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

                                   FORM 10-KSB

         [X]   ANNUAL REPORT PUSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                       OR

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

  FOR THE TRANSITION PERIOD FROM __________________ TO ________________________

                        Commission File Number: 000-25973

                                  JOYSTAR, INC.
        ----------------------------------------------------------------
                 (Name of Small Business Issuer in its Charter)

               California                                68-0406331
----------------------------------------    ------------------------------------
   (State or Other Jurisdiction of          (I.R.S. Employer Identification No.)
    Incorporation or Organization)

               95 Argonaut St. First Floor, Aliso Viejo, CA 92656
                    ----------------------------------------
                    (Address of Principle Executive Offices)

                                 (949) 837-8101
          -------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

      Securities Registered Pursuant to Section 12(b) of the Exchange Act:

                                      None

      Securities Registered Pursuant to Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 Par Value

         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 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 not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         The registrant's revenues for its most recent fiscal year were $62,087.

         The aggregate market value of the voting stock held by non-affiliates
of the registrant as of April 7, 2005 was $2,332,768 based upon the market price
of the registrant's Common Stock of $0.42 as of April 7, 2005.

The number of the Company's shares of Common Stock outstanding as of April 7,
2004 was 23,957,633. The registrant has no outstanding non-voting common equity.

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

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                                  JOYSTAR, INC.
                            FORM 10-KSB ANNUAL REPORT
                 AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2004
                                TABLE OF CONTENTS

Forward-Looking Statements

                                     PART 1

Item 1.     Description of Business                                           4

Item 2.     Description of Property                                          18

Item 3.     Legal Proceedings                                                18

Item 4.     Submission of Matters to a Vote of Security Holders              18


                                     PART II

Item 5.     Market for Common Equity, Related Stockholder Matters and
              Small Business Issuer Purchases of Equity Securities           19

Item 6.     Management's Discussion and Analysis or Plan of Operation        21

Item 7.     Financial Statements                                             23

Item 8.     Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure                                       24

Item 8A.    Controls and Procedures                                          24

Item 8B.    Other Information                                                24


                                    PART III

Item 9.     Directors and Executive Officers of the Registrant               25

Item 10.    Executive Compensation                                           16

Item 11.    Security Ownership of Certain Beneficial Owners and
              Management and Related Stockholder Matters                     28

Item 12.    Certain Relationships and Related Transactions                   28

Item 13.    Exhibits                                                         29

Item 14.    Principal Accountant Fees and Services                           29

            Signatures

                                        2



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                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Form 10-KSB contains forward-looking statements about the business,
financial condition and prospects of the Company that reflect assumptions made
by management and management's beliefs based on information currently available
to it. We can give no assurance that the expectations indicated by such
forward-looking statements will be realized. If any of management's assumptions
should prove incorrect, or if any of the risks and uncertainties underlying such
expectations should materialize, the Company's actual results may differ
materially from those indicated by the forward-looking statements.

     The key factors that are not within the Company's control and that may have
a direct bearing on operating results include, but are not limited to, the
acceptance by customers of the Company's products and services, the Company's
ability to develop new products and services cost-effectively, the ability of
the Company to raise capital in the future, the development by competitors of
products or services using improved or alternative technology, the retention of
key employees and general economic conditions.

     There may be other risks and circumstances that management is unable to
predict. When used in this Form 10-KSB, words such as, "believes," "expects,"
"intends," "plans," "anticipates" "estimates" and similar expressions are
intended to identify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions. All
forward-looking statements are intended to be covered by the safe harbor created
by Section 21E of the Securities Exchange Act of 1934.

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                                     PART I

Item 1.  DESCRIPTION OF BUSINESS
         -----------------------

Overview

Joystar, Inc., a California corporation ("Joystar", "Company" or "we") is one of
the fastest growing travel agency networks. The Company specializes in selling
complex travel products including cruises, vacation packages and group travel
through its national sales force of over 1,300 of independent travel agents.
Joystar's comprehensive business solutions combine innovative technology,
marketing opportunities and expert support services to independent and
home-based travel agents giving them more time to sell travel. With Joystar,
professional travel agents can concentrate on promoting travel and servicing
their clients without the administrative and financial burden of
owning/operating a traditional storefront travel agency.

The Company maintains its corporate offices at 95 Argonaut St. First Floor,
Aliso Viejo, CA 92656. The Company's telephone number is (949) 837-8101.

Business of the Company

Joystar specializes in selling complex travel products including cruises,
vacation packages and group travel through its national sales force of over
1,300 of independent travel agents. As of April 14, 2005 the Company's
membership was 1,385 agents. Joystar's main revenue models are:

TRAVEL AGENCY MODEL

Under the travel agency model, the Company acts as either an intermediary, or a
merchant. When we transact travel bookings acting as an intermediary in the
transaction, we pass a customer's reservation to the travel supplier (airline,
hotel, cruise line, car rental, etc.). The Company receives a commission from
the travel supplier after the travel is completed. In the agency transaction,
the supplier sets the retail price paid by the customer, and is the merchant of
record for the transaction. In a merchant transaction, Joystar receives access
to consolidator fares (wholesale airline seats and hotel rooms) from suppliers
at deeply discounted negotiated rates. Joystar determines the "mark-up" and
processes the transactions as the merchant of record. Acting as a merchant
enables Joystar to achieve a higher level of gross profit than in the agency
model and generally provides better prices to customers than an agency
transaction. Integrating merchant inventory with the online booking technology
platform enables the Company to create a significant benefit to the Company's
agents, customers and preferred suppliers.

