<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-QSB

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


(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

For the quarterly period ended September 30, 2004
                               -------------------

                                      -OR-

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________to __________.

                        Commission file number 000-26175
                                               ---------

                           DISCOVERY INVESTMENTS INC.
                           --------------------------
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                      88-0409151
            ------                                      ----------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

                  5/F, GUOWEI BUILDING, 73 XIANLIE MIDDLE ROAD
              GUANGZHOU, GUANGDONG, THE PEOPLE'S REPUBLIC OF CHINA
              ----------------------------------------------------
                    (Address of principal executive offices)

                                 86-20-8432-7909
                                 ---------------
                           (Issuer's telephone number)

             6767 W. TROPICANA AVE., SUITE 207, LAS VEGAS, NV 89103
             ------------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


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 the past 90 days Yes[X]  No [ ]


Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [X] No [ ]


The number of shares of common stock outstanding as of November 19, 2004 is
99,999,997.


Transitional Small Business Disclosure Format (Check one): Yes [ ]  No [X]

<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                                      INDEX


                                                                     PAGE NUMBER
                                                                     -----------
PART I.  FINANCIAL INFORMATION                                             3

Item 1.  Financial Statements                                              3

         Consolidated Balance Sheet as of September 30, 2004 (unaudited)   3

         Consolidated Statements of Income for the three months and nine
         months ended September 30, 2004 and 2003 and from September 10,
         1996 (inception) through September 30, 2004 (unaudited)           4

         Consolidated Statements of Cash Flows for the nine months ended
         September 30, 2004 and 2003, and from September 10, 1996
         (inception) through September 30, 2004 (unaudited)                5

         Notes to Consolidated Financial Statements (unaudited)            6

Item 2.  Management's Discussion and Analysis or Plan of Operation        12

Item 3.  Controls and Procedures                                          14

PART II. OTHER INFORMATION                                                15

Item 6.  Exhibits and Reports on Form 8-K                                 15

SIGNATURES                                                                16


                                       2
<PAGE>

                         PART I. - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEETS
                               SEPTEMBER 30, 2004
                                   (UNAUDITED)

                                                Sept. 30, 2004     Dec. 31, 2003
                                                --------------     -------------
ASSETS
CURRENT ASSETS
Cash                                                 $       0        $       0
Goodwill                                             $       0        $       0
Assets of discontinued operations                    $       0        $       0
Total current assets                                 $       0        $       0
                                                     ----------       ----------
TOTAL ASSETS                                         $       0        $       0
                                                     ==========       ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Bank overdraft                                       $       0        $       0
Accounts payable                                     $       0        $  54,847
Officers' advances                                   $  49,050        $  63,693
Liabilities of discontinued operations               $       0        $       0
                                                     ----------       ----------
Total current liabilities                            $  49,050        $ 118,540
                                                     ----------       ----------

TOTAL LIABILITIES                                    $  49,050        $ 118,540
                                                     ----------       ----------

STOCKHOLDERS' EQUITY
*30,259,007 shares at September 30, 2004             $ 228,040        $  24,500
Retained Earnings                                    $(277,090)       $(143,040)

TOTAL STOCKHOLDERS' EQUITY                           $ (49,050)       $(118,540)
                                                     ----------       ----------
Total liabilities and stockholders' equity           $       0        $       0
                                                     ==========       ==========


See Accompanying Notes to Consolidated Financial Statements.

                                       3
<PAGE>
<TABLE>

                                          DISCOVERY INVESTMENTS, INC.
                                         (A DEVELOPMENT STAGE COMPANY)
                                       CONSOLIDATED STATEMENTS OF INCOME
                                              SEPTEMBER 30, 2004
                                                  (UNAUDITED)
<CAPTION>

                                                                                                  Sept 10, 1996
                                      Three Months Ended                Nine Months Ended         (Inception) to
                                   Sept. 30,       Sept. 30,       Sept. 30,       Sept. 30,        Sept. 30,
                                     2004            2003            2004            2003             2004
                                 -------------   -------------   -------------   -------------   -------------
<S>                              <C>             <C>             <C>             <C>             <C>
Revenues                         $          0    $          0    $          0    $          0    $          0
Cost of revenue                  $          0    $          0    $          0    $          0    $          0
                                 -------------   -------------   -------------   -------------   -------------
Gross profit                     $          0    $          0    $          0    $          0    $          0

