<PAGE>


                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

[X]      QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2000

[ ]      TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF
         1934 for the transition period from . . . . to . . . .

                         Commission file number 0-21087

                          Tollycraft Yacht Corporation
        Exact name of small business issuer as specified in its charter)

                 Nevada                          86-0849925
        (State or other jurisdiction of        (I.R.S. Employer
        incorporation or organization)         Identification No.)


        8201 Peters Road, Suite 1000, Plantation, Florida     33324
            (Address of principal executive offices)        (Zip Code)

                                 (954) 916-2618
              (Registrant's telephone number, including area code)

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

The number of shares of common stock outstanding as of March 31, 2000 is
8,117,476.

Transitional Small Business Disclosure Format (check one): Yes ... No .X.

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PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                          Tollycraft Yacht Corporation
                               First Quarter 2000

                                  Balance Sheet

                                                     March 31,      December 31,
                                                       2000             1999
                                                   -------------   -------------

                                     ASSETS
                                     ------

Current assets:
   Cash                                            $         --    $         95
   Raw material inventories                                  --         303,508
   Work-in-process inventories                               --          96,909
                                                   -------------   -------------
          Total current assets                               --         400,512


Molds and patterns and tooling, net of
  accumulated depreciation of $936,216                1,952,228       1,952,228

Equipment, net of accumulated depreciation
  of $455,637 in 1999                                        --         422,064

Other assets                                          2,372,687       2,374,500
                                                   -------------   -------------
                                                   $  4,324,915    $  5,149,304
                                                   =============   =============


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

Net deferred tax liabilities                       $    330,498    $    330,498

Commitments and contingencies

Stockholders' equity:
   Preferred stock, no stated value; authorized
     5,000,000 shares, issued and outstanding
     1,231,341 shares                                 2,534,333       2,534,333
   Common stock, no par value; authorized
     100,000,000 shares, issued and outstanding
     12,738,576 shares                               18,755,650      18,755,650
   Retained deficit                                 (17,295,566)    (16,471,177)
                                                   -------------   -------------
          Total stockholders' equity                  3,994,417       4,818,806
                                                   -------------   -------------
                                                   $  4,324,915    $  5,149,304
                                                   =============   =============


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                          Tollycraft Yacht Corporation
                               First Quarter 2000

                             Statement of Operations

                                                           Three months ended
                                                                March 31
                                                         -----------------------
                                                           2000           1999
                                                         --------       --------
Costs and expenses:
   General and administrative expenses                   $402,325       $  1,925
   Loss on disposal of assets                             422,064             --
                                                         --------       --------
Loss before provision for income taxes                    824,389          1,925

Provision for income taxes                                     --             --
                                                         --------       --------
Net loss                                                 $824,389       $  1,925
                                                         ========       ========

Net loss per common share                                $   .065       $   .000
                                                         ========       ========


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                          Tollycraft Yacht Corporation
                               First Quarter 2000

                             Statement of Cash Flows

                                                           Three months ended
                                                                March 31
                                                        ------------------------
                                                           2000          1999
                                                        ----------    ----------
Cash flows from operating activities:
   Net loss                                             $(824,389)    $  (1,925)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
     Depreciation and amortization                          1,813         1,875
     Loss on disposal of assets                           422,064            --
     Change in raw material and work-in-process
      inventories                                         400,417            --
                                                        ----------    ----------
Net decrease in cash                                          (95)          (50)

Cash at beginning of period                                    95           145
                                                        ----------    ----------
Cash at end of period                                   $      --     $      95
                                                        ==========    ==========


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                          TOLLYCRAFT YACHT CORPORATION
                          Notes to Financial Statements
                    For the Three Months Ended March 31, 2000

1. Nature of business and summary of significant accounting policies

NATURE OF BUSINESS: Tollycraft Yacht Corporation (the "Company") is engaged in
the manufacture and distribution of luxury motor yachts. The Company grants
credit to its customers. The ability to collect its accounts receivable is
affected by economic fluctuations in the geographic areas served by the Company.

