FORM 10 KSB

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

(Mark One)

[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES  EXCHANGE
       ACT OF 1934 [NO FEE  REQUIRED]  FOR THE FISCAL  YEAR ENDED DECEMBER 31,
       1999

       OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

       [NO FEE REQUIRED] for the transition period from

       ____________ to ____________



                        Commission file number: 000-27487


                    SAN DIEGO SOCCER DEVELOPMENT CORPORATION
                 (Name of small business issuer in its charter)


       CALIFORNIA                                         33-0770631
       ----------                                         ----------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                        Identification Number)

    2123 Garnet Ave., Suite B
     San Diego, California                                   92109
     ---------------------                                   -----
(Address of principal executive offices)                  (Zip Code)


          Issuer's telephone number, including area code:
                          (858) 581-2120


Securities registered pursuant to Section 12(b) of the Securities Exchange Act:

Title of each class                           Name of each exchange on which
registered


                               NONE


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<PAGE>

Securities registered pursuant to section 12(g) of the Securities Exchange Act:

Title of each class                           Name of each exchange on which
registered

   COMMON STOCK,
   No Par Value                                        NONE


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  Exchange  Act of 1934  during the  preceding  12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

Yes     [X]          No     [ ]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S B 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 [ ]

As of December 31,  1999,  5,284,369  shares of the  issuer's  Common Stock were
outstanding to approximately 530 shareholders of record.

DOCUMENTS INCORPORATED BY REFERENCE:

See Part III, Item 13, Exhibits and Reports on Form 8-K



                              PART I



Item 1:    DESCRIPTION OF BUSINESS

Forward-looking Statements

      Certain matters discussed in this Registration  Statement on Form 10SB are
"forward-looking  statements"  intended  to qualify  for the safe  harbors  from
liability  established by the Private Securities  Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the  statement  will  include  words such as the Company  "believes,"
"anticipates,"  "expects,"  "estimates" or words of similar meaning.  Similarly,
statements  that  describe the Company's  future plans,  objectives or goals are
also forward-looking  statements. Such forward-looking statements are subject to
certain risks and  uncertainties  which are described in close proximity to such
statements and which could cause actual results to differ  materially from those
anticipated as of the date of this report. Shareholders, potential investors and
other  readers  are  urged  to  consider   these   factors  in  evaluating   the


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<PAGE>

forward-looking statements and are cautioned not to place undue reliance on such
forward-looking  statements.  The forward-looking statements included herein are
only made as of the date of this report and the Company undertakes no obligation
to publicly update such forward-looking  statements to reflect subsequent events
or circumstances.

Business Development

San Diego Soccer Development Corporation, a California corporation,  was founded
in 1997 to develop,  own, and run a professional  soccer team in San Diego, with
the ultimate  goal of becoming a Major League Soccer  franchise.  The Company is
headquartered at 2123 Garnet Avenue, Suite B, San Diego, CA 92109.

The Company  operates as The San Diego Flash  soccer  club.  The Company  stages
professional  soccer games and competes in the A-League,  America's  Division II
professional  league.  The  sanctioning  body for the  league is USL,  or United
Soccer Leagues,  formerly known as USISL. In its inaugural  season in San Diego,
the team won the championship of the Pacific  Division,  and nearly captured the
A-League  title.  In its  second  season,  the Flash  team  captured  its second
straight Pacific Division crown, the first of the A-League's 30 teams nationwide
to  win  back-to-back   division   championships  in  its  first  two  years  of
competition. The team is currently beginning its 2000 season.

In the fourth quarter of 1999, the Company paid a $20,000  franchise fee for the
Riverside  County  Elite  Division  III Soccer  franchise.  This fee was paid in
anticipation  of an agreement  pursuant to which the Company will purchase a 75%
interest in Riverside County Soccer Development Corporation,  which operates the
Elite.  The Company  expects  such  transaction  to be finalized in the first or
second quarter of the 2000 fiscal year.

Business of Issuer

      Marketing and Distribution

The  Company,  as part of its regular  business  and  promotion of its San Diego
Flash brand name, currently sells branded merchandise at its home games. Through
the 1998 season and the 1999 season, the Company's  merchandise was produced and
sold through a local vendor. This contract has recently been terminated, and the
merchandise operation has been brought in-house.  The Company believes that this
change will allow it to make a greater  margin on the sales of its  merchandise,
as well as allowing greater control of price points, quality, and product mix.

The  Company  plans to expand its  merchandise  operation  to  include  sales at
kiosk-based  locations in selected  malls in San Diego  County.  The plan is for
these kiosk outlets to sell Flash branded merchandise, as well as general soccer
merchandise and equipment. The Company plans to place kiosks in 3 major malls in
the greater San Diego area.

                                       4
<PAGE>

The Company  has  increased  its ticket  sales  distribution  effort by hiring a
ticket sales  contractor,  Sportix.net.  The contract  calls for  Sportix.net to
provide  telemarketing  and  sales  services  to the  Company  in  return  for a
commission  on each ticket sold.  The Company  believes  that this contract will
increase overall ticket sales.

      Proprietary Rights

The team  currently  claims  trademark  protection for the brand name "San Diego
Flash".  It holds a franchise with the USL as an A-League team, the top division
of the USL.  The  A-League is  currently  regarded as the `second  division'  of
American soccer,  behind the MLS (Major League Soccer). The Company has sublease
agreements with concessionaires at its games for sales of food and non-alcoholic
beverages.

      Competition

The  Company's  A-League  soccer  franchise  competes  for sports  entertainment
dollars  not  only  with  other  major  league  sports,  but also  with  college
athletics,  high-school  athletics  and  other  sports-related  (and  non-sports
related) entertainment in the San Diego area.

      Seasonality

Seasonal  aspects of the sport of Soccer have a material effect on the company's
operations.  These effects are largely  self-evident in the attached  financials
and audit of the Company.

      Employees

The Company presently  employs its officers and directors,  and certain clerical
staff on an "as  needed"  basis.  This  includes  10  full-time  and 1 part-time
management personnel, and 26 part-time players and coaching personnel.


ITEM 2:    DESCRIPTION OF PROPERTY

The Company presently utilizes  approximately  1,350 square feet of office space
and related equipment and resources, including computers, printers, typewriters,
desk, conference table and cabinets.

The Company,  through Yan K Skwara and Marta Glodkoska, Yan Skwara's mother, who
are  lessees,  leases 1,350 sq ft from Mark  Spitzer  under a  three-year  lease
agreement.  The lease  will run out in January  1,  2002.  Currently,  the lease
payment is $1,350 a month.  The terms of lease  agreement  does not call for any
increase  in the  payments.  Mr.  Skwara and Mrs.  Glokoska  pass the lease cost
direct to the Company with out any compensation.