General, selling and
administrative expenses          $      8,524    $     15,000    $    144,913    $     65,000       1,970,151
                                 -------------   -------------   -------------   -------------   -------------

Net operating income (loss)      $     (8,524)   $    (15,000)   $   (144,913)   $    (65,000)   $ (1,970,151)
                                 -------------   -------------   -------------   -------------   -------------
Non operating income (expense)   $     (8,524)   $    (15,000)   $          0    $          0    $   (284,753)

Net (Loss) before
extraordinary item               $     (8,524)   $    (15,000)   $   (144,913)   $    (65,000)   $ (2,254,904)
                                 -------------   -------------   -------------   -------------   -------------

Reorganization items             $          0    $          0    $          0    $          0    $    (30,858)

Net (Loss) from continuing
operations                       $          0    $    (15,000)   $   (144,913)   $    (65,000)   $ (2,285,762)
                                 -------------   -------------   -------------   -------------   -------------

Extraordinary gain on
pre-petition debt discharge      $          0    $          0    $   (144,913)   $    (65,000)   $   (300,445)
                                 -------------   -------------   -------------   -------------   -------------

Gain (Loss) from
discontinued operations          $          0    $          0    $          0    $  2,539,282    $ (1,865,677)
                                 -------------   -------------   -------------   -------------   -------------

Net income (loss)                $     (8,524)   $    (15,000)   $   (144,913)   $  2,474,282    $ (2,166,122)
                                 -------------   -------------   -------------   -------------   -------------

Net income (loss) per share
basic and diluted (Note 2)       $          0    $          0    $     (0.006)   $       0.10    $    (0.2356)
                                 =============   =============   =============   =============   =============
Average number of
shares of common
stock outstanding                  30,259,007      26,888,207      25,503,966      24,499,583       8,916,401
                                 =============   =============   =============   =============   =============

</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                                       4

<PAGE>
<TABLE>

                                               DISCOVERY INVESTMENTS, INC.
                                              (A DEVELOPMENT STAGE COMPANY)
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   SEPTEMBER 30, 2004
                                                       (UNAUDITED)

                                                                Nine Months Ended
                                                                                          September 10, 1996
                                                                                             (inception) to
                                                         Sept. 30, 2004    Sept. 30, 2003    Sept. 30, 2004
<S>                                                       <C>               <C>               <C>
Cash Flows From Operating Activities
Net income (loss)                                         $  (144,913)      $   (65,000)      $  (276,889)
Impairment of Intangible Asset                                      0                 0             4,800

Extraordinary gain on pre-petition debt discharge                   0                 0        (1,985,347)
Professional fees                                                   0                 0            65,858
Changes in assets and liabilities
Increase in accounts payable and accrued expenses
(pre-petition)                                                (54,847)           35,000           421,913
Increase in accounts payable and accrued expenses
(post-petition)                                                     0                 0             4,909
Increase in officer advances (pre-petition)                         0            30,000            17,576
Increase in officer advances (post-petition)                  (49,050)                0            13,970
                                                          ------------      ------------      ------------
Net cash provided by (used in) operating activities
before reorganization activities                             (248,810)                0         1,735,010
                                                          ------------      ------------      ------------

(Decrease) in Cash Resulting from Reorganization
Items:
Pre-petition claims paid pursuant to plan                           0                 0           (19,142)
Professional fees paid                                              0                 0           (65,858)
                                                          ------------      ------------      ------------
Net cash (used in) reorganization activities                        0                 0                 0
                                                          ------------      ------------      ------------
Net cash (used in) operating activities                             0                 0        (1,650,010)

Cash Flows From Investing Activities                          248,810                 0                 0

Cash Flows From Financing Activities
Issuance of common stock                                            0                 0            50,010
Proceeds from notes payable                                         0                 0         1,600,000
                                                          ------------      ------------      ------------
Net cash provided by financing activities                     248,810                 0         1,650,010
                                                          ------------      ------------      ------------

Net increase (decrease) in cash and cash equivalents                0                 0                 0

Cash and cash equivalents, beginning of period                      0                 0                 0

Cash and equivalents, end of period                                 0                 0                 0

Supplemental Schedule of Non-Cash Investing and
Financing Activities
Discharge of short term notes payable                               0                 0                 0
Discharge of long term notes payable                                0                 0
Issuance of shares on acquisition of Bycom Media                4,800             4,800             4,800
Issuance of shares on acquisition of Bycom Media                    0            14,000                 0
</TABLE>

See Accompanying Notes to Consolidated Financial Statements.

