a  member  of  the  Investment  Company  Institute.  IASI  provides
administrative,  dividend  disbursement  and  transfer  agent  services  to  the
Portfolio.  In  2001,  the  Company  received  a fee of .35%  per  annum  of the
Portfolio's  average  daily  net  assets to pay for  costs  associated  with the
administration  of the  Portfolio.  The Company  believes that IASI may become a
potential  revenue source for the Company by providing similar services to other
funds and outside small mutual fund families.                                   

     The  Company  acquired  the assets of a tax  preparation  and tax  planning
services  company in late 2000  through  Impact Tax & Business  Services,  Inc.,
(ITABS) a wholly owned subsidiary of the Company formed in November 2000. ITABS,
at December  31, 2001  provided tax  planning  and tax  preparation  services to
approximately 181 individual clients,  55 individuals with sole  proprietorships
and 12 small  businesses.  The Company  believes  ITABS may continue to grow and
become a stable  revenue  source for the Company.  The Company is considering an
expansion of ITABS products and services as a move to provide a more  predictive
source of revenue and future  profits that are not subject to the same variables
that can effect the  Company's  historic  lines of business  that are based upon
performance-based fees.                                                         

     Total assets under  management  and  corporate  earnings may  substantially
increase or decrease due to stock market  conditions,  including  the onset of a
long-term declining, or bear market;  performance returns as influenced by EAM's
investment  advisory decisions;  expense and related  effectiveness of marketing
efforts;  and competition  from other investment  advisory  companies and mutual
funds. Other indirect  influences,  such as interest rate changes by the Federal
Reserve Board,  economic  conditions  such as high inflation  and/or  recession,
international  events,  acts of  terrorism,  and other  factors  may also affect
assets under management and corporate earnings.                                 

The Industry                                                                    
------------                                                                    

     Revenues in the investment  advisory  business are determined  primarily by
fees based on the value of assets under management and on investment performance
results. Therefore, the principal determinants of growth in the industry are the
growth of individual assets under management and achieving  positive  investment
performance results. In management's judgment, the major factors which influence
growth in the industry are: (1) changes in the market value of  securities;  (2)
net cash flow into or out of  existing  accounts;  (3) gains of new or losses of
existing accounts; and (4) the general stock market condition.                  

Competition                                                                     
-----------                                                                     

     EAM  competes to manage  investment  portfolios  for  individuals,  trusts,
corporate pension plans, other corporate accounts,  and foundations.  Management
believes that the most important factors affecting competition in the investment
advisory business are: (1) the abilities and reputations of investment advisors;
(2) the differences in the investment performance results achieved by investment
advisory firms; (3) the stability of a firm's workforce, especially of portfolio
managers;  (4) an effective  marketing force and  distribution  system;  and (5)
quality of client services.                                                     

     EAM has many competitors,  including other investment advisors,  investment
companies,  broker-dealers  and  financial  planners in  addition to  investment
alternatives offered by insurance companies,                                    

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banks, credit unions, securities dealers and other financial institutions.  Many
of these  institutions  possess  large sales  forces and  significant  financial
resources,  are able to engage in more extensive  marketing and advertising than
EAM and may offer accounts insured by the Federal Deposit Insurance Corporation.

Management believes the Company's long-term performance history for individually
managed  accounts,  the adverse  effect on EAM's  reputation  resulting from the
circumstances surrounding the litigation initiated by W. Neal Jordan against the
Company and the short-term and long-term market  conditions and projections will
substantially  hinder the Company's  ability to remain  competitive  within this
highly competitive  industry and hinder its ability to achieve long term success
in the Company's  historical  core business.  Therefore,  the Company intends to
consider a  restructuring  of EAM in 2002 (See Item 6,  "Liquidity  and  Capital
Resources").                                                                    

Regulation                                                                      
----------                                                                      

     EAM is  registered  with and  subject  to  regulation  by the SEC under the
Investment  Advisers Act of 1940 and,  where  applicable,  under state  advisory
laws. EAM is also subject to regulation by the SEC under the Investment  Company
Act of 1940.  IFNI is  registered  as a  broker-dealer  with the SEC  under  the
Securities  Exchange Act of 1934 (the  "Exchange  Act") and,  where  applicable,
under state  securities  laws,  and is  regulated by the SEC,  state  securities
administrators  and the NASD.  IASI is registered as a transfer  agent under the
Exchange Act and is regulated by the SEC.                                       

     By law,  investment  advisors and  broker-dealers  are  fiduciaries and are
required to serve their clients'  interests with undivided  loyalty.  There is a
potential conflict of interest because of the affiliation  between EAM and IFNI.
While EAM  believes  that its  existing  relationships  are in  compliance  with
applicable laws and regulations, because of this potential conflict of interest,
the SEC may closely examine these relationships.                                

     Many  aspects  of  the  financial  services  industry  involve  substantial
liability risks,  including  exposure under federal and state securities laws in
connection  with  the   distribution   of  securities  and  investment   advisor
activities.  Although  the  Company  currently  maintains  errors  and  omission
insurance   policies  insuring  against  this  risk,  such  insurance  does  not
necessarily protect the Company against loss in all events.                     

     There can be no assurance that any changes to existing laws, regulations or
rulings   promulgated  by  government  entities  having  jurisdiction  over  the
Company's investment advisory, broker-dealer, investment company and commodities
trading  business  will not have an  adverse  effect  upon the  business  of the
Company.                                                                        

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Employees                                                                       
---------                                                                       

     At March 1, 2002, the Company employed 8 full-time personnel, three of whom
are  executive  officers of the  Company.  The Company  utilizes the services of
independent  contractors  to  assist  the  employees  in  the  operation  of the
Company's business.                                                             

ITEM 2. PROPERTIES                                                              

     The Company  currently  maintains its headquarters at 333 West Vine Street,
Suite 206, Lexington, Kentucky. The Company also currently has satellite offices
in Pittsburgh, Pennsylvania and Steamboat Springs, Colorado. In a move to reduce
overhead and  consolidate  operations,  the Company has recently  sub-leased its
offices in the Boston,  Massachusetts  area and is  proceeding  to sub-lease its
Lexington,  Kentucky  offices  and  move  its  headquarters  to the  Pittsburgh,
Pennsylvania   area.   All  current   properties  are  leased  for  a  total  of
approximately  $5,200 per month.  All  properties  currently  under a  sub-lease
agreement are sub-leased for a total of approximately $1,185 per month.         

ITEM 3. LEGAL PROCEEDINGS                                                       

     On June 27, 2001, W. Neal Jordan initiated  litigation  against the Company
and Messrs.  A. J. Elko and Charles R. Clark in the United States District Court
for the Eastern  District of  Kentucky.  On October 2, 2001 the  District  Court
issued a preliminary  injunction to preclude,  in connection  with the Company's
Annual  Meeting of  Shareholders  scheduled  to be held on October 4, 2001,  the
counting of the 3,100,000  shares of the Company's common stock issued on August
6, 2001, to the Kirkland S. & Rena B. Lamb  Foundation in exchange for 1,500,000
shares of the Company's  outstanding  preferred  stock. The Court denied without
prejudice  Mr.  Jordan's  motion for a  preliminary  injunction  to prevent  the
Company from issuing any additional  shares of the Company's  common stock.  The
Court also denied the Company's motion to dismiss the litigation.               