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<PAGE>

The  Company  has  signed a Use of  Facilities  Agreement  with San  Diego  Mesa
College. The agreement provides a "pre game rental charge" of $1450 per game and
seasonal  cost of $3,000  per year to be paid on or before  December  15 of each
year.  The terms of contract are for one year and renewable by mutual consent of
the parties.

It is the management's belief that all facilities are adequately insured against
damage and loss.


ITEM 3:    LEGAL PROCEEDINGS

The  Company is not  currently  subject to any legal  proceeding.  Further,  the
Company  is  not  aware  of  any  contemplated   action  or  proceeding  by  any
governmental authority to which Company is a participant.


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

Not Applicable


                                     PART II

ITEM 5:    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Currently,  the shares of the  Company are not listed on any  national  exchange
including the "Pink Sheets" or on the over-the-counter Bulletin Board.

Recent Sales of Unregistered Securities

From October 13, 1997 to January 31, 1999 the Company offered and privately sold
458,300  shares of Common Stock at $1.00 per share for a total of $458,300.  The
offering was underwritten by Lloyd Wade Securities, 5005 LBJ Freeway, Suite 360,
Dallas,  TX.  Attached to this  offering  were  warrants,  183,320 of which were
issued.  The warrants are convertible  into common stock at an exercise price of
$1.25/share.  72,400 of the  warrants  were  exercised  in 1998 and 13,000  were
exercised in 1999. 97,920 remain outstanding. These warrants will expire between
October 2001 and June 2003.  Commissions  of 15% were paid on 43,000 shares sold
by brokers at Lloyd Wade  Securities.  No general forms of advertising were used
in connection with the issuance of the shares. This issuance was exempt from the
registration provisions of the Act by virtue of Section 4(2) and Regulation D as
promulgated thereunder.

                                       6
<PAGE>

From  February 3, 1999 to December 31, 1999,  the Company  offered and privately
sold 183,320  shares of Common Stock at $1.00 per share for a total of $183,320.
The  Company  may sell up to a total of  1,000,000  shares  under this  offering
before it is closed.  No underwriters  were used in connection with the issuance
of these shares.  No general forms of advertising  were used in connection  with
the  issuance of the  shares.  This  issuance  is exempt  from the  registration
provisions of the Act by virtue of Section 4(2) and  Regulation D as promulgated
thereunder.

The Company sold convertible debt securities in 1999,  pursuant to two series of
promissory  notes. A total of $733,950 was sold under the Series 99-1 Promissory
Note. As of December 31, 1999,  $404,850 has been converted into common stock at
1 share per dollar held in the notes. $329,100 of said notes remain outstanding.
The Series 99-1 Promissory  Notes matured on December 31, 1999.  These issuances
are exempt from the registration  provision of the Act by virtue of Section 4(2)
and Regulation D as promulgated thereunder.

The Company issued 1,319,700 shares of restricted common stock in 1998 and 1,500
shares of restricted  common stock in 1999 as  compensation  to  employees.  The
shares were issued in reliance  upon the  exemption  contained  in Section  4(2)
under the Securities Act.

The Company issued 260,000  shares of restricted  common stock in 1997,  150,000
shares of  restricted  common  stock in 1998 and  268,935  shares of  restricted
common  stock  in 1999 in  exchange  for  consulting  services  provided  to the
Company.  The shares were issued in reliance  upon the  exemption  contained  in
Section 4(2) under the Securities Act.

The Company issued 1,078,300  options to purchase shares of common stock in 1999
as additional  compensation  and bonus to employees and  consultants,  including
some   officers  and   directors  of  the  Company  (See  "Item  10:   Executive
Compensation"  below).  These options are  exercisable at  $0.05/share  and will
expire in April of 2004.  The shares were issued in reliance  upon the exemption
contained in Section 4(2) under the Securities Act.

The Company sold 150,000 shares of restricted common stock in September, 1997 in
exchange for an existing A-league soccer franchise.  This is the franchise under
which the team currently operations. (See "Item I: Description of Business") The
shares were issued in reliance  upon the  exemption  contained  in Section  4(2)
under the Securities Act.

The Company sold 650,000  shares of restricted  common stock in 1998 and 295,000
shares of  restricted  common stock in 1999 in exchange for  securities of other
companies.  These securities were immediately sold to produce a cash flow to the
Company.  The shares were issued in reliance  upon the  exemption  contained  in
Section 4(2) under the Securities Act.


                                       7
<PAGE>


ITEM 6:    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The Company operates a top-ranked team in Soccer's  A-League  (Division II). The
Company's gate receipts for 1999 decreased by 28.7 % from 1998.  Operating costs
of the Company  increased  by 69% from 1998 to 1999.  It is important to mention
that the  revenues in the 1998 season were not enough to cover  expenses and the
Company experienced significant losses. This was also true for 1999.

The Company is working to build brand  recognition of the San Diego Flash in the
community.  The Company's efforts to build its fan base include direct marketing
to the youth soccer market,  general  advertising,  and media relations with all
local sports media outlets. Another effort to improve visibility and recognition
of the team involves awarding  complementary tickets to potential fans that have
yet to attend a game.  The team  plans to  reduce  the  number of  complimentary
tickets in the coming year, as the visibility  and  recognition of the brand has
increased.

The Company sold convertible debt securities in 1999,  pursuant to two series of
promissory  notes. A total of $719,950 was sold under the Series 99-1 Promissory
Note. As of December 31, 1999,  $390,850 has been converted into common stock at
1 share per dollar held in the notes. $329,000 is said notes remain outstanding.
The Series 99-1  Promissory  Notes  matured on  December  31,  1999.  A total of
$37,900  was sold  under  the  Series  99-2  Promissory  Note.  These  notes are
convertible  into common  stock at 1 share per dollar  held in the notes.  As of
December 31, 1999, none of the Series 99-2 Promissory Notes had been converted.

The  Company,  as part of its regular  business  and  promotion of its San Diego
Flash brand name, currently sells branded merchandise at its home games. Through
the 1998 season and the 1999 season, the Company's  merchandise was produced and
sold through a local vendor. This contract has recently been terminated, and the
merchandise operation has been brought in-house.  The Company believes that this
change will allow it to make a greater  margin on the sales of its  merchandise,
as well as allowing greater control of price points, quality, and product mix.

The  Company  plans to expand its  merchandise  operation  to  include  sales at
kiosk-based  locations in selected  malls in San Diego  County.  The plan is for
these kiosk outlets to sell Flash branded merchandise, as well as general soccer
merchandise and equipment. The Company plans to place kiosks in 3 major malls in
the greater San Diego area. The Company believes that these kiosks will prove to


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<PAGE>

be revenue-producers, and also feels that they will serve an important marketing
function in increasing community awareness of the San Diego Flash. Uncertainties
in  being  able  to  accomplish  this   merchandising   plan  include   possible
non-availability of space at local malls, potential lack of public acceptance of
the products sold, and potential competition from other outlets.