                                                           5
<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                  (UNDAUDITED)


NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

         Nature of business:
         -------------------
         Discovery Investments, Inc. ("Company") was organized September 10,
         1996 under the laws of the State of Nevada. As of September 30,2004,
         the Company had no operations and, in accordance with Statement of
         Financial Accounting Standard (SFAS) No. 7, "ACCOUNTING AND REPORTING
         BY DEVELOPMENT STAGE ENTERPRISES," was considered a development stage
         company.

         On August 9, 2001 ("Petition Date"), the Company filed a voluntary
         petition for Chapter 11 protection pursuant to the United States
         Bankruptcy Code. As of that date, The United States Bankruptcy Court
         for the District of Nevada ("Bankruptcy Court") assumed jurisdiction
         over the assets of the Company. On September 24, 2001, the Bankruptcy
         Court confirmed the Disclosure Statement and Plan of Reorganization
         (the "Plan") submitted by the Debtors. On September 24, 2001 the Plan
         became effective.

         A summary of the Company's significant accounting policies is as
         ----------------------------------------------------------------
         follows:
         --------

         Basis of Presentation
         ---------------------
         The Company implemented guidance provided by the American Institute of
         Certified Public Accountants Statement of Position 90-7 "Financial
         Reporting By Entities in Reorganization Under the Bankruptcy Code"
         ("AICPA SOP 90-7") as of September 30, 2001. Accordingly, the Company's
         financial statements for the periods prior to September 30, 2001 are
         not comparable to financial statements presented on or subsequent to
         September 30, 2001. These consolidated financial statements include the
         accounts of the Company and its wholly owned subsidiary, Bycom Media
         Inc., as of September 30, 2004.

         Estimates
         ---------
         The preparation of financial statements in conformity with generally
         accepted accounting principles requires management to make estimates
         and assumptions that affect the reported amounts of assets and
         liabilities and 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 differ
         from those estimates.

         Cash
         ----
         For the Consolidated Statements of Cash Flows, all highly liquid
         investments with maturity of three months or less are considered to be
         cash equivalents. There were no cash equivalents as of September 30,
         2004.

         Income taxes
         ------------
         Income taxes are provided for using the liability method of accounting
         in accordance with SFAS No. 109 "ACCOUNTING FOR INCOME TAXES." A
         deferred tax asset or liability is recorded for all temporary
         differences between financial and tax reporting. Temporary differences
         are the differences between the reported amounts of assets and
         liabilities and their tax basis. Deferred tax assets are reduced by a
         valuation allowance when, in the opinion of management, it is more
         likely than not that some portion or all of the deferred tax assets
         will not be realized. Deferred tax assets and liabilities are adjusted
         for the effect of changes in tax laws and rates on the date of
         enactment.

         Reporting on costs for start-up activities
         ------------------------------------------
         Statement of Position 98-5 ("SOP 98-5), "REPORTING ON THE COSTS OF
         START-UP ACTIVITIES" which provides guidance on the financial reporting
         of start-up and organization costs, requires most costs of start-up
         activities and organization costs to be expensed as incurred. With the
         adoption of SOP 98-5, there has been little to no effect on the
         Company's consolidated financial statements.

                                       6
<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                  (UNDAUDITED)


         Year end
         --------

         The Company originally selected March 31 for its fiscal year end. In
         2000, the Company changed its fiscal year end to December 31.

NOTE 2. RESTRUCTURING ITEMS

         Pursuant to the Disclosure Statement and Plan of Reorganization
         becoming effective September 24, 2001, all general unsecured claims
         were discharged in exchange for cash payments totaling $50,000. An
         impaired interest holder-shareholder paid $30,858 for the Chapter 11
         administrative claims. The remaining $19,142 was distributed to the
         Class One impaired creditors on a pro-rata basis, along with a pro-rata
         share of unregistered common stock, not to exceed 100,000 shares, of
         the Debtor.