     On October 3, 2001, the Company  appealed the District  Court's issuance of
the  preliminary  injunction to the United States Court of Appeals for the Sixth
Circuit. On October 4, 2001, the Company filed an emergency motion for a stay of
The District Court's preliminary injunction. That same day, a judge of the Court
of Appeals issued an order enjoining the parties from holding any  shareholder's
meeting or conducting any shareholder's vote pending  consideration by a regular
three-judge motions panel of the Preliminary  Injunction entered by the District
Court. On October 25, 2001, the Court of Appeals granted the Company's motion to
expedite the appeal.  On October 26, 2001, a  three-judge  panel of the Court of
Appeals entered an order  dissolving the temporary stay of the District  Court's
preliminary  injunction  granted on  October  4, 2001 and  denied the  Company's
motion for a stay of enforcement of the District Court's preliminary  injunction
while the appeal is pending.  On February 22, 2002,  the District Court affirmed
its order of January 25, 2002, denying all pending motions,  pending a ruling by
the Court of Appeals. The appellate court has not scheduled a hearing date as of
the date of filing this document. The management of the Company does not believe
the claims to be  meritorious  and does not expect the resolution of this matter
to have a material adverse effect on the Company's operations.                  

In  connection  with a late 1997  examination  of the  Company,  the SEC  raised
certain issues regarding  possible  violations of the federal securities laws in
connection  with the  private  placement  of  debentures  of  Boston  Restaurant
Associates,  Inc.  Management  of the Company does not expect the  resolution of
this  matter to have any  material  adverse  effect on the  Company's  financial
condition, results of operations or business.                                   

     Other  than the  foregoing,  the  Company  is not a party  to any  material
litigation,   and  management  has  no  knowledge  of  any  threatened  material
litigation against the Company.                                                 

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

     During the third  quarter of the 2001 fiscal  year,  the Company and Mr. W.
Neal Jordan  submitted  solicitation for proxies to the shareholders to vote for
competing slates of Board of Director  nominees,  and certain other matters,  at
the Company's  Annual  Meeting of  Shareholder's  scheduled for October 4, 2001.
Because of the initial stay granted by the appellate court, as described in Item
3 above, the Annual Shareholder's  Meeting was not held on October 4th, 2001. As
required by  applicable  Florida  corporate  law,  the  Company  will call a new
shareholder's  meeting and will set a new record date for that  meeting.  During
the period covered by this report,  no other matters were submitted to a vote of
security holders through the solicitation of proxies or otherwise.              

 PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                

Market for Common Stock                                                         
-----------------------                                                         

     The Company's common stock currently trades on the OTC Bulletin Board under
the symbol  "JAHI." The following are the high and low sales prices for JAHI for
the two-year  period ended December 31, 2001. Such prices may represent high and
low bid  quotations or prices  between  dealers in securities and do not include
retail markup, markdown, or commissions and may not necessarily represent actual
transactions.                                                                   

Year Ended December 31, 2000         High            Low                        
---------------------------------------------------------                       
First Quarter                  $0.42           $0.20                  
Second Quarter                 $0.38           $0.13                  
Third Quarter                  $0.29           $0.15                  
Fourth Quarter                 $0.32           $0.13                  

Year Ended December 31, 2001         High            Low                        
---------------------------------------------------------                       
First Quarter                  $0.18           $0.05                  
Second Quarter                 $0.10           $0.05                  
Third Quarter                  $0.15           $0.05                  
Fourth Quarter                 $0.11           $0.05                  

     On February 26, 2002,  the closing price of the Company's  common stock was
$0.03.  As of February 26, 2002,  approximately  1,015,000  shares of its common
stock were held in accounts of EAM clients,  which represented  approximately 7%
of the  Company's  outstanding  shares of common  stock as of December 31, 2001.
Wallace Neal Jordan owned approximately 31% of the Company's  outstanding shares
of common stock at December 31, 2001.                                           

Dividends                                                                       
---------                                                                       

Common                                                                          

     The Company has not paid or declared  cash  dividends  on its common  stock
since  inception and does not  anticipate  paying  dividends in the  foreseeable
future.  At December 31, 2001,  the Company's  policy was to retain all earnings
for application in its business. Payment of future cash                         

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dividends is at the  discretion  of the Board of Directors  and will depend upon
earnings,  financial  requirements  of the Company and other such factors as the
Board of Directors may deem relevant.                                           

Preferred                                                                       

     From February 1993 until June 30, 1998, the Company made  semi-annual  cash
dividend payments on its cumulative  convertible non-voting preferred stock at a
rate of 8% per annum.  The  Company did not make any  dividend  payments on this
stock in 1999 and 2000.  On  December  29,  2000,  the  company  entered  into a
preferred  stock exchange  agreement (the  "Agreement")  with its sole preferred
shareholder  (the  "Shareholder").  The  Shareholder  was the owner of 3,000,000
shares of the Company's 8% Convertible  Redeemable  Cumulative  Preferred  Stock
(the "Outstanding  Preferred Stock"). The Company was in arrears with respect to
the payment of dividends on the Outstanding  Preferred  Stock,  which arrearages
totaled $600,000 as of December 31, 2000 (the "Dividend Arrearage").            

     The Agreement  provided that the Company declare and pay a cash dividend of
$100,000 on the Outstanding  Preferred Stock and exchange  3,500,000 shares of a
new 2000  Convertible  Preferred  Stock  (the  "New  Preferred  Stock")  for the
3,000,000  shares of the  Outstanding  Preferred  Stock and  cancellation of the
$500,000  balance  of  the  Dividend  Arrearage.  The  New  Preferred  Stock  is
convertible  into JAHI common stock at the rate of one share of common stock for
each  $3.50  of the face  amount  of the New  Preferred  Stock  and will  have a
dividend  rate of 3% for each of the calendar  years 2001 through  2003,  4% for
calendar year 2004, 5% for calendar year 2005, 6% for calendar year 2006, 7% for
calendar year 2007,  and 8% for calendar year 2008 and  thereafter.  The Company
relied upon the  exemption  from  registration  contained in Section 4(2) of the
Securities Act of 1933, as amended, for the issuance of the New Preferred Stock.

Shareholders                                                                    
------------                                                                    

     At December  31,  2001,  there were  14,217,266  outstanding  shares of the
Company's common stock and 252 shareholders of record.                          

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS                                    

Safe Harbor for Forward-Looking Statements                                      
------------------------------------------                                      

     Information  found in this report  contains  forward-looking  implications,
which may differ  materially  from actual  results due to the  success,  or lack
thereof,  of JAHI's  management  decisions,  marketing and sales  effectiveness,
investment decisions, and the management of clients' stock portfolios and pooled
investments as influenced by market  conditions,  Federal  Reserve Board policy,
economic trends, political developments,  domestic and international events, and
other factors.  There can be no guarantee that any forward-looking  implications
discussed  and/or  referenced  in this report will have any impact,  positive or
negative, upon the earnings, value and/or operations of the Company.            

Results of Operations                                                           
---------------------                                                           

     Net loss for 2001 was  $1,493,496  or $0.14  per  common  share  and  share
equivalent  compared to a net loss of $4,013 or $0.02 per common share and share
equivalent  for  2000.  The  increase  in net loss was  primarily  caused by the
decrease in investment advisory fees during 2001.                               

                                                                               8

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     Revenues from investment  advisory fees for 2001 totaled $247,562  compared
to $2,753,348  for 2000, a decrease of 91%.  Realized  losses on trading  equity
securities for 2001 were $250,914  compared to realized losses on trading equity
securities of $283,407 for 2000.                                                

     Commission revenues increased for 2001 to $351,138, as compared to $241,679
for 2000, an increase of  approximately  45%. This increase was primarily due to
an increase in the volume of securities  transactions for client accounts by the
Company based on its investment strategy, market conditions and other factors.  