The Company's  contract with a local food and beverage  concessionaire  has also
been  terminated.  The Company plans to contract with a professional  caterer to
service the food and beverage  needs of its fans,  and believes that its revenue
from food and beverage will increase from this change.

The Company  has  increased  its ticket  sales  distribution  effort by hiring a
ticket sales  contractor,  Sportix.net.  The contract  calls for  Sportix.net to
provide  telemarketing  and  sales  services  to the  Company  in  return  for a
commission  on each ticket sold.  The Company  believes  that this contract will
increase overall ticket sales.

Seasonality

Since the Company's  team plays from April to September  each year, the business
operations  are highly  seasonal.  With the major  sources  of  revenue  for the
Company coming from team operations, this seasonality is material.


ITEM 7:    FINANCIAL STATEMENTS

(Begins on Page 16 Below)


ITEM 8:    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINACIAL MATTERS

Not Applicable



                             PART III


ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
         PERSONS; COMPLIANCE WITH SECTION 16(A).


      The following persons represent the Board of Directors and Officers of the
Company as of December 31, 1999:


                                       9
<PAGE>

         Name                Age                 Title
         ----                ---                 -----

Yan K. Skwara                 34        Director, President, CEO

Sam Kaloustian                30        Chariman, VP, General

Trisha Bollman                29        Director, Secretary

Chris Payne                   32        Director, COO

Steven R. Peacock             52        Director


      Directors are elected on an annual basis. The terms for each director will
expire at the next annual meeting of shareholders or at such time as a successor
is duly elected.

      Yan K.  Skwara.  Mr.  Skwara  is  founder,  and has been  President  and a
Director of the Company since its  inception;  he was elected CEO of the Company
in September,  1998.  For the past 10 years,  Mr. Skwara has been employed as an
investment  banker,   holding  various   securities   licenses  through  several
investment  banking firms. Mr. Skwara is currently  employed  full-time with the
Company and brings his prior  experience in the investment  banking world to the
Company.  Mr. Skwara has significant  experience in management,  product support
and overall knowledge in the investor relations arena. Mr. Skwara also maintains
a significant background in the soccer industry. He is a student of the game and
has been  actively  playing  the game for 17 years and  began  his  professional
career in soccer at age nineteen where he signed his first professional contract
with a club in Germany. Prior to playing overseas, Mr. Skwara studied and played
at  California  State  University  of Los Angeles.  He played in Germany for two
years  before  coming  back to the states to finish  his career in Los  Angeles.
After a  professional  career,  Mr.  Skwara  acquired his North Texas Soccer `D'
Coaching  License and also was founder  and partner of a semi-pro  franchise  in
Dallas, Texas in 1994.

      Sarkis Kaloustian. Mr. Kaloustian has previously served as Chairman of the
Board of  Directors,  and was elected  Vice  President  and  General  Manager in
September.  Prior to that date, Mr. Kaloustian served as CEO of the Company. Mr.
Kaloustian  is an attorney  licensed to practice law in the State of  California
and has been a legal practitioner in a civil law firm  predominantly  engaged in
business and  corporate  transaction  and  litigation  matters for the past four
years.  Mr.  Kaloustian,  aside from his duties as Vice  President  and  General
Manager,  is also the Company's in house corporate counsel.  Prior to practicing
law as a civil  trial  attorney  and  joining  Company's  management  team,  Mr.
Kaloustian  interned  for the United  States  Attorneys'  Office,  the  District
Attorney's Office as well as the San Diego Attorney's  Office. He is currently a
volunteer and vice-president for the San Diego County Soccer League; a San Diego
based  Premier  amateur  adult  league.  Mr.  Kaloustian  has also  served  as a
volunteer member for the City of San Diego Recreation  Department Sports Council
for Mira Mesa from 1995 until present.  Mr. Kaloustian has extensive  experience
in  corporate  legal and  management  matters,  as well as over twelve  years of


                                       10
<PAGE>

experience  in  coordinating  and  operating  soccer  clubs  and  leagues.   Mr.
Kaloustian has played soccer for over 21 years and has played  semi-professional
soccer for club teams in both Los Angeles and Glendale,  California. He has also
been coaching collegiate level players in San Diego for the past seven years.

      Trisha Bollman.  Ms. Bollman has been Corporate  Secretary and Director of
Investor Relations since the Company's inception.  Prior to joining the Company,
she was employed from 1989 to 1992 as an Insurance  Underwriter and from 1992 to
present has worked in several  Investment Banking Firms in the corporate finance
division as well as head of  operations.  She is a licensed  Series 11 Assistant
Representative  registered with the National  Association of Securities Dealers.
Utilizing her skills in investment banking, Ms. Bollman assists in the Company's
investor relations and marketing division.

      Christopher M Payne.  Since April 1999,  Mr. Payne has been a Director and
Chief  Operating  Officer of the Company.  Between May 1998 and April 1999,  Mr.
Payne was the Chief Operating Officer of a startup  sportswear  Company where he
developed  relationships  with  third-party  vendors  and  manufacturers.   From
December  1994  until  April  1998,  Mr.  Payne was Vice  President  of a gaming
development  Company  which  financed  and  built  hotels  and  casinos  in  the
Philippines  and  Costa  Rica.  He is  experienced  in  both  the  creation  and
evaluation  of  business  plans and  private  placement  memoranda.  He also has
extensive construction and project management experience and is a valuable asset
in the  scheduling of tight  deadlines and complex  projects.  Mr. Payne holds a
Bachelor of Arts in Psychology from the University of California, San Diego that
he  received  in 1992.  Mr.  Payne is a native of  England  but is  currently  a
resident of San Diego.

      Mr.  Steven R.  Peacock,  is  President  and founder of Peacock  Financial
Corporation which he has worked for for 22 years. He has extensive experience in
real estate  development,  property  management  and  construction.  His vision,
creative mind,  persistence  and direction  have  positioned  Peacock  Financial
Corporation to take advantage of the upturn in the real estate marketplace,  but
also to increase  shareholder  value  through the  creation  or  acquisition  of
subsidiaries strategically positioned within their own industries.


      Except as noted above,  during the past five years,  none of the Company's
executive  officers or directors  have been  convicted in a criminal  proceeding
(other than traffic  violations and other minor offenses) or been parties to any
bankruptcy, insolvency or similar proceedings,  individually, or as an executive
officer of general  partner of a business in  bankruptcy,  insolvency or similar
proceedings.