         The discharge of debt was reflected in the December 31, 2001 financial
         statements. The Company's post-reorganization balance sheet as of
         September 24, 2001 became the opening balance sheet for the reorganized
         Company, as reflected in the following table:
<TABLE>
                                               Adjustments to Record the Plan or Reorganization
                                               Balance Sheet    Debt Discharge     Balance Sheet
                                               -------------    --------------     -------------
<S>                                             <C>               <C>               <C>
ASSETS                                          $         0       $         0       $         0

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable                                $    19,182       $    30,858       $    50,000

Liabilities Subject to Compromise
Short term notes payable                        $   100,000       $  (100,000)      $         0
Accounts payable                                     82,160           (82,160)                0
Interest payable                                    284,753          (284,753)                0
Officer's advances                                   17,576           (17,576)                0
Notes payable                                     1,500,000        (1,500,000)                0
Total Liabilities Subject to Compromise         $ 1,984,489       $(1,984,489)      $         0
Total Liabilities                               $ 2,003,671       $(1,953,631)      $   (50,000)

Stockholders' Equity
Common stock                                    $     2,100       $         0       $     2,100
Accumulated Deficit                              (2,005,771)       (1,953,631)          (52,100)
Total Stockholders' Equity                      $(2,003,671)      $(1,953,631)      $   (50,000)

Total Liabilities and Stockholders' Equity      $         0       $         0       $         0

The following proforma statements of operations reflect the results of
operations as if the reorganization had been effective December 31, 2000.
</TABLE>

                                       7
<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                  (UNDAUDITED)

<TABLE>
                         PRO FORMA STATEMENTS OF INCOME

                                                            For the Year Ended December 31, 2001
                                                      As Reported       Adjustments           Proforma
                                                      -----------       -----------           --------
<S>                                                   <C>               <C>                  <C>
Revenues                                              $         0       $         0          $         0
Cost of revenue                                                 0                 0                    0
Gross profit                                          $         0       $         0          $         0
General, selling and administrative expenses               11,579                 0               11,579
Operating Loss                                        $   (11,579)      $         0          $   (11,579)
Non-operating income (expense)
Interest expense                                          (98,753)                0              (98,753)

(Loss) before reorganization items and
extraordinary item                                    $  (110,332)      $         0          $  (110,332)
Reorganization items (Note 2)                             (30,858)           30,858(1)                 0

(Loss) before extraordinary item                      $  (141,190)      $    30,858          $  (110,332)
Extraordinary gain on pre-petition debt
discharge (Note 2)                                    $ 1,985,347       $(1,985,347)(2)      $         0
Net income (loss)                                     $ 1,844,157       $(1,954,489)         $  (110,332)

Net (loss) per share, Basic and diluted (Note 2)      $     (0.87)      $     (0.93)         $     (0.05)

(1) Elimination of effect of reorganization items
(2) Elimination of the gain on pre-petition debt discharge.

</TABLE>

NOTE 3. REORGANIZATION ITEMS

         Reorganization Items consisted of the following for the period ended
September 30, 2004 and years ended December 31, 2003 and 2002:

<TABLE>
                       September 30, 2004      December 31, 2003      December 31, 2002
                       ------------------      -----------------      -----------------
<S>                               <C>                    <C>                    <C>
Professional Fees                 $35,000                $80,000                $80,000

</TABLE>

NOTE 4. ACQUISITION OF BYCOM MEDIA INC.

         On April 29, 2002, the Company entered into a Plan and Agreement of
         Reorganization ("the Plan") with Bycom Media, Inc., an Ontario, Canada
         corporation ("Bycom"). Pursuant to the Plan, the Company acquired all
         the outstanding shares of Bycom for 4,800,000 shares of Company stock.
         Bycom became a wholly owned subsidiary of the Company. The closing of
         the purchase of Bycom occurred on May 5, 2002.

         Bycom was engaged in multimedia applications for internet-based
         businesses. Bycom has since discontinued all operations.

         The Company recorded the excess of the purchase price over the net book
         value of Bycom as goodwill on consolidation.

                                       8
<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                  (UNDAUDITED)


NOTE 5. STOCKHOLDERS' EQUITY

         Common stock
         ------------

         The authorized common stock of the Company consists of 100,000,000
         shares with par value of $0.001. As of September 30, 2004, there were
         30,259,007 shares of common stock issued and outstanding.