     Selling,  general, and administrative  ("SG&A") expenses of $2,091,690 were
incurred  during  2001,  compared to SG&A  expenses of  $2,221,318  for 2000,  a
decrease of approximately 6%. The decrease in SG&A expenses stems primarily from
a decrease in selling expenses related to fees paid to investment advisory sales
representatives.                                                                

     Total other income (loss) was $171,638 for 2001, compared to ($467,815) for
2000.  The increase in other income can be primarily  attributed  to  unrealized
gains on trading  equity  securities of $69,958 in 2001,  compared to unrealized
losses of $619,943 in 2000.                                                     

Liquidity and Capital Resources                                                 
-------------------------------                                                 

     At December 31, 2001, the Company had cash and cash  equivalents of $91,984
versus  $1,029,173  at December 31, 2000.  This decrease is primarily due to the
decrease in net cash provided by operating activities.                          

     Marketable  securities  were valued at $49,298 at  December  31,  2001,  as
compared to $328,609 at December 31, 2000, a decrease of approximately  85%. The
decrease in marketable  securities can be primarily  attributed to the sale of a
majority of the securities owned at December 31, 2000 in order to meet operating
expenses in 2001.                                                               

     Net investment  advisory fees receivable were $16,394 at December 31, 2001,
as compared to $195,253 at December 31, 2000, a decrease of  approximately  92%.
This decrease can be primarily attributed to significantly lower incentive-based
billings in 2001 as compared to 2000.                                           

     Accounts  payable and accrued  expenses were $146,080 at December 31, 2001,
as compared to $195,359 at December 31, 2000, a decrease of  approximately  25%.
The  decrease  in  accounts  payable  and  accrued  expenses  can  be  primarily
attributed  to lower  accrued  expenses for fees due  investment  advisor  sales
representatives.  Accruals  are based upon actual  expenses  incurred as well as
unbilled expenses.                                                              

     Net cash used in  operating  activities  for fiscal year 2001 was  $911,441
compared to net cash  provided by  operations of $834,502 for the same period in
2000.  This change was due primarily to the net loss for the year ended December
31, 2001.                                                                       

     Net cash used in  investing  activities  for fiscal  year 2001 was  $60,248
compared to $286,086 for 2000.  This change was due primarily to the issuance of
a note receivable related to the Company's  investment in a start-up business as
an "angel" investor in 2000.                                                    

     Net cash provided by financing  activities for fiscal year 2001 was $34,500
compared to net cash used in  financing  activities  of  $100,000 in 2000.  This
change was due primarily the exercising of stock options during 2001.           

At  December  31,  2001,  the  Company  had  $141,282  in  cash  and  marketable
securities.                                                                     

                                                                               9

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Negative  stock market trends have impaired the Company's  ability to gather new
assets into the individually managed accounts.  Negative investment  performance
within the individually  managed accounts has impaired the Company's  ability to
earn performance-based  revenues.  Because of these negative trends, the Company
may not generate  sufficient revenues to continue current operations through the
next twelve months.  Management is currently  considering the sale of the Boston
Restaurant   Debenture,   is  considering  a  restructuring   of  Equity  Assets
Management,  Inc. and/or may seek additional  capital through the sale of equity
to meet the cash requirements needed to sustain current operations over the next
few months.  If the Company  cannot raise  additional  capital,  sell the Boston
Restaurant  Debenture or restructure Equity Assets Management,  Inc. in the near
future,  the  Company  will need to cease  operations  in its present  form.  No
assurances can be given that management's efforts will be successful.           

ITEM 7. FINANCIAL STATEMENTS                                                    

     Financial  statements  contained in this report  reflect no change from the
preceding  year in any  accounting  principles  or practices or in the method of
application of those  principles or practices.  Information with respect to this
item is contained in the consolidated  financial statements beginning on page 13
of this report. Such information is incorporated herein by reference.           

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

None                                                                  

PART III                                                                        

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

     The response to this item will be included in a definitive  proxy statement
filed within 120 days after the end of the Company's fiscal year, which response
is incorporated herein by reference.                                            

ITEM 10. EXECUTIVE COMPENSATION                                                 

     The response to this item will be included in a definitive  proxy statement
filed within 120 days after the end of the Company's fiscal year, which response
is incorporated herein by reference.                                            

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

     The response to this item will be included in a definitive  proxy statement
filed within 120 days after the end of the Company's fiscal year, which response
is incorporated herein by reference.                                            

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

     The response to this item will be included in a definitive  proxy statement
filed within 120 days after the end of the Company's fiscal year, which response
is incorporated herein by reference.                                            

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                       

(a)  Exhibits: See Exhibit Index.                                               

(b)  Reports on Form 8-K: None                                                  

                                                                              10

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 EXHIBIT INDEX

Exhibit   Description                                                       Page
Number                                                                          

 3.1      Articles of Incorporation, as amended                              (1)
 3.2      Bylaws, as amended                                                 (2)
 4.1      Specimen Certificate of Common Stock                               (2)
 4.2      Specimen Warrant Certificate                                       (2)
 4.3      Form of Warrant Agreement, as amended                              (2)
 4.4      Form of IPO Underwriter's Warrant                                  (2)
4.5      Specimen Certificate of 2000 Variable Rate                           
          Convertible Cumulative Preferred Stock                             (1)
10.1      Employment Agreement between the Company and                          
          Wallace Neal Jordan                                                (3)
10.2      Non-Competition Agreement between the Company                         
          and Wallace Neal Jordan                                            (3)
21        Subsidiaries of the Company                                        (1)
23.1      Spicer Jeffries & Co., Consent                                     (1)
(1)  Filed herewith.                                                            
(2)  Incorporated  herein from certain  exhibits to the  Company's  Registration
     Statement  on Form S-1,  File No.  33-31324,  as declared  effective by the
     Securities  and Exchange  Commission on June 5, 1990.  Incorporated  herein
     from certain  exhibits to the  Company's  Current  Report on Form 8-K dated
August 15, 1991.                                                      

                                                                              11

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SIGNATURES

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

      JORDAN AMERICAN HOLDINGS, INC.
    (Registrant)

Dated, 2002                 By: /s/ A. J. Elko                                  
               ---------------------------------
   A. J. Elko,
                                    President, Chief Executive Officer, Director

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

Dated, 2002                 By: /s/ A. J. Elko                                  
               ---------------------------------
   A. J. Elko,
                                    President, Chief Executive Officer, Director

Dated, 2002                 By: /s/ Charles R. Clark                            
               ---------------------------------
         Charles R. Clark,
                           Chairman of the Board of Directors,
                Chief Investment Officer

Dated, 2002                 By: /s/ Emmett A. Pais, CPA                         
               ---------------------------------
       Emmett A. Pais,
                           Chief Financial Officer, Secretary,
 Treasurer

Dated, 2001                 By: /s/ Gerald L. Bowyer                            
               ---------------------------------
         Gerald L. Bowyer,
Director

Dated, 2001                 By: /s/ Richard Williams                            
               ---------------------------------
         Richard Williams,
Director

                                                                              12

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INDEPENDENT AUDITORS' REPORT                                                    

To the Board of Directors                                                       
Jordan American Holdings, Inc. and Subsidiaries                                 

We have audited the accompanying  consolidated balance sheets of Jordan American
Holdings,  Inc.  and  Subsidiaries  as of December  31,  2001 and 2000,  and the
related consolidated statements of operations,  changes in stockholders' equity,
and cash flows for the years then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.                      

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

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the financial  position of Jordan  American
Holdings,  Inc.  and  Subsidiaries  as of December  31,  2001 and 2000,  and the
results of their  operations  and their cash flows for the years then ended,  in
conformity with accounting principles generally accepted in the United States of
America.                                                                        

The accompanying  consolidated  financial statements have been prepared assuming
the Company  will  continue as a going  concern.  As  discussed in Note 9 to the
consolidated  financial  statements,  the Company has suffered  recurring losses
from  operations  that raise  substantial  doubt about the Company's  ability to
continue  as a going  concern.  Management's  plans  in  this  regard  are  also
discussed in Note 9.                                                            

                          /s/ SPICER, JEFFRIES & CO.