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<PAGE>



Option/SAR Grants in Last Fiscal Year

The following table sets forth certain information  concerning individual grants
of stock  options to executive  officers of the Company,  during the fiscal year
ending December 31, 1999:



       Name         Number of Securities     Percent of      Exercise
       ----         --------------------     ----------      --------

Yan K. Skwara              150,000              13.9           $.05

Sarkis Kaloustian          50,000                4.6           $.05

Trisha Bollman             50,000                4.6           $.05

Chris Payne                130,000              12.1           $.05



Section 16(A) Beneficial Ownership Reporting Compliance

Under the securities  laws of the United States,  the Company's  directors,  its
executive  officers,  and any  persons  holding  more  than ten  percent  of the
Company's  Common Stock are required to report  their  initial  ownership of the
Company's  Common  Stock and any  subsequent  changes in that  ownership  to the
Commission  and the  Company.  Specific  due dates for these  reports  have been
established and the Company is required to disclose any failure to file, or late
filing, of such reports.  Based solely on the Company's review of Forms 3, 4 and
5 and amendments  thereto  furnished to the Company and written  representations
with  respect to filing of such  Forms,  the Company is aware that no Forms have
been  filed  timely  to date.  Initial  Form 3's are  being  filed  concurrently
herewith by  mailing.  The  Company  knows of no Form 4 filings  required by any
officer, director or 10% shareholder at this time.


ITEM 10:   EXECUTIVE COMPENSATION


The  following  table  sets  forth  information  concerning  cash  and  non-cash
compensation paid or accrued on behalf of the Company's Chief Executive Officer,
Yan K.  Skwara,  for the fiscal  years ended  December 31, 1998 and December 31,
1999. No other person had a total salary and bonus in excess of $100,000 for the
fiscal years ended December 31, 1998 and 1999.



                                       12
<PAGE>


<TABLE>

                                     SUMMARY COMPENSATION TABLE
<CAPTION>


             Annual Compensation                                         Long Term Compensation

-----------------------------------------------------------------------------------------------------------------
  (a)        (b)       (c)         (d)           (e)           (f)            (g)         (h)           (i)
-----------------------------------------------------------------------------------------------------------------
                                                             Restricted
Name and                                        Other          Stock                      LTIP           All
Principal                                       Annual        Awards(s)                  Payouts        Other
Position    Year    Salary($)     Bonus      Compensation       ($)         Options        ($)       Compensation
--------    ----    ---------     -----      ------------       ---         -------        ---       ------------

<S>         <C>     <C>            <C>           <C>            <C>         <C>            <C>           <C>
Yan K.      1998    $60,000*       N/a           N/a            N/a         150,000        N/a           N/a
Swara, CEO

            1999    $60,000*       N/a           N/a            N/a         150,000        N/a           N/a
</TABLE>

* Indicated salary is an amount currently being accrued by Company.




Compensation of Directors

      The  Directors  of the Company are not paid any fee for their  services in
such capacity.


ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
         MANAGEMENT

Set forth below is the direct  ownership of the Registrants  Common voting stock
by  Directors,  Officers  or any  owner  of 5% or more of the  Common  Stock  of
Registrant as of December 31, 1999:


<TABLE>
<CAPTION>

  Title of          Name and Address                Amount of and Nature
  Class           of Beneficial Owner            of the Beneficial Ownership        Percent of Class
  -----           -------------------            ---------------------------        ----------------


  <S>              <C>                                   <C>                           <C>
  Common           Trisha Bollman                        571,428                       12.8 %
  Stock            1560 Chalcedony #H
                   San Diego, Ca 92109

  Common           Sarkis Kaloustian                     571,428                       12.8 %
  Stock            1246 Roslyn Lane
                   La Jolla, Ca 92037

  Common           Yan Skwara                            571,428                       12.8 %
  Stock            1680 Chalcedony #H
                   San Diego, Ca. 92109

  Common           Altomare Trust                        237,000                        5.3 %
  Stock            3883 Ruffin Road
                   San Diego, Ca 92123

  Common           Lloyd Wade Securities                 116,000                        2.6 %
  Stock            5005 LBJ Freeway
                   Dallas, TX 75246

  Common           Peacock Financial Corporation         200,000                        4.5 %
  Stock            2531 San Jacinto Ave
                   San Jacinto, Ca 92583


</TABLE>

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<PAGE>



ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

All of the  Company's  officers  and  directors  have  been in the  past and may
continue to be active in business with other  companies and on their own behalf.
All  officers  and  directors  have  retained  the  right to  conduct  their own
independent  business interests;  these activities may give rise to conflicts of
interest  with the Company.  The officers  and  directors  have agreed that if a
business  opportunity  relating to the Company's business comes to the attention
of its officers or directors,  such  opportunity  will be made  available to the
Company and the  Company  shall have the right of first  refusal  with regard to
such opportunity, after full disclosure of the opportunity to the Company. If an
officer or director owes a fiduciary  duty to another entity similar to the duty
owed to the  Company,  it is possible  that the conflict  may be  impossible  to
resolve in a manner that is equitable to both entities.

A majority of  disinterested  directors may reject a corporate  opportunity  for
various reasons.  If the Company rejects such opportunity,  then any director or
officer may avail themselves of such opportunity. In addition, if an opportunity
is  presented  to the  Company,  and one or more of the  Company's  officers  or
directors has an outside  interest in the  opportunity,  the opportunity will be
reviewed at a meeting of the Board of Directors and the  interested  director(s)
will not vote on issues relating to such opportunity. To the best ability and in
the best judgment of the officers and directors of the Company, any conflicts of
interest  between the  Company and the  personal  interest of the  officers  and
directors  of the Company  will be resolved in a fair manner  which will protect
the interests of the Company.

ITEM 13:   EXHIBITS AND REPORTS ON FORM 8-K

         (a)    Exhibits

3.1      Articles of Incorporation (1)
3.2      By-laws (1)
4.1      Series 99-1 Promissory Note (1)
4.2      Form of Option Agreement
10.1     Lease agreement by and between Yan K. Skwara & Marta
         Glodkoska & Donn Lowrey and Russell Thurman, dated
         January 11, 1999 (1)
10.2     Stadium agreement by and between San Diego Soccer
         Development Corporation and San Diego Mesa College, dated
         November 2, 1998 (1)
27       Financial Data Schedule


                                       14
<PAGE>

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

(1)      The Company hereby  incorporates the footnoted  Exhibit by reference in
         accordance with Rule 12b-32, as such Exhibit was originally filed as an
         Exhibit to the Company's Form 10SB registration statement filed October
         29, 1999.


         (b)   Reports on Form 8-K

                NONE.


SIGNATURES

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


SAN DIEGO SOCCER DEVELOPMENT CORPORATION


By:  /s/ Yan K. Skwara
----------------------

Yan K. Skwara, Chief Executive Officer
Date: March 31, 2000

In accordance  with the  Securities  Exchange Act of 1934,  this report has been
signed below by the  following  persons on behalf of the  registrant  and in the
capacities and on the dates indicated.

SIGNATURE                    TITLE                       DATE



/s/ Yan K. Skwara         Chief Executive Officer   March 31, 2000
                          President

/s/ Steve Peacock         Chairman of the Board     March 31, 2000

/s/ John Upton            Director                  March 31, 2000

/s/ Sarkis Kaloustian     Director                  March 31, 2000

/s/ Chris Payne           Director                  March 31, 2000





                                       15
<PAGE>



                    San Diego Soccer Development Corporation

                              Financial Statements

                                December 31, 1998

                                       And

                                December 31, 1999






Index to Financial Statements.