INVENTORIES: Inventories are valued at net realizable value, which is lower than
cost.

EQUIPMENT: Equipment is carried at cost. Additions and improvements to jigs,
patterns and molds are capitalized. Depreciation is computed using the
straight-line method over the estimated useful life of the assets, which range
from three to ten years.

REVENUE RECOGNITION: Revenue is recognized upon completion, shipment and title
transfer of each yacht. Accordingly, revenue and costs of individual yachts are
included in operations in the year during which they are completed.

ESTIMATED WARRANTIES: The Company records a warranty accrual at the time of sale
for estimated claims, based on actual claims experience. There is a general
one-year parts and labor warranty to the original owner for defects in all
Tollycraft built hulls, deck bridges, stringers and bulkheads.

ADVERTISING: The Company expenses the cost of advertising as incurred.

PENSION AND PROFIT SHARING PLAN: Union employees of the Company participate in a
pension plan, which qualifies under Section 401(k) of the Internal Revenue Code.
The Company is required by the union contract to make annual contributions of
$.05 per labor hour. The Company contributed $24,132 to the plan in 1998. No
contributions were made to the plan in 1999. The Company is in the process of
terminating the pension and profit sharing plans.

INCOME TAXES: Income taxes are accounted for and reported using an asset and
liability approach. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax bases of assets
and liabilities that will result in taxable or deductible amounts in the future
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to effect taxable income.

Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to be realized. Income tax expense is the tax
payable or refundable for the period plus or minus the change during the year in
deferred tax assets and liabilities.


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                          TOLLYCRAFT YACHT CORPORATION
                          Notes to Financial Statements
                    For the Three Months Ended March 31, 2000


Deferred tax assets result principally from the Company's net operating losses
not yet utilized for tax purposes. Valuation allowances have been provided for
those deferred tax assets as their utilization are uncertain. Deferred tax
liabilities result principally from the use of accelerated depreciation for tax
purposes.

NET LOSS PER COMMON SHARE: Net loss per share is computed by dividing net loss
by the weighted average number of common shares outstanding during the period.
The weighted average number of common stock shares outstanding was 8,171,718 for
1999 (5,018,273 for 1998). Preferred stock is not considered a common stock
equivalent.

SIGNIFICANT RISKS AND UNCERTAINTIES: The process of preparing financial
statements in conformity with generally accepted accounting principles requires
the use of estimates and assumptions regarding certain types of assets,
liabilities, revenues and expenses. Management of the Company has made certain
estimates and assumptions regarding the reserve for warranty expenses, costs of
work-in-process inventory, contingent liabilities regarding their inventories
and equipment, and federal penalties on unpaid payroll taxes. Such estimates and
assumptions primarily relate to unsettled transactions and events as of the date
of the financial statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.

2.  Operations

The Company has devoted substantial efforts during 1999 and 1998 in relocating
their corporate administrative and sales offices to Plantation, Florida, its
manufacturing facilities to Merida, Yucatan, Mexico and restructuring debt,
rather than in the marketing and manufacturing of luxury motor yachts.
Management believes that the efficiencies expected to be achieved by relocating
to the Eastern United States, which is closer to the geographic area most served
by the Company, and the lower operating overhead expected by relocating their
manufacturing to Mexico will enable the Company to achieve profitably.

The accompanying financial statements have been prepared on a basis of going
concern, which basis contemplates the realization of assets and the satisfaction
of liabilities as they become due through continuing operations. No adjustments
have been made to the accompanying financial statements should the Company be
unable to continue in existence, as the outcome of management's plan is
uncertain.