Denver, Colorado                                                                
March 1, 2002                                                                   

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

 CONSOLIDATED BALANCE SHEETS
 ===========================

                                                      December 31,
           ASSETS                                     2001          2000
           ------                                     ----          ----

ASSETS:                                                                         
 Cash and cash equivalents                           $    91 984   $ 1 029 173
 Marketable securities                                    49 298       328 609
Investment advisory fees receivable, net of                                 
allowance for doubtful accounts of $37,113                            
    and $27,820                                           16 394       195 253
 Deposit with clearing broker                             25 000        25 000
Other receivables, net of allowance for doubtful                            
    accounts of $127,177                                  55 291        73 548
 Other assets                                             83 501        46 051
Intangible assets, net of accumulated                                       
    amortization of $8,258 and $939 (Note 5)              86 359        83 564
Property, equipment and leasehold improvements,                             
at cost net of accumulated amortization and                           
    deprecation of $217,924 and $169,110                 124 689       110 148
 Receivable from officer (Note 5)                         22 310        61 697
 Notes receivable (Note 3)                               500 000       650 000
                                                     -----------   -----------

       TOTAL ASSETS                                  $ 1 054 826   $ 2 603 043
                                                     ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY                                  
------------------------------------                                  

LIABILITIES:                                                                    
 Accounts payable and accrued expenses               $   146 080   $   195 359
 Payable to officer (Note 5)                                  --        26 166
 Deferred investment advisory fees                        13 249        27 025
                                                     -----------   -----------
       TOTAL LIABILITIES                                 159 329       248 550
                                                     -----------   -----------

COMMITMENTS AND CONTINGENCIES (Notes 8 and 9)                                   

STOCKHOLDERS' EQUITY (Note 4):                                                  
Variable rate, cumulative, convertible,                                     
non-voting preferred stock, $0.01 par value,                          
$1.00 liquidation value, authorized 5,000,000                         
shares; issued and outstanding 2,000,000 and                          
    3,500,000 shares, respectively                        20 000        35 000
Common stock, $0.001 par value, authorized                                  
20,000,000 shares; issued and outstanding                             
14,217,266 and 10,421,266 shares,                                     
    respectively                                          14 217        10 421
 Additional paid-in capital                            4 463 657     4 417 953
  Deficit                                              (3 602 377)   (2 108 881)
                                                     -----------   -----------
       TOTAL STOCKHOLDERS' EQUITY                        895 497     2 354 493
                                                     -----------   -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $ 1 054 826   $ 2 603 043
                                                     ===========   ===========

The accompanying notes are an integral part of these statements.                

                                                                              14

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF OPERATIONS
 =====================================

                                                     Year Ended December 31,
                                                      2001          2000
                                                      ----          ----

REVENUE:                                                                        
 Investment advisory fees                            $   247 562   $ 2 753 348
 Commission income                                       351 138       241 679
 Business services and other                              78 770        15 369
  Realized loss on trading securities                    (250 914)     (283 407)
                                                     -----------   -----------
       TOTAL REVENUE                                     426 556     2 726 989
                                                     -----------   -----------

OPERATING EXPENSES:                                                             
 Salaries and related expenses                           808 450       743 679
 Commission expense                                      140 700       519 292
 General and administrative                              199 599       245 368
 Professional fees                                       394 591       224 679
 Communications and data processing                       88 611        96 482
 Licenses, registrations and franchise taxes              45 654        59 658
 Insurance                                                51 630        74 731
 Travel and entertainment                                 59 361        72 673
 Marketing                                                63 919        62 577
 Clearing costs                                           94 264        54 992
 Depreciation and amortization                            56 133        37 044
 Occupancy and equipment                                  88 778        30 143
                                                     -----------   -----------
       TOTAL OPERATING EXPENSES                        2 091 690     2 221 318
                                                     -----------   -----------

       OPERATING INCOME (LOSS)                        (1 665 134)      505 671
                                                     -----------   -----------

OTHER INCOME (LOSS):                                                            
Change in unrealized gain (loss) on                                         
     trading securities                                    69 958      (619 943)
 Interest and dividends                                   78 550       149 477
 Other, net                                               23 130         2 651
                                                     -----------   -----------
        TOTAL OTHER INCOME (LOSS)                         171 638      (467 815)
                                                     -----------   -----------

NET INCOME (LOSS) BEFORE INCOME TAXES                  (1 493 496)       37 856 

  Provision for state income taxes (Note 6)                    --       (41 869)
                                                     -----------   -----------

NET LOSS                                              $(1 493 496)  $    (4 013)
                                                     ===========   ===========

Basic and diluted loss per common share               $      (.14)  $      (.02)
                                                     ===========   ===========

Basic and diluted weighted-average number of                                    
 common shares outstanding                            11 737 737    10 421 266
                                                     ===========   ===========

The accompanying notes are an integral part of these statements.                

                                                                              15

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
==========================================================

                                                        [Enlarge/Download Table]

                                       Preferred Stock              Common Stock         Additional                   Total     
                                      $ 0.01 Par Value           $ 0.001 Par Value        Paid-in                  Stockholders'
                                    Shares        Amount        Shares        Amount      Capital       Deficit       Equity    
                                    ------        ------        ------        ------      -------       -------       ------    
                                                                                                                                
BALANCES, DECEMBER 31, 1999        3 000 000   $    30 000    10 421 266   $    10 421  $ 4 502 853   $(2 104 868)  $ 2 438 406 

  Retirement of preferred stock   (3 000 000)      (30 000)           --            --   (2 970 000)           --    (3 000 000)

  Issuance of preferred stock      3 500 000        35 000            --            --    3 465 000            --     3 500 000 

  Dividends on preferred stock            --            --            --            --     (600 000)           --      (600 000)

  Issuance of stock options in                                                                                                  
     connection with asset                                                                                                      
     purchase                             --            --            --            --       20 100            --        20 100 

  Net loss                                --            --            --            --           --        (4 013)       (4 013)
                                 -----------   -----------   -----------   -----------  -----------   -----------   ----------- 

BALANCES, DECEMBER 31, 2000        3 500 000        35 000    10 421 266        10 421    4 417 953    (2 108 881)    2 354 493 

  Conversion of preferred stock   (1 500 000)      (15 000)    3 100 000         3 100       11 900            --            -- 

  Exercise of stock options               --            --       696 000           696       86 304            --        87 000 

  Dividends on preferred stock            --            --            --            --      (52 500)           --       (52 500)

  Net loss                                --            --            --            --           --    (1 493 496)   (1 493 496)
                                 -----------   -----------   -----------   -----------  -----------   -----------   ----------- 

BALANCES, DECEMBER 31, 2001        2 000 000   $    20 000    14 217 266   $    14 217  $ 4 463 657   $(3 602 377)  $   895 497 
                                 ===========   ===========   ===========   ===========  ===========   ===========   =========== 

The accompanying notes are an integral part of these statements.                