                                                                            Page
Report of independent auditor................................................ 17
Balance Sheet as of December 31, 1999........................................ 18
Statements of Operations..................................................... 19
Statements of Shareholders' (Deficit)........................................ 20
Statements of Cash Flows..................................................... 20
Notes to Financial Statements................................................ 22


                                       16
<PAGE>



                          Independent Auditors' Report


To the Board of Directors and Stockholders
San Diego Soccer Development Corporation
San Diego, California

We have audited the accompanying  balance sheets of San Diego Soccer Development
Corporation  as of December  31, 1999 and 1998,  and the related  statements  of
operations, stockholders' deficit and cash flows for the years then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 of the  financial  statements  provide a  reasonable
basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of San Diego Soccer Development
Corporation  as of December 31, 1999 and 1998, and the results of its operations
and its cash  flows  for the  years  then  ended in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 12 to the
financial  statements,  the Company has sustained  recurring losses and negative
cash flows since its inception in 1997 and it had a working  capital  deficiency
and was in  default  under  the  terms of its  convertible  promissory  notes at
January 1, 2000. These conditions  raise  substantial  doubt about the Company's
ability to continue as a going  concern.  Management's  plans in regard to these
matters are also described in Note 12 to the financial statements. The financial
statements do not include any  adjustments  relating to the  recoverability  and
classification of reported asset amounts and  classification of liabilities that
might result from the outcome of this uncertainty.


/s/ Logan Throop & Co., LLP
---------------------------
San Diego, California

February 28, 2000




                                       17
<PAGE>






                    SAN DIEGO SOCCER DEVELOPMENT CORPORATION

                               DBA SAN DIEGO FLASH

                                 BALANCE SHEETS
<TABLE>

<CAPTION>




                                              1999                1998
                                          -----------       -----------------
<S>                                    <C>                   <C>
Assets

Current assets

  Cash                                     $ 50,253               $ 298
  Shareholder advances                            -                 100
  Trading securities                              -              22,725

   Total current assets                      50,253              23,123


Other assets
  Deposit                                     1,350                   -
  Property and equipment, net                18,119               9,695
  Soccer franchise, net                     166,800             143,000
                                            -------             -------
   Total other assets                       186,269             152,695
                                            -------             -------


  Total assets                            $ 236,522           $ 175,818
                                          =========           =========


----------------------------------------------------------------------------------------
Liabilities and stockholders' equity

Current liabilities

  Bank overdraft                          $  1,065              $ 7,871
  Accounts payable                         102,005               40,138
  Accrued liabilities                       42,483              177,912
  Accrued payroll and payroll taxes        212,764              154,236
  Loans from affiliated company              2,273                    -
  Shareholder loans                              -               45,090
  Note payable                              15,646               16,979
  Convertible promissory Notes             329,100                    -
  Deferred revenue                          32,490               18,066
                                          --------              -------

   Total current liabilities               737,826              460,292
                                           -------              -------

Stockholders' equity
  Common stock, no par value,
            20,000,000 shares authorized,  5,284,369 and 3,801,484 shares issued
            and outstanding at December 31, 1999
            and 1998, respectively.      2,000,298              852,703
  Common stock subscribed, 12,000 shares    12,000                    -
  Stock subscriptions receivable           (48,000)            (172,500)
  Additional paid in capital               941,363               88,460
  Accumulated deficit                   (3,406,965)          (1,053,137)

   Total stockholders' equity             (501,304)            (284,474)
                                           -------             --------

Total liabilities and stockholders'
                            Equity     $   236,522             $175,818
                                       ===========             =========

</TABLE>



                                       18
<PAGE>




                    SAN DIEGO SOCCER DEVELOPMENT CORPORATION

                               DBA SAN DIEGO FLASH

                            STATEMENTS OF OPERATIONS

<TABLE>

<CAPTION>

                                       1999                         1998
                                    -----------               -----------------

<S>                               <C>                        <C>
Revenue:

     Ticket sales                    $ 58,789                    $ 82,534
     Corporate sponsorships           183,829                     199,489
     Other revenue                     10,224                      10,361
                                        -----                      ------

      Total revenue                   252,842                     292,384
                                      -------                     -------

Operating expenses
    General and administrative      1,346,795                     504,738
    Game and player expenses          641,575                     458,418
    Advertising and promotion         630,097                     311,124
                                      -------                     -------

      Total operating expenses      2,365,625                   1,274,280
                                    ---------                   ---------

Loss from operations               (2,365,625)                   (981,896)
Other income (loss)
  Gain (loss) on trading securities    36,067                     (25,136)
  Loss on abandoned equipment          (6,400)                          -
  Interest expense                    (17,870)                     (4,832)
    Total other income (loss)          11,797                     (29,968)
                                       ------

Net loss                          $(2,353,828)                $ (1,011,864)
                                   ==========                 ============

Loss per share                    $     (0.50)                $      (0.35)
Average number of shares
  outstanding                       4,692,432                    2,906,987
</TABLE>



                                       19
<PAGE>





                                    SAN DIEGO SOCCER DEVELOPMENT CORPORATION

                                             DBA SAN DIEGO FLASH

                                      STATEMENTS OF STOCKHOLDERS' DEFICIT

<TABLE>

<CAPTION>

                                                   Common Stock               Stock                         Total
                                               --------------------       subscriptions   Accumulated    Stockholders'
                                               Shares        Amount        receivable       Deficit    equity (deficit)
                                               ------        ------        ----------       -------    ----------------

<S>                                          <C>         <C>            <C>            <C>            <C>

Balance at December 31, 1997                 2,352,284   $   187,893    $      --      $   (41,273)   $   146,620

  Issuance of stock and warrants for cash      354,300       354,300           --             --          354,300
  Issuance of stock for services               100,000        80,000           --             --           80,000
  Issuance of stock for trading securities     650,000       118,770           --             --          118,770
  Warrants exercised                            72,400        36,200           --             --           36,200
  Stock subscriptions receivable               172,500       172,500       (172,500)          --             --
  Issuance of stock for syndication cost       100,000          --             --             --             --
  Syndication costs paid                          --          (8,500)          --             --           (8,500)
  Net loss                                        --            --             --       (1,011,864)    (1,011,864)
                                               -------     ---------      ---------        -------        -------


Balance at December 31, 1998                 3,801,484       941,162       (172,500)    (1,053,137)      (284,474)
                                             =========       =======       ========     ==========       ========

