SECURITIES EXCHANGE COMMISSION

                              WASHINGTON, DC 20549
                                ----------------

                                   FORM 10-KSB

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1999

                        Commission file number 000-26029

                          ASIAN STAR DEVELOPMENT, INC.
                           ---------------------------
             (Exact name of registrant as specified in its Charter)

                                     Nevada
                                    --------
         (State of other jurisdiction of incorporation or organization)

                                   86-0866395
                                ----------------
                      (I.R.S. Employer Identification No.)

                          Room 930, Block B, East Wing
                            New World Office Building
                         Tsimshatsui, Kowloon, Hong Kong
                  ---------------------------------------------
                    (Address of Principal Executive Offices)

       Registrant's telephone number, including area code:(852) 2721-0936

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

             Securities to be registered pursuant to Section 12(g)
                            of the Act: Common Stock

                                  Common Stock
                                  ------------
                                (Title of Class)

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

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

There are 12,955,530 shares of common stock outstanding as of December 31, 1999.
The shares are traded on the OTC Bulletin Board.

Check if there is no disclosure of delinquent  filers in response to Item 405 of
 Regulation S-B is not contained in this form, and no

disclosure will be contained , to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this
Form 10_KSB. X.

State issuer's revenues for its most recent fiscal year: $41,926

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates  computed by reference to the price at which the common equity
was sold,  or the average bid and asked  price of such  common  equity,  as of a
specified date within the past 60 days. On March 17, 2000, the aggregate  market
value was $32,971,250.

State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. 12,955,530 shares
                                                     ------------------



<PAGE>

                       TABLE  OF  CONTENTS
                       -------------------

              Part  I

Item  1     Description of Business

Item  2     Description of Property

Item  3     Legal Proceedings

Item  4     Submission of Matters to a Vote of Security Holders


              Part  II

Item  5     Market for Common Equity and Related Stockholder Matters

                The  Company's  shares  of Common  Stock  are  traded on the OTC
                Bulletin  Board.  The  High/Low  bid  quotations  for the period
                ending December 31, 1999, was $3.50/$.75

Item  6     Management's Discussion and Analysis of Plan of Operations.


Item  7     Financial Statements

Item  8     Changes in and Disagreement with Accountants on Accounting
            and Financial Disclosure.


              Part  III

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

Item 10     Executive Compensation

Item 11     Security Ownership of Certain Beneficial Owners and
            Management

Item 12     Certain Relationships and Related Transactions

Item 13     Exhibits, List and Reports on Form 8-K



                                        1

<PAGE>

ITEM  1.  DESCRIPTION  OF  BUSINESS
          =========================


Background  and  Reorganization
---------------------------------
Asian Star Development,  Inc.,  (Registrant) was incorporated  under the laws of
the State of Nevada in United  States of  America  on January 8, 1997 to conduct
real estate  development  business  in the  People's  Republic  of China  (PRC).
Currently,  Registrant has four (4) separate  projects under development in PRC.
In  addition,  the  Company  has signed a joint  development  agreement  for the
acquisition of an LPG cylinder and LPG bottling plant in Malaysia, together with
the  development  of a Super  Port  in the  State  of  Kelantan,  Malaysia,  all
contingent upon further governmental approval. The Registrant believes this will
be a long-term project,  if approved.  In addition,  the Super Port project will
require  substantial cash investments  which Registrant is not currently capable
of funding and, therefore, will be required to find a venture partner, such as a
major oil company, to participate and provide the necessary funding.  Registrant
has not contacted any such potential partner and will not do so unless and until
the project is approved by all necessary  Malaysian  governmental  agencies.  In
addition,  the  acquisition of the two LPG facilities will require cash payments
from Registrant, which Registrant anticipates will have to be generated from the
sale of its common  stock in  private  placement  transactions,  if and when the
projects receive the requisite governmental approvals.

Business Acquisitions
---------------------
On January 8, 1997, Registrant entered into an agreement with Honpar (Huangzhou)
Properties  Limited,  a Hong  Kong  corporation,  for the  purchase  and sale of
certain assets. Stephen Chow, an officer,  director and principal shareholder of
Registrant,  is also an officer,  director and principal  shareholder  of Honpar
(Huangzhou).  Pursuant to the terms of the Agreement,  Registrant issued a total
of 5,760,000  shares of its  restricted  Common Stock in exchange for all of the
rights and interests in and to the assets of Honpar  (Huangzhou),  consisting of
an 80% equity  interest in and to 2 projects  known as "Dragon Villa" and "Water
World".  A total of  4,885,700  of the shares  were  issued to 4 parties who are
officers, directors and/or principal share- holders of Registrant as follows:

<TABLE>
<CAPTION>

<S>                                                          <C>
Name of Officer/Director/Principal Shareholder              Number of Shares
----------------------------------------------              ----------------
Stephen Chow                                                4,322,700
Extensiview Ltd.                                              503,000
Paul Tong (1)                                                  10,000
Paul Lam                                                       50,000
</TABLE>

(1) These shares are held in the name of Sino Pride Group  Limited,  a Hong Kong
corporation  of  which  Mr.  Tong,  an  officer,  director  and  shareholder  of
Registrant, is an officer, director and principal shareholder.

The balance of 874,300 shares were issued to 81 unrelated third parties.

                                        2

<PAGE>

This transaction was a reverse acquisition in which the controlling Shareholders
of Honpar  (Huangzhou)  became the controlling  shareholders of Registrant.  The
number  of  shares  issued  was  based  on the  estimated  market  value  of the
properties at the time of acquisition, which was approximately US$14,164,000, or
approximately $2.46 per share.

On January 8, 1997,  Registrant entered into an agreement with Honpar Properties
Limited,  a Hong Kong corporation,  for the purchase and sale of certain assets.
Stephen Chow, an officer,  director and principal shareholder of Registrant,  is
also an officer, director and shareholder of Honpar Properties Limited. Pursuant
to the terms of the Agreement,  Registrant issued a total of 3,240,000 shares of
its  restricted  Common Stock in exchange for all of the rights and interests in
and to the  assets,  consisting  of all right,  title and  interest in a project
known as "Maple  City".  A total of  2,309,000  of the shares  were  issued to 5
parties who are officers,  directors,  advisors and/or principal shareholders of
the Registrant as follows:

<TABLE>
<CAPTION>

<S>                                                          <C>
Name of Officer/Director/Principal Shareholder              Number of Shares
----------------------------------------------              ----------------
Stephen Chow                                                1,077,300
Extensiview Ltd.                                              972,000
Sang Chan                                                     103,000
Paul Tong (1)                                                 100,000
Sam Chow (2)                                                   56,700
</TABLE>

(1) These shares are held in the name of Sino Pride Group  Limited,  a Hong Kong
corporation  of  which  Mr.  Tong,  an  officer,  director  and  shareholder  of
Registrant, is an officer, director and principal shareholder.

(2) Sam Chow is a member  of  Registrant's  Advisory  Board and the  brother  of
Stephen Chow.

The balance of 931,000  shares were issued to 19 unrelated  third  parties.  The
number  of  shares  issued  was  based  on the  estimated  market  value  of the
properties at the time of acquisition,  which was approximately US$6,524,000, or
approximately $2.01 per share.

On December  15, 1998,  Registrant  issued  2,590,730  shares of Common Stock at
$1.113  per share in  exchange  for 100%  equity  interest  in Honpar  (Shilong)
Properties  Limited (Honpar  Shilong),  a Hong Kong corporation of which Stephen
Chow,  an officer,  director and  principal  shareholder  of  Registrant,  is an
officer,  director and principal  shareholder.  The  2,590,730  shares issued by
Registrant  for the  exchange  of  Honpar  Shilong's  shares  was  based  on the
historical cost of the net assets and  liabilities of Honpar Shilong,  which was
$2,879,078  . The  price per share of $1.113  used to  determine  the  number of
Registrant's  shares to be issued (2,590,730 shares) was based on a 30% discount
on the weighted average trading price of the Registrant's  shares 60 days before
the  transaction  date.  Honpar Shilong has one project,  the Shilong City Hall,
which has been under construction since 1996.  Registrant intends to sell all of
the above development projects once they are completed and fully operational.

                                   3

<PAGE>

<TABLE>
<CAPTION>

<S>                                                          <C>
Name of Officer/Director/Principal Shareholder              Number of Shares
----------------------------------------------              ----------------
Stephen  Chow(1)                                              180,000

</TABLE>

(1)  Immediately  upon his receipt of these shares,  Mr. Chow made a gift of all
180,000 shares,  in three (3) equal parts,  each consisting of 60,000 shares, to
his three  daughters,  Connie  Chow,  Conway Chow and Melody  Chow.  Each of his
daughters  is over 21 years of age and none of them  reside  in the same  house-
hold as Mr. Chow.

As  a  result  of  Registrant's  acquisitions  of  Honpar  (Huangzhou),   Honpar
Properties  Limited  and Honpar  (Shilong)  Properties  Limited,  the  officers,
directors  and  principal  shareholders  of  Registrant  received the  following
aggregate number of shares and percentage of outstanding shares of Registrant:

<TABLE>
<CAPTION>



Name of Officer, Director          Aggregate Number         Percentage of Total
Principal Shareholder             of Shares Received        Outstanding Shares
------------------------          ------------------       -------------------
<S>                                  <C>                         <C>
Stephen Chow                          5,400,000                  42%
Extensiview Ltd.                      1,475,000                  11%
Paul Tong                               110,000                   1%
Sang Chan                               103,000                   1%
Paul Lam                                 50,000              Less than 1%
Sam Chow                                 56,700              Less than 1%

</TABLE>

Including business combinations described above,  Registrant's  subsidiaries and
equity interests therein are as follows:

NAME                                       INCORPORATED    EQUITY
----                                       IN              INTEREST
                                           --------------  ---------

DONGGUAN DRAGON VILLA LTD                     PRC            80%
DONGGUAN DRAGON ENTERTAINMENT CENTRE LTD.     PRC            80%
HONSTAR ENTERTAINMENT CENTRE LTD              PRC           100%
GANG FENG (BOLUO) REAL ESTATE CO. LTD         PRC           100%
HONPAR (SHILONG) PROPERTIES LIMITED           HONG KONG     100%
ASIAN STAR (HONG KONG) LIMITED                HONG KONG     100%

General
-------
Registrant  raised  a total of  $723,600  in a public  offering  pursuant  to an
exemption provided by Rule 504 of Regulation D, promulgated under the Securities
Act of 1933,  as amended.  The  offering  was  approved for sale by the New York
State  Department  of Law on June 4, 1997 and was  closed on March 12,  1998.  A
total of 361,800 shares of Common Stock, at a price of $2.00 per share were sold
under the offering.

Registrant has a Web site at www.asianstardev.com.

                                  4

<PAGE>

Registrant's corporate offices are located at Suite 930, East Wing, Block B, New
World Office Building, Tsimshatsui, Kowloon, Hong Kong.

Registrant's  Business  Strategy
--------------------------------
Registrant's  business  strategy is to complete  its current  projects in China,
while seeking purchasers for the projects in their current stage of development.
Registrant's current projects involve resorts, amusement parks and entertainment
complexes;  however,  Registrant  may,  if  the  opportunity  arises  and  seems
feasible, seek to also build and develop shopping malls and other retail centers
and multi-use  structures.  Once a project is completed  and fully  operational,
Registrant  intends  to  sell  its  interests  in and to that  project,  thereby
generating  funds for other  business  projects  selected  by  Registrant.  (See
"Management  Discussion and  Analyses-Results of Operations" and "Description of
Projects-Limited  Operating History;  Accumulated  Deficit;  Need for Additional
Capital.") Registrant will also seek to diversify its business by expanding into
technology  projects on a joint venture basis.  Registrant is currently involved
in discussions and negotiations for various technology-related projects.

Four(4) Real Estate Projects Under Development
----------------------------------------------

1.  Dragon  Villa  Resort  in  Shilong,  Dongguan,  Guandong  Province:

Honpar (Huangzhou)  Properties  Limited, a Hong Kong corporation wholly owned by
Stephen S. Chow, Chairman of the Board and President of Registrant, entered into
an equity joint venture  agreement with Shilong City  Development Co., a company
owned by the  Government  of Shilong City, to develop a piece of property at the
gateway of the Huangzhou Development District, a new district of Shilong City.

Honpar  (Huangzhou)  Properties  Limited  owned 80% of the Joint Venture and the
Shilong  Government  owns 20%. On January 8, 1997,  Registrant  entered  into an
asset  purchase   agreement  whereby  it  acquired  all  of  Honpar  (Huangzhou)
Properties  Limited's  right,  title and  interest  in and to the joint  venture
agreement  and  project  in  exchange  for  5,760,000   shares  of  Registrant's
restricted common stock. According to the terms of the agreement, the profit and
loss sharing ratio between  Registrant and Shilong City  Development  Co. is 80%
and 20%, respectively.

Shilong City Development Co. contributed 57,500 square meters  (approximately 86
acres)  of  land to the  project  and is  responsible  for  securing  government
approvals,  permits and licenses, and obtaining financing for all infrastructure
improvements (electricity, drinking water, sewer lines, gas, telecommunications,
etc.) prior to  commencement  of  construction.  As of December 31, 1999,  5,700
square  meters land usage rights  certificate  was  obtained.  The joint venture
company is awaiting  issuance  of the land usage  rights  certificates  from the
relevant authorities for the remaining parcels. Registrant is responsible for
the  master  layout  of the  project,  architectural  design,  coordination  and
building  supervision,  as well as cost of the  construction  of the  buildings,
including road work and landscaping.

The master  plans for the project were  approved by the Shilong City  Government
and construction work has commenced with piling work already completed for Phase
1 and part of Phase 2.