HOST AGENCY MODEL

The Company provides syndicated technology, hosting, and support services to a
growing network of professional home-based travel agents. Joystar provides its
agents with all of the training, tools and back office support for them to
operate a successful and rewarding business. In addition to the commissions
earned, Joystar's national sales force of independent agents are granted stock
options in the Company. Additional benefits to Joystar agents include access to
Solo 401K retirement plans and 529 college saving plans for the agents' children
and grandchildren.

PROFESSIONAL HOME-BASED TRAVEL AGENTS

Experienced travel agents and travel agency owners are closing their
"storefronts" en masse in an effort to control costs. The Company has developed
three programs to address the unique needs of its travel agents.

Agent Advantage Pro and Pro-100 Programs for Agents

PRO-100 offers independent and home-based travel agents all of the benefits of
the Company's popular, AGENT ADVANTAGE PRO, including a consumer website and
"Agents Only" extranet and live toll free support. The difference between the
two programs: Agent Advantage is free and agents receive 90% of the commissions
they generate and the monthly fee for Pro-100 is $199/month and receive 100% of
the commissions they generate. Pro-100 was developed for our agents who generate
more than $24,000 in gross commissions annually. Pro-100 further enhances an
agent's opportunity by passing 100% of the commissions back to them. Joystar
benefits as well from the fixed membership fees and the value of the member's
total bookings and allows the Company to negotiate better commissions and
overrides with the supplier company.

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HAP*E is the Company's private-labeled, enterprise solution designed for host
travel agencies. Enterprise Hap*E program was created for the thousands of
agency owners, managers, and enterprising travel agents. Joystar enables these
agents to operate their own "micro" host agencies. The fees for Hap*E members
begin at $299 per month. Included is the master host agency website as well as
the ability to manage up to ten sub-agents all with their own personalized
websites. Every agent receives access to all Joystar's tools, booking engines,
and marketing programs. The monthly fees go up in $100 per month increments with
each new level offering the ability to manage ten additional agents.

NEW TRAVEL AGENTS

According to the Department of Labor statistics over 13 million people operate a
home-based business. And over 1,500 new home-based businesses are opened every
day. The technology advances within the industry have made it very easy for
people without any traditional travel agency experience to succeed as home-based
travel agents. The benefits of "owning a travel agency" for less than $500,
appeals to a large diverse group of people. From small business owners, to
home-based and internet entrepreneurs - stay at home moms to affluent travelers
- Web masters and super-affiliates to every church, little league, and other
non-profit in the world. The potential market for this model is in the hundreds
of thousands of home-based travel agents and affiliates. In order to ensure the
success of new agents and improve the income of Joystar's experienced agents,
the Company is developing a "mentor" program. Each new agent will be assigned to
a qualifying experienced agent that will provide guidance during their training
period. The commission generated during this mentorship will be shared between
the trainee and the mentor.

Revenues from transaction fees and commissions, generated by the agents from
booking travel with their clients, are shared between Joystar and the agent.
Joystar aims to develop a membership base of 150,000 part-time, home-based
agents, and online affiliates over the next 5 years. The majority of the
members' annual renewal fees in this segment will be $149. We believe that with
the tools, marketing resources and support we provide to their agents, they will
produce an average of $10,000 per year in leisure bookings. Revenue on complex
leisure travel is expected to be approximately 15%.

STRATEGY

When airlines stopped paying travel agency commissions and consumers began
migrating to online agencies for flights, hotels, and cars, many predicted the
demise of the travel agent community. Indeed, thousands of travel agencies did
close their doors, but after three years of consolidation, the travel agent
industry is experiencing an upturn, especially in the complex leisure products
which include cruises, vacation packages, and group travel.
As professional travel agents are adapting and re-branding, a new business model
is emerging - home-based travel agent hosting and IT outsourcing. There are
roughly 25,000 small and mid-sized agencies in America with sales between $1
million and $5 million dollars. Of the estimated 100,000 travel agents here in
the U.S., it is estimated that between 15,000-20,000 have already moved to
home-based operations (Credit Suisse Report).

Independent agents and agency owners are looking for ways to increase revenues,
reduce costs, and streamline operations. They are becoming more and more reliant
on both technology and the Internet. Joystar relieves travel agents of their
non-revenue producing tasks freeing them to do what they do best - sell travel.
Members have access to the industry's most advanced booking engines empowering
them to book flights, Web fares, car rentals, hotel reservations, cruises,
vacations, insurance, and other travel related products.
Joystar is proving to be the hands-down choice for serious professionals that
want to flourish in this changing and exciting time in the industry. Since the
launch of its hosting program in August of 2004, Joystar has signed up over
1,100 agents making it the largest and fastest growing agency in the industry.

The Company's short-term goal is to be hosting 2,000 professional home based
travel agents by the end of June of 2005 and 3,500-4,000 by year end. To reach
that goal, the Company has implemented an aggressive marketing campaign
targeting both home-based agents and traditional agents contemplating the move
home.

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We believe that the hosting models for professional home-based agents will
complement our program for the over 13,000,000 Americans who are operating
home-based businesses. In this model, the Company aims to enroll 50,000 members
by the end of 2006 and 150,000 by 2010. To ensure the success of both
experienced and inexperienced agents, the Company intends to assign part-time
and novice agents to an experienced home-based agent. Revenues from
corporate-assigned sub-agents will be split equally between the new agent, the
booking agent, and Joystar. Joystar's strategy for reaching this massive group
of home-based Entrepreneur covers multiple channels including marketing website,
search engine optimization, Email Marketing and the Company's recently completed
Infomercial.