         As of January 1, 1999 the authorized common stock of the Company
         consisted of 25,000 shares. On March 15, 1999, the State of Nevada
         approved the Company's amended Articles of Incorporation, which
         increased its capitalization from 25,000 common shares to 25,000,000
         common shares. The no par value was changed to $0.001 per share. Also,
         on March 15, 1999, the Company's shareholders approved a forward split
         of its common stock at one hundred shares for one share of the existing
         shares. The number of common stock shares outstanding increased from
         21,000 to 2,100,000. Prior period information has been restated to
         reflect the stock split. As part of the reorganization explained in
         Note 2, the Company issued 99,881 shares of stock to the Class One
         impaired creditors on November 29, 2001.

         On April 25, 2002, the sole director of the Company adopted a
         resolution that resulted in a stock dividend. For stockholders of
         record on May 5, 2002, the Company will issue 2.5 shares for each
         shares owned. In lieu of issuing a fractional share certificate, the
         Company shall round up to a full share. On September 4, 2002 14,000,000
         shares were issued for the acquisition of Cavio Corportion. In the
         second quarter of 2003 the Company unwound the transaction and
         cancelled the 14,000,000 shares. This resulted in approximately
         24,499,600 shares outstanding as of June 30, 2003.

         On April 29, 2002, the Company issued 4,800,000 pursuant to a Plan of
         Reorganization whereby it acquired all of the outstanding shares of
         Bycom Media Inc. therefore (Note 4).

         On July 10, 2002, the State of Nevada approved the Company's amended
         Articles of Incorporation, which increased its capitalization from
         25,000,000 common shares to 100,000,000 common shares.

         The Company currently does not have any authorized preferred stock, but
         see Note 10 regarding the Company's plans to amend its articles of
         incorporation.

         Net loss per common share

         Net loss per share is calculated in accordance with SFAS No. 128,
         "EARNINGS PER SHARE." The weighted-average number of common shares
         outstanding during each period is used to compute basic loss per share.
         Diluted loss per share is computed using the weighted averaged number
         of shares and dilutive potential common shares outstanding. Dilutive
         potential common shares are additional common shares assumed to be
         exercised.

         Basic net loss per common share is based on the weighted average number
         of shares of common stock outstanding for the nine months ended
         September 30, 2004 and 2003 was 25,503,966, and 24,499,583,
         respectively, for the years ended December 31, 2003 and 2002,
         24,499,583 and 23,540,670, respectively, and 8,916,401 since inception.
         As of September 30, 2004 and December 31, 2003 and 2002 and since
         inception, the Company had no dilutive potential common shares.

NOTE 6. INCOME TAXES

         There is no provision for income taxes for the period ended June 30,
         2004, due to the net loss and no state income tax in Nevada, the state
         of the Company's domicile and operations. The Company's total deferred
         tax asset as of September 30, 2004 is as follows:

Net operating loss carry forward                                       $ 3,634
Valuation allowance                                                    $(3,634)
Net deferred tax asset                                                 $     0

                                       9
<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                  (UNDAUDITED)

         The net federal operating loss carry forward will expire in 2020. This
         carry forward may be limited upon the consummation of a business
         combination under IRC Section 381.

         For financial reporting purposes, the Company reported an extraordinary
         gain in the amount of $1,984,489 resulting from the cancellation of
         indebtedness that occurred from the bankruptcy discharge on the
         effective date. Pursuant to Section 1087 of the Internal Revenue Code,
         this extraordinary gain is excluded from income taxation and certain
         tax attributes of the Company are eliminated or reduced, up to the
         amount of such income excluded from taxation. As a result, the
         Company's net operating loss carryforwards were reduced by the
         $1,984,489

NOTE 7. GOING CONCERN

         The Company's consolidated financial statements are prepared in
         accordance with generally accepted accounting principles applicable to
         a going concern. This contemplates the realization of assets and the
         liquidation of liabilities in the normal course of business. Currently,
         the Company does not have significant cash of other material assets,
         nor does it have operations or a source of revenue sufficient to cover
         its operation costs and allow it to continue as a going concern. Until
         the Company has sufficient operations, the officers and directors have
         committed to advancing the operating costs of the company.