3.  Other assets

Other assets were as follows at December 31:

                                                         1999            1998
                                                      ----------      ----------
Prepaid manufacturing expenses                         2,000,000      $2,000,000
Prepaid consulting services                              360,000         360,000
Product rights not used in operations                     14,500          22,000
         Total other assets                           $2,374,500      $2,382,000


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                          TOLLYCRAFT YACHT CORPORATION
                          Notes to Financial Statements
                    For the Three Months Ended March 31, 2000


4.  Equipment

         Equipment was as follows at December 31:

                                                     1999               1998
                                                 ------------       ------------
Manufacturing equipment                          $   486,126        $   486,126
Office furniture and fixtures                        391,575            391,575
Molds and patterns                                 2,888,444          2,888,444
                                                 ------------       ------------
                                                   3,766,145          3,766,145
Less accumulated depreciation                     (1,391,853)        (1,391,853)
                                                 ------------       ------------
Equipment, net                                   $ 2,374,292        $ 2,374,292
                                                 ============       ============
5.  Income taxes

         Net deferred tax liabilities were as follows at December 31:

                                                       1999             1998
                                                   ------------     ------------
Deferred tax assets
Net operating loss carryovers                      $ 6,987,849      $ 6,983,795
Valuation allowance for deferred
  tax assets                                        (6,987,849)      (6,983,795)

Deferred tax liabilities- depreciation                (330,498)        (330,498)

Net deferred tax liabilities                       $  (330,498)     $  (330,498)
                                                   ============     ============

The Company had net operating loss carryovers as of December 31, 1999 of
approximately $20,567,000 ($20,540,000 for 1998) available to offset future
taxable income, if any. In the event of ownership changes aggregating 50% or
more in any three-year period, the amount of loss carryovers that becomes
available for utilization in any year may be limited. If not utilized against
future taxable income, the tax loss carryovers will expire $3,100,000 in 2010;
$2,000,000 in 2011; $11,500,000 in 2012; $2,910,000 in 2013; $1,030,000 in 2014;
and $27,000 in 2015.

6.  Capital stock

In April 1999, the Board of Directors authorized the issuance of 238,500 shares
of common stock in exchange for professional services. Management of the Company
valued the share grants at an average price of $.082 per share, which
represented no discount from the closing bid price of the Company's common stock
at the date of grant. The Company recorded professional fees expense totaling
$19,477 during the year ended December 31, 1999 as a result of these grants.

In June 1998, the Company offered each debtor one share of preferred stock
Company for each ten dollars of debt they were owed. Notes payable, accounts
payable, accrued liabilities, convertible promissory notes payable, and all
other long-term debtors were offered the conversion. The offering required a
majority of the debtors to agree to the terms of the conversion. In July 1998, a
majority of the debtors agreed to the offering and, accordingly, all of the then
outstanding debt was converted to preferred stock. In December 1999, the Company
issued the preferred stock.


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                          TOLLYCRAFT YACHT CORPORATION
                          Notes to Financial Statements
                    For the Three Months Ended March 31, 2000


In October 1998, the Company entered into an "Agreement for Payment of Tax
Obligations" with a Mexican corporation known as Grupo Clima, S.A. DE C.V
("Grupo"). Under the agreement, the Company issued 3,000,000 shares of its
common stock to Grupo. In exchange, Grupo has agreed to satisfy all of the
claims with the Federal, State of Washington, Cowlitz County, Washington and any
local taxing authorities against the Company. Grupo intends to negotiate a
settlement with each of the taxing authorities, sell the common stock and use
the proceeds to satisfy the tax claims, and obtain a full release of liability
for the Company and any of its officers. Under the agreement, no additional
shares may be issued should the amount of the claims exceed the proceeds from
the sale of the common stock, nor is Grupo obligated to return to the Company
any proceeds in excess of the aggregate claims. The Company may be contingently
liable for some or all of the taxing authorities claims should Grupo not be able
to obtain a full release of liability for the Company and any of its officers.

In February 1998, the Board of Directors authorized the issuance of 53,333
shares of common stock in exchange for legal services. Management of the Company
valued the share grants at $3.00 per share, which represented no discount from
the closing bid price of the Company's common stock at the date of grant. The
Company recorded professional fees expense totaling $160,000 during the year
ended December 31, 1998 as a result of these grants.