Phase 1 will consist of:

(1)     Resort  Hotel - The 4-story building is completed and ready for interior
finish  work.
                                        5

<PAGE>

(2)   Entertainment   Center  -  The  building  plans  have  been  approved  and
construction has commenced. The building will house the largest Night Club/Music
Hall in  Guangdong.  The  Entertainment  Center  will  also  contain  a Sports &
Recreation Club, Restaurant, Sauna and other indoor activities.

An  approximately  67-acre site  adjacent to this project was  designated  for a
water park, which will become an integral part of the recreational activities of
the  Dragon  Villa  Resort.  Registrant  contributed  funds  in  the  amount  of
$1,468,797 to the joint venture company,  Dongguan Dragon Villa Limited, for the
construction of the water park, while the PRC joint venture partner  contributed
a parcel of land.  This parcel of land will be returned to the PRC joint venture
partner  when the  co-operative  joint  venture  agreement  expires  in 70 years
commencing  from 1997.  The  construction  of the water  park and  entertainment
center which  includes  facilities  such as a restaurant,  swimming  pools and a
kiosk was completed and operations  commenced on August 1, 1998. The park is now
open  and  has a full  range  of  water  sports  and  entertainment  facilities,
including a standard size underwater musical swimming pool, wave pool, toddler's
pool,  water  slide  towers,  restaurant  and other  facilities.  The water park
operation is seasonal. The profit and loss sharing ratio between Dongguan Dragon
Villa Limited and the joint venture partner is 80% and 20%, respectively.

Shilong is a well-known  industrial/business  area of Dongguan in the  Guangdong
Province. It is located in the northern portion of Dongguan and is serviced by a
well-developed road and communication network to other cities. The entire region
is  served  by  the  Shenzhen/Guangzhou  Freeway,  which  connects  Dongguan  to
Guangzhou in the north and  Shenzhen in the south.  Shilong is  approximately  a
13-hour drive from Hong Kong.

Shilong is also serviced by train, which takes approximately 45 minutes,  either
from Guangzhou or Shenzhen.  Planning is currently underway for redevelopment of
the existing train station into a modern train station to match the operation of
a high speed train  serving the  increasing  population  from the various  local
districts.  The journey from Shilong to Guangzhou is expected to be shortened to
approximately  20 minutes  when the new train  station  project is  completed in
2001.

Shilong is one of the cities of Dongguan  with  active  foreign  investments  by
high-tech  industries  from  Japan,  Taiwan,  Hong  Kong and the  U.S.  With the
continuing  development  of  major  entertainment/leisure   complexes,  such  as
Registrant's  water park and other  planned  resorts,  Shilong is  projected  to
become a major regional entertainment center.

With the  continuing  growth in both the  business  and  residential  markets in
Shilong and Guandong Province,  Registrant  believes its projects will be highly
successful  and  will  make  a  significant   contribution   to  the  successful
development of the areas of the Province where it operates.

2.  Mapi  (Maple  City),  Guandong,  China:

Honpar Properties Limited, a Hong Kong corporation, entered into a Joint Venture
Agreement with the Government of Mapi to develop Maple City, nicknamed the "City
of the  Future".  Under the  terms of the  agreement,the  Government  of Mapi is
responsible  for  securing  all  necessary  government  approvals,  permits  and
licenses  for  all  aspects  of the  project  and  obtaining  financing  for all
infrastructure  improvements  (electricity,  drinking water,  sewer lines,  gas,
telecommunications, etc.) prior to commencement of

                              6

<PAGE>

construction.  Honpar Properties  Limited is responsible for the development and
construction  of the joint  venture  projects.  On January  8, 1997,  Registrant
entered  into an asset  purchase  agreement  with Honpar  Properties  Limited to
acquire all of Honpar's  rights,  titles and  interests  in the Maple City Joint
Venture Agreement.

The Maple City project, which is developed by Registrant, comprises 3 parcels of
land which are close,  but not  adjacent  to each other.  The land usage  rights
certificates  for the Maple  City  project  stipulate  a lease  term of 70 years
commencing  from 1993 and the total area is  approximately  74,000 square meters
(approximately  111 acres).  It is the intention of Registrant to build a hotel,
commercial and entertainment complex on these parcels of land.

Registrant intends to develop the parcels as follows:

(1) A Hotel Entertainment Center/Exhibition Plaza will be built on 35,000 square
meters in the heart of the  project.  The  building is  completed  and ready for
interior  finish work.  The main  building  will house a hotel with 24 rooms,  a
night club, a sauna and  restaurant on the first floor.  Registrant  anticipates
expansion of the hotel to up to 200 rooms in the future.

(2) An exclusive resort with a private lake, single family homes,  marina,  club
and  water  amusement  facilities  will be  built on 6,000  square  meters.  The
infrastructure  work and utilities are currently being completed.  The main road
from the City Center Gateway to the project site has been completed.

(3) A commercial/residential complex in the City Center Gateway will be built on
33,000 square meters. All utilities and  infrastructure  work has been completed
on this project.

The Maple City Master Plan includes the new railway  station and freeway  system
and includes 500 acres for an industrial  park near the train station.  86 acres
are reserved for hotel,  commercial,  entertainment and condominium developments
in the heart of the city.  Approximately  600  acres  are set aside  around  the
lakeshore  areas  of Red Lady  Lake  for the  usage  of  developing  resort  and
residential  properties.  Maple City is located east of  Guangzhou  and north of
Huizhou  and in the  center  of  Guandong  Province,  the  wealthiest  and  most
developed  Province,  with a total population of 62,460,000.  Fully aware of the
fact that both Guangzhou City and Shenzhen City are overly populated,  congested
and  developed,  the Chinese  Central  government  is diverting new projects and
investment  into the Greater Huizhou area. The new  "Beijing-Hong  Kong" railway
passes through Maple City,  giving it direct access to all major cities in China
by train.  The present  South-West  route also  provides rail service from Maple
City to other major cities of  Guandong,  the East route to Shantou and the West
route to Zhanjiang. In addition,  Guandong has one of the newest freeway systems
in China,  making access to Maple City  accessible  from many cities by car and,
when the new  freeway  is  completed,  travelers  will have  access  to  Pingtam
Airport,  a 30-minute  drive from Maple City and the only airport in the Huizhou
area. The total population of the five major  surrounding  cities  accessible to
Maple  City  is   approximately  17  million.   Maple  City  enjoys   year-round
sub-tropical climate, typical of Southern China.

                               7

<PAGE>

3.  Shilong  City  Hall  Plaza

The Shilong  City Hall  project,  which  under  development  by Honpar  Shilong,
consists  of a parcel  of land  located  in the  center  of  Shilong  Town  with
approximately  5,855 square meters.  Honpar Shilong  entered into a co-operative
contract with Shilong City Government to build a commercial complex on the land,
including  retail and office  space,  residential  space and a city hall theatre
with approximately 1,000 seats. In addition, Honpar Shilong is required to allow
the Shilong City  Government to freely use the city hall  theater.  The lease of
land  usage  rights  will  expire  in 70 years  commencing  on the date when the
inspection   certificate   (certificate   of  occupancy   after   completion  of
construction) is issued by the City Government.

Pursuant to the terms of the co-operative  contract,  Honpar Shilong is required
to pay, upon the issuance of the inspection  certificate,  RMB50 million for the
land  usage  rights  and  RMB3.8  million  for  land  management  fee  and  land
improvement expenses.  Upon fulfilling the above requirements,  the title of the
land usage rights will be  transferred  to Honpar  Shilong from the Shilong City
Government.  As of December 31, 1999,  RMB4 million  ($469,814)  in  installment
payments had been made by Honpar  Shilong  against the RMB50  million land usage
rights.

On  December  15,  1998,  Registrant  acquired  100% of Honpar  Shilong's  total
outstanding  shares in exchange for 2,590,730 shares of Registrant's  restricted
common stock.

The subject property is a rectangular  shaped corner lot located at the junction
of two major arterial roads within the prime commercial/ residential location of
Shilong  City and  directly  across  from a  newly-developed  high-rise,  modern
commercial building/apartment hotel. The site is also in close proximity to some
of the well-known tourist areas of Shilong, and to the train and bus stations.

Registrant's current development plans include a main structure, consisting of a
food court,  bars,  night club,  fitness  center and  shopping  mall;  a theater
building; and a parking garage.

4.    6-12  Convenience  Store  Chain

In September,  1998, Registrant entered into a letter of intent with Lin Tao Ge,
an unrelated third party, to form a new Hong Kong corporation to acquire 100% of
the  total  issued  and  outstanding  shares of two  China  corporations,  Super
Shopping  Channels Ltd. and Beijing  Kinetic Sales Network  Limited.  Registrant
will own 75% of the  newly-formed  corporation and Mr. Ge will own 25%. No costs
have been  incurred  on this  project  as of the date of the filing of this Form
10-KSB.

Due to the rapid process of reform and liberalization in China,  coupled with an
increased  demand for work  efficiency and an  acceleration in the pace of life,
most people in Beijing have changed their  purchasing  habits in order to adjust
to cosmopolitan living. Nevertheless, Beijing still lacks a large-scale
convenience  store chain that carries a large  variety of products  where people
can conveniently shop at a relatively early or late hour.  Registrant intends to
develop the first large scale convenience store chain in China,  namely the 6-12
Convenience Store. Each store, or kiosk, will be equipped

                                8

<PAGE>

with  air-conditioning,  electricity and water,  computers to facilitate  record
keeping,   telecommunication  equipment  and  shelf  space  for  300-400  retail
convenience  items.  Billboard spaces on the exterior of the kiosks will also be
available for rental.  Registrant  intends to begin installation of 1,000 "6-12"
Convenience  Stores in Beijing.  Registrant is also developing  plans to install
the stores in other  regions of China in the near  future.  However,  Registrant
believes this will be a long-term  project and does not anticipate any work will
be done on this project during calendar year 2000.

Project Funding
---------------
The operating activities of the above four projects were substantially  financed
by Stephen Chow, an officer,  director and principal  shareholder of Registrant,
by either infusing  equity capital or providing  shareholder  loans.  Additional
financing was derived from the sale of the Registrant's equity securities.  (See
"Certain Transactions" and "Financial Statements".)

Considering the condition that only limited funding is presently available,  the
completion of these four projects on a timely basis will depend significantly on
the additional  funding  available to the Registrant  through debt and/or equity
financing in the near future. (See "Management Discussion and Analyses")

Competition
-----------
Both Maple City and  Shilong  Town are  currently  being  heavily  expanded  and
developed  with the  assistance  of  their  respective  governments.  Registrant
anticipates  that there will be extensive  competition  from other companies and
businesses,  including some large,  multi-national  hotel and resort developers.
Currently, Registrant has the only Water World project commencing operation and
other projects in development in the Dongguan area. There are currently  several
resort hotels and  entertainment  facilities  in the area,  but none as large as
those being developed by Registrant.

Government  Regulation
----------------------
Registrant's  projects are subject to various laws and governmental  regulations
relating to its business  operations  and project  developments,  such as zoning
requirements. In these joint venture projects with Chinese state-owned entities,
the Chinese  partners are  responsible  for obtaining all licenses,  permits and
regulatory  approvals  for  the  projects.   Meanwhile,   Registrant  is  solely
responsible  for obtaining such licenses,  permits and regulatory  approvals for
any other projects not involving these state-owned entities. Registrant believes
it is currently in compliance with all laws, rules and regulations applicable to
its  projects  and such laws,  rules and  regulations  do not  currently  have a
material impact on its operations. However, due to the increasing popularity and
growth  in  development  in the areas of China  where  Registrant  is  currently
operating, it is possible that new laws, rules and/or regulations may be adopted
with respect to Registrant's projects or proposed projects. The enactment of any
such laws,  rules or  regulations  in the  future may have a negative  impact on
Registrant's  projected  growth,  which  could  in  turn  decrease  Registrant's
projected revenues or increase its cost of doing business.

Employees
---------
At the present  time,  Registrant  has 80  full-time  employees,  including  its
officers  and  directors.  Registrant  subcontracts  out all of the  work on its
development projects to unrelated third parties.

                                9

<PAGE>

ITEM  2.  DESCRIPTION  OF  PROPERTY
          =========================

The property held by Registrant consist of the following:

(A)     Shilong  Town  Resort  and  Water  World
(B)     Maple  City  Resort
(C)     Shilong  City  Hall  Plaza



(A)     Shilong  Town  Resort  and  Water  World
       -----------------------------------------
The Shilong Town project,  which was acquired by Registrant  for a total cost of
$8,523,218,  out of which $6,053,268  represents the land usage fee (right),  or
cost for the parcel of land,  as agreed upon by the  Registrant  and the Seller.
The property is situated in Shilong Town, Dongguan, Guangdong Province. Although
this  amount  was the  contractually  agreed  upon  value of the land  usage fee
(right),  the  Registrant  has  not  realized  this  value  from  an  accounting
standpoint  and  the  book  value  of the  right  is  carried  on the  financial
statements at $0. The price was paid by Registrant through Issuance of 5,760,000
shares of its restricted  Common Stock. The parcel of land contains a total area
of 57,500 square  meters and the land usage fee for 50-70 years,  as provided in
the agreement between the parties,  is RMB 50 Million.  The 57,500 square meters
of property was contributed by Shilong City  Development  Co. (SCDC),  a Chinese
corporation owned by the Chinese government,  as consideration for its 20% share
of  capital  in the joint  venture  company  with  Honpar  (Huangzhou)Properties
Limited.

The  project  consists  of 3 parcels  of land  located in the new  Shilong  Town
Center,  which  are  adjacent  to  each  other  and  comprise  a  total  area of
approximately  86 acres. It is the intention of Registrant and its joint venture
partner,  Shilong City  Development  Co., a company  owned by the  Government of
Shilong Town to establish a residential, commercial and entertainment complex on
these 3 parcels of land.

Registrant  expects the project will be completed in 2001. The land on which the
commercial and  entertainment  buildings will be built will have a 50-year lease
term while the remainder have a 70-year lease term,  starting from the date when
land usage rights certificates are obtained. (See "Description of Business.")

The Shilong Water Amusement Park project is located adjacent to the 3 parcels of
land and  consists of  approximately  40,000  square  meters.  This land will be
returned to the Government of Shilong when the joint venture  agreement  expires
in 70 years. (See Item 1. "Description of Business.")

(B)     Maple  City  Resort
        -------------------

Registrant  issued  3,2400,000  shares of its restricted Common Stock to acquire
the Maple City Project  through the  acquisition of Honpar  Properties  Limited,
which was 80% owned by Honpar (Huangzhou) Properties Limited.

The Maple  City  project  consists  of 3 parcels of land which are close to each
other, comprising approximately 74,000 square meters. The land usage

                                 10

<PAGE>

rights certificates of the Maple City project stipulate a lease term of 70 years
commencing  from 1993 and the total area is  approximately  74,000 square meters
(approximately  111 acres).  The land was  contributed  to Registrant at nominal
consideration.  It is the intention of  Registrant to build a hotel,  commercial
and  entertainment  complex on these parcels of land. A hotel and  entertainment
center is being built by a PRC wholly-owned  subsidiary,  Honstar  Entertainment
Center Limited  (Honstar),  with structural work already  completed.  Registrant
anticipates the project being completed in 2002.

The Maple City Master Plan includes the new railway  station and freeway  system
and includes 500 acres for an industrial  park near the train station.  86 acres
are reserved for hotel,  commercial,  entertainment and condominium developments
in the heart of the city.  Approximately  600  acres  are set aside  around  the
lakeshore  areas  of Red Lady  Lake  for the  usage  of  developing  resort  and
residential properties. (See Item 1. Description of Business.)

(C)     Shilong  City  Hall  Plaza
        --------------------------
On December 15, 1998, Registrant entered into an agreement with Honpar (Shilong)
Properties Limited, a Hong Kong corporation,  of which Stephen Chow, an officer,
director and principal  shareholder of Registrant,  is an officer,  director and
principal shareholder, whereby Registrant agreed to exchange 2,590,730 shares of
its restricted  Common Stock for 100% of the total issued and outstanding  stock
of Honpar (Shilong)  Properties Limited. The net asset value of Honpar (Shilong)
Properties  Limited was  supported  by audited  financial  statements  of Honpar
(Shilong) Properties Limited,  prepared in accordance with U.S. GAAP. Registrant
considers  the  transaction  by which it acquired  all these  assets is an arm's
length transaction for the following reasons:

(a) The  management  of Registrant is not related,  directly or  indirectly,  to
Shilong  City  Development  Co.  ("SCDC")  and neither  party has the ability to
control  the other party or  exercise  influence  over the other party in making
financial and/or operating decisions.

(b) Prior to the Shilong Town project, there were no other dealings among Honpar
(Huangzhou) Properties Limited, Honpar Properties Limited, SCDC and Registrant.

(c) The land usage fee (RMB $50 Million) was agreed to by the parties  (SCDC and
Honpar) after considerable arm's length  negotiations  between the management of
Honpar (Huangzhou) Properties Limited and SCDC.

(d) Following the transfer of the subject  projects to the  Registrant by Honpar
(Huangzhou)  Properties  Limited and Honpar  Properties  Limited,  both of these
companies  commenced  proceedings  for  liquidation  and have no further rights,
titles or interests in or to the subject projects.

(e) Land improvement and development  contracts for the Shilong Town project and
other  projects  were  entered  into with  parties not related to the  officers,
directors or shareholders of Honpar  (Huangzhou)  Properties,  Honpar Properties
Limited or the Issuer.  These land  improvement and  development  contracts were
accepted by the management of each company based upon their property development
expertise  and  comparable   market  prices  for  similar  goods  and  services.
Registrant anticipates the project will be completed in 2002.

                                    11

<PAGE>

Limited Operating History; Accumulated Deficit; Need for Additional Capital
---------------------------------------------------------------------------
There is limited historical financial information about Registrant upon which to
base an evaluation of Registrant's  performance or to make a decision  regarding
an investment in shares of  Registrant's  Common  Stock.  Registrant  has had an
accumulated  deficit of $2,169,145 through December 31, 1999.  Registrant's cash
and cash  equivalents  decreased  from $71,690 at December 31, 1998 to $5,628 at
December 31, 1999.

Registrant completed construction of its first project, Shilong Water World, and
commenced  operations on August 1, 1998,  generating  gross revenues at December
31,  1998 of $188,583  and for  December  31,  1999 of $41,926.  There can be no
assurance that Registrant will be successful in its business  operations or will
achieve  significant  levels  of market  acceptance  for its  proposed  property
development  ventures.  Registrant's  business could be subject to any or all of
the problems,  expenses, delays and risks inherent in the establishment of a new
business  enterprise  including  limited capital  resources,  possible delays in
construction and/or development of its properties, possible cost overruns due to
price and cost increases in raw products and manufacturing processes,  uncertain
market acceptance and the absence of an operating history.  Therefore, there can
be no  assurance  that  Registrant's  business  or  proposed  ventures  will  be
successful  or that  Registrant  will be able to achieve or maintain  profitable
operations.  Further,  there  can  be no  assurance  that  Registrant  will  not
encounter  unforeseen  difficulties  that may deplete its capital resources more
rapidly than anticipated.

To become and remain  profitable  and  competitive,  Registrant  will  likely be
required to make significant  investments in the construction and development of
its properties.  Registrant is seeking  additional  equity financing in order to
provide for the capital required to maintain or expand its business  operations.
To date,  Registrant has not been  successful in its attempts to find additional
equity financing and presently has no available sources of financing.

Upon completion of each project, Registrant intends to sell its interests in and
to that project,  thereby  generating funds for other business projects selected
by Registrant. (See "Description of Business-Registrant's Business Strategy" and
"Management Discussion and Analyses - Results of Operations".)

The timing and total amount of capital  requirements cannot be predicted at this
time.  There  can be no  assurance  that  any  financing  will be  available  on
acceptable  terms, if at all. If such financing is not available on satisfactory
terms, Registrant may be unable to continue, develop or expand its business or
develop new  properties  at the rate  desired and its  operating  results may be
adversely  affected.  Equity  financing  could result in additional  dilution to
existing shareholders.

ITEM  3.     LEGAL  PROCEEDINGS
             ==================

One  of  Registrants  subsidiaries,  Honpar  (Shilong)  Properties  Limited,  is
involved in a legal proceeding with a PRC  construction  company relating to the
Shilong Town Hall project.  The amount  claimed by the  construction  company is
Approximately RMB 5 million ($605,000 U.S).  Management of Registrant has Denied
and is  vigorously  defending  against the claims and believes that a Contingent
liability is remote.

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

During the fourth  quarter of the fiscal year covered by the report,  no matters
were submitted to a vote of security holders.

                                       12

<PAGE>

                                     PART II
                                    =========

ITEM  5.  MARKET FOR COMMON EQUITY STOCK  AND  OTHER  SHAREHOLDER  MATTERS
          ================================================================

Common  Stock  Trading  Information
-----------------------------------
Registrant's  shares were  formerly  traded on the OTC Bulletin  Board under the
symbol  ASTV and  commenced  trading  on July 1, 1998.  On August 1,  1999,  the
Registrant's  shares were delisted from the Bulletin  Board because it failed to
comply  with  the OTC  Bulletin  Board  Eligibility  Rule,  which  requires  all
companies to be fully reporting  under the Securities  Exchange Act of 1934, and
for their Form 10SB to be in a "no comment"  stage with the SEC. The  Registrant
has filed a Form 10-SB to comply with the Eligibility Rule, and on approximately
December 15, 1999,  its shares  commenced  trading again on the OTC BB under the
symbol ASTV. The following  table sets forth the high and low bid quotations for
the Common Stock for the periods indicated. These quotations reflect prices
between dealers,  do not include retail mark-ups,  mark-downs or commissions and
may not necessarily represent actual transactions.

<TABLE>
<CAPTION>

PERIOD                      HIGH            LOW
------                      -----          -----
<S>                       <C>             <C>
December 31, 1999          2.00            1.00
SEPTEMBER 30, 1999         1.50             .75
JUNE 30, 1999              3.50            1.25
MARCH 31, 1999             2.25            1.50
DECEMBER 31, 1998          2.25            1.125
SEPTEMBER 30, 1998         2.25            2.00
JULY 1, 1998               2.00            2.00
</TABLE>

This  information  was  obtained  from the Internet  (Quicken.com)  and does not
reflect inter-dealer prices, without retail mark-up,  mark-down,  or commission,
and may not represent actual transactions.

As of December 31, 1999, there were 168 shareholders of record of the 12,955,530
shares of Common Stock issued and outstanding.

Stock  Transfer  Agent
----------------------
Transfer  Online,  227 S.W.  Pine Street,  Suite 300,  Portland,  Oregon  97204,
telephone  number (503) 227-2950,  is Registrant's  stock transfer agent for its
securities.

Dividends
---------
Registrant  has not paid  any cash  dividends  to any of its  shareholders.  The
declaration of any future cash  dividends will be at the sole  discretion of the
Board of  Directors  and will  depend  upon the  earnings,  if any,  the capital
requirements and financial position of Registrant,  general economic  conditions
and other  pertinent  conditions.  Unless  otherwise  determined by the Board of
Directors,  no dividends  shall be paid on any share which has been purchased or
redeemed  by  Registrant  while the shares are held by  Registrant.  Pursuant to
Registrant's Articles of Incorporation (attached hereto as Exhibit 3(I) and

                                  13

<PAGE>


incorporated  herein  by  reference),  the  Directors  may,  from  time to time,
capitalize any undistributed  surplus on hand of Registrant and may from time to
time issue  shares,  bonds,  debentures or debt  obligations  of Registrant as a
dividend  representing such undistributed  surplus on hand, or any part thereof.
It is the present  intention of Registrant  not to pay any cash dividends in the
foreseeable  future,  but rather to  reinvest  any  earnings  into its  business
operations.

The Securities and Exchange  Commission has adopted  regulations which generally
define "penny  stock" to be any equity  security that has a market price of less
than $5.00 per share,  subject to certain exceptions.  Registrant's Common Stock
may be deemed to be a penny  stock and thus will  become  subject  to rules that
impose additional sales practice  requirements on  broker/dealers  who sell such
securities to persons other than established customers and accredited investors,
unless the Common Stock is listed on The Nasdaq Small Cap Market.  Consequently,
the penny  stock  rules may  restrict  the  ability of  broker/  dealers to sell
Registrant's  securities  and may  adversely  affect  the  ability of holders of
Registrant's Common Stock to resell their shares in the secondary market.

ITEM  6.  MANAGEMENT'S  DISCUSSION  AND  ANALYSES
          ======================================

This annual report  contains  forward-looking  statements that involve risks and
uncertainties.  The statements contained in this registration statement that are
not  purely  historical  are  forward-looking   statements,   including  without
limitation statements regarding Registrant's expectations,  beliefs,  intentions
or strategies  regarding the future. All forward-looking  statements included in
this document are based on  information  available to the Registrant on the date
hereof, and Registrant assumes no obligation to update any such  forward-looking
statements.  Registrant's  actual  results may differ  materially as a result of
certain  factors,  including  those set forth  hereafter  and  elsewhere in this
registration  statement.  Potential  investors  should  consider  carefully  the
following factors, as well as the more detailed information  contained elsewhere
in this registration statement, before making a decision to invest in the Common
Stock of Registrant. In addition,  several recent accounting pronouncements (SOP
98-1,  98-5, SFAS 133 and SAB 101 on revenue  recognition) may have an effect on
the Registrant, and Registrant intends to consult with its independent certified
public accountants to determine the nature and extent of such effect.

   Consolidation of Joint Ventures in PRC
-----------------------------------------
The  Company  has  consolidated  the joint  ventures  in China  because it has a
controlling  interest  provided  by the  underlying  joint  venture  agreements;
however,  joint venture  interests in the PRC are generally not  consolidated in
the financial  statements of U.S. companies due to rights asserted by the PRC as
a  party  to  the  joint  venture   agreements.   In  that  regard,   the  PRC's
interpretation of the joint venture agreements may differ from the Company's and
it is uncertain what legal recourse the Company would have available  within the
Chinese legal system if any such dispute arose.

Selected  Consolidated  Financial  Data
---------------------------------------
The following historical financial data for the year ended December 31, 1999 and
the year ended  December 31, 1998 was derived from the  historical  consolidated
financial  statements of Registrant that have been audited by BDO International,
independent auditors (the Financial Statements).

                                 14

<PAGE>

<TABLE>
<CAPTION>

BALANCE SHEET DATA:
------------------

                                              12/31/98      12/31/99
                                              ========     =========
<S>                                          <C>          <C>
Cash and cash equivalents . .                $   71,690  $     5,628
Subscription receivable . . . . . . . .          91,980            -
Prepayments                                     393,818      133,059
Inventories . . . . . . . . . . . . . .          29,045        3,905
Other assets. . . . . . . . . . . . .            20,405       43,690
                                              ----------   ---------
Total current assets. . . . .                $  606,938   $  186,282
Land usage rights                               469,814      469,814
Land improvement                              4,274,312    4,274,312
Construction in progress. . . .               1,564,530    1,656,970
Property and equipment(net) . . . .           1,424,053    1,363,294
                                             ----------   ----------
Total assets. . . . . . . .                 $ 8,339,647    7,950,672

Due to a shareholder. . . . .               $   236,922  $   714,204
Accounts payable.                               579,289      542,821
Others payable                                  126,447      159,150
Accrued expenses. . . . . . . . .                95,737      180,890
                                            -----------  -----------
Total current liabilities .                 $ 1,038,395  $ 1,597,065
Total shareholders'
equity                                        7,301,252  $ 6,353,607
</TABLE>

<TABLE>
<CAPTION>

Statements of operations data:
------------------------------
                                          Year           Year
                                          Ended          Ended
                                   December 31, 1998  December 31, 1999
                                  ------------------  -----------------
<S>                                <C>             <C>
Sales. . . . . .                       $188,583        $ 41,926
Cost of sales ..                       $ 94,845        $104,214
Selling expenses                       $175,744        $ 84,547
General and
administrative
expenses                               $975,567      $1,071,710
Other Income, net                   $   (46,058)       $(60,400)
Net loss . . . .   .                $(1,011,515)    $(1,158,145)
Net loss per
common share                           $   (.08)       $    (09)
Weighted average
common shares
Outstanding                           12,294,905       12,955,530
</TABLE>

                                       15

<PAGE>

Results of  Operations
-----------------------
Limited Operating History; Accumulated Deficit; Need for Additional Capital

There is limited historical financial information about Registrant upon which to
base  an  evaluation  of the  Registrant's  performance  or to  make a  decision
regarding an investment in shares of Registrant's  Common Stock.  Registrant has
an accumulated  deficit of $2,169,660  through  December 31, 1999.  Registrant's
cash and cash equivalents  decreased from $71,690 at December 31, 1998 to $5,628
at December 31, 1999.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998:

Revenue from the operation of the Water Park's  restaurant and swimming pool for
the twelve  months ended  December 31, 1999 amounted to $41,926 and for the year
ended  December  31,  1998,  it amounted to  $188,583.  Reduction  in revenue is
because of the  suspension  of  restaurant  business  after the Chinese New Year
during the first  quarter of 1999.  Included in the selling  expenses of $84,547
for the twelve months ended December 31, 1999 are mainly salary and depreciation
expenses.

Registrant had no other revenues for the year ended December 31, 1999, as all of
its other projects were in the  construction/development  stage through December
1999.  Revenues  realized  in 1999 were  attributable  to the opening of Shilong
Water World in summer seasons of 1999.

The cost of sales for the year ended  December 31, 1999 was  $104,214.  Selling,
general and administrative  expenses were $1,156,257 for the year ended December
31, 1999. Other income for the year ended December 31, 1999 was $60,400.

The main  items  included  in 1999 cost of sales are food  material  and  salary
expenses. Reduction in selling expenses is because of the gradual lay off of PRC
staff  after the Chinese  New Year.  Included in the general and  administrative
expenses are $351,620 consulting fees, $163,354 salary expenses and $120,000 CEO
compensation.

Net cash provided by financing activities decreased from $1,491,273 for the year
ended  December 31, 1998 to $569,262 for the year ended  December 31, 1999, as a
result of the  decrease  in proceeds  of sale of Common  Stock and advance  from
shareholders of registrant.

Registrant's  net loss for the year  ended  December  31,  1999 was a deficit of
$1,158,145, or a deficit of $.09 per share, based on 12,955,530 weighted average
shares outstanding at December 31, 1999.

The large deficit for the year ended 1999 was attributed to the costs associated
with the general and administrative expenses of $1,071,710.

                                       16

<PAGE>

Year Ended December 31, 1998 Compared to Year Ended December 31, 1997:

Revenue for the five (5) months  operation  of the Water Park for the year ended
December 31, 1998 was  $188,583.  Registrant  had no revenues for the year ended
December 31, 1997, as all of its projects were in the construction / development
stage through December 1997. Revenues realized in 1998 were attributable to the

opening of Shilong  Water World in August,  1998.  The Water World is a seasonal
operation, which will reduce potential revenues from the project.

The cost of sales for the year ended  December  31, 1998 was  $94,845.  Selling,
general and administrative  expenses were $1,151,311 for the year ended December
31, 1998. Other income for the year ended December 31, 1998 was $46,058.

The main items  included in 1998 cost of sales are  $58,239  food  material  and
$31,573 salary  expenses.  Selling  expenses  comprise  $46,000 salary and staff
benefits, $46,432 depreciation expenses, and $63,892 fuel and water. General and
administrative   expenses  include  $112,500   consultancy  fee,   $120,000  CEO
compensation and $679,314 stock-based compensation.

Net cash provided by financing activities increased from $886,669 for the period
ended December 31, 1997 to $1,491,273 for the year ended December 31, 1998, as a
result of proceeds received from sales of Common Stock of Registrant.

Registrant's  net loss for the year  ended  December  31,  1998 was a deficit of
$988,883,  or a deficit of $.08 per share, based on 12,294,905  weighted average
shares  outstanding at December 31, 1998. Since there were no revenues  realized
during the calendar year 1997, no comparison of net loss is made.

The large  deficit  of the year ended 1998  period was  attributed  to the costs
associated with the stock-based  compensation  amounting to $679,314 and the CEO
compensation of $120,000.]

Liquidity and Capital Resources

For the year ended  December 31, 1999,  Registrant  has generated  negative cash
flow from its operations for the twelve months  operation due to the payment for
overhead.  Due to  the  infant  stage  of its  operations,  substantial  ongoing
investment in properties and development  efforts, and expenditures to build the
appropriate  infrastructure  to support  expected future growth,  Registrant has
been substantially dependent on private placements of its equity securities and
shareholder loan financing to fund its cash requirements.

Year Ended December 31, 1999 Compared to Year Ended December 31, 1998

Expenditures  for  acquisition  of properties  and fixed assets  decreased  from
$1,470,510  for the year ended  December  31, 1998 to $81,628 for the year ended
December 31, 1999.  Payments for construction  materials increased from $444 for
the year ended  December  31,  1998 to $92,440 for the year ended  December  31,
1999.

                                       17

<PAGE>

Proceeds from common stock subscription decreased from $1,778,680 for the twelve
months ended  December 31, 1998 to $91,980 for the twelve months ended  December
31, 1999.

As of December 31, 1999,  Registrant  had total assets of  $7,950,672  and total
liabilities of $1,597,065.

Year Ended December 31, 1998 and Year ended December 31, 1997:

Expenditures  for acquisition of properties and fixed assets increased from $966
for the year ended  December 31, 1997 to $1,470,510  for the year ended December
31, 1998.  Expenditures for overhead,  representing  accumulated  indirect costs
which are  related  to  projects,  decreased  from  $477,591  for the year ended
December 31, 1997 to $471,742 for the year ended December 31, 1998. Payments for
land  improvement  costs decreased from $523,597 for the year ended December 31,
1997 to zero for the year ended  December 31,  1998.  Net cash used in investing
activities  increased  from  $1,002,154  for the year ended December 31, 1997 to
$1,942,696 for the year ended December 31, 1998.

Registrant  issued  198,100  shares of Common Stock at $2.00 per share through a
Rule 504 Regulation D offering in 1997. The total proceeds were $362,340, net of
total  offering  expense of $33,860.  Of these  198,100  shares of Common Stock,
20,000 shares were issued in early January 1998.

In March 1998, Registrant issued another 163,700 shares of Common Stock at $2.00
per share  through the same Rule 504  Regulation  D offering in 1997.  The total
proceeds were $294,660,  net of total offering expense of $32,740.  The investor
group  consisted of  approximately  20  individuals.  Most  investors are either
relatives  or  close  friends  of one  of the  Registrant's  directors  and  are
accredited investors.

In  June  1998,  Registrant sold, in a private placement transaction, a total of
323,000  shares  of its restricted Common Stock to Extensiview Ltd., an existing
shareholder  of  Registrant,  for  the sum of $646,000 U.S., or $2.00 per share.

In July 1998,  pursuant to a Stock Option Plan adopted by the Board of Directors
of Registrant on July 1, 1998, Registrant granted stock options to acquire up to
a total of  968,480  shares of its  restricted  Common  Stock to  certain of its
officers,  directors, key employees and consultants.  As additional compensation
for  services  rendered  and/or  incentives  for  services  to  be  rendered  to
Registrant  in the near future.  The Stock Option Plan provides that each holder
of Options  shall be entitled to purchase one share of  Registrant's  restricted
Common  Stock at an  exercise  price of $1.50  per share for a period of one (1)
year from the date of issue of the Option.  Any shares acquired through exercise
of  these  Options  shall  be   restricted   shares  and  may  not,   under  any
circumstances,  be  registered or in any way become free trading until two years
from the date the shares are acquired through exercise of the Option. As of the

                                       18

<PAGE>

date of this registration statement, no Options have been exercised.

In August 1998, Registrant sold, in a private placement transaction,  a total of
300,000 shares of its  restricted  Common Stock to Mr. Li Chee Ngam, for the sum
of $660,000 U.S., or $2.20 per share.

In September  1998,  Registrant  issued 200,000 shares of its restricted  Common
Stock, valued at $2.25 per share, to two unrelated business entities in exchange
for stock promotion services for a term of two (2) years.

In November 1998, Registrant sold, in a private placement  transaction,  a total
of 180,000  shares of its  restricted  Common Stock to Mr. Li Chee Ngam, for the
sum of $270,000 U.S., or $1.50 per share.

In December 1998,  Registrant  issued 2,590,730 shares of its restricted  Common
Stock,  valued at $1.113 per share,  in exchange  for a 100% equity  interest in
Honpar  Shilong,  a company  incorporated in Hong Kong of which Stephen Chow, an
officer,  director  and  principal  shareholder  of  Registrant,  is an officer,
director  and  principal  shareholder.  The  value of the  price  per  share was
determined  based on the historical  cost of the total assets and liabilities of
Honpar Shilong as of October 31, 1998.

Since  inception,  Registrant  has used its  Common  Stock and stock  options to
attract and compensate  employees and consultants,  as additional  incentive for
debt financing, for acquisitions, and to repay outstanding indebtedness.

As of December 31, 1999,  Registrant's  total assets and total  liabilities were
$7,950,672 and $1,597,065, respectively.

Registrant has begun  operations at its Shilong Water World and has yet to reach
break-even in terms of both cash flow and profitability.

Total cash inflows from financing activities of $569,262 generated from proceeds
of sale of common stock and advance from  shareholder,  were used for payment of
the general and administrative expenses.

                                       19

<PAGE>

ITEM  7.      FINANCIAL  STATEMENTS  AND  EXHIBITS
              ====================================

Audited financial  statements of Registrant for the year ended December 31, 1998
and the year ended December 31, 1999,  were audited by BDO  International,  29/F
Wing On Centre,  111 Connaught Road Central,  Hong Kong. The audited  statements
immediately follow:

[BDO Logo Appears Here]                         BDO International



                                                Certified Public Accountants
                                                29th Floor Wing on Centre
                                                111 Connaugh Road Central
                                                Hong Kong
                                                Telephone (852) 2541-5041
                                                Fax (852) 2815-0002



               Report of Independent Certified Public Accountants

To the Board of Directors and Shareholders of
Asian Star Development, Inc.


We have  audited  the  accompanying  consolidated  balance  sheets of Asian Star
Development,  Inc. as of December 31, 1999 and 1998 and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for the
years ended  December  31, 1999 and 1998.  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 generally accepted auditing standards
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of Asian  Star
Development, Inc. at December 31, 1999 and 1998, and the consolidated results of
their  operations and cash flows for the years ended December 31, 1999 and 1998,
in conformity with generally accepted accounting principles in the United States
of America.

By: /s/ BDO International
    ---------------------

Certified Public Accountants
Hong Kong, January 17, 2000 except

Note 13 as to which the date is January 25, 2000




                                       20

<PAGE>

<TABLE>
<CAPTION>

                           ASIAN STAR DEVELOPMENT, INC.
                           CONSOLIDATED BALANCE SHEETS

                            (Expressed in US Dollars)

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

                                                          1999              1998
                                                          ----              ----

ASSETS

CURRENT ASSETS

<S>                                                  <C>             <C>
   Cash and cash equivalents                         $      5,628    $    71,690
   Subscription receivable                                      -         91,980
   Prepayments                                            133,059        393,818
   Inventories (Note 3)                                     3,905         29,045
   Other assets                                            43,690         20,405
                                                     ------------    -----------
     Total current assets                                 186,282        606,938

Land usage rights (Note 4)                                469,814        469,814
Land improvement (Note 4)                               4,274,312      4,274,312
Construction in progress (Note 4)                       1,656,970      1,564,530
Property and equipment, net (Note 5)                    1,363,294      1,424,053
                                                     ------------    -----------
Total assets                                           $7,950,672      8,339,647
                                                     ============    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

   Due to a shareholder (Note 6)                     $    714,204    $   236,922
   Accounts payable                                       542,821        579,289
   Others payable                                         159,150        126,447
   Accrued liabilities                                    180,890         95,737
                                                     ------------    -----------
     Total current liabilities                       $ 1,597,065     $ 1,038,395

COMMITMENTS AND CONTINGENCIES (Note 8)

MINORITY INTEREST (Note 9)

SHAREHOLDERS' EQUITY Common stock, $0.001 par value:

   25,000,000 shares authorized, 12,955,530
     shares issued and outstanding (Note 10)              12,956          12,956
Additional paid-in capital (Notes 10 and 11)           8,510,311       8,207,831
Stock subscribed                                               -          91,980
Accumulated losses                                    (2,169,660)    (1,011,515)
                                                     ------------    -----------
   Total shareholders' equity                          6,353,607       7,301,252
                                                     ------------    -----------
Total liabilities and shareholders' equity           $ 7,950,672     $ 8,339,647
                                                     ===========     ===========


See  accompanying  summary  of  accounting  policies  and notes to  consolidated
financial statements.

</TABLE>

                                       21

<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS

                            (Expressed in US Dollars)

                                                                                 Year ended
                                                                                December 31,
                                                                                ------------

                                                                              1999             1998
                                                                              ----             ----
<S>                                                                <C>                 <C>
Revenue, net                                                       $        41,926     $    188,583

Cost of sales                                                              104,214           94,845
                                                                   ---------------     ------------
Gross (loss)/profit                                                       (62,288)           93,738

Selling expenses                                                          (84,547)        (175,744)

General and administrative expenses                                    (1,071,710)        (975,567)

Other income, net                                                          60,400            46,058
                                                                   ---------------     ------------
Loss before income tax                                                 (1,158,145)       (1,011,515)

Income tax provision (Note 7)                                                   -                 -
                                                                    --------------      ------------
Net loss before minority interest                                      (1,158,145)       (1,011,515)

 Less: loss in a subsidiary attributed to minority interest                     -                 -
                                                                    --------------     -------------
Net loss attributed to common shareholders                           $ (1,158,145)     $ (1,011,515)
                                                                     =============      ============
Net loss per common share - Basic and diluted                        $      (0.09)    $       (0.08)
                                                                     =============     =============

Weighted average number of common shares
   outstanding                                                          12,955,530        12,294,905
                                                                     =============     =============



See accompanying summary of accounting policies and notes to consolidated financial statements

</TABLE>

                                       22

<PAGE>

<TABLE>
<CAPTION>

                          ASIAN STAR DEVELOPMENT, INC.
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            (Expressed in US Dollars)


                                                  Common Stock
                                           ------------------------       Additional                                     Total
                                            Number                          Paid-in    Accumulated        Stock     Shareholders'
                                            of Shares       Amount         Capital        Losses       Subscribed       Equity
                                            ---------       ------         -------        ------       ----------       ------
<S>                                        <C>                <C>         <C>            <C>                <C>         <C>
Balance at December 31, 1997                11,788,830        $11,789     $4,702,626   $           -   $          -   $  4,714,415

Rule 504 offering (Note 10)                    163,700            164        294,496               -              -        294,660
Private placement in 6/98 (Note 10)            323,000            323        645,677               -              -        646,000
Private placement in 8/98 (Note 10)            300,000            300        659,700               -              -        660,000
Private placement in 9/98 (Note 10)            200,000            200        449,800               -              -        450,000
Private placement in 11/98 (Note 10)           180,000            180        177,840               -         91,980        270,000
Stock-based compensation (Note 11)                   -              -        679,314               -              -        679,314
CEO notional compensation (Note 12)                  -              -        120,000               -              -        120,000
Capital injected (Note 10)                           -              -        478,378               -              -        478,378
Net loss                                             -              -              -      (1,011,515)             -     (1,011,515)
                                           -----------       --------    -----------    -------------  ------------     -----------
Balance at December 31, 1998                12,955,530         12,956      8,207,831      (1,011,515)        91,980      7,301,252

Stock subscription received                          -              -         91,980               -        (91,980)             -
Stock-based compensation (Note 11)                   -              -         90,500               -              -         90,500
CEO notional compensation (Note 12)                  -              -        120,000               -              -        120,000
Net loss                                             -              -              -      (1,158,145)             -     (1,158,145)
                                           -----------       --------    -----------      -----------  ------------     -----------
Balance at December 31, 1999                12,955,530        $12,956     $8,510,311   $ (2,169,660)   $          -      $6,353,607
                                            ==========        =======     ==========   =============   ============     ============


See accompanying summary of accounting policies and notes to consolidated financial statements


</TABLE>

                                       23

<PAGE>

<TABLE>
<CAPTION>

                          ASIAN STAR DEVELOPMENT, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                            (Expressed in US Dollars)

                                                                             Year ended
                                                                             December 31,
                                                                            ------------
                                                                          l999              1998
                                                                       ---------         ---------
<S>                                                                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                         $(1,158,145)     $ (1,011,515)
     Adjustment to reconcile net loss to
        net cash provided by operating activities
     Depreciation and amortisation of fixed assets                       113,850           49,617
     Stock issued for consulting service                                  90,500          450,000
     Recognition of deferred expense                                     225,000                -
     Non-cash compensation expense                                       120,000          799,314
     Prepayments                                                          35,759        (393,818)
     Inventories                                                          25,140         (29,045)
     Other assets                                                       (23,285)         (19,825)
     Accounts payable                                                   (36,468)          579,289
     Others payable                                                       32,703           92,587
     Accrued expenses                                                     85,153         (27,802)
                                                                   -------------    -------------
NET CASH (USED)/PROVIDED BY OPERATING ACTIVITIES                       (489,793)          488,802

CASH FLOWS FROM INVESTING ACTIVITIES
     Payments for overhead                                                     -        (471,742)
     Payments for land improvement                                             -                -
     Payments for construction materials                                (92,440)            (444)
     Proceeds from disposal of fixed assets                               28,537                -
     Acquisition of properties and fixed assets                         (81,628)      (1,470,510)
                                                                   -------------    -------------
NET CASH USED IN INVESTING ACTIVITIES                                  (145,531)      (1,942,696)

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from common stock subscription                              91,980        1,778,680
     Advance from (Repayment to) a shareholder                           477,282        (287,407)
                                                                   -------------    -------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                569,262        1,491,273

NET (DECREASE)/INCREASE IN CASH
   AND CASH EQUIVALENTS                                                 (66,062)           37,379

CASH AND CASH EQUIVALENTS
   AT BEGINNING OF PERIOD                                                 71,690           34,311
                                                                   -------------    -------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $       5,628          $71,690
                                                                   =============    =============

SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT
   NON-CASH TRANSACTIONS
Capital injection in Honpar Shilong for:

   Land usage rights                                               $           -    $     234,905
   Land improvement                                                            -          231,668
   Construction in progress                                                    -           11,805


See accompanying summary of accounting policies and notes to consolidated financial statements

</TABLE>

                                       24

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 1 - BACKGROUND AND REORGANIZATION

Asian Star Development, Inc., ("the Company") was incorporated under the laws of
the State of Nevada in United  States of  America  on January 8, 1997 to conduct
real estate development business in the People's Republic of China ("PRC").

The Company was incorporated to consolidate two projects, the Maple City project
and Shilong  Town  project,  previously  conducted  by two Hong Kong  companies,
namely Honpar Properties Limited  ("Honpar") and Honpar  (Huangzhou)  Properties
Limited ("Honpar Huangzhou")  respectively.  Honpar and the Company are owned by
the same group of  shareholders.  Honpar Huangzhou is wholly-owned by one of the
Company's majority shareholders.

The  interest  in the  project of Maple City was  transferred  into  Honpar from
Brightstar  Investment  Limited in 1993, a company in which an existing director
of the Company has the majority interests.  The transfer-in value of the project
at that time was determined on the basis of historical cost.

The Shilong Town project is conducted through two equity joint venture companies
in the PRC,  Dongguan  Dragon Villa Ltd.  ("Dragon  Villa") and Dongguan  Dragon
Entertainment  Centre Ltd. ("Dragon  Entertainment"),  in which Honpar Huangzhou
owned 80%  interests  and rights.  Dragon  Villa and Dragon  Entertainment  were
formed in December 1995, for the sole purpose of this project.

The Company issued  9,000,000  shares of common stock in exchange for the entire
rights to and  interests  in the Maple  City  project  and an 80%  rights to and
interests in Dragon Villa and Dragon Entertainment on January 8, 1997.

In October 1997, the Company entered into a co-operative joint venture agreement
in respect of the  development of Shilong Water World located in Shilong Town in
the  PRC  through   Dragon  Villa.   The  joint  venture   constructed  a  water
entertainment  complex which includes facilities such as a restaurant,  swimming
pools and a kiosk. Operations commenced on August 1, 1998.

During  December 1998, the Company  issued  2,590,730  shares of common stock at
$1.113  per share in  exchange  for 100%  equity  interest  in Honpar  (Shilong)
Properties Limited ("Honpar Shilong"),  a company  incorporated in Hong Kong and
conducting the Shilong City Hall Project since 1996. Honpar Shilong was owned by
a major shareholder of the Company. The price per share of $1.113 was calculated
based on a 30% discount on the weighted average trading price for 60 days before
the  transaction  date (December 15, 1998).  The number of shares was determined
based on the  historical  cost of the total  assets  and  liabilities  of Honpar
Shilong divided by the price per share as determined aforementioned.

This  combination  was  treated as a  reorganization  of entities  under  common
control  and  accounted  for in a manner  similar to that in pooling of interest
Consequently,  the  consolidated  financial  statements  present  the  financial
positions,  the related results of operations,  shareholders'  equity,  and cash
flows of the Company by  consolidating  the two entities'  activities as if this
combination had taken place at the beginning of the years presented.

                                       25

<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 1 - BACKGROUND AND REORGANIZATION (Cont'd)

After this  combination,  the total  subsidiaries  and equity  structure  are as
follows:

<TABLE>
<CAPTION>

Name                                                      Incorporated in          Equity Interest
----                                                      ---------------          ---------------
<S>                                                   <C>                              <C>
Dongguan Dragon Villa Ltd.                                      PRC                      80%
Dongguan Dragon Entertainment Centre Ltd.                       PRC                      80%
Honstar Entertainment Centre Ltd.                               PRC                     100%
Gang Feng (Boluo) Real Estate Co. Ltd.                          PRC                     100%
Honpar (Shilong) Properties Limited                          Hong Kong                  100%
Asian Star (Hong Kong) Limited                               Hong Kong                  100%
Able Wealth Investments Limited                       British Virgin Islands            100%

</TABLE>

The  Company  did not have any  operating  activities  in 1997 and has  suffered
losses of  $1,158,145  and  $1,011,515  in 1999 and 1998  respectively,  and had
negative  working capital in 1999 and 1998.  Historically,  one of the Company's
directors and major shareholders provided the Company with substantial financing
sources.  The  director  has  provided  a letter of support  indicating  that he
pledges to provide continuous financial support to enable the Company to satisfy
its working  capital  requirements  and to  complete  its  commitments  to these
investment  projects on a going concern basis.  While there is no assurance that
funding will be available, the Company is continuing to actively seek funding to
complete respective investment projects through equity and/or debt financing.
There  is  an  uncertainty   that  management  fund  raising  exercise  will  be
successful.  The accompanying financial statements do not include any provisions
or adjustments, which might result from the outcome of the uncertainty discussed
above.

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING AND PRINCIPLES OF CONSOLIDATION

The consolidated  financial statements are prepared in accordance with generally
accepted  accounting  principles in the United States of America and present the
financial statements of the Company and its foreign  subsidiaries.  All material
intercompany  transactions  have been  eliminated.  The joint ventures have been
consolidated  because the Company controls the development and operations of the
real estate projects and maintains control over the board. The rights of the PRC
joint venture partners are protective in nature.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

The  Financial  position  and  result of  operations  of the  Company's  foreign
subsidiaries  are determined  using local currency  (Renminbi Yuan and Hong Kong
Dollars,  hereafter "RMB" and "HKD"  respectively)  as the functional  currency.
Assets and  liabilities  of the  subsidiaries  are  translated at the prevailing
exchange rate in effect at each period end. Contributed capital is translated at
historical  exchange rate when capital was injected.  Income statement  accounts
are  translated  at the  weighted  average  rate of exchange  during the period.
Translation  adjustments  arising from the use of different  exchange rates from
period  to  period  are  included  in  cumulative  translation   adjustments  in
shareholders' equity. However, to date there have been no cumulative translation
adjustments.  Gains and losses resulting from foreign currency  transactions are
included  in  other  income  or  expense.  There  are  currently  no  assets  or
liabilities that would give rise to an other comprehensive income item.

                                       26

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)

REVENUE RECOGNITION

Revenue  from  swimming  pool ticket sales are  recognized  when tickets (net of
business  tax)  are  sold.  Revenue  from  goods  sold in  kiosk  operation  are
recognized  when the risk of loss for the goods  sold is  passed to the  buyers,
which is usually at the time of delivery.  Revenue from restaurant operation are
recognized when the services are rendered to the customers.

INVENTORIES

Inventories,  which consist of purchased  merchandise and consumable stores, are
stated at the lower of cost (first-in-first-out basis) and market value.

CAPITALIZATION POLICY

The  development  and  construction of real estate involves direct project costs
and  indirect  project  costs,  which are  allocated  to a specific  real estate
project. Capitalization of these costs continues until the project is complete.

LAND USAGE RIGHTS

Land usage right is an intangible asset and stated at cost and is amortized over
the unexpired land usage term.

LAND IMPROVEMENT

Land improvement is stated at cost, including substantially capitalized interest
and  direct  costs  related  to  grading,  filling,  leveling,  and  landscaping
activities.  Land improvement is depreciated over the estimated economic life of
any project which is built on these parcels of improved land.

CONSTRUCTION IN PROGRESS

Construction in progress is stated at cost.  Construction  in progress  includes
direct costs and capitalized interest related to any identifiable project

OVERHEAD

Overhead represents all accumulated  indirect costs that are related to projects
such as project supervisors' salaries, certain travel and administrative
expenses,  and legal  fees,  etc.  The  accumulated  overhead  is  allocated  to
respective projects based on the actual time spent on each project. A project is
generally  considered  to be  operational  when it is  substantially  completed.
including tenant  improvement,  and held available for occupancy,  but not later
than one year from cessation of major construction activities.

                                       27

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include all highly liquid investments with an original
maturity of three months or less.

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment are stated at cost.  Depreciation  is computed  using the
straight-line method to allocate the acquisition cost of depreciable assets over
the estimated useful lives of the assets as follows:

<TABLE>
<CAPTION>

                                                                       Estimated
                                                                     Useful Life
                                                                   (in years)
                                                                   ----------

<S>                                                                  <C>
Land usage rights                                                    50 - 70
Building premises                                                    10 - 25
Water amusement park facilities                                       8 - 25
Vehicles                                                                8
Office furniture, fixture and equipment                               3 - 10
Kitchen equipment and facilities                                      3 - 10

</TABLE>

Maintenance,  repairs and minor  renewals  are  charged  directly to expenses as
incurred.  Additions and betterments to property and equipment are  capitalized.
When assets are disposed of, the related cost and accumulated depreciation
thereon are removed from the accounts and any resulting gain or loss is included
in operations.

INCOME TAXES

The Company and its  subsidiaries  account for income taxes using the  liability
method,  which  requires an entity to  recognize  deferred tax  liabilities  and
assets.  Deferred income taxes are recognized  based on the differences  between
the tax bases of  assets  and  liabilities  and their  reported  amounts  in the
financial statements that will result in taxable or deductible amounts in future
years.  Further, the effects of enacted tax laws or rate changes are included as
part of deferred tax  expenses or benefits in the year that cover the  enactment
in the near future  date.  A  valuation  allowance  will be provided  due to the
uncertainty that deferred tax benefit will be realized.

                                       28

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of certain financial instruments,  including cash, accounts
receivable and accounts  payable  approximate fair value as of December 31, 1999
and 1998 because of the relatively short-term maturity of these instruments.

USE OF ESTIMATES

The  preparation  of the  financial  statements  in  accordance  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions   that  affect  reported  amounts  of  assets  and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could be different from those estimates.

IMPAIRMENT OF LONG-LIVED ASSETS

The  Company  adopted  the  provisions  of  Statement  of  Financial  Accounting
Standards No. 121 (SFAS No. 12l)  "Accounting  for the  Impairment of Long-Lived
Assets and for Long-Lived  Assets to be Disposed Of", which requires  impairment
losses to be recorded on long-lived assets being developed, based on fair value,
when  indicators  of  impairment  are  present and the  undiscounted  cash flows
estimated to be  generated  by those  assets are less than the assets'  carrying
amount.  Example of indicators of impairment  include a significant  decrease in
the market value of an asset,  a  significant  change in the extent or manner in
which an asset is used or a  significant  adverse  change  in legal or  business
factors that could affect the value of an asset.

The estimation  process in  determining  the fair value of real estate assets is
inherently  uncertain  and relies on  considerable  extent on current and future
economic and market  conditions,  the availability of suitable financing to fund
holding,   development,   and  construction  activities  and  the  repayment  or
refinancing of existing  debts.  Such economic and market  conditions may affect
management's  development  and  marketing  plans.   Accordingly,   the  ultimate
realization may differ from amounts presently estimated.

EARNINGS (LOSS) PER SHARE

Effective  December  31,  1997,  the  Company  adopted  Statement  of  Financial
Accounting  Standards  No.  128 (SFAS  No.  128"),  "Earnings  per  Share".  The
statement  replaces the calculation of primary and fully diluted earnings (loss)
per share with basic and  diluted  earnings  (loss)  per share.  Basic  earnings
(loss) per share includes no dilution and is computed by dividing  income (loss)
available  to  common  shareholders  by the  weighted  average  number of shares
outstanding  during the period.  Diluted  earnings (loss) per share reflects the
potential  dilution of securities  that could share in the earnings (loss) of an
entity, similar to fully diluted earnings (loss) per share.

During loss  periods,  dilutive  common  equivalent  shares are  excluded as the
effect would be antidilutive.

                                       29

<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 2 - SUMMARY OF IMPORTANT ACCOUNTING POLICIES (Cont'd)

STOCK-BASED COMPENSATION

The Company adopted  Statement of Financial  Accounting  Standards No. 123 (SFAS
No.  123),  "Accounting  for  Stock-based  Compensation".  The Company  uses the
intrinsic  value method of accounting  per APB No. 25 for employee stock options
and discloses  the pro forma impact on net income and earnings  (loss) per share
as if the fair value  based  method had been  applied.  For equity  instruments,
including  stock options  issued to  non-employee,  the fair value of the equity
instruments or the fair value of the consideration  received,  whichever is more
readily  determinable,  is used to  determine  the  value of  services  or goods
received and the corresponding charge to operations.

NEW ACCOUNTING STANDARDS NOT ADOPTED YET

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Standards  No.  133  (SFAS  No.  133),   "Accounting  for  Derivative
Instruments  and  Hedging  Activities".  SFAS  No.  133  requires  companies  to
recognize  all  derivatives  contracts as either  assets or  liabilities  in the
balance sheet and to measure them at fair value. If certain  conditions are met,
a derivative may be specifically  designated as a hedge,  the objective of which
is to match the timing of gain or loss  recognition  on the  hedging  derivative
with the recognition of (i) the changes in the fair value of the hedged asset or
liability that are  attributable  to the hedged risk or (ii) the earnings effect
of the hedged  forecasted  transaction.  For a derivative  not  designated  as a
hedging  instrument,  the gain or loss is  recognized in income in the period of
change.  SFAS No. 133 is  effective  for all  fiscal  quarters  of fiscal  years
beginning after June 15, 2000.

Historically,  the Company has not entered into derivatives  contracts either to
hedge existing risks or for speculative purposes.  Accordingly, the Company does
not  expect  adoption  of the new  standard  on  January  1, 2001 to affect  its
financial statements.

NOTE 3 - INVENTORIES

<TABLE>
<CAPTION>

Inventories consist of:
                                                        December 3l,
                                                        ------------
                                                     1999             1998
                                                     ----             ----
<S>                                                 <C>             <C>
Merchandise and service goods                       $3,109          $20,275
Spare parts and supplies                               796            8,770
                                                    -------        --------
                                                    $3,905          $29,045

</TABLE>

                                       30

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

 NOTE 4 - PROJECTS UNDER CONSTRUCTION

<TABLE>
<CAPTION>

Projects under construction consist of the following:

                              Shilong          Shilong         Maple        Shilong
                              Town           Water World       City        Town Hall       Total
                              ----           -----------       ----        ---------       -----
<S>                           <C>                   <C>    <C>            <C>            <C>
Accumulated cost:

Land usage rights            $    -         $         -    $        -    $   469,814   $    469,814
Land improvement              217,800                 -     1,876,701      2,179,811      4,274,312
Construction in progress      302,227                 -        85,470              -        387,697
Overhead                      131,271                 -       495,312        550,250      1,176,833
                                                                                       ------------
Balance. 12/31/1998                                                                      $6,308,656
                                                                                       ============

Accumulated cost:

Land usage rights                   -                 -             -        469,814   $    469,814
Land improvement              217,800                 -     1,876,701      2,179,811      4,274,312
Construction in progress      358,661                 -       139,920              -        498,581
Overhead                      112,827                 -       495,312        550,250      1,158,389
                                                                                       ------------
Balance  12/31/1999                                                                      $6,401,096
                                                                                       ============

</TABLE>

Shilong Town (land usage term: 50 - 70 years)

The  Shilong  Town  project,  which is  developed  by Dragon  Villa  and  Dragon
Entertainment,  comprises  three parcels of land located in Shilong Town center,
which are  adjacent  to each  other with a total  area of  approximately  57,500
square meters. It is the intention of the joint venture companies to establish a
residential,  commercial and  entertainment  complex on these 3 parcels of land.
Management  expects  the  completion  date will be 2001.  Out of  57,500  square
meters, a land usage rights certificate in the name of Dragon Villa with a total
area of  approximately  5,700 square meters was obtained  during 1998. The joint
venture  entities  are  waiting  for  the  issuance  of the  land  usage  rights
certificates from the relevant  authorities for the remaining parcels.  The land
on which the commercial and entertainment buildings will be built will have a 50
year lease term while the remainder will have a 70 year lease term starting from
the date when land usage  rights  certificates  are  obtained.  According to the
joint venture  agreement,  the profit and loss sharing ratio between the Company
and the joint venture partner is 80% and 20% respectively.

Shilong Water World ( land usage term: 70 years)

The Shilong Water World project,  which is developed by Dragon Villa, is located
adjacent to the Shilong  Town center with a total area of  approximately  40,000
square  meters.  The  Company  contributed  funds  for  the  construction  of an
entertainment  complex while the PRC joint venture partner  contributed a parcel
of land  without  receiving  any  consideration.  This  parcel  of land  will be
returned to the PRC joint venture  partner when the  co-operative  joint venture
agreement  expires in 70 years starting from 1997. The construction of the water
entertainment  center which includes  facilities such as a restaurant,  swimming
pools and a kiosk was completed and the operations  commenced on August 1, 1998.
The profit and loss  sharing  ratio  between the  Company and the joint  venture
partner is 80% and 20% respectively.

                                       31

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 4 - PROJECTS UNDER CONSTRUCTION (Cont'd)

Maple City (land usage term: 70 years)

The Maple City  project,  which is  developed by the  Company,  comprises  three
parcels  of  land  which  are  close  by  each  other.  The  land  usage  rights
certificates  of the  Maple  City  project  stipulate  a lease  term of 70 years
commencing from 1993 and the total area is  approximately  74,000 square meters.
The land  was  contributed  by a local  Chinese  partner  to the  Company  at no
consideration.  It is the intention of the Company to build a hotel,  commercial
and  entertainment  complex on these parcels of land. A hotel and  entertainment
center is being built by a PRC registered and wholly-owned  subsidiary,  Honstar
Entertainment  Centre Ltd.  ("Honstar").  The  construction  has  commenced  and
certain concrete structural work was completed.

Shilong Town Hall (land usage term: 70 years)

The Shilong Town Hall project, which is developed by Honpar Shilong, consists of
a parcel of land located in the center of Shilong Town with approximately 5,855
square meters.  Honpar Shilong entered into a co-operative contract with Shilong
Town Government to build a commercial complex including retail and office space,
residential space and a town hall theater with approximately  1,000 seats on the
aforementioned parcel of land. In addition,  Honpar Shilong is required to allow
the Shilong Town Government to freely use the town hall theater.  The Land usage
rights  will  expire  in 70 years  starting  from the date  when the  inspection
certificate is issued.

In light of the co-operative  contract,  Honpar Shilong is required to pay, upon
the issuance of an inspection  certificate  when the  construction  is complete.
RMB50 million for the land usage rights and RMB3.8  million for land  management
fee and land improvement expenses.  Upon fulfilling the above requirements,  the
land usage rights will be  transferred  to Honpar  Shilong from the Shilong Town
Government.  As of  December  31,  1999,  a  total  of RMB4  million  ($469,814)
instalment  payments were made by Honpar Shilong  against the RMB50 million land
usage rights.

Harmonic Hall Investment

On July 6, 1999, one of the Company's wholly owned subsidiary has entered into a
preliminary  agreement  to  purchase  62.5% of  Harmonic  Hall  Holding  Limited
("HHHL") in exchange for 3,870,968 restricted common stock of the Company. These
terms  have  never  been  materialized  and  negotiation  on new terms have been
undergoing between the Company and HHHL. No agreed terms have been reached up to
now.

                                       32

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 5 - PROPERTY AND EQUIPMENT, NET

<TABLE>
<CAPTION>

Property and equipment consists of:                     December 31,
                                                        ------------
                                                      1999           1998
                                                      ----           ----
<S>                                               <C>            <C>
Building premises                                $    393,606    $   332,586
Water amusement park facilities                       982,915        964,765
Vehicles                                                    -         20,171
Office furniture, fixture and equipment                56,971         59,168
Kitchen equipment and facilities                       96,265        101,424
                                                 ------------    -----------
                                                    1,529,757      1,478,114
Less: Accumulated depreciation                      (166,463)       (54,061)
                                                 ------------    -----------
                                                 $  1,363,294    $ 1,424,053
                                                 ============    ===========

</TABLE>

NOTE 6 - RELATED PARTY TRANSACTIONS

The  Company,  from  time  to  time,  received  from  or  made  repayment  to  a
shareholder.  The balance due to the shareholder  does not bear any interest and
does not have clearly defined terms of repayments.

As of December 31, 1999 and 1998, the amount due to the  shareholder is $714,204
and $236,922 respectively.

NOTE 7 - INCOME TAXES

Dragon Villa commenced  operations in 1998. The standard  enterprise  income tax
rate in PRC is 33% of which 30% is attributed to the central  government  and 3%
to the provincial government. For the year ended December 31, 1999, Dragon Villa
suffered a tax loss, no provision for income taxes is required accordingly.  For
the years ended December 31, 1999 and 1998 the Company suffered tax losses.

Significant  components  of the  Company's  estimated  deferred tax assets as of
December 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>

                                                          December 3l,
                                                          ------------
                                                     1999             1998
                                                     ----             ----
<S>                                                <C>              <C>
Deferred tax assets and liabilities:
Net operating loss carry forward                   $ 686,123        $ 333,961
Property and equipment                               (38,937)          13,382
                                                   ---------        ---------
Not deferred tax assets                              647,186          347,343
Valuation allowance for deferred tax assets         (647,186)        (347,343)
                                                   ---------        ---------
Net deferred tax assets                            $       -        $       -
                                                   =========        =========

</TABLE>

                                       33

<PAGE>

                         ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Based on the joint  venture  contracts  and  agreements  the Company has entered
into,  the overall  status of the four  projects  as of December  31, 1999 is as
follows:

<TABLE>
<CAPTION>

                                     Total
                                Investment

                                Per Project            Costs               Years Remaining to
                               Per Agreement         Incurred           Complete the Project Per
Project                         or Contract           to Date             Agreement or Contract
-------                         -----------           -------             ---------------------

<S>                              <C>                   <C>              <C>
Shilong Town                     $24,200,000           $576,461                    Six
Shilong Water World                3,630,000          1,468,797               No time limit
Maple City                        38,000,000          2,016,621               No time limit
Shilong Town Hall                 23,571,000          2,649,625        Pending on the PRC economic
                                                                       conditions and endeavoring
                                                                     to complete within three years
                               -------------        -----------
                                 $89,401,000         $6,711,504
                                 ===========         ==========

</TABLE>

One of the Company's  subsidiary,  Honpar (Shilong) Properties Limited, has been
involved in a legal proceeding with a PRC  construction  company relating to the
Shilong Town Hall project.  The amount  claimed by the  construction  company is
approximately  RMB7,682,860  (equivalent  to  $929,626).  The  management of the
Company has denied and defended  vigorously  against the claim and believes that
the  realisation  of  this  contingent  liability  is  remote.  Accordingly,  no
provision has been provided for the claim amount.

Financing Resource Dependency

Historically,   the  operating  activities  of  the  above  four  projects  were
substantially  financed by one of the  Company's  directors  through the form of
either infusing equity capital or providing  shareholder's  loans in addition to
the fund raising  exercises  implemented  in 1999 and 1998 and described in Note
10.

Considering  the  condition  that only limited  funding is presently  available,
management believes that the completion of these four projects on a timely basis
will depend  significantly  on the additional  funding  available to the Company
through debt and/or equity financing in the near future.

NOTE 9 - MINORITY INTEREST

The Company applies APB Opinion No. 19 and related interpretations in accounting
for the minority  share of  attributable  losses  arising from the  operation of
Shilong  Water World under the entity of Dragon  Villa.  The 20% loss of $67,815
attributable  to the minority  shareholder  was recognised by the Company as all
the joint ventures have  deficiencies in assets and no capital  contribution has
been made by the minority shareholder as of the balance sheet date.

                                       34

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 10 - TRANSACTIONS IN SHAREHOLDERS' EQUITY

The Company  issued  198,100 shares of common stock at $2.00 per share through a
Rule 504 Regulation D offering in 1997. The total proceeds were $362,340, net of
offering  expense  of  $33,860.  Among  these  198,100  shares of  common  stock
subscribed, 20,000 shares were issued in early January 1998.

In March 1998,  the Company  issued  163,700 shares of common stock at $2.00 per
share through a Rule 504 Regulation D offering.  The net proceeds were $294,660,
net  of  offering   expense  of  $32,740.   The  investor  group   consisted  of
approximately  20 individuals.  The investors who bought  approximately  150,000
shares of common  stock are  either  relatives  or close  friends  of one of the
Company's directors and are all accredited investors.

In June 1998,  the Company  issued  323,000  shares of common stock at $2.00 per
share to a business entity in exchange for proceeds of $646,000.

In August 1998,  the Company  issued  300,000 shares of common stock at a market
price of $2.20  per  share to an  accredited  investor  for  total  proceeds  of
$660,000.

In September 1998, the Company issued 200,000 shares of common stock at a market
price  of $2.25  per  share to two  business  entities  in  exchange  for  stock
promotion service for a term of two years.

In November  1998, the Company issued 180,000 shares of common stock at a market
price of $1.50 per share to the same  investor  who  previously  bought  300,000
shares of common stock at $2.20 per share.

In December 1998, the Company issued  2,590,730 shares of common stock at $1.113
per share in exchange  for 100% equity  interest  in Honpar  Shilong,  a company
incorporated in Hong Kong and owned by a major shareholder of the Company.  This
transaction was treated as a reorganization of entities under common control and
accounted for in a manner similar to that in pooling of interest.  The price per
share of $1.113 was calculated  based on a 30% discount on the weighted  average
trading price of 60 days before the  transaction  date (December 15, 1998).  The
number of shares was determined based on the historical cost of the total assets
and liabilities of Honpar Shilong divided by the price per share as determined
aforementioned.  The following table presents the shareholders' equity of Honpar
Shilong as of December 31, 1997 and 1998.

<TABLE>
<CAPTION>

                                             Additional
                                 Common        Paid-in      Retained      Translation
                                  Stock        Capital      Earnings       Adjustment       Total
                                  -----        -------      --------       ----------       -----
<S>                              <C>        <C>             <C>           <C>           <C>
Balance, 01/01/97              $   60,797   $   547,177     $          -  $        -    $   607,974
Capital injected                  179,845     1,618,602                -           -      1,798,447
                               ----------   -----------     ------------ -----------    -----------
Balance, 12/31/97                 240,642     2,165,779                -           -      2,406,421
Capital injected                   47,838       430,540                -           -        478,378
                               ----------   -----------     ------------ -----------    -----------
Balance, 12/31/98              $  288,480   $ 2,596,319     $          -  $        -    $ 2,884,799
                                =========   ===========     ============ ===========    ===========


</TABLE>

                                       35

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 11 - STOCK OPTIONS

On July 1, 1998,  the Board of Directors of the Company  approved a Stock Option
Plan.  The Stock Option Plan  provides  officers,  directors,  key employees and
consultants  with  options  to  purchase  shares of common  stock as  additional
compensation for services rendered and/or incentives for services to be rendered
to the Company in the near  future.  As a result of adopting  this Stock  Option
Plan, a total of 968,480 options were granted on July 14, 1998 and were
exercisable for one year. During the year ended December 31, 1999, none of these
options had been exercised.

During  1999,  100,000  options  with an  exercise  price of $1.25 per share and
50,000  options  with an  exercise  price of $1.50 per  share  were  granted  to
consultants.  The options vest  immediately  and are  exercisable  for one year.
Accordingly,  a total of 150,000  shares of common stock will be reserved by the
Company for issuance upon exercise of the granted  stock  options.  Compensation
expense of $90,500 was recorded related to these options.

Each option is immediately  exercisable  after the granting date and will expire
if it would not be exercised  within one year from the granting date. The shares
acquired  through  exercise of the options shall be  restricted  and will not be
registered  for trading  unless the  Company,  in its sole  discretion,  files a
registration statement and includes these designated shares.

<TABLE>
<CAPTION>

                                    Granting       Options    Exercise      Vesting      Expiring
                                      Date         Granted      Price        Period        Date
                                      ----         -------      -----        ------        ----
<S>                                  <C>          <C>          <C>           <C>         <C>
Options granted to

     non-employees                   2/24/99        100,000      $1.25        None        2/23/00
                                     3/11/99         50,000      $1.50        None        3/10/00
                                                   --------
Total options granted                              150,000
                                                   =======

</TABLE>

The weighted  average exercise price at December 31, 1999 is $1.33. The weighted
average  fair value of options  issued or  extended  during  1999 was $0.6.  The
following assumptions were used to determine the fair value of options:

<TABLE>
<CAPTION>

                                               December 31,      December 31,
                                                   1999              1998
                                              ------------        ----------
<S>                                              <C>               <C>
Expected life                                     1 year            1 year
Volatility                                          80%               69%
Expected dividend yield                              -                 -
Risk free rate                                     4.82%             5.50%
                                             ================    =========

</TABLE>

                                       36

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 11 - STOCK OPTIONS (Cont'd)

The Company applies APB Opinion No. 25 and related interpretations in accounting
for its stock options granted to employees.  In 1998, the difference of $164,240
between  the  option  exercise  price  of $1.5  and  market  price  of $2.0  was
recognized as employee stock  compensation  cost. In accordance with APB No. 25,
no  compensation  cost has been recognized for the fair value of options granted
to employees. Had the compensation cost for the fair value of options granted to
employees been  recognized in line with SFAS No. 123, the Company's net loss and
loss per share would have been increased to the pro forma amounts as follows:

<TABLE>
<CAPTION>

                                                      December 31,
                                                      ------------
                                                  1999               1998
                                                  ----               ----
<S>                                          <C>                 <C>
Net loss attributed to common shares
   As reported                               $  (1,158,145)      $ (1,011,515)
   Pro forma                                    (1,158,145)        (1,111,636)

Basic loss per share
   As reported                               $      (0.09)      $       (0.08)
   Pro forma                                        (0.09)              (0.09)
                                             =============      ==============

</TABLE>

A summary of the status of the  Company's  stock options as of December 31, 1999
and 1998 are presented as follows:

<TABLE>
<CAPTION>

                                                                        Weighted
                                                                         Average
                                                                      Exercise
                                                  Shares                Price
                                                  ------                -----
<S>                                              <C>                    <C>
Outstanding at January 1, 1998                          -               $   -
Options granted to non-employees                  640,000               $1.50
Options granted to employees                      328,480               $1.50
                                                  -------
Outstanding at December 31, 1998                  968,480               $1.50
Options granted to non-employees                  150,000               $1.33
Options expired                                  (968,480)              $1.50
                                                  -------
Outstanding at December 31, 1999                  150,000               $1.33
                                                  =======               =====

</TABLE>

                                       37

<PAGE>

                          ASIAN STAR DEVELOPMENT, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            (Expressed in US Dollars)

NOTE 11 - STOCK OPTIONS (Cont'd)

The following table summarizes information about stock options outstanding as of
December 31, 1999:

<TABLE>
<CAPTION>

                                       Options Outstanding                  Options Exercisable
                                       -------------------                  -------------------
                                            Weighted
                                             Average       Weighted                      Weighted
                                            Remaining       Average                       Average
                             Number        Contractual     Exercise         Number       Exercise
Exercise Price             Outstanding        Life            Price       Exercisable       Price
--------------             -----------        ----            -----       -----------       -----
<S>                         <C>           <C>                <C>           <C>             <C>
$1.25 - $1.50                150,000       0. 16 Years        $1.33         150,000         $1.33
                             =======                                        =======

</TABLE>

Using Black Scholes option pricing model,  the Company  determined that the fair
value of 968,480 options granted during 1998 was $779,435.

Subsequent  to the year end the Company  granted  options to key  employees  and
consultants to purchase  1,300,000 shares of the Company's common stock at $1.25
per share.

NOTE 12 - CEO NOTIONAL COMPENSATION

CEO of the Company  waived his personal  salary of $120,000 in each fiscal years
ended  December 31, 1999 and 1998.  The Company  recorded this amount as part of
additional paid-in capital.

NOTE 13 - POST BALANCE SHEET EVENT

On January 13, 2000, one of the Company's subsidiaries,  Able Wealth Investments
Limited,  entered into a sale and purchase  agreement with the owner of two Hong
Kong incorporated  companies.  Through this agreement,  Able Wealth  Investments
Limited acquires the entire equity shares of these two Hong Kong companies which
operate a  cafeteria  business in Hong Kong.  According  to the  agreement,  the
purchase  consideration is $445,162  (equivalent to HK$3,450,000) which shall be
paid by issuing 261,860 restricted shares of the Company at $1.7 per share.

On January  25,  2000,  the  Company  entered  into an  agreement  to acquire an
existing LPG cylinder  manufacturing  plant and an associated LPG bottling plant
in the state of  Kelantan,  Malaysia.  The project also  includes the  exclusive
right to  install a  deep-water  port for  tankers.  The total  project  cost is
estimated to be $2.3 billion.

                                       38

<PAGE>

ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS
             ==================================================

Registrant has not had any changes in or disagreements  with  Accountants  since
inception.

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

The  following  table sets forth the names,  ages and positions of the Directors
and Executive Officers of Registrant:

<TABLE>
<CAPTION>

Name and Address                 Age           Position(s) Held (1)
----------------                 ---           --------------------
<S>                              <C>            <C>
Stephen Chow                     59            President, CEO and
Room 930, Block B,                             Chairman of the Board
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Sang Chan                        63            Director and Treasurer
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Paul Lam                         58            Director and Secretary
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Dr. Paul Tong                    58            Director
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

</TABLE>

                                   39

<PAGE>

Each director of the Registrant is elected by the  stockholders to a term of one
(1) year and serves until his successor is elected and  qualified.  Each officer
of the Registrant is elected by the Board of Directors to a term of one (1) year
and serves until his  successor is duly  elected and  qualified,  or until he is
removed  from  office.  The Board of Directors  has no  nominating,  auditing or
compensation committees.

Background  of  Officers  and  Directors
----------------------------------------

Stephen  Chow - Mr. Chow has been the Chief  Executive  Officer,  President  and
Chairman of the Board of Directors of the Registrant  since  inception.  For the
past  five  years,  he has also  been the  Managing  Director  of  Honpar  group
companies,  Hong Kong and Vice  President  of Enrich  Ventures,  Ltd.,  a public
corporation  traded on the Vancouver Stock  Exchange.  From 1983 to 1990, he was
Senior Vice President of Hip Shing Land  Development  Ltd., USA and from 1972 to
1994, he was President of Consolidated Investment & Construction Ltd. in Canada.

He is  currently  the  Advisor  of  Economic  Affairs  in the  City of  Taishan,
Guandong,  China  and has  been  appointed  an  Honorable  Citizen  of  Shilong,
Dongguan, Guandong, China. His past appointments/affiliations  include Director,
Community  Redevelopment Agency of the City of Los Angeles;  Director/Officer of
Windsor  Builders  Association  of  Ontario,  Canada;  President,  Essex  County
Chinese-Canadian  Association of Ontario,  Canada; and Director,  Multi-Cultural
Council of Canada.  He graduated from Hong Kong Technical College in 1959. He is
the  brother of Sam Chow,  a member of  Registrant's  Advisory  Board.  Mr. Chow
devotes full time to the business of Registrant.

Sang  Chan  -  Mr.  Chan has been a Director and the Treasurer of the Registrant
since inception.  From 1993 to the present, he has also been Chairman of Po Sang
Construction  Co.,  Ltd.  of  China;  General  Manager  of  Honpar  (Huangzhou)
Properties  Co.,  Ltd.;  General  Manager  of  the  China  Division  of  Honpar
Properties,  Ltd.  and the Owner/Manager of Po Sang Construction Co., Ltd., Hong
Kong.  From  1961 to 1993 he was a Consultant/Designer for various architectural
firms  in  Hong  Kong.  Mr.  Chan has a Major Degree in Accounting from Yuet Hoi
University  of  Macau  and  devotes  full  time  to  the business of Registrant.

Paul Lam - Mr. Lam has been a Director and the Secretary of the Registrant since
inception.  From  1992  to the present, he has been the Managing Director of CNT
Group  Ltd.,  a  Hong-Kong  publicly-traded paint manufacturing company.
From 1975 to 1992, he was Managing  Director  of  The China Paint Mfg. (1946)
Co., Ltd.  Mr. Lam graduated from  the  University  of  California-Berkeley  in
1966  with  a B.A. Degree in Chemistry.  He  is  currently a committee member of
the Chinese People Political Consultative Conferences (CPPCC) of Shenyang City,
Liaoling Province and Chengdu City, Sichuan, respectively. He devotes his time
as necessary to the business of Registrant.

Dr.  Paul  Tong  - Dr. Tong has been a Director of the Registrant since March 2,
1998.  From  1995  to September 1997, he has been the Chief Executive Officer of
Pacific  Century  Regional  Developments  Ltd.,  with  responsibility  for
infrastructure  and  property  developments.  From  1978 to 1994, he was General
Manager  of  New World Development Co., Ltd., where he supervised the design and
administration  of  commercial,  residential and infrastructural projects in the
Asian  Pacific  and  North America.  Dr. Tong has gained extensive experience in
civil  engineering  having  worked  as  a  geotechnical  engineer  for a British
consultancy as a civil engineer for a Hong Kong engineering consultancy and as a
director  and  technical  manager  of a Hong Kong construction company. Dr. Tong

                                       40

<PAGE>

graduated  from  the  University  of  Manchester, U.K. in 1970 with a PhD. He is
currently  a  member  of the Institution of Civil Engineers, London and the Hong
Kong  Institution of Engineers. He devotes his time as necessary to the business
of  Registrant.

Employment  Agreements
----------------------
None of  Registrant's  officers or directors are  currently  party to employment
agreements  with  Registrant.  Registrant  presently  has  no  pension,  health,
annuity, bonus, insurance,  profit sharing or similar benefit plans; however, it
may adopt such plans in the future.  There are  presently  no personal  benefits
available for directors, officers or employees of Registrant, except for options
granted by the Board of Directors to certain officers, directors and consultants
to Registrant.

Advisory  Board
---------------
The following professional engineers comprise Registrant's Advisory Board:

Brian Poon - Mr. Poon, a Canadian  residing in Vancouver,  B.C., is a structural
engineer by  profession  with  extensive  building  and  structural  engineering
experience in Canada and Hong Kong for over 30 years. He was the chairman of the
Structural  Division of the Hong Kong  Institution  of Engineers  1984-1985  and
served  as  Council  member  for  several  years.  He  co-founded  Ng Chun Man &
Associates,   Architects   and  Engineers   (H.K.)  Ltd.,  one  of  the  largest
architectural  and engineering firms in Hong Kong. In a wide and varied spectrum
in building  development  field,  his major  projects  include the Asia Terminal
Limited Building,  the Hong Kong Exhibition  Centre,  Central Plaza in Hong Kong
and Shantou  University in China.  He took up residence in Vancouver in 1991 and
is the President of Jet Fast Consultants Ltd. in Vancouver.  He is also involved
in food, hotel, travel and tour business and property  developments in Southeast
Asia.

Sam  Chow  -  Mr.  Chow  resides  in  San  Francisco,  California,  where  he
is professionally  licensed  in  Civil Engineering by the State of California.
Mr. Chow  has  35  years  of experience in construction, structural engineering,
and civil  engineering  involving  various  low-rise  and  high-rise  commercial
and residential  buildings.  Mr.  Chow  is  the  Founder  and  President  of
ECD Construction,  Inc.,  which  provides  contracting  and  construction
management services  to  both  public  and  private sector.  As a licensed
General Building Contractor,  his  projects  include  commercial,  residential,
and  industrial construction.  Prior  to  founding  ECD Construction, Inc., Mr.
Chow was at Davy McKee  Corporation,  where  he  was  responsible  for  all
aspects of civil and structural  work  on  several multi-million dollar mining
projects.  Mr. Chow is the  brother  of Stephen Chow, an officer, director and
principal shareholder of Registrant.  Mr.  Chow  is the brother of Stephen Chow,
an officer, director and principal  shareholder  of  Registrant.


                                       41

<PAGE>

ITEM  10.     EXECUTIVE  COMPENSATION
              ========================

The  following  table sets forth certain  information  relating to the aggregate
annual remuneration the Registrant pays to its officers and directors:

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
                           SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------
                        ANNUAL COMPENSATION            LONG-TERM COMPENSATION
                                                              SECURITIES
                                               RESTRICTED     UNDERLYING
NAME AND PRINCIPAL                             STOCK           OPTIONS/
POSITION                    YEAR     SALARY    AWARD(S)(2)      SARS(2)    OTHER
-------------------         ----     ------    -----------    ----------  ------
<S>                        <C>      <C>        <C>            <C>            <C>

STEPHEN CHOW (1)            1998       -       $178,480        178,480         -
PRESIDENT, CEO

SANG CHAN,                  1997    $46,000       -               -            -
TREASURER                   1998    $46,000    $100,000        100,000         -

PAUL LAM                    1998       -       $100,000        100,000         -

PAUL TONG                   1998       -       $100,000        100,000         -
-------------------------------------------------------------------------------
</TABLE>

(1) Mr.  Stephen Chow,  CEO of  Registrant,  waived his annual  compensation  of
$120,000 for the fiscal year ended December 31, 1999.

The other  officers and directors of  Registrant  do not currently  receive cash
remuneration  or salaries  for their  efforts.  Upon  successful  completion  of
Registrant's  proposed business projects, or receipt of revenues from operations
of  Registrant,  of  which  there  can  be  no  assurance,  salaries  and  other
remuneration will be established by the Board of Directors as appropriate.

There are no employment  contracts between Registrant and any of its officers or
directors.

Registrant does not have any plan or arrangement with respect to compensation to
its executive  officers which would result from the  resignation,  retirement or
any other  termination of employment with Registrant or from a change in control
of Registrant, or a change in the executive officers' responsibilities following
any change in control,  where in respect of an executive  officer,  the value of
such compensation exceeds $120,000.

               OPTION/SAR  GRANTS  IN  LAST  FISCAL  YEAR
               ------------------------------------------

On July  14,  1998,  Registrant  granted  the  following  stock  options  to the
following  officers and/or  directors as additional  compensation and incentives
for services rendered to Registrant:

                                       42

<PAGE>

<TABLE>
<CAPTION>

                                     PERCENT

                                       OF

                                     TOTAL
                   NUMBER OF         OPTIONS/
                   SECURITIES        SARS
                   UNDERLYING        GRANTED         EXERCISE      DATE OF
NAME OF HOLDER     GRANTED (#)       FISCAL YR       PRICE         EXERCISE
--------------     ----------       ----------      ---------      --------
<S>                  <C>               <C>            <C>            <C>
STEPHEN CHOW         178,000           18%         $1.50/SHARE    UNTIL 7/13/99

PAUL TONG            100,000           10%         $1.50/SHARE    UNTIL 7/13/99

PAUL LAM             100,000           10%         $1.50/SHARE    UNTIL 7/13/99

SANG CHAN            100,000           10%         $1.50/SHARE    UNTIL 7/13/99
</TABLE>
(1)  These percentages are based on the total number of option shares (968,480).

Each of the above options allow the holder to purchase one share of Registrant's
restricted  Common Stock at an exercise price of $1.50 per share for a period of
one (1) year from the date of issue of the Option. Any shares acquired through
exercise of these  options  shall be  restricted  shares and may not,  under any
circumstances,  be  registered or in any way become free trading until two years
from the date the  shares are  acquired  through  exercise  of the  option.  The
records of the stock transfer agency,  as well as any  certificates  issued upon
exercise of these options shall contain said restrictive legend.

There are no other bonus, pension,  deferred  compensation,  long-term incentive
plans or  awards,  or any other  similar  plans for  executive  officers  and/or
directors of Registrant.

ITEM 11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND
          =========================================================
          MANAGEMENT
          ==========

The following table sets forth information  regarding the shares of Registrant's
Common Stock, par value $.001, beneficially owned for (i) each stockholder known
by  Registrant  to be the  beneficial  owner  of 5% or more of the  Registrant's
issued and outstanding Common Stock; (ii) each of the Registrant's  officers and
directors; and (iii) all officers and directors as a group. At December 31,1999,
there were 12,955,530 shares of Common stock outstanding.

                                       43

<PAGE>

<TABLE>
<CAPTION>

                                                 Amount &
                                                 Nature of
                                     Title       Beneficial      Percent of
Name and address                    Of Class     Ownership(1)      Class
-----------------                  ----------   -----------      ----------
<S>                                   <C>           <C>              <C>
Stephen Chow (2). . . . . .       Common Stock    5,578,480          43%
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Sang Chan                          Common Stock     200,000           2%
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Paul Lam                            Common Stock    150,000            1%
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Dr. Paul Tong                       Common Stock     210,000            2%
Room 930, Block B,
East Wing
New World Office Bldg.
Tsimshatsui, Kowloon,
Hong Kong

Sam Chow (2)                        Common Stock     222,800            2%
2535 Irving Street
San Francisco, Ca. 94122

--------------------------
All officers and directors
as a group                                         6,361,280           49%

</TABLE>

(1) Includes  Stock  Options  which were  granted to the officers and  directors
under  a  Stock  Option  Agreement,  dated  July  14,  1998.  (See  "Management"
"Principal Stockholders" and "Certain  Transactions").  None of the options were
exercised and they all elapsed.

(2) Sam Chow, a member of Registrant's Advisory Board, is the brother of Stephen
Chow, an officer, director and principal shareholder of Registrant.

There are no  arrangements,  known to  Registrant,  including  any pledge by any
person of securities of the Registrant,  which may, at a subsequent date, result
in a change in control of Registrant.

                                 44

<PAGE>

Future  Sales  by  Existing  Stockholders
-----------------------------------------
All shares of Common Stock of Registrant are  "restricted  securities",  as that
term is defined in Rule 144 of the Rules and  Regulations of the SEC promulgated
under the Act ("Rule 144"), save and except the 361,800 shares which were issued
under a public  offering  in the State of New  York,  pursuant  to an  exemption
provided by Rule 504 of Regulation D, promulgated under the Securities Act of
1933, as amended,  which are not "restricted  securities" under Rule 144 and can
be publicly  sold,  except for those  Shares  purchased by  "affiliates"  of the
Registrant, as that term is defined in Rule 144.

Under  Rule 144,  restricted  shares  can be  publicly  sold,  subject to volume
restrictions and certain restrictions on the manner of sale,  commencing one (1)
year after their  acquisition.  Sales of shares by  "affiliates"  are subject to
volume  restrictions and certain other restrictions  pertaining to the manner of
sale, all pursuant to Rule 144.

Item  12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
              ==================================================

On January 8, 1997,  Registrant  entered  into two separate  agreements  for the
purchase  and sale of certain  assets,  one with Honpar  (Huangzhou)  Properties
Limited  and one with  Honpar  Properties  Limited.  Stephen  Chow,  an officer,
director and principal  shareholder of the Registrant,  is an officer,  director
and principal shareholder of both of these companies.  Registrant issued a total
of 9,000,000  shares of its  restricted  Common Stock in exchange for all of the
rights and interests in and to the assets as follows:  (i)  5,760,000  shares in
exchange for an 80% equity interest in the Dragon Villa and Water World projects
in Guandong Province, China, and (ii) 3,240,000 shares in exchange for the Maple
City project. Of the total 9,000,000 shares,  5,755,800 were issued to officers,
directors,  advisors  and/or control person of the Registrant and 3,244,200 were
issued to unrelated third parties. (See Item 1, Description of Business and Item
3, Description of Property.)

On June 20, 1998, Registrant sold, in a private placement  transaction,  a total
of  323,000  shares  of its  restricted  Common  Stock to  Extensiview  Ltd.,  a
principal shareholder of Registrant and an unrelated third party, for the sum of
$646,000 U.S., or $2.00 per share.

                                       45

<PAGE>

On December 15, 1998,  Registrant  acquired a city hall  development  project in
Shilong Town by issuing 2,590,730 shares of its Common Stock to Honpar (Shilong)
Properties Limited, a Hong Kong corporation,  of which Stephen Chow, an officer,
director and principal  shareholder of Registrant,  is an officer,  director and
shareholder, in exchange for 100% equity interest in Honpar (Shilong).

ITEM  13. EXHIBITS, LISTS AND REPORTS ON FORM 8-K.
         =========================================


EXHIBITS

a) All required exhibits, including the Company's Articles of Incorporation, and
Bylaws, are attached to the Company's Form 10-SB, filed on December 1, 1999. All
previously filed exhibits are incorporated herein by reference.

b) Reports on Form 8-K:  No reports  were on filed on Form 8K during the quarter
ended December 31, 1999.

Exhibit No.         Document Description
-----------         ---------------------

3.1                 Articles of Incorporation and any Amendments-
                     Incorporated by reference to the Form 10-KSB,
                             filed December 1, 1999

3.2                 Bylaws- Incorporated by reference to the Form 10-KSB,
                             filed December 1, 1999

8                   Consent of BDO International,
                    Certified Public Accountants

27                  Financial Data Schedule

                              SIGNATURES
                              ===========

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

ASIAN  STAR  DEVELOPMENT,  INC.,  a

Nevada  corporation

By: /s/  STEPHEN CHOW                            Dated:  March 28,2000
Chief  Executive  Officer  and  President

By: /s/  SANG CHAN                               Dated:  March 28,2000
Chief  Financial  Officer