                                                                              16

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF CASH FLOWS
 =====================================
 INCREASE (DECREASE) IN CASH

                                                     Year Ended December 31,
                                                      2001          2000
                                                      ----          ----

CASH FLOWS FROM OPERATING ACTIVITIES:                                           

 Net loss                                            $(1 493 496)  $   (4 013)
Adjustments to reconcile net loss to net cash                               
provided by (used in) operating activities:                               
    Depreciation and amortization                         56 133        37 044
    Unrealized loss on note receivable                   150 000            --
    Decrease in receivable from clearing broker               --         5 435
    Decrease in other receivables                         18 257        11 915
Decrease in investment advisory fees                                  
       receivable                                        178 859       651 654
    Decrease in trading marketable securities            279 311       279 273
   (Increase) decrease in other assets                   (37 450)       56 284
Decrease in accounts payable and accrued                              
        expenses                                          (49 279)     (194 815)
     Decrease in deferred investment advisory fees        (13 776)       (8 275)
                                                     -----------   -----------

NET CASH PROVIDED BY (USED IN) OPERATING                        
          ACTIVITIES                                    (911 441)      834 502
                                                     -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:                                           

  Decrease (increase) in receivable from officer           39 387       (35 141)
 Increase (decrease) in payable to officer               (26 166)       26 166
  Capital expenditures, net                               (73 469)      (42 111)
  Issuance of note receivable                                  --      (150 000)
  Purchase of assets from related entity                       --       (85 000)
                                                     -----------   -----------

        NET CASH USED IN INVESTING ACTIVITIES             (60 248)     (286 086)
                                                     -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:                                           

 Exercise of stock options                                87 000            --
  Dividends on preferred stock                            (52 500)     (100 000)
                                                     -----------   -----------

NET CASH PROVIDED BY (USED IN) FINANCING                        
           ACTIVITIES                                      34 500      (100 000)
                                                     -----------   -----------

The accompanying notes are an integral part of these statements.                

                                                                              17

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF CASH FLOWS
 =====================================
 INCREASE (DECREASE) IN CASH
 (Continued)

                                                     Year Ended December 31,
                                                      2001          2000
                                                      ----          ----

NET INCREASE (DECREASE) IN CASH                                                 
 AND CASH EQUIVALENTS                                   (937 189)      448 416

CASH AND CASH EQUIVALENTS, beginning of year            1 029 173       580 757 
                                                     -----------   -----------

CASH AND CASH EQUIVALENTS, end of year                $    91 984   $ 1 029 173 
                                                     ===========   ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW                                            
INFORMATION:                                                                

    Interest paid                                    $     1 755   $     3 608
                                                     ===========   ===========
    Income taxes paid                                $        --   $    52 851
                                                     ===========   ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH                                             
INVESTING AND FINANCING ACTIVITIES:                                         

Issuance of preferred stock for retirement of                               
    preferred stock and dividends in arrears         $        --   $ 3 500 000
                                                     ===========   ===========
 Conversion of preferred stock into common stock     $    15 000   $        --
                                                     ===========   ===========

During the year ended December 31, 2000, the                                
Company purchased assets from a related                               
entity for cash and common stock options. In                          
connection with the acquisition, liabilities                          
were assumed as follows:                                              

Fair value of assets acquired                 $   107 288       
Cash paid                                         (85 000)      
Common stock options issued                       (20 100)      
                                       -----------

Liabilities assumed                        $     2 188    
                                       ===========

The accompanying notes are an integral part of these statements.                

                                                                              18

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES            

ORGANIZATION                                                                    
------------                                                                    

Jordan  American  Holdings,   Inc.  and  Subsidiaries   (JAHI/the  Company)  was
incorporated in Florida in May 1989. JAHI has conducted its investment  advisory
business under the name of Equity Assets Management. In 2001, JAHI announced the
formation of a wholly owned  subsidiary  named Equity  Assets  Management,  Inc.
(EAM) and moved its investment  advisory business into that entity. EAM provides
investment advisory and portfolio  management services to individual  investors,
pooled accounts and its mutual fund with its customers located  substantially in
the  United  States.  EAM is  registered  as an  investment  advisor  under  the
Investment Advisor Act of 1940.                                                 

The Company also owns 100% of the issued and outstanding  common stock of IMPACT
Financial Network, Inc. (IFNI), IMPACT Administrative  Services, Inc. (IASI) and
IMPACT Tax and Business Services,  Inc. (ITABS).  IASI provides  operational and
administrative support to Impact Management Investment Trust (see Note 2). EAM's
customer  investment   transactions  are  primarily  brokered  through  IFNI,  a
registered  broker-dealer  in securities  acting as a  non-clearing  introducing
broker.  ITABS,  created in September  2000,  provides tax  preparation  and tax
planning services to individuals and small businesses (see Note 5).             

The accompanying  consolidated financial statements include the accounts of JAHI
and its  subsidiaries;  all  significant  intercompany  transactions  have  been
eliminated during consolidation.                                                

SIGNIFICANT ACCOUNTING POLICIES                                                 
-------------------------------                                                 

Investment  advisory fees  received in advance are deferred and  amortized  into
income over the period in which services are performed. Investment advisory fees
based on a percentage of the annual increase in the market value of a customer's
portfolio  (including  interest and  dividends)  are  recognized at the contract
anniversary  date.  Fees due to sales  representatives  are recognized when such
fees are earned.                                                                

Commission  income is  recognized  on a  settlement  date basis,  which does not
differ materially from the trade date basis of accounting.                      

For purposes of the statements of cash flows, the Company considers money market
funds at brokers with maturities of three months or less to be cash equivalents.

                                                                              19

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

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

SIGNIFICANT ACCOUNTING POLICIES (continued)                                     
-------------------------------                                                 

Marketable  securities consist principally of corporate stocks. These securities
are carried at market value, as determined by nationally  recognized  securities
exchanges.  Restricted  securities  are  valued  based  on the  judgment  of the
Company's  management  reflecting  various  factors  as to the  amount  that the
Company  might  reasonably  expect  to  receive  upon  disposition  to a willing
purchaser. Consideration is given to factors such as earnings history, financial
condition,  recent sales prices of the issuer's securities and the proportion of
securities owned. The cost of marketable securities was $114,104 and $613,373 at
December 31, 2001 and 2000 respectively.                                        

The Company has entered into an agreement with a clearing broker that requires a
minimum restricted cash balance of $25,000.  Due to the restricted nature of the
cash deposit,  it is not considered a cash  equivalent  for financial  reporting
purposes.                                                                       

Property, equipment and leasehold improvements are carried at cost. Depreciation
and amortization is computed using  straight-line  and accelerated  methods over
the  estimated  useful lives of the related  assets  ranging from three to seven
years.                                                                          

Intangible  assets  are  amortized  on a  straight-line  basis  over a period of
fifteen years.                                                                  

The Company  accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes". Under the asset and
liability  method of  Statement  109,  deferred tax assets and  liabilities  are
recognized for the estimated future tax consequences attributable to differences
between  the  financial  statement  carrying  amounts  of  existing  assets  and
liabilities and their respective tax basis.  Deferred tax assets and liabilities
are  measured  using  enacted  tax rates in effect  for the year in which  those
temporary differences are expected to be recovered or settled.                  