NOTE 8. RELATED PARTY TRANSACTIONS

         The Company neither owns nor leases any real or personal property. The
         resident agent of the corporation provides office services without
         charge. Such costs are immaterial to the financial statements and
         accordingly, have not been reflected therein. The officers and
         directors for the Company are involved in other business activities and
         may, in the future, become involved in other business opportunities. If
         a specific business opportunity becomes available, such persons may
         face a conflict in selecting between the Company and their other
         business interest. The Company has not formulated a policy for the
         resolution of such conflicts.

NOTE 9. WARRANTS AND OPTIONS

         There are no warrants or options outstanding to acquire any additional
         shares of common stock of the Company.

NOTE 10. SUBSEQUENT EVENTS

         On October 15, 2004, Evergreen Asset Group Limited, an International
         Business Company organized to do business under the laws of the British
         Virgin Islands ("Evergreen"), completed the closing of a reverse
         acquisition of the Company pursuant to which the Company acquired all
         of the outstanding shares of Evergreen capital stock in exchange for a
         controlling interest in the Company (the "Reorganization"). Pursuant to
         the Securities Purchase Agreement and Plan of Reorganization dated
         September 9, 2004, as amended by that certain Amendment No.1 to
         Securities Purchase Agreement and Plan of Reorganization dated October
         8, 2004, by and among the Company, Evergreen and the shareholders of
         Evergreen (the "Purchase Agreement"), the Company issued an aggregate
         of 83,500,000 shares of its common stock (representing 83.5% of the
         Company's capital stock outstanding) in exchange for all of the issued
         and outstanding shares of Evergreen capital stock transferred to the
         Company by each Evergreen shareholder at the closing. In addition,
         certain stockholders agreed to cancel 13,759,010 shares of common stock
         of the Company held by them. As a result of the Reorganization,
         Evergreen became a wholly-owned subsidiary of the Company.

                                       10
<PAGE>

                           DISCOVERY INVESTMENTS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004
                                  (UNDAUDITED)


         On November 12, 2004, the Company filed a preliminary information
         statement with the SEC in connection with resolutions by adopted by the
         board of directors of the Company approving: (a) an amendment to the
         Company's articles of incorporation to: (i) change the Company's name
         to "China Evergreen Environmental Corporation"; (ii) increase the
         authorized number of shares of common stock to 200,000,000; (iii)
         authorize 50,000,000 shares of preferred stock, whereby the board of
         directors of the Company will be authorized to establish, from the
         authorized shares of preferred stock, one or more classes or series of
         shares, to designate each such class and series, and to fix the rights
         and preferences of each such class and series; (iv) delete from the
         Company's articles of incorporation the first paragraph of former
         Article XIX regarding indemnification of directors and officers, and
         (v) update the address for the Company's agent for service of process
         in Nevada and remove provisions not otherwise required to be located in
         our articles of incorporation under Nevada law; and (b) amendments to
         the Company's bylaws to: (i) change Section 3 of Article II regarding
         the number of authorized directors; and (ii) delete a portion of
         Section 2 of Article VIII regarding the board of director's authority
         to change the authorized number of directors.

         Pursuant to regulations promulgated under the Securities Exchange Act
         of 1934, as amended, the amended and restated articles of incorporation
         and the amendments to the bylaws may not be effected until at least 20
         calendar days after the information statement is sent or given to the
         Company's stockholders. The Company anticipates that the amended and
         restated articles of incorporation will become effective on or after
         December 13, 2004 upon filing with the Nevada Secretary of State. The
         Company anticipates that the amendments to the Company's bylaws will
         become effective on December 13, 2004.

                                       11
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

GENERAL

         The discussion contained herein contains "forward-looking statements"
         that involve risk and uncertainties. These statements may be identified
         by the use of terminology such as "believes," "expects," "may,"
         "should" or anticipates" or expressing this terminology negatively or
         similar expressions or by discussions of strategy. The cautionary
         statements made in this Form 10QSB should be read as being applicable
         to all related forward-looking statements wherever they appear in this
         Form 10QSB. The Company's actual results could differ materially from
         those discussed in this report.

OVERVIEW

         As of September 30, 2004, the Company had no assets or operations and
         could be defined as a "shell" company whose sole purpose was to locate
         and consummate a merger or acquisition with another public entity or a
         private entity.