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

  Issuance of stock and warrants for cash       16,000        16,000           --             --           16,000
  Issuance of stock for cash                   148,300       148,300           --             --          148,300
  Warrants exercised                            13,000         6,500           --             --            6,500
  Stock subscriptions payable                     --            --           12,000           --           12,000
  Issuance of stock for services               273,600       273,600           --             --          273,600
  Stock subscription receivable satisfied
    by receipt of services                        --            --          110,500           --          110,500
  Issuance of stock to satisfy accrued
    liabilities                                194,000       155,200           --             --          155,200
  Issuance of stock for trading securities     295,000        78,345           --             --           78,345
  Payment stock subscription receivable           --            --           62,000           --           62,000
  Stock subscriptions receivable                48,000        48,000        (48,000)          --             --
  Issuance of stock for syndication cost        70,135          --             --             --             --
  Issuance of stock for equipment               20,000        20,000           --             --           20,000
  Issuance of stock for converted notes        404,850       404,850           --             --          404,850
  Stock options issued                            --         849,703           --             --          849,703
  Net loss                                        --            --             --       (2,353,828)    (2,353,828)
                                             ---------     ---------       --------     ----------     ----------


Balance at December 31, 1999                 5,284,369     2,941,661        (36,000)    (3,406,965)      (501,304)
                                             =========     =========       ========     ==========       ========

</TABLE>




                                       20
<PAGE>



                    SAN DIEGO SOCCER DEVELOPMENT CORPORATION

                               DBA SAN DIEGO FLASH

                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                           1999                 1998
                                                       -----------        -----------------

<S>                                                    <C>                <C>
Cash flows from operating activities:

   Net loss                                            $(2,353,828)       $(1,011,864)
   Adjustments to reconcile net loss to
        net cash used by operating activities:
    Depreciation and amortization                           11,376              8,020
    (Gain) loss on trading securities                      (36,067)            25,136
    Loss on abandoned fixed assets                           6,400               --
    Stock issued for services                              384,100             80,000
    Stock options issued for services                      671,718               --
    Corporate sponsorship for trading securities              --               35,537
    (Increase) decrease in deposits                         (1,350)              --
    Proceeds from sale of trading securities               137,137            106,558
    Increase (decrease) accounts payable                    61,867             42,504
    Increase (decrease) bank overdraft                      (6,806)             7,871
    Increase (decrease) accrued liabilities                246,284            302,036
    Increase (decrease) deferred revenue                    14,424             18,066


       Net cash (used) by operating activities            (864,745)          (457,210)
                                                          --------           --------

Cash flows from investing activities:
   Purchase of soccer franchise                            (20,000)              --
   Purchase of property and equipment                         --               (5,716)
                                                           -------             ------

    Net cash provided (used) by investing activities       (20,000)            (5,716)
                                                           -------            -------


Cash flows from financing activities:

   Proceeds from sale of stock, net issuance costs         182,800            382,000
   Proceeds from stock subscription receivable              62,000              --
   Proceeds from promissory notes                          733,950              --
   Payment of notes payable                                 (1,333)             --
   Payment of obligation for soccer franchise                 --              (30,000)
   Proceeds from note payable                                 --               10,920
   Proceeds from rlated party loans, net                     2,273              --
   Proceeds from shareholder loans, net                    (44,990)            32,541

    Net cash provided by financing activities              934,700            395,461
                                                           -------            -------

Net increase(decrease) in cash                              49,955            (67,465)

Cash at beginning of period                                    298             67,763
                                                           -------             ------


Cash at end of period                                  $    50,253        $       298
                                                       ===========        ===========
Supplemental disclosures:
Interest paid                                          $     6,277        $     --

Noncash financing and investing activities:
   Stock issued in exchange for equipment              $    20,000        $     --
   Stock issued in exchange for trading securities     $    78,345        $   118,770
   Stock subscription receivable                       $    48,000        $     --
   Stock issued for settlement of accrued liabilities  $   155,200        $   172,500
   Stock issued for syndication costs                  $    70,135        $    80,000
   Stock issued for convertible promissory notes       $   404,850        $     --
   Stock options for accrued liabilities               $   177,985        $     --
   Soccer franchise financed                           $    10,000        $     --
</TABLE>





                                       21
<PAGE>



                    SAN DIEGO SOCCER DEVELOPMENT CORPORATION

                              DBS SAN DIEGO FLASH

                         NOTES TO FINANCIAL STATEMENTS



1.    Organization and Operations

      Organization
      San  Diego  Soccer   Development   Corporation,   (the   "Company"),   was
      incorporated on August 22, 1997 in the state of California. The Company is
      engaged in the management and marketing of a professional soccer team. The
      majority of the Company's revenues are currently  generated from corporate
      sponsorships  and ticket sales.  The Company exited the development  stage
      and held its first game during 1998.


2.    Summary of Significant Accounting Policies

      Trading Securities
      Equity   securities   are   classified  as  Trading   Securities  and  are
      available-for-sale  to support current  operations.  These  securities are
      stated at estimated fair value based upon market quotes.  Unrealized gains
      and losses are  recognized  as income or loss during the  current  period.
      Realized gains and losses are recognized  using the weighted  average cost
      method.

      Property and Equipment
      Property  and  equipment  are  stated  at cost  and  depreciated  over the
      estimated  useful  lives  of the  assets  (one to five  years)  using  the
      straight-line method.

      Soccer Franchise
      The membership in the United Systems of Independent Soccer Leagues (USISL)
      represents the original  purchase price of the franchise  recorded at cost
      and is  amortized  using the  straight  line method over a 25 year period.
      Each franchise is continuously evaluated by management to determine if its
      carrying value will be realized based upon the estimated  discounted  cash
      flow  expected  from  the  franchise.   Additional  amortization  will  be
      recognized in a period a decline in value is identified.


<PAGE>


2.    Summary of Significant Accounting Policies (continued)

      Revenue and Expense Recognition
      Revenue  from ticket  sales is  recognized  at the time the home game,  to
      which such proceeds relate, is played.  Accordingly,  advance ticket sales
      for the next  season are  recorded  as deferred  revenues  and  recognized
      ratably  during  the  applicable  season.  Revenue  from  advertising  and
      promotions is recognized  ratably during the season the promotion  relates
      to is  played.  Professional  league  team  expenses,  principally  player
      compensation,  are recorded as expense over the entire Professional Soccer
      League  regular   season.   Administrative,   general,   advertising   and
      promotional expenses are charged to operations as incurred.

      Income Taxes
      Deferred income taxes are provided for the estimated tax effects of timing
      differences  between income for tax and financial  reporting.  A valuation
      allowance is provided  against deferred tax assets,  where  realization is
      uncertain.  The  income  tax  provision  or credit is the tax  payable  or
      refundable  for the period  plus or minus the change  during the period in
      deferred tax assets and liabilities.

      Temporary  differences are differences between the tax basis of assets and
      liabilities  and their reported  amounts in the financial  statements that
      will  result  in  taxable  or  deductible  amounts  in future  years.  The
      Company's temporary  differences consist primarily of net operating losses
      and depreciation.