Also in February 1998, the Board of Directors authorized the issuance of 8,044
shares of common stock to the Tollycraft Union 401(k) Plan and Trust
representing accrued pension contributions for the plan years 1993, 1995 and
1996 totaling $24,132. Management of the Company valued the share grants at
$3.00 per share, which represented no discount from the closing bid price of the
Company's common stock at the date of grant.

7.  Commitment and contingencies

In September 1998, the Company entered into an agreement with a Mexican
corporation known as Yachts of the Americas' S.A. DE C.V. ("Yachts of the
Americas"). Under the agreement, Yachts of the Americas has agreed to build a
manufacturing plant and facilities and to manufacture boats and luxury motor
yachts in strict compliance with the specifications of the Company. The plant
and all machinery it builds or purchases will remain in the ownership of Yachts
of the Americas. The primary reason for entering into this agreement by the
Company and Yachts of the Americas is to take advantage of the NAFTA treaty
benefits between the two countries. The Company expects to be more competitive
in the United States markets as a result of this manufacturing agreement.

During 1998, the Company issued to Yachts of the Americas, 2,000,000 shares of
its common stock in accordance with the agreement. In exchange, Yachts of the
Americas has agreed to provide to the Company $2,000,000 of future manufacturing
services at their cost plus 20%.

In October 1997, the previous landlord of the building in which the Company
leased its office and manufacturing facilities seized substantially all of the
Company's personal property consisting of all work-in-process inventories, raw
material inventories and all manufacturing equipment, office furniture and
fixtures, and molds and patterns for failure to pay rent under their lease
agreement. The landlord also filed a claim against the Company for approximately
$291,000. In December 1997, the landlord held a lien foreclosure sale and sold
all personal property it had seized.


<PAGE>
                          TOLLYCRAFT YACHT CORPORATION
                          Notes to Financial Statements
                    For the Three Months Ended March 31, 2000


The Company believes it has a substantial claim against the landlord for
unlawfully conducting a landlord's lien foreclosure sale at a time after the
landlord's lien had expired. The Company also believes that certain equipment
and molds and patterns sold had preferential liens against them. Based on a
third party appraisal, the value of the molds and patterns alone was
approximately $5,900,000. The Company is vigorously pursuing the matter and
believes it has a reasonable possibility of a favorable outcome. No adjustments
have been made in the accompanying financial statements for any gain or loss
contingency, as the outcome of the matter is uncertain.

                                POWER OF ATTORNEY

The Registrant and each person whose signature appears below hereby authorizes
D.R. Cooley, the agent for service named in this Report, with full power to act
alone, to file one or more amendments to this Report, which amendments may make
such changes in this Report as such agent for service deems appropriate, and the
Registrant and each such person hereby appoints such agent for service as
attorney-in-fact, with full power to act alone, to execute in the name and in
behalf of the Registrant and any such person, individually and in each capacity
stated below, any such amendments to this Report.

Forward Looking Statements

This discussion may contain statements that could be deemed forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934 and the Private Securities Litigation Reform Act, which statements are
inherently subject to risks and uncertainties. Forward-looking statements are
statements that include projections, predictions, expectations or beliefs about
future events or results or otherwise are not statements of historical fact.
Such statements are often characterized by the use of qualifying words (and
their derivatives), such as "expect," "believe," "estimate," "plan," "project,"
"anticipate," or other statements concerning opinions or judgment of the Company
and its management about future events. Factors that could influence the
accuracy of such forward-looking statements include, but are not limited to, the
financial success or changing strategies of the Company's customers, actions of
government regulators, the level of market interest rate and general economic
conditions. All forward-looking statements included herein are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such forward-looking statements. It is important to
note that the Company's actual results could differ materially from those in
such forward-looking statements due to the factors cited above. As a result of
these factors, there can be no assurance the Company will not experience
material fluctuations in future operating results on a quarterly or annual
basis, which would materially and adversely affect the Company's business,
financial condition and results of operations.