TARGET MARKET

Consumers planning and purchasing a trip generally engage in a predictable
process that begins with considering destinations, dates and budgets, and
progresses to a series of purchase decisions involving transportation,
accommodations and destination activities. Historically, this planning and
purchasing process has been inefficient because consumers have to spend a
significant amount of time piecing together the information from a variety of
sources. Consumers frequently consulted many different media and people, such as
guidebooks, magazines, travel agents, friends, co-workers and individual travel
suppliers. The supply side of the travel industry can be equally inefficient.
The supplier community includes hundreds of airlines, thousands of hotels,
dozens of car rental companies, numerous vacation packagers and cruise lines and
hundreds of thousands of destination services merchants such as restaurants,
attractions, and local transportation and tour providers. These suppliers spend
substantial amounts of money to reach and attract potential purchasers. The
fragmental nature of the global consumer travel market makes it difficult and
inefficient for suppliers to effectively target those consumers who are
currently engaged in the travel planning process.

Consumers and suppliers rely on travel agents as intermediaries to provide
information on their travel choices and help them purchase their trips. Joystar
travel agents have access to comprehensive information on the availability and
pricing of airline seats through global distribution systems. The Company makes
it possible for our travel agents to provide consumers reliable, comprehensive
travel information.

The Company has been able to combat the inefficiency and fragmentation of the
industry with technology. Joystar uses technology to make the process of
planning and purchasing travel easier for their agents and customers.

GEOGRAPHIC AREA OF SERVICES. The Company plans to offer travel planning services
in the United Sates, the United Kingdom, Canada, and the Puerto Rico. Joystar
products are planned to include direct-to- consumer travel planning services
sold via the Internet and call centers, our co-branded private label business.

RECENT DEVELOPMENTS

On March 1, 2005, Joystar announced that the Company's membership had surpassed
1,000 professional, home-based agents. This milestone makes the Company not only
one of the fastest growing, but also one of the largest host agency in the
industry in terms of professional agent members. Joystar launched AGENT
ADVANTAGE PRO, its hosting program for professional home-based agents in August
of last year with an initial goal of reaching 500 members by July, 2005. In
November the Company announced hitting the 500 agent mark and by year end
membership had grown to over 700 agents.

A recent report by Credit Suisse/First Boston on the emerging home-based travel
agency model estimates there are between 15,000-20,000 professional home-based
travel agents in America. This number is expected to grow to over 30,000 by 2007
and near 50,000 by 2010. These professional agents, who have left their
traditional storefront travel agencies to operate a home-based agency, represent
an estimated $7.6 billion in travel sales.

On February 28, 2005 Joystar announced a new program for professional home-based
travel agents. PRO-100 offers independent and home-based travel agents all of
the benefits of the Company's popular AGENT ADVANTAGE PRO, including a consumer
website, "Agents Only" extranet and live toll free support.

When implemented later this month, Joystar will offer two booking solutions, a
consumer view and an "Agents Only" booking tool. This combination blends
real-time access to cruise line inventory to deliver the best response times and
closing ratios. The features included are:

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Co-branded Private Label Cruise Web-Site - An easy, no maintenance solution
providing cruise content, technology, and fulfillment with no up-front costs.
Private Label Cruise Web-Site - Content, technology, and fulfillment services
are housed in a customized user interface. Maintains look and feel as well as
branding integrity of the partner's Web site. Connectivity as well as access to
robust cruise content, including cruise descriptions, cabin categories, deck
plans, amenities, and more.

In 2005, over 10 million passengers spent approximately $15 billion on cruises.
According to a recent Credit Suisse/First Boston report on "The Emerging
Home-based Travel Agency Model", it is estimated that the current 90/10 channel
mix between travel agents and non-traditional sources (supplier direct and
online agencies) will shift to roughly 75/25 by 2008. Joystar's online cruise
booking solution will allow our agents to stay ahead of the curve.

The Cruise Booking Engine allows consumers and agents to book and manage cruise
reservations online. The integration of the cruise booking engine will provide
both consumers and travel agents with:

     -    Access to over 30 cruise lines and real-time connectivity to 7 major
          cruise lines including - Carnival, Royal Caribbean, Celebrity,
          Norwegian Cruise Lines, Princess, Holland America and Windstar.

     -    A comparative search engine that allows consumers and agents to search
          and compare up to four cruises side-by-side.

Joystar's home-based travel agents and pure online travel sellers that sell
cruises now have a technology that will increase sales and enhance profit
margins. The engine also benefits our cruise line partners by reducing sales and
distribution expenses.

On March 15, 2005 Joystar announced the opening of The Joystar Miami Cruise
Center and enhanced commission opportunities for the Company's travel agent
network. The Florida based Cruise Center will assist our agents in growing their
cruise business. The Joystar Miami Cruise Center adds another important support
component to the largest segment of our business - cruises. Our agent members
benefit from having access to our California support staff, along with a cruise
support staff in Florida. The cruise center staff have years of experience in
selling group and individual cruises.

The Miami Cruise Center has been recognized as a Carnival Top Account; a
Radisson Seven Seas Cruises Top account; a Cunard Inner Circle Agency; a Holland
America Centurion Agency; a Norwegian Cruise Lines Capitan's Club Agency; a
Princess I-Excel Agency and has held Key Account status with Celebrity and Royal
Caribbean Cruise Lines. These preferred supplier relationships give Joystar
agents access to top account commission levels and special promotions. This,
combined with our new online cruise booking engine, empowers Joystar members to
compete head to head, with the likes of Expedia, Travelocity and other large
cruise only agencies.