         On October 15, 2004, Evergreen Asset Group Limited, an International
         Business Company organized to do business under the laws of the British
         Virgin Islands, completed the closing of a reverse acquisition of the
         Company pursuant to which the Company acquired all of the outstanding
         shares of Evergreen capital stock in exchange for a controlling
         interest in the Company. Pursuant to the Securities Purchase Agreement
         and Plan of Reorganization dated September 9, 2004, as amended by that
         certain Amendment No.1 to Securities Purchase Agreement and Plan of
         Reorganization dated October 8, 2004, by and among the Company,
         Evergreen and the shareholders of Evergreen, the Company issued an
         aggregate of 83,500,000 shares of its common stock (representing 83.5%
         of the Company's capital stock outstanding) in exchange for all of the
         issued and outstanding shares of Evergreen capital stock transferred to
         the Company by the Evergreen shareholders at the closing. In addition,
         certain stockholders agreed to cancel 13,759,010 shares of common stock
         held by them. As a result of the Reorganization, Evergreen became a
         wholly-owned subsidiary of the Company.

         On November 12, 2004, the Company filed a preliminary information
         statement with the SEC in connection with resolutions by adopted by the
         new board of directors of the Company approving: (a) an amendment to
         the Company's articles of incorporation to: (i) change the Company's
         name to "China Evergreen Environmental Corporation"; (ii) increase the
         authorized number of shares of common stock to 200,000,000; (iii)
         authorize 50,000,000 shares of preferred stock, whereby the board of
         directors of the Company will be authorized to establish, from the
         authorized shares of preferred stock, one or more classes or series of
         shares, to designate each such class and series, and to fix the rights
         and preferences of each such class and series; (iv) delete from the
         Company's articles of incorporation the first paragraph of former
         Article XIX regarding indemnification of directors and officers, and
         (v) update the address for the Company's agent for service of process
         in Nevada and remove provisions not otherwise required to be located in
         our articles of incorporation under Nevada law; and (b) amendments to
         the Company's bylaws to: (i) change Section 3 of Article II regarding
         the number of authorized directors; and (ii) delete a portion of
         Section 2 of Article VIII regarding the board of director's authority
         to change the authorized number of directors.

         Pursuant to regulations promulgated under the Securities Exchange Act
         of 1934, as amended, the amended and restated articles of incorporation
         and the amendments to the bylaws may not be effected until at least 20
         calendar days after the information statement is sent or given to the
         Company's stockholders. The Company anticipates that the amended and
         restated articles of incorporation will become effective on or after
         December 13, 2004 upon filing with the Nevada Secretary of State. The
         Company anticipates that the amendments to the Company's bylaws will
         become effective on December 13, 2004.

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<PAGE>

PLAN OF OPERATION

         As discussed above, Evergreen became a subsidiary of the Company in
         connection with the reverse acquisition. Evergreen was established in
         May 2004 as an investment holding company for waste water treatment
         businesses in the People's Republic of China. Evergreen, through its
         four majority-owned subsidiaries, Guangdong Xinxinmei Environmental
         Protection Co., Limited, Beijing Haotai Shiyuan Water Purification Co.
         Limited, Shangdong Haiyang Shenshi Environmental Protection Co. Limited
         and Xianyang Beicheng Water Purification Co. Limited, provides waste
         water turn-key engineering, equipment and chemical trading. In
         addition, Evergreen has invested in, manages and operates five water
         treatment facilities through a "BOT arrangement" (Build, Operate and
         Transfer) with the PRC government.

         Prior to the reverse acquisition described above, Evergreen raised $4.2
         million from sale of a waste water facility. The proceeds from this
         sale are expected to provide for the working capital needs of the
         Company.

         Evergreen maintains an investment program in research and development
         to improve existing technology and develop new technology that apply to
         its operations in the waste water treatment business. The Company
         anticipates continuing its commitment to this research and development
         investment in the near future.

         The Company also remains alert to opportunities to profitably divest
         rather than continue to operate BOT facilities. Divestiture of BOT
         facilities is an important element of the Company's financing strategy
         and provides opportunities for returns on investments.

         The Company has no plan to change the number of employees during the
         next 12 months. The Company expects to continue to grow by establishing
         research and development alliances with a number of research
         institutions in the People's Republic of China to jointly develop new
         waste water technologies. The Company also plans to subcontract field
         work to third party contractors.

ACCOUNTING FOR GOOD WILL AND OTHER INTANGIBLE ASSETS.