      Net Earnings Per Common Share
      Net earnings  (loss) per common  share are based on the  weighted  average
      number of common shares outstanding during each period. The calculation of
      diluted  earnings  (loss)  per  common  share is  similar to that of basic
      earnings   (loss)  per  common  share,   except  that  the  numerator  and
      denominator  are adjusted to reflect the decrease in earnings per share or
      the  increase  in loss per share that could occur if  securities  or other
      contracts to issue common  stock,  such as stock  options and  convertible
      notes,  were  exercised or converted into common stock that then shared in
      the Company's earnings or loss.


<PAGE>



2.    Summary of Significant Accounting Policies (continued)

      Net Earnings Per Common Share (Continued)
      The Company was  required  to compute  primary and diluted  loss per share
      amounts  for 1999 and 1998  pursuant  to SFAS 128.  Since the  Company had
      losses applicable to common stock in 1999 and 1998, the assumed effects of
      the exercise of  outstanding  stock  options and  conversion of notes were
      anti-dilutive and,  accordingly,  dilutive per share amounts have not been
      presented in the accompanying statements of operations.

      Stock Options
      The  Company  has  granted  options to  purchase  common  stock to various
      individuals  and  officers of the  Company in return for various  services
      rendered to the  Company.  Under the  Statement  of  Financial  Accounting
      Standards No. 123,  Accounting for Stock-Based  Compensation ("SFAS 123"),
      the Company is recognizing the compensation  cost using the estimated fair
      value method.  Under the fair value method, total compensation cost is the
      estimated  fair  value of the stock  options at the grant  date,  less any
      amount paid by the employee for the stock options.

      Use of 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.


3.   Trading Securities

     Following is a summary of trading securities:


     December 31,                           1999            1998
     -----------------------------------------------------------

     Aggregate cost                        $   0         $ 37,819
     Gross unrealized holding loss            (0)         (15.094)
                                              --          -------

     Aggregate fair value                  $   0         $ 22,725
                                           =====         ========


4.    Property and equipment

      Depreciation  expense for the years ended  December 31, 1999 and 1998 were
      $5,176 and $2,050,  respectively.  Property and  equipment  consist of the
      following:

      December 31,                           1999              1998
      ----------------------------------------------------------------------

      Soccer equipment                      $ 6,000          $ 6,000
      Computers and software                 17,716            5,715
                                             ------            -----
                                             23,716           11,715
      Less accumulated depreciation          (5,597)          (2,020)
                                             ------           ------
                                            $18,119          $ 9,695
                                            =======          =======


5.    Soccer Franchises

      During 1997, the Company  purchased a soccer  franchise to operate the San
      Diego Flash in San Diego,  California.  The  Company  paid cash and common
      stock for the franchise and the value of the stock portion was  determined
      based on the cash price of a 1998 A-League franchise,  which was the first
      season the Company could participate in the league.

      During 1999, the Company purchased a D-3 Pro League franchise for $30,000.
      The new  franchise is playing in  Riverside  and will serve as a farm team
      for the San Diego Flash. The franchises have been amortized as follows:

      December 31,                          1999              1998
      ------------------------------------------------------------
      Soccer Franchises                  $ 180,000         $ 150,000
      Accumulated amoritization            (13,200)           (7,000)
                                           -------            ------
                                         $ 166,800         $ 143,000
                                         =========         =========






<PAGE>



6.    Related Party Transactions

      Stockholder Loans
      Certain  stockholders  of the  Company  paid game and player  expenses  on
      behalf  of the  Company.  As of  December  31,  1998 the  amount  owed was
      included  in the ending  balance  payable to  stockholders.  The  balances
      payable to  stockholders  were due on demand and  accrued  interest at 8%.
      Accrued  interest  was  included  in the ending  balance.  The balance was
      completely paid off during 1999.

      Loans from Affiliated Company
      During 1999,  certain  officers of the Company formed  another  company to
      acquire and operate a Las Vegas  soccer  franchise.  The Company  received
      loans from that company and have accrued  interest at 10%. The loan is due
      on demand.

      Stock for Trading Securities
      The  Company  traded  shares of its stock for stock of a publicly  trading
      company's  stock  at a  highly  discounted  rate in  order to get cash for
      operations.  The President of the publicly  traded company is also a major
      shareholder  of the Company.  During 1999 this  shareholder  also became a
      director of the Company. (See note 10)


7.    Note Payable

      The Company has a note payable to an individual  bearing  interest at 10%.
      The note is due on demand.



<PAGE>



8.    Convertible Promissory Notes

      In  order to  obtain  "bridge"  funds  while a  public  offering  is being
      prepared, the Company issued convertible notes with a face amount totaling
      $733,950  during  1999.  The notes bear  interest  at 8% per annum and are
      convertible  into  common  stock at $1.00 per  share at the  option of the
      holder.  The  notes  matured  on  December  31,  1999.  During  1999,  the
      noteholders converted $404,850 of convertible notes into 404,850 shares of
      common  stock.  The  remaining  balance  of  $329,100  is in default as of
      January 1, 2000.


9.    Leasing Activities

      The Company  leases its office  facilities  under an operating  lease that
      expires on January 16,  2002.  The base rent under the lease is $1,350 per
      month.  The  Company  also  leased a soccer  field from a local  community
      college on an annual lease that expired at the end of 1999.  The base rent
      was $1,450 per home game.  The Company has one other  operating  lease for
      equipment.  Operating  lease  expense  for 1999 and 1998 was  $59,247  and
      $40,103 respectively.

      The  future  annual  minimum  lease  payments  under  operating  leases at
      December 31, 1999 are as follows:


      Year Ending December 31,
      ------------------------------------------------------------------------
         2000                                          $ 17,628
         2001                                            16,914
                                                         ------
      Total Minimum Lease Payments                     $ 34,542
                                                       ========



<PAGE>



10.   Stockholders' Deficit

      Common Stock
      During 1997, the Company prepared a private placement  memorandum offering
      1,000,000  Common Shares (the Offering).  The 1,000,000 common shares were
      offered at a price of $5.00 per unit.  Each unit  included 5 common shares
      and entitled the investor to 2 warrants to purchase  additional  shares of
      common stock for $.50 per share. The price per unit was allocated $4.00 to
      the shares and $1.00 to the warrants.  Under the Offering the Company sold
      458,300 common shares and raised $425,050 net of syndication costs.

      A second  private  placement  memorandum  dated  February 3, 1999  (Second
      Offering)  offered  1,000,000 common shares at a price of $1.00 per share.
      Under the Second Offering, the Company raised $148,300.

      During the last quarter of 1998 the Company  traded  650,000 shares of its
      stock  for  stock  of a  publicly  trading  company's  stock  at a  highly
      discounted  rate in order to get cash for  operations.  Most of the  stock
      received in the trade was liquidated, however, stock valued at $22,725 was
      still held in trading  securities  at December 31, 1998.  The President of
      the publicly  traded  company is also a major  shareholder of the Company.
      During 1999 this shareholder also became a director of the Company.