Earnings per share requires presentation of both basic earnings per common share
and diluted earnings per common share. Common stock equivalents are not included
in the weighted average  calculation  since their effect would be anti-dilutive.
Net income (loss) per common share has been adjusted to reflect  preferred stock
dividends  paid or in arrears of  $105,000  and  $240,000  for the years  ending
December 31, 2001 and 2000 (see Note 4).                                        

The  Financial   Accounting   Standards  Board  issued  statement  of  Financial
Accounting   Standards  No.  123  ("SFAS  123"),   "Accounting  for  Stock-based
Compensation"  which recommends,  but does not require,  measuring  compensation
cost for stock options based on the fair value of the options at the grant date.
The Company has elected not to adopt SFAS 123 but continues to apply  Accounting
Principles  Board Opinion No. 25 and related  Interpretations  in accounting for
the Plan and other stock option activity.                                       

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

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

SIGNIFICANT ACCOUNTING POLICIES (continued)                                     
-------------------------------                                                 

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amount of  assets  and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the consolidated  financial  statements and the reported amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates,  and such differences may be material to the  consolidated  financial
statements.                                                                     

Certain  2000  amounts  have been  reclassified  to conform to the current  year
presentation.                                                                   

NOTE 2 - IMPACT MANAGEMENT INVESTMENT TRUST                                     

The Company  formed Impact  Management  Investment  Trust (the Trust),  which is
registered under the Investment  Company Act of 1940 as a diversified,  open-end
management  investment company (mutual fund). The Trust includes two series (the
Portfolio).  EAM is the investment  advisor of the Trust and IFNI is the primary
distributor of the Trust.                                                       

At December 31, 2001 and 2000,  the market value of the Company's  investment in
the  Portfolio  was  $1,608  and  $1,348,  respectively,  which is  included  in
marketable  securities  in the  accompanying  consolidated  balance  sheets.  As
investment advisor of the Portfolio,  EAM receives an annual investment advisory
fee equal to 1.25% of the Portfolio's  average daily net assets. Of this amount,
60 basis points is paid to the sub advisor of the Trust.                        

NOTE 3 - NOTES RECEIVABLE                                                       

The Company owns a $500,000  variable rate  convertible  subordinated  debenture
from Boston  Restaurant  Associates,  Inc. (BRAI).  The principal balance of the
debenture  is due  and  payable  on  December  31,  2011.  The  debenture  has a
conversion price of $1.25 per share and bears interest at a rate of 14%.        

In connection with the purchase of the debenture,  the Company also acquired, at
no cost,  warrants to subscribe  for the purchase  from BRAI up to 500,000 fully
paid and  nonassessable  shares of BRAI's  common  stock.  The  purchase  rights
represented by the warrants are exercisable by the Company, in whole or in part,
at any time through  December 31, 2006, at an exercise price of $3.00 per share.
The Company's management has estimated the value of the BRAI warrants to be $-0-
at December 31, 2001 and 2000. This determination was made considering primarily
the current value of the underlying common stock and the current  illiquidity of
the warrants.                                                                   

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 3 - NOTES RECEIVABLE (concluded)                                           

In March 2000, the Company issued an unsecured  Convertible  Subordinated Bridge
Note Receivable for $150,000.  The note bears interest at 10% and matures on May
31, 2001. The Company is entitled to receive a 4% equity interest in this entity
if and  when it  completes  a public  offering  of its  securities.  The note is
convertible into Series A Convertible Preferred Stock. The Company has estimated
the value of this investment to be $-0- at December 31, 2001.                   

The carrying value of the above notes  receivable  approximates  the fair market
value as  estimated by  management,  after  considering  such factors as current
interest rates,  liquidity,  conversion  terms and the credit  worthiness of the
borrowers.                                                                      

NOTE 4 - STOCKHOLDERS' EQUITY                                                   

At December 31, 2001, the Company has stock warrants  outstanding  entitling the
warrant  holder to acquire  1,113,000  shares of common  stock at $.50 per share
expiring June 5, 2010.                                                          

The Company also has  outstanding  underwriter  warrants  related to the initial
public  offering  entitling the Company's  former  president to purchase  44,545
units at a price of $2.58 per unit expiring  through  January 8, 2011. Each unit
contains  five  shares of common  stock and five stock  warrants;  two  warrants
entitle the holder to purchase one share of common stock for $.60 per share.    

JAHI has authorized  5,000,000  shares of $0.01 par value preferred  stock.  The
Board of Directors is authorized to issue preferred stock in one or more series,
to determine the rights  thereto,  and to fix the number of shares on any series
of preferred stock and the designation of any such series.                      

The Company issued  3,000,000 shares of 8% cumulative,  convertible,  non-voting
preferred  stock and one share of common stock to a customer of EAM in a private
placement offering.  In connection with this offering,  750,000 shares of common
stock were given to the Company to distribute to the  preferred  shareholder  by
three officers of the Company for no additional consideration.                  

From  February  1993 until June 30,  1998,  the Company  made  semi-annual  cash
dividend payments on its cumulative  convertible non-voting preferred stock at a
rate of 8% per annum.  The  Company did not make any  dividend  payments on this
stock in 1999. On December 31, 2000, the Company  entered into a preferred stock
exchange  agreement (the "Agreement")  with its sole preferred  shareholder (the
"Shareholder").  The  Shareholder  was the  owner  of  3,000,000  shares  of the
Company's 8% Convertible Redeemable Cumulative Preferred Stock (the "Outstanding
Preferred  Stock").  The Company was in arrears  with  respect to the payment of
dividends on the Outstanding  Preferred Stock, which arrearages totaled $600,000
as of December 31, 2000 (the "Dividend Arrearage").                             

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 4 - STOCKHOLDERS' EQUITY (continued)                                       

The  Agreement  provided  that the Company  declare  and pay a cash  dividend of
$100,000 on the Outstanding  Preferred Stock and exchange  3,500,000 shares of a
new 2000  Convertible  Preferred  Stock  (the  "New  Preferred  Stock")  for the
3,000,000  shares of the  Outstanding  Preferred  Stock and  cancellation of the
$500,000  balance of the  Dividend  Arrearages.  The New  Preferred  Stock has a
dividend  rate of 3% for each of the calendar  years 2001 through  2003,  4% for
calendar year 2004, 5% for calendar year 2005, 6% for calendar year 2006, 7% for
calendar  year  2007,  and 8% for  calendar  year 2008 and  thereafter.  The New
Preferred  Stock is  convertible at the option of the holder into fully paid and
non-assessable  shares of common  stock at the rate of one share of common stock
for each $3.50 in face  amount of the New  Preferred  Stock.  Unpaid and accrued
dividends shall be credited to the conversion price.                            

In August 2001, the Company issued  3,100,000 shares of common stock in exchange
for 1,500,000  shares of the New  Preferred  Stock.  In addition,  the preferred
stock agreement was modified to provide that the dividend rate for the remainder
of 2001 and for 2002 is 5.25%.  During the year ended  December  31,  2001,  the
Company  declared  and paid a cash  dividend of $52,500.  At December  31, 2001,
dividends in arrears totaled $52,500.                                           

In August 2001, the Company's  former  president  exercised  options to purchase
696,000 shares of common stock at $.125 per share, for proceeds of $87,000.     

In connection with the preferred stock issuances, the Company obtained "key man"
life insurance on the Company's former  president,  in the amount of $2,500,000.
The holder of Preferred Stock is the direct  beneficiary and will be redeemed at
the rate of $1.25 per share,  in exchange  for such  shares.  In  addition,  the
Company  maintains life insurance on the former  president and certain  officers
aggregating $3,250,000, with the Company as the primary beneficiary.            

NOTE 5 - RELATED PARTY TRANSACTIONS                                             

The Company has a loan to an officer bearing interest at a rate of 10% per annum
in the amount of $22,310 and $61,697,  including accrued  interest,  at December
31, 2001 and 2000, respectively.                                                

On November 30, 2000, the Company  purchased certain assets of a tax preparation
and tax planning services company from an officer and shareholder of JAHI valued
at $105,100 as determined by the Board of Directors of the Company. The purchase
included a client  database  in the amount of $71,025  and  goodwill of $13,478,
which are included on the accompanying  balance sheets as intangible assets. The
Company  issued  100,500 stock options valued at $20,100 as part of the purchase
price. In connection with the purchase,  the Company owed the officer $26,166 at
December 31, 2000.  During the year ended  December 31, 2001, the Company repaid
the amount owed.                                                                

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 6 - INCOME TAXES                                                           

For the year  ended  December  31,  2000,  the  Company  utilized  approximately
$990,000  of its net  operating  loss  carryforward  to offset  taxes  currently
payable.  The tax effect of temporary  differences that give rise to significant
portions of deferred  tax assets and  deferred  tax  liabilities  are  primarily
attributable to net operating loss  carryforwards  for U.S. income tax purposes.
The  difference  between net income for  financial  statement  purposes  and net
income for income tax  purposes  is  primarily  due to realized  and  unrealized
losses of approximately $181,000 and $903,000 as of December 31, 2001 recognized
for financial reporting purposes and not for income tax reporting purposes.     