BUSINESS DEVELOPMENT

The Company is developing a global travel marketplace in which travel suppliers
can reach, in a highly efficient manner, a large audience of consumers who are
actively planning and purchasing complex travel products including cruises and
vacation packages. As of April 4, 2005, the Company has a network of over 1,200
professional home-based agents.

In our quest to offer the best hosting services to professional travel agents,
Joystar will begin development on iamatravelagent.com. The Web sites will target
service-oriented consumers who are looking for an experienced travel
professional to help them with their vacation planning. The site is intended to
create consumer leads for qualifying travel agents. To receive consumer leads,
travel agents must hold a professional designation from either The Travel
Institute or, CLIA (Cruise Lines International Association), or IATAN. This
qualification will be the primary value proposition for the consumers. They will
know that they are dealing with "The Best of the Best" the travel industry has
to offer. It will also promote further education and professional standards
within the agent community. Agents that want to benefit from the leads generated
on iamatravelagent.com.

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INDUSTRY

According to a recent report by Credit Suisse/First Boston, there are
approximately 20,000 professional travel agents working from their homes. That
number is expected to grow to nearly 50,000 by 2010. This emerging group
represents an estimated $7.6 billion annually in travel sales. While online
travel continues to grow, travel agents are the dominant force in travel
distribution, especially in the complex, high-grossing products including
vacations, cruises, and group travel. A recent study conducted by the Cruise
Line Industry, concluded that 90% of the 10 million people who went on a cruise
last year, booked through a travel agent. THOUSANDS UPON THOUSANDS OF
TRADITIONAL TRAVEL AGENCIES ARE CLOSING THEIR "STOREFRONT" OPERATIONS IN AN
EFFORT TO REDUCE COSTS FUELING THE GROWTH OF THE HOME-BASED SEGMENT. JOYSTAR IS
CAPITALIZING ON THIS RAPIDLY EMERGING MARKET BY PROVIDING THEM EVERYTHING THEY
NEED TO SUCCEED.

Typical of traditional travel agencies in America, the competitive landscape in
the Host Travel Agency space is highly fragmented. The American Society of
Travel Agents reported recently that there are more than 25,000 "Mom & Pop"
travel agencies, each hosting between one and five home-based agents. And while
there are several "mid-tier" host agencies with sales ranging from $50 million
to $100 million, no dominant player exists. Joystar aims to be that dominant
player in that industry.

COMPANY'S BACKGROUND

Joystar, Inc.was incorporated in the State of California on February 5, 1998
under the name Advanced Refrigeration Technologies, Inc. Its original business
operations consisted of designing, manufacturing and marketing an energy
efficiency evaporator fan motor controller for walk-in refrigerators and
freezers. The Company was unsuccessful in that business and was unable to
continue its operations. Since August, 2002, the Company has been actively
engaged in finding a potential investor to acquire the Company and bring in a
new business.

The Acquisition of Joystar, Inc.

As of June 11, 2003, the Company consummated a transaction, whereby the Company
acquired all of the issued and outstanding shares of Joystar, Inc., a Nevada
corporation ("Joystar - Nevada") in exchange for the issuance by the Company of
a total of 13,880,599 newly issued restricted shares of common voting stock to
the Joystar-Nevada shareholders pursuant to the Agreement and Plan of
Reorganization, dated as of June 10, 2003, by and between the Company and
Joystar (the "Closing"). The Company issued a total of 13,880,599 shares of
common stock of Company to Joystar-Nevada shareholders in the transaction. The
Company paid $60,000 at the Closing of the transaction for some of the debts of
Advanced Refrigeration Technologies, Inc., and assumed additional liabilities of
Company in the approximate amount of $55,000. Upon the Closing, the all present
officers of the Company resigned and William M. Alverson was appointed as the
Company's President, Chief Financial Officer and Secretary. Upon the Closing,
William M. Alverson was appointed to the Board of Directors of the Company. An
additional director was appointed as of June 18, 2003. Immediately prior to the
share exchange, there were approximately 3,322,840 shares of the Company's
common stock issued and outstanding. As a result of the acquisition, there were
approximately 17,203,439 shares of common stock issued and outstanding.

The Asset Sale and Purchase Contract which was entered by and between Advanced
Refrigeration Technologies, Inc. and Advanced Refrigeration Controls, Inc, a
newly formed corporation by the former shareholders of the Company, included the
total assets consisting of inventories, fixed assets and patents for a total
value of $85,063 and the assumption of liabilities including primarily former
shareholders loans, for a total amount of $105,217. The Company had a gain of
$20,154 on the disposition of assets and liabilities.

Merger of Joystar, Inc.

As of June 4, 2004 Joystar, Inc., a Nevada corporation and a wholly-owned
subsidiary of the Company, was officially merged with and into Joystar, Inc., a
California corporation (formerly Advanced Refrigeration Technologies, Inc.)
pursuant to Section 1110(a) of the California Corporations Code and Section
92A.200 of Nevada Revised Statutes. In connection with the merger the Company
provided for the name change from Advanced Refrigeration Technologies, Inc. to
Joystar, Inc., pursuant to Section 1110(d) of the California Corporations Code.
The merger and the name change was approved by the Company's Board of Directors
pursuant to Section 1110(a). The shareholders approval of the Company was not
required under the California law to effect the merger and the name change and
was not obtained for this action.


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GOVERNMENT REGULATION
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TRAVEL INDUSTRY REGULATION

Joystar must comply with laws and regulations relating to the travel industry
and the sale of travel services. These include registering with various states
and countries as a seller of travel, complying with certain disclosure
requirements and participating in state restitution funds. Both the Federal
Trade Commission and the Department of Transportation take the position that
their regulations prohibiting unfair and deceptive advertising practices apply
to our business.