         In July 2001, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards "SFAS" No. 141, "Business
         Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets."
         SFAS No. 141 requires business combinations initiated after June 30,
         2001 to be accounted for using the purchase method of accounting, and
         broadens the criteria for recording intangible assets separate from
         goodwill. Recorded goodwill and intangibles will be evaluated against
         these new criteria and may result in certain intangibles being subsumed
         into goodwill, or alternatively, amounts initially recorded as goodwill
         may be separately identified an recognized apart form goodwill. SFAS
         No. 142 requires the use of a non-amortization approach to account for
         purchased goodwill and certain intangibles. Under a non-amortization
         approach, goodwill and certain intangibles is more than its fair value.
         Goodwill is the excess of the acquisition costs of the acquired entity
         over the fair value of the identifiable net assets acquired. The
         Company is required to test goodwill and intangible assets that are
         determined to have an indefinite life for impairments at least
         annually. The provisions of SFAS No. 142 require the completion of an
         annual impairment test with any impairments recognized in current
         earnings. The provisions of SFAS No. 141 and SFAS No. 142 may be
         applicable to the reverse acquisition of the Company by Evergreen
         discussed above.

         The Company has been informed that the transaction with Evergreen will
         be accounted for as a reverse acquisition with the Company being the
         surviving registrant. As a result, Evergreen's shareholders will
         exercise control over the Company. The transaction will be deemed to be
         a capital transaction where the Company and Bycom are treated as a
         non-business entity. Therefore, the accounting for the business
         combination is identical to that resulting from a reverse merger,
         except no goodwill or other intangible assets will be recorded. For
         accounting purposes, Evergreen will be treated as the accounting
         acquirer and, accordingly, will be presented as the continuing entity.
         At the time of the business combination, the transaction between Bycom
         and the Company may require restatement to reflect the application of
         SFAS No. 141 and SFAS No. 142.

OFF-BALANCE SHEET ARRANGEMENTS

         The Company does not have any off-balance sheet arrangements.

                                       13
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

         As discussed above, the management of Evergreen replaced the management
         of the Company in connection the closing of the reverse acquisition on
         October 15, 2004. As required by SEC rules, the Company's new
         management has conducted an evaluation of the effectiveness of the
         design and operation of the Company's disclosure controls and
         procedures at the end of the period covered by this report. This
         evaluation was carried out with the assistance of previous management
         of the Company. Based on this evaluation, the new principal executive
         officer and principal financial officer have concluded that the design
         and operation of our disclosure controls and procedures are effective.
         There were no changes in the Company's internal control over financial
         reporting or in other factors that have materially affected, or are
         reasonably likely to materially affect, the Company's internal control
         over financial reporting.


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<PAGE>

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

    REGULATION
    S-B NUMBER                           EXHIBIT

         10.1     Securities Purchase Agreement and Plan of Reorganization dated
                  September 9, 2004, by and between Discovery Investments, Inc.,
                  Evergreen Asset Group Limited and the shareholders of
                  Evergreen Asset Group Limited (incorporated by reference to
                  Exhibit 2.1 to Form 8-K filed on October 21, 2004).

         10.2     Amendment No. 1 to Securities Purchase Agreement and Plan of
                  Reorganization dated October 8, 2004, by and between Discovery
                  Investments, Inc., Evergreen Asset Group Limited and the
                  shareholders of Evergreen Asset Group Limited (incorporated by
                  reference to Exhibit 2.1 to Form 8-K filed on October 21,
                  2004).

         31.1     Rule 13a-14(a) Certification of Chief Executive Officer dated
                  November 22, 2004

         31.2     Rule 13a-14(a) Certification of Chief Financial Officer and
                  Chief Accounting Officer dated November 22, 2004

         32       Certification of Chief Executive Officer and Chief Financial
                  Officer pursuant to 18 U.S.C. Section 1350, dated November 22,
                  2004.


(b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter for which this report is
filed.


                                       15
<PAGE>

                                   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.

                                               DISCOVERY INVESTMENTS, INC.




November 22, 2004                              By:      /s/ Chong Liang Pu
                                                  ------------------------------
                                                        Chong Liang Pu
                                                        Chief Executive Officer



                                               By:      /S/ Ren Cai Ding
                                                  ------------------------------
                                                        Ren Cai Ding
                                                        Chief Financial Officer


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