As of December 31, 2001 and 2000, the Company had  approximately  $4,270,000 and
$2,000,000,  respectively  in pretax  U.S.  net  operating  loss  carryforwards,
expiring  through  the year 2021.  A large  portion of such net  operating  loss
carryforwards were incurred prior to the August 15, 1991 reverse  acquisition of
JAHI and its subsidiaries,  and as such,  management of the Company  anticipates
restrictions on the use of these  carryforwards due to provisions of Section 382
of the U.S. Internal Revenue Code.                                              

The deferred tax assets that result from such  operating loss  carryforwards  of
approximately   $1,450,000   and   $680,000  at  December  31,  2001  and  2000,
respectively,  have been fully  reserved  for in the  accompanying  consolidated
financial  statements.  During the years ended  December 31, 2001 and 2000,  the
valuation  allowance  established  against the net operating loss  carryforwards
increased (decreased) by $770,000 and $(336,600), respectively.                 

As of December  31, 2001 and 2000,  the Company  also had U.S.  net capital loss
carryforwards of approximately $796,000 and $545,000, respectively, which expire
through  2006.  The  deferred tax assets of  approximately  $271,000 in 2001 and
$185,000 in 2000 that result from the capital loss carryforwards have been fully
reserved for in the accompanying  consolidated financial statements.  During the
years ended  December 31, 2001 and 2000,  the  valuation  allowance  established
against the capital  loss  carryforwards  increased  by $251,000  and  $268,000,
respectively.                                                                   

NOTE 7 - STOCK OPTIONS                                                          

During  August  1991,  the Board of Directors  of JAHI  approved  the  Long-Term
Incentive Plan (the "Plan"), a stock option plan. The aggregate number of shares
of common  stock that may be granted by the Company will not exceed a maximum of
2,000,000 shares during the period of the Plan.                                 

The  option  price  per  share  shall be at  least  the fair  market  value  (as
determined by the Finance/Compensation  Committee or, in lieu thereof, the Board
of Directors) of the common stock on the date the stock option is granted. If at
any time a stock option is granted,  an employee owns more than 10% of the total
combined  voting  power of all  classes  of stock of the  Company  or any of its
subsidiaries,  then the terms of the stock option shall  specify that the option
price  shall be at least 110% of the fair market  value of the stock  subject to
the option,  and shall be exercisable  for up to 5 years from the date of grant.
In addition,  the Plan provides for the mandatory  grant of options to directors
on a yearly basis commencing March 1, 1993.                                     

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 7 - STOCK OPTIONS (continued)                                              

If for any reason a change in control of the Company  occurs,  or under the sole
discretion of the Finance/Compensation  Committee or, in lieu thereof, the Board
of Directors,  all shares subject to the stock option shall  immediately  become
earned and  exercisable.  The Board of Directors may discontinue the Plan at any
time,  and  may  amend  it  from  time  to  time.   Certain  amendments  require
stockholders' approval.                                                         

The  Company  has  also  issued  certain  stock  options  outside  of the  Plan.
Information with respect to all options is as follows:                          

                                                        [Enlarge/Download Table]

                                 Long-Term                                                      Weighted   
                                 Incentive         Other                         Exercise       Average    
                                    Plan          Options         Total        Price Range   Exercise Price
                                    ----          -------         -----        -----------   --------------
                                                                                                           
Balances at December 31, 1999      1 585 482         287 200      1 872 682   $ 0.13 - 2.00   $        0.56
   Granted                            58 750              --         58 750     0.20 - 0.35            0.31
   Forfeited                              --              --             --              --              --
                               -------------   -------------  -------------   -------------   -------------

Balances at December 31, 2000      1 644 232         287 200      1 931 432     0.13 - 2.00            0.55
   Granted                            70 000              --         70 000     0.13 - 0.13            0.13
   Exercised                        (696 000)             --       (696 000)    0.13 - 0.13            0.13
   Forfeited                        (102 500)             --       (102 500)    1.12 - 1.38              --
                               -------------   -------------  -------------   -------------   -------------

Balances at December 31, 2001        915 732         287 200      1 202 932   $ 0.13 - 2.00   $        0.72
                               =============   =============  =============   =============   =============

Number of options exercisable                                                                              
at December 31, 2000               1 422 532         257 200      1 679 732   $ 0.13 - 2.00   $        0.55
                               =============   =============  =============   =============   =============

Number of options exercisable                                                                              
at December 31, 2001                 789 732         267 200      1 056 932   $ 0.13 - 2.00   $        0.55
                               =============   =============  =============   =============   =============

At December 31, 2001 and 2000 respectively,  1,084,268 and 355,768 share options
were available for future grant under the Plan.                                 

The  following  table  summarizes  additional  information  regarding  all stock
options outstanding at December 31, 2001:                                       

                                                        [Enlarge/Download Table]

                      *                                                    *                         
                    Number        Weighted-Average     Weighted          Number           Weighted   
   Exercise     Outstanding at        Remaining        Average       Exercisable at       Average    
    Prices     December 31, 2001  Contractual Life  Exercise Price  December 31, 2001  Exercise Price
    ------     -----------------  ----------------  --------------  -----------------  --------------
                                                                                                     
$ 0.13 - 0.38        577 232         6.5 years         $   0.20           472 232         $   0.21   
  0.57 - 1.00      1 583 200         7.6 years             0.62         1 542 200             0.66   
  1.02 - 1.50        180 500         4.2 years             1.19           180 500             1.19   
  1.56 - 2.00         75 500         2.0 years             1.87            75 500             1.87   
                  ----------                                           ----------                    
                   2 416 432                                            2 270 432                    
                  ==========                                           ==========                    

*    Includes 1,213,500 stock options and warrants discussed in Notes 4 and 5.  

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 7 - STOCK OPTIONS (continued)                                              

Had the  Company  measured  compensation  cost  based on the  fair  value of the
options  at the  grant  date  for  2001 and  2000  consistent  with  the  method
prescribed  by SFAS 123, the Company's net income (loss) and earnings per common
share would have been reduced to the pro forma amounts indicated below:         

                                                   2001           2000
                                                   ----           ----

    Net income (loss)              As reported     $    (1 493    $    (4 013)
                                   Pro forma              (496)       (19 564)
    Basic and diluted earnings     As reported      (1 502 146)          (.02)
       (loss) per common share     Pro forma              (.14)          (.02)
                                           (.14)

The fair value of each option grant was estimated at the date of the grant using
the Black-Schoels  option pricing model with the following  assumptions for 2001
and 2000: risk-free interest rate of 4.3% and 5.5%; no dividend yield;  expected
life of 10 years; and volatility of 118% and 99%.                               

During the initial phase-in period of applying SFAS 123 for pro forma disclosure
purposes,  the results may not be  representative of the effects on reported net
income  (loss) for future years  because  options  vest over  several  years and
additional grants generally are made each year.                                 