REGULATIONS OF THE INTERNET

Currently, few laws and regulations apply directly to the Internet and
commercial online services and, to the extent such laws exist or apply to us, we
believe we are in compliance with all of them. The following summary does not
purport to be complete discussion of all enacted or pending regulations and
policies that may affect our business. This summary focuses primarily on the
enacted federal, state and international legislation specific to businesses that
operate as we do. For further information concerning the nature and extent of
federal, state and international regulation of online businesses, you should
review public notices and rulings of the U.S. Congress, state and local
legislature and international bodies.

Due to the growth of the Internet and online commerce, coupled with publicity
regarding Internet fraud, new laws and regulations are continually being
considered (at the federal, state and international levels) regarding property
ownership, sales and other taxes, pricing and content, advertising, intellectual
property rights, libel, user privacy, and information security. New laws or
different applications of existing laws would likely impose additional burdens
on companies conducting business online and may decrease the growth of the
Internet or commercial online services. In turn, this could decrease the demand
for our products and services or increase our cost of doing business. We cannot
predict whether any of the proposed privacy legislation currently pending will
be enacted and what effect, if any, it would have on our company.

TAXES. Federal regulation imposing limitations on the ability of states to
impose taxes on Internet-based sales was enacted in 1998 and extended in 2001.
The Internet Tax Non-Disclosure Act, as this legislation is known, exempts
certain types of sales transactions conducted over the Internet from multiple or
discriminatory state and local taxation through November 1, 2003. It is possible
this legislation will not be renewed when it terminates. Failure to renew this
legislation could allow state and local governments to impose taxes on
Internet-based sales, and these taxes could decrease the demand for our products
or services or increase our cost of operations.

PRIVACY. As an online business, customers provide us with personally
identifiable information (PII) that has been specifically and voluntarily given.
PII includes information that can identify a customer as a specific individual,
such as name, phone number, or e-mail address. This information is used only for
the purpose of responding to and fulfilling customer requests for our travel
products and services. We will only share customer PII with our authorized
travel service providers, and only as necessary in order to complete a
transaction that customers specifically request. We do not sell or rent PII to
anyone. We provide customers with choice and control over the collection and use
of their PII, as well as a means of updating, correcting, or removing any PII
stored in their customer profile. Customers are provided the opportunity to
specifically choose the promotional marketing communications they wish to
receive from our company. If they choose to opt-out any of the promotional
e-mail services that we provide, then we will only send e-mail that relates to a
specific travel purchase they have made through us.

CURRENT US FEDERAL PRIVACY REGULATION. Increasing concern over consumer privacy,
including regulations related to the use of the Internet for conducting
transactions and electronic commerce, has led to the introduction of proposed
legislation at the federal level. The most far-reaching of these current laws
are focused on financial institutions, health care providers, and companies that
voluntarily solicit information form children. For businesses that operate
online such as Joystar, the Unsolicited Electronic Mail Act of 1999 has been
enacted to protect individuals, families, and internet service providers form
unsolicited and unwanted electronic mail, commonly referred to as spamming.
Additionally, the Federal Trade Commission has a role in consumer privacy
protection and is involved with related enforcement activities.

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CURRENT STATE PRIVACY REGULATION. Most states have enacted legislation to
regulate the protection of consumer's information on the Internet. Much of this
legislation is focused on financial institutions and health care providers. The
legislation that has become state law is a small percentage of the number still
pending, and is similar to what has been enacted at the federal level. The
Company cannot predict whether any of the proposed state privacy legislation
currently pending review will be enacted and what effect, if any, it would have
on our Company.

SPECIAL RISK FACTORS

Prospective investors should carefully consider the risks of an investment in
any speculative start-up business and the risks and the speculative factors
inherent to and affecting the Company's business described below.

Factors that may cause Joystar to fail are the following:

-    The Company's prospects must be considered in light of the risks,
     uncertainties, expenses and difficulties frequently encountered by
     companies in their early stages of development.

-    Our inability to obtain new customers at reasonable cost, retain existing
     customers or encourage repeat purchases.

-    Decreases in the number of visitors to our websites or our inability to
     convert visitors to our websites into customers.

-    Our inability to adequately maintain, upgrade and develop our websites, the
     systems that we use to process customers' orders and payments or our
     computer network.

-    Our inability to retain existing airlines, hotels, rental car companies and
     other suppliers of travel services ("travel suppliers") or to obtain new
     travel suppliers .

-    Our inability to obtain travel products on satisfactory terms from our
     travel suppliers.

-    The ability of our competitors to offer new or enhanced websites, services
     or products.

-    Fluctuating gross margins due to a changing mix of revenues.

-    The termination of existing relationships with key service providers or
     failure to develop new ones.

-    The amount and timing of operating costs relating to expansion of our
     operations.

-    Economic conditions specific to the Internet, online commerce and the
     travel industry

-    Attract additional travel suppliers and consumers to our service.

-    Maintain and enhance our brand.

-    Expand our service offerings.

-    Operate, expand and develop our operations and systems efficiently.

-    Maintain adequate control of our expense

-    Respond to technological changes.

-    Respond to competitive market conditions

-    We may not be successful in accomplishing these objectives and our failure
     to do so may have a material adverse effect on our business, operating
     results and financial condition.

-    We depend on our relationships with travel suppliers, licensees and
     computer reservation systems; our business could be harmed by adverse
     changes in these relationships.


                                       10

<PAGE>


-    Our business model relies on relationships with travel suppliers, and it
     would be negatively affected by adverse changes in these relationships. We
     depend on travel suppliers to enable us to offer our customers
     comprehensive access to travel services and products. Consistent with
     industry practices, we currently have few agreements with our travel
     suppliers obligating them to sell services or products through our
     websites. It is possible that travel suppliers may choose not to make their
     inventory of services and products available through online distribution.
     Travel suppliers could elect to sell exclusively through other sales and
     distribution channels or to restrict our access to their inventory, either
     of which could significantly decrease the amount or breadth of our
     inventory of available travel offerings. We will also depend on travel
     suppliers for advertising revenues.

-    In addition to our relationships with travel suppliers, our business model
     relies on our relationships with licensees and computer reservations
     systems. Our license revenues are generated through new and existing travel
     agents.

-    Adverse changes in any of these relationships could have a material adverse
     effect on our business, operating results and financial condition.

-    A decline in commission rates or the elimination of commissions could hurt
     our business.

-    A substantial majority of our online revenues depends on the commissions
     paid by travel suppliers for bookings made through our online travel
     service. Generally, we do not have written commission agreements with our
     suppliers. As is standard practice in the travel industry, we rely on
     informal arrangements for the payment of commissions. Travel suppliers are
     not obligated to pay any specified commission rate for bookings made
     through our websites. We cannot assure you that airlines, hotel chains or
     other travel suppliers will not reduce current industry commission rates or
     eliminate commissions entirely, either of which could have a material
     adverse effect on our business, operating results and financial condition.

     For example, in 1995, most of the major airlines placed a cap on per-ticket
     commissions payable to all travel agencies for domestic airline travel. In
     September 1997, the major United States airlines 9 reduced the commission
     rate payable to traditional travel agencies from 10% to 8%. In 1997, the
     major United States airlines reduced the commission rate payable for online
     reservations from 8% to 5%. In addition, since 1998, many airlines have
     implemented a zero commission of for domestic round trip ticket sales.

-    Consumers, travel suppliers and advertisers may not accept our website as a
     valuable commercial tool which would harm our business.

-    For us to achieve significant growth, travel agents, consumers, travel
     suppliers, and advertisers must accept our website as a valuable commercial
     tool. Consumers who have historically purchased travel products using
     traditional commercial channels, such as local travel agents and calling
     airlines directly must instead purchase these products through our website.

-    Similarly, travel suppliers and advertisers will also need to accept or
     expand their use of our website. Travel suppliers will need to view our
     websites as an efficient and profitable channel of distribution for their
     travel products. Advertisers will need to view our website as effective
     ways to reach their potential customers.

-    In order to achieve the acceptance of consumers, travel suppliers and
     advertisers contemplated by our business plan, we will need to continue to
     make substantial investments in our technology and brand. We cannot at this
     time determine how much of an investment it will take nor, be assured that
     we will be able to secure the funds required. We do not have specific plans
     or budget at this time. Our failure to make progress in these areas may
     harm our business.

-    Intense competition could reduce our market share and harm our financial
     performance.

-    The markets for the products and services offered by us are intensely
     competitive. We compete with other online travel reservation services,
     traditional travel agencies, and travel suppliers offering their services.
     We also compete with many of the same parties and others in the licensing
     of technology to home based travel agents and corporate travel agencies.

                                       11

<PAGE>

-    We compete with a variety of companies with respect to each product or
     service we offer. These competitors include: Internet travel agencies such
     as Expedia, Orbitz, and Travelocity; local, regional, and national and
     international traditional travel agencies;consolidators and wholesalers of
     airline tickets and other travel products, including online consolidators
     such as Cheaptickets.com, Hotwire and Priceline.com.; individual airlines,
     hotels, rental car companies, cruise operators and other travel service
     providers, some of which are suppliers to our websites; operators of travel
     industry reservation databases.

In addition to the traditional travel agency channel, many travel suppliers,
including many suppliers with which we will do business, also offer their travel
services as well as third- party travel services directly through their own
websites. Suppliers also sell their own services directly to consumers,
predominantly by telephone. As the market for online travel services grows, we
believe that the companies involved in the travel services industry, including
travel suppliers, traditional travel agencies and travel industry information
providers, will increase their efforts to develop services that compete with our
services by selling inventory from a wide variety of suppliers. We cannot assure
you that our online operations will compete successfully with any current or
future competitors.

Many of our competitors have longer operating histories, larger customer bases,
greater brand recognition and significantly greater financial, marketing and
other resources than we have and may enter into strategic or commercial
relationships with larger, more established and better-financed companies. Some
of our competitors may be able to secure services and products from travel
suppliers on more favorable terms, devote greater resources to marketing and
promotional campaigns and commit more resources to website and systems
development than we are able to devote. In addition, the introduction of new
technologies and the expansion of existing technologies may increase competitive
pressures. Increased competition may result in reduced operating margins, as
well as loss of market share and brand recognition. We cannot assure you that we
will be able to compete successfully against current and future competitors.
Competitive pressures faced by us could have a material adverse effect on our
business, operating results and financial condition.

We believe that establishing, maintaining and enhancing the Joystar brand will
be a critical aspect of our efforts to attract and expand our online traffic.
The number of Internet sites that offer competing services, many of which
already have well-established brands in online services or the travel industry
generally, increases the importance of establishing and maintaining brand
recognition. Promotion of the Joystar brand will depend largely on our success
in providing a high-quality online experience supported by a high level of
customer service. In addition, to attract and retain online users and to respond
to competitive pressures, we intend to increase our spending substantially on
marketing and advertising with the intention of expanding our brand recognition.
However, we cannot assure you that these expenditures will be effective to
promote our brand or that our marketing efforts generally will achieve our
goals.

If we are unable to provide high-quality online services or customer support, if
we fail to promote and maintain our brand or if we incur excessive expenses in
these efforts, our business, operating results and financial condition would be
materially adversely affected. If we are unable to introduce and sell new
products and services, our business may be harmed.

We need to broaden the range of travel products and services and increase the
availability of products and services that we offer in order to enhance our
service. We will incur substantial expenses and use significant resources trying
to expand the range of products and services that we offer. However, we may not
be able to attract sufficient travel suppliers and other participants to provide
desired products and services to our consumers. In addition, consumers may find
that delivery through our service is less attractive than other alternatives. If
we launch new products and services and they are not favorably received by
consumers, our reputation and the value of the Joystar brand could be damaged.

Our relationships with consumers and travel suppliers are mutually dependent
since consumers will not use a service that does not offer a broad range of
travel services. Similarly, travel suppliers will not use a service unless
consumers actively make travel purchases through it. We cannot predict whether
we will be successful in expanding the range of products and services that we
offer. If we are unable to expand successfully, our business, operating results
and financial condition may be materially adversely affected. We may be unable
to plan and manage our operations and growth effectively.

                                       12

<PAGE>

-    Growth and our anticipated future operations will continue to place, a
     significant strain on our management, systems and resources. We will
     continue to increase the scope of our operations and the size of our
     workforce. In addition to needing to train and manage our workforce, we
     will need to continue to improve and develop our financial and managerial
     controls and our reporting systems and procedures. A failure to plan,
     implement and integrate these systems successfully could adversely affect
     our business.

-    Our growth may increase our expense levels and the difficulties we face in
     managing our operations.

-    Declines or disruptions in the travel industry, such as those caused by
     terrorism or general economic downturns, could reduce our revenues.

-    We rely on the health and growth of the travel industry. Travel is highly
     sensitive to travel safety concerns, and thus declines may occur after acts
     of terrorism that affect the safety of travelers. The terrorist attacks of
     September 11, 2001 on the World Trade Center in New York City and the
     Pentagon in northern Virginia using hijacked commercial airliners resulted
     in bookings industry wide. The long-term effects of these events could
     include, among other things, a protracted decrease in demand for air travel
     due to fears regarding additional acts of terrorism, military responses to
     acts of terrorism and increased costs and reduced operations by airlines
     due, in part, to new security directives adopted by the Federal Aviation
     Administration. These effects, depending on their scope and duration which
     we cannot predict at this time together with any future terrorist attacks,
     could significantly impact our long-term results of operations or financial
     condition.

-    In addition, travel is sensitive to business and personal discretionary
     spending levels and tends to decline during general economic downturns,
     which could also reduce our revenues. Other adverse trends or events that
     tend to reduce travel are likely to hurt our business. These may include:

     o    Price escalation in the airline industry or other travel-related
          industries.

     o    Increased occurrence of travel-related accidents.

     o    Airline or other travel-related strikes.

     o    Political instability.

     o    Regional hostilities and terrorism.

     o    Bad weather

     o    Interruptions in service from third parties could hurt our business.

-    We rely on third-party computer systems and third-party service providers,
     including the computerized central reservation systems of the airline,
     hotel and car rental industries to make airline ticket, hotel room and car
     rental reservations and credit card verifications and confirmations. Any
     interruption in these third-party services or deterioration in their
     performance could hurt our business. If our arrangement with any of these
     third parties is terminated, we may not find an alternate source of systems
     support on a timely basis or on commercially reasonable terms.

-    Our success depends on maintaining the integrity of our systems and
     infrastructure.

-    As our operations grow in both size and scope, domestically and later
     internationally, we will need to improve and upgrade our systems and
     infrastructure to offer an increasing number of travel agents, customers
     and travel suppliers enhanced products, services, features and
     functionality. The expansion of our systems and infrastructure will require
     us to commit substantial financial, operational and technical resources
     before the volume of business increases, with no assurance that the volume
     of business will increase. Travel agents, consumers and suppliers will not
     tolerate a service hampered by slow delivery times, unreliable service
     levels or insufficient capacity, any of which could have a material adverse
     effect on our business, operating results and financial condition.


                                       13

<PAGE>

-    In this regard, our operations face the risk of systems failures. Our
     systems and operations are vulnerable to damage or interruption from fire,
     flood, power loss, telecommunications failure, break-ins, earthquake and
     similar events. Business interruption insurance may not adequately
     compensate us for losses that may occur. The occurrence of a natural
     disaster or unanticipated problems at our leased facilities could cause
     interruptions or delays in our business, loss of data or render us unable
     to process reservations. In addition, the failure of our computer and
     communications systems to provide the data communications capacity required
     by us, as a result of human error, natural disaster or other operational
     disruption could result in interruption of our service. The occurrence of
     any or all of these events could adversely affect our reputation, brand and
     business.

-    Rapid technological changes may render our technology obsolete or decrease
     the competitiveness of our services.

-    To remain competitive, we must continue to enhance and improve the
     functionality and features of our website. The Internet and the online
     commerce industry are rapidly changing. If competitors introduce new
     services embodying new technologies, or if new industry standards and
     practices emerge, our existing website and proprietary technology and
     systems may become obsolete. Our future success will depend on our ability
     to do the following:

     o    Enhance our existing services.

     o    Develop and license new services and technologies that address the
          increasingly sophisticated and varied needs of our prospective
          customers and suppliers.

     o    Respond to technological advances and emerging industry standards and
          practices on a cost-effective and timely basis

Developing our website and other proprietary technology entails significant
technical and business risks. We may use new technologies ineffectively or we
may fail to adapt our websites, transaction-processing systems and network
infrastructure to customer requirements or emerging industry standards. If we
face material delays in introducing new services, products and enhancements, our
customers and suppliers may forego the use of our services and use those of our
competitors.

The success of our business will depend on continued growth of online commerce
and the Internet.

Our future revenues and profits depend upon the widespread acceptance and use of
the Internet and online services as a medium for commerce. Rapid growth in the
use of the Internet and online services is a recent phenomenon. This growth may
not continue. A sufficiently broad base of consumers may not accept, or continue
to use, the Internet as a medium of commerce. Demand for and market acceptance
of recently introduced products and services over the Internet are subject to a
high level of uncertainty.

The Internet has experienced, and is expected to continue to experience,
significant growth in the number of users and amount of traffic. Our success
will depend upon the development and maintenance of the Internet's
infrastructure to cope with this increased traffic. This will require a reliable
network backbone with the necessary speed, data capacity and security and the
timely development of complementary products for providing reliable Internet
access and services. Major online service providers and the Internet itself have
experienced outages and other delays as a result of software and hardware
failures and could face such outages and delays in the future. Outages and
delays are likely to affect the level of Internet usage and the processing of
transactions on our websites. In addition, the Internet could lose its viability
because of delays in the development or adoption of new standards to handle
increased levels of activity or of increased government regulation. The adoption
of new standards or government regulation may require us to incur substantial
compliance costs.

-    Our business is exposed to risks associated with online commerce security
     and credit card fraud.

                                       14

<PAGE>

Consumer concerns over the security of transactions conducted on the Internet or
the privacy of users may inhibit the growth of the Internet and online commerce.
To transmit confidential information such as customer credit card numbers
securely, we rely on encryption and authentication technology. Unanticipated
events or developments could result in a compromise or breach of the systems we
use to protect customer transaction data. Furthermore, our servers may also be
vulnerable to viruses transmitted via the Internet. While we proactively check
for intrusions into our infrastructure, a new and undetected virus could cause a
service disruption.

Under current credit card practices, we may be held liable for fraudulent credit
card transactions and other payment disputes with customers. A failure to
control fraudulent credit card transactions adequately would adversely affect
our business.

-    Our planned international operations will involve risks.

At some time in the future, we plan to operate in the United Kingdom, Germany,
Canada, France, the Netherlands and Italy and may expand our operations to other
countries. In order to achieve widespread acceptance in each country we enter,
we believe that we must tailor our services to the unique customs and cultures
of that country. Learning the customs and cultures of various countries,
particularly with respect to travel patterns and practices, is a difficult task
and our failure to do so could slow our growth in those countries. We will be
subject to the normal risks of doing business internationally, as well as risks
specific to Internet-based companies in foreign markets. These risks include:

     o    Delays in the development of the Internet as a broadcast, advertising
          and commerce medium in international markets.

     o    Difficulties in managing operations due to distance, language and
          cultural differences, including issues associated with establishing
          management systems infrastructures in individual foreign markets.

     o    Unexpected changes in regulatory requirements.

     o    Export and import restrictions.

     o    Tariffs and trade barriers and limitations on fund transfers.

     o    Difficulties in staffing and managing foreign operations.

     o    Potential adverse tax consequences.

     o    Exchange rate fluctuations.

-    Increased risk of piracy and limits on our ability to enforce our
     intellectual property rights.

Any of these factors could harm our business. We may not elect to hedge our
foreign currency exposures.

We may be found to have infringed on intellectual property rights of others
which could expose us to substantial damages and restrict our operations.

We could be subject to claims that we have infringed the patents, copyrights or
other intellectual property rights of others. In addition, we may be required to
indemnify travel suppliers for claims made against them. Any claims against us
could require us to spend significant time and money in litigation, delay the
release of new products or services, pay damages, develop new intellectual
property or acquire licenses to intellectual property that is the subject of the
infringement claims. These licenses, if required, may not be available on
acceptable terms or at all. As a result, intellectual property claims against us
could have a material adverse effect on our business, operating results and
financial condition.

-    Because our market is seasonal, our quarterly results will fluctuate.

                                       15

<PAGE>

-    Our limited operating history and anticipated rapid growth will make it
     difficult for us to assess the impact of seasonal factors on our business.
     Nevertheless, we expect our business to be subject to seasonal
     fluctuations, reflecting seasonal trends for the products and services
     offered by our websites. For example, demand for travel bookings may
     increase in anticipation of summer vacations and holiday periods, but
     online travel bookings may decline with reduced Internet usage during the
     summer months. These factors could cause our revenues to fluctuate from
     quarter to quarter. Our results may also be affected by seasonal
     fluctuations in the inventory made available to our service by travel
     suppliers. Airlines, for example, typically enjoy high demand for tickets
     through traditional distribution channels for travel during holiday
     periods. As a result, during these periods, airlines may either have fewer
     inventories to offer through our service or available tickets may be less
     competitively priced. These same factors are expected to affect rental
     cars, hotels and other travel products and services.

-    Our success depends in large part on the continuing efforts of a few
     individuals and our ability to continue to attract, retain and motivate
     highly skilled employees.

-    We will depend substantially on the continued services and performance of
     our senior management, particularly William M. Alverson, our Chief
     Executive Officer and President. The loss of the services of any executive
     officers or other key employees could hurt our business.

-    Our website will rely on intellectual property, and we cannot be sure that
     this intellectual property will be protected from copy or use by others,
     including potential competitors.

-    We regard some of our content and technology as proprietary and will try to
     protect our proprietary technology by relying on trademarks, copyrights,
     trade secret laws