      During 1999 the Company traded an additional  200,000 shares with the same
      publicly traded company,  again at a highly  discounted  rate, in order to
      get cash for  operations.  The Company  further  traded 95,000 shares with
      another  publicly  traded company for shares valued at $38,792 on the date
      of trade.  All of the trading  securities  were  liquidated  by the end of
      1999.

      Warrants
      Warrants  for  183,320  shares were  issued  along with the first  private
      placement.  Warrants  for 85,400 were  exercised  in total during 1999 and
      1998, leaving 97,920 outstanding at December 31, 1999. The warrants expire
      in 2001.


<PAGE>



10.   Stockholders' Deficit (Continued)

      Convertible promissory notes
      At  December  31,  1999  the  Company  had  convertible  promissory  notes
      outstanding which were convertible into 329,100 shares of common stock.
      (See note 8)

      Stock Options
      The Company had the following common stock option  transactions during the
      year ended December 31, 1999:

                                                   Weighted     Contractual life
                                Shares or price     Average        of Options
                                   per share     Exercise Price    Outstanding
                                   -------------------------------------------


     Options outstanding at
       January 1, 1999                    0                0                0

     Options granted                985,300            $ .05       3.67 years

     Options granted                100,000            $1.25       3.67 years

     Options exercised                    0                0                0

     Options forfeited or
        expired                           0                0                0
        ---------------------------------------------------------------------

     Options outstanding at
       December 31, 1999          1,085,300            $ .16      3.67 years
       ---------------------------------------------------------------------

     Options price range at
       end of year                 $.05 through $1.25
       ---------------------------------------------------------------------

     Exercisable at end of
       year                       1,085,300
       ---------------------------------------------------------------------

10.   Stockholders' Deficit (Continued)

      Stock Options (Continued)
      The fair value of the stock  options  are  estimated  on the date of grant
      using the Black-Scholes option-pricing model. The estimated fair value has
      been  calculated  ignoring  the  volatility  factor which is allowed for a
      non-public  company.  The following  assumptions were used to estimate the
      fair values of options:

          Risk free interest rate         5.5%
          Expected life                   4 years
          Expected dividend yield         0%

      The weighted  average fair value at the grant date of the options  awarded
      during the year was $0.78.


11.   Income Taxes

      At December 31, 1999,  the Company had federal and state tax net operating
      loss carryforwards of approximately $3,156,000.  The federal and state tax
      loss  carryforwards  will expire at various dates through year 2019 unless
      previously utilized and may be significantly limited in use as a result of
      changes in ownership of the Company.

      Significant  components  of the  Company's  deferred  tax assets are shown
      below. A valuation  allowance of $1,041,000 has been  recognized to offset
      the deferred tax assets as  realization  of such assets is uncertain.  The
      valuation  allowance  increased  during  1999  and  1998 by  $728,000  and
      $299,000, respectively.


      December 31,                             1999           1998
      -----------------------------------------------------------------

      Deferred tax assets computed at 34%
         Net operating loss                 $1,041,000     $ 274,000
         Accrued bonus compensation                  0        39,000
                                                     -        ------
      Net deferred tax assets                1,041,000       313,000
                                             ---------       -------

      Valuation allowance for deferred      (1,041,000)     (313,000)
                                            ----------      --------

      Total deferred tax assets             $        0     $       0
      --------------------------------------------------------------


12.   Contingencies - Going Concern

      As reported in the financial  statements,  the Company has an  accumulated
      deficit of approximately  $3,407,000 at December 31, 1999 and has incurred
      a loss from operations for the year then ended.  In addition,  the Company
      was not able to pay  their  promissory  notes  when the notes  matured  on
      December 31, 1999.  The Company's  shareholders'  deficit was $501,304 and
      its current liabilities exceeded its current assets by $687,573.

     These factors create uncertainty about the Company's ability to continue as
     a going concern.  The ability of the Company to continue as a going concern
     is dependent on the Company  obtaining  adequate  capital to fund operating
     losses  until it  becomes  profitable.  If the  Company is unable to obtain
     adequate capital it could be forced to cease operations.

     In  order  to  continue  as a going  concern,  develop  and  grow  its game
     attendance,  revenues and achieve a  profitable  level of  operations,  the
     Company  will need,  among  other  things,  additional  capital  resources.
     Management's  plans to obtain such  resources  for the Company  include (1)
     raising  additional  capital through sales of common stock, the proceeds of
     which  would  be used to  build  soccer  stadiums  in both  San  Diego  and
     Riverside County, hiring of administrative,  sales and marketing personnel;
     (2)  continuing to use stock options to pay for employee  compensation  and
     marketing services;  (3) converting promissory notes into common stock; (4)
     expanding the revenue sources from corporate sponsors, television and radio
     advertising,  concessions,  merchandise sales,  soccer camps,  concerts and
     other stadium  events.  In addition,  management is continually  seeking to
     improve the operations  and grow the business  through a variety of venues.
     However,  Management cannot provide any assurances that the Company will be
     successful in accomplishing any of its plans.

     The ability of the Company to continue as a going concern is dependent upon
     its ability to successfully accomplish the plans described in the preceding
     paragraph  and  eventually  secure other  sources of  financing  and attain
     profitable operations. The accompanying financial statements do not include
     any  adjustments  that  might be  necessary  if the  Company  is  unable to
     continue as a going concern.


  13.Subsequent Events

      Common Stock (unaudited)
      As of March 1, 2000 the  Company  has  issued  12,000  common  shares  for
      marketing services and 2,000 shares for bonus  compensation  pertaining to
      the year 2000.

      Convertible Promissory Notes (unaudited)
      In order to obtain  bridge  funds  while in the  process of  completing  a
      formal registration with the Security Exchange Commission, the Company has
      issued  convertible  notes with a face amount totaling $54,900 as of March
      1, 2000. The notes bear interest at 8% per annum and are convertible  into
      common  stock at $1.00 per share at the  option of the  holder.  The notes
      mature on July 1, 2000.

      Merger (unaudited)
      During December 1999 the Company entered into  negotiations to merge with
      Roller Coaster,  Inc. (a Nevada Corporation).  Roller Coaster,  Inc. is a
      public shell with no activity  other than  inception in December 1995 and
      a 1:10 stock split in October  1999.  The merger was  consummated  in the
      month of March 2000.

      According to the merger agreement the surviving  corporation will be named
      San Diego Soccer Development Corporation and will be a Nevada Corporation.
      Shares will be exchanged  1:1 for the public  shell's  shares.  The merger
      will  result in  approximately  7,784,000  shares  outstanding  (2,500,000
      shares  pertaining to the former Roller Coaster,  Inc.) Shares  authorized
      will be  100,000,000  common  stock  at $.001  par  value  and  50,000,000
      preferred  shares at $.001 par value. In connection  with the merger,  the
      Company incurred $200,000 in consulting fees on the merger.  The merger is
      expected to be accounted for as a pooling-of-interests.