NOTE 8 - COMMITMENTS                                                            

The Company  leases office space from unrelated  entities  under  month-to-month
agreements and  non-cancelable  operating leases expiring  through 2003.  Future
minimum  lease   payments   under  the  leases  as  of  December  31,  2001  are
approximately as follows:                                                       

Year              Amount                          
----              ------                          

2002           $    49 500                        
2003                40 100                        
-----------         
$    89 600         
===========         

Total  rent  expense  for the  years  ended  December  31,  2001  and  2000  was
approximately $71,718 and $24,000, respectively.                                

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 9 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK AND CONTINGENCIES    

In the normal course of business,  the Company's client  activities  ("clients")
through its clearing broker involve the execution,  settlement, and financing of
various client securities transactions.  These activities may expose the Company
to  off-balance  sheet  risk.  In the  event the  client  fails to  satisfy  its
obligations,  the  Company  may  be  required  to  purchase  or  sell  financial
instruments  at  prevailing  market  prices  in order to  fulfill  the  client's
obligations.                                                                    

In the Company's investment activities, the Company has purchased securities for
its own  account  and may incur  losses if the  market  value of the  securities
decline subsequent to December 31, 2001.                                        

The  Company's  revenues are  primarily  derived from a percentage of the assets
under management and performance fees based on the appreciation of those assets.
Assets  under  management  are  impacted by both the extent to which the Company
attracts new, or loses existing  clients and the appreciation or depreciation of
the U.S.  and  international  equity and fixed  income  markets.  A downturn  in
general economic conditions could cause investors to cease using the services of
the Company.                                                                    

The  Company's  financial  instruments,  including  cash and  cash  equivalents,
receivables,  other  assets,  payables  and other  liabilities,  are  carried at
amounts  that  approximate  fair  value  due to the  short-term  nature of those
instruments. The Company's marketable securities are carried at the December 31,
2001 market value.                                                              

The Company has a  substantial  portion of its assets on deposit  with banks and
brokers.  Assets deposited with banks and brokers are subject to credit risk. In
the event of a bank's or  broker's  insolvency,  recovery  of Company  assets on
deposit may be limited to account  insurance or other  protection  afforded such
deposits.                                                                       

The  Securities and Exchange  Commission  ("SEC") has completed an inspection of
the Company's investment advisory and broker-dealer  operations.  As a result of
the inspection,  certain issues arose regarding possible violations.  Management
of the Company does not expect the  resolution of this matter to have a material
adverse effect on the Company's operations.                                     

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 9 - FINANCIAL  INSTRUMENTS  WITH OFF-BALANCE  SHEET RISK AND  CONTINGENCIES
(continued)                                                   

The former  President  of the Company and his son filed a complaint  against the
Company and two of its officers seeking an injunction against current management
based upon violation of federal  securities  laws and breaches of the common law
fiduciary  duty of directors of a Florida  corporation.  The  management  of the
Company  does not believe the claims to be  meritorious  and does not expect the
resolution  of this matter to have a material  adverse  effect on the  Company's
operations.                                                                     

The accompanying  consolidated  financial statements have been prepared assuming
the Company will continue as a going concern. The Company has suffered recurring
losses from operations that raise  substantial doubt about the Company's ability
to continue as a going concern.  Management's  plans in this regard are to raise
capital through the issuance of common stock and/or selling certain subsidiaries
or assets of the Company. The accompanying  consolidated financial statements do
not include any  adjustments  relating to the  recovery  and  classification  of
recorded  asset amounts or the amount and  classification  of  liabilities  that
might be necessary should the Company discontinue operations.                   

NOTE 10 - RECENT ACCOUNTING PRONOUNCEMENTS                                      

In June 1997,  the  Financial  Accounting  Standards  Board ("the FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures About
Segments of and Enterprise and Related Information".  This statement established
standards for the way that public business  enterprises report information about
operating segments in annual financial  statements and requires that enterprises
report  selected  information  about  operating  segments  in interim  financial
reports  issued to  stockholders.  This statement was adopted by the Company for
the year ended December 31, 1997. The Company does not have segments, therefore,
this statement had no effect on the Company.                                    

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities".  This statement  established  standards for
derivative  instruments,  including certain derivatie  instruements  imbedded in
other contracts, and for hedging activities.  The effective date of SFAS No. 133
was  deferred  by the  issuance  of SFAS No.  137.  SFAS No. 133 was then futher
amended by SFAS No.  138.  The  deferred  effective  date of SFAS No. 133 is for
fiscal years  beginning  after June 15, 2000. The Company adopted this statement
during the year ended  December 31, 2001.  The Company does not have  derivative
instruments, therefore, this statement had no effect on the Company.            

In June 2001,  the FASB  issued  SFAS No.  141,  "Business  Combinations".  This
statement  established  standards  for  financial  accounting  and reporting for
business  combinations.  This  statement  applies to all  business  combinations
initiated  after June 30, 2001. The Company  adopted this  statement  during the
year ended December 31, 2001, and it had no effect on the Company.              

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JORDAN AMERICAN HOLDINGS, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
==========================================
 (Continued)

NOTE 10 - RECENT ACCOUNTING PRONOUNCEMENTS                                      

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets".  This statement  established standards for accounting and reporting for
acquired goodwill and other intangible  assets.  This statement also established
how goodwill and other intangible assets should be accounted for after they have
been  initially  recognized in the financial  statements.  The effective date of
this  statement  is for fiscal years  beginning  after  December  15, 2001.  The
Company will adopt this statement  during the fiscal year  beginning  January 1,
2002. The Company does not  anticipate  that this statement will have any effect
on the Company.                                                                 

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment and
Disposal  of  Long-Lived  Assets".  This  statement  established  standards  for
accounting  and reporting for the  impairment or disposal of long-lived  assets.
The  effective  date of this  statement  is for  fiscal  years  beginning  after
December 15, 2001. The Company will adopt this statement  during the fiscal year
beginning January 1, 2002, and does not anticipate that this statement will have
any effect on the Company.                                                      

NOTE 11 - REGULATORY REQUIREMENTS                                               

IFNI is a  registered  broker-dealer  in  securities  with  the  Securities  and
Exchange  Commission  and,  accordingly,  is  subject  to  Rule  15c3-1  of  the
Securities  Exchange Act of 1934, as amended ("the net capital rule").  Pursuant
to the net capital rule, IFNI is required to maintain a minimum net capital,  as
defined  under such rule.  At December  31,  2001,  IFNI had net capital and net
capital  requirements  of $29,953 and $5,000,  respectively.  The  Company's net
capital ratio (aggregate indebtedness to net capital) was .19 to 1. According to
Rule  15c3-1,  the  Company's  net  capital  ratio  shall  not  exceed  15 to 1.
Therefore, on a consolidated basis as of December 31, 2001, net assets of $5,000
are not  available  for any  purpose  other  than  meeting  IFNI's  net  capital
requirements.                                                                   

                                                                              29

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		12/31/11		22
		1/8/11		23
		6/5/10		23
		12/31/06		22
Filed on:		4/15/02
		3/1/02		7		14
		2/26/02		1		8
		2/22/02		7
		1/25/02		7
		1/1/02		30
For Period End:		12/31/01		1		30			NT 10-K
		12/15/01		30
		10/26/01		7					DFAN14A
		10/25/01		7
		10/4/01		7		8			DEF 14A,  DEFC14A
		10/3/01		7					DEFA14A
		10/2/01		7
		8/6/01		7					4,  4/A
		6/30/01		29					10QSB
		6/27/01		7
		6/4/01		3
		5/31/01		23
		12/31/00		8		27			10KSB40
		12/29/00		9
		11/30/00		24
		6/15/00		29
		6/30/98		9		23			10QSB
		12/31/97		29					10KSB,  DEF 14A
		3/1/93		25
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