Results of Operations

Current operating results were as expected and budgeted by management. All
production has been discontinued and all non-essential personnel have been laid
off. A net loss of $824,389 was incurred for the quarter ended March 31, 2000,
due to general and administrative expenses and loss on disposal of assets. For
the quarter ended March 31, 1999 the net loss had been $1,925. There were no
sales for the quarter ended March 31, 2000 as a result of inactivity.

Financial Condition

As of March 31, 2000, the Company's current assets equaled $0, comparable to the
March 31, 1999 figure of $0. As of March 31, 2000, current liabilities were
zero, the same as they were on March 31, 1999. This is due to the inactivity of
the business.

Year 2000 Compliance

The Company is aware of the issues associated with the programming code in
existing computer systems as the Year 2000 approaches. The "Year 2000" problem
is concerned with whether computer systems will properly recognize date
sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or cause a
system to fail. The Year 2000 problem is pervasive and complex as the computer
operation of virtually every company will be affected in some way.

The Company, like most owners of computer software, will be required to modify
significant portions of its software so that it will function properly in the
Year 2000. Preliminary estimates of the total costs to be incurred by the
Company to resolve this problem range from $5,000 to $10,000. Maintenance or
modification costs will be expensed as incurred, while the costs of new software
will be capitalized and amortized over the software's useful life.

Since the Company mainly uses third-party "off-the-shelf" software, it does not
anticipate a problem in resolving the Year 2000 problem in a timely manner. The
Company is currently taking steps to ensure that its computer systems and
services will continue to operate on and after January 1, 2000. However, there
can be no assurance that Year 2000 problems will not occur with respect to the
Company's computer systems. Furthermore, the Year 2000 problem may impact other
entities with which the Company transacts business, and the Company cannot
predict the effect of the Year 2000 problem on such entities or the resulting
effect on the Company. The cost to be incurred by the Company related to
externally maintained systems are expected to be minimal.



<PAGE>

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Tollycraft v. Lemmons, et al., Case No. 99-5380, pending before the Federal
District Court for the Western District of Washington at Tacoma.

Tolly filed suit against D&C Lemmons, LLC, Don and Jane Doe Lemmons, Jerry and
Jane Doe Clark, and Northstar Yachts for conversion of Tollycraft's personal
property consisting of Tollycraft's hull molds, hull plugs, patterns, associated
tooling, and a partially completed 48-foot hull, hull number 48-110. In
addition, Tollycraft has asserted claims of violation of Tollycraft's patent and
trademark rights, as well as a breach of contract action against Don Lemmons
based on a consulting agreement between Tollycraft and Don Lemmons. Tollycraft
has prayed for return of its personal property and for a monetary judgment in an
amount not less than $18,000,000.00. A motion for Partial Summary Judgment has
been filed by Tollycraft on the issue of conversion and is pending before the
Court.

D & C Lemmons v. Tollycraft
Cowlitz County, Washington
Stipulated Judgment in the amount of $291,048.00.
Tollycraft has filed a substantial offsetting claim against D & C Lemmons for
unlawfully conducting a landlord's lien foreclosure. Based upon the law
regarding landlord liens, the Company has been advised by counsel that it has a
strong chance of success in its claim against D&C Lemmons.

Dennis Pursley v. Tollycraft Yacht Corporation and 35 others
San Diego Superior Court, San Diego County, California
Claim for intentional misrepresentation, sale of security not qualified for
sale, and fraudulent transfer. On September 23, 1999 the parties settled this
case. Under the terms of the settlement, Tollycraft agreed to issue 200,000
shares of restricted common stock to Pursley, et al.

Part II, Item 5. Other Information.

Item 2. Changes in Securities

None

Item 3. Defaults Upon Senior Securities

None

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

None

Item 5. Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibit Table:

27 Financial Data Schedule

     (b) No reports on Form 8-K were filed during the quarter.

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                                  [Signatures]

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


Tollycraft Yacht Corporation
    (Registrant)


Date:


By: /s/ Peter Hobbs
   ---------------------------------
   Peter Hobbs, Chairman
   Chief Financial Officer

Tollycraft Yacht Corporation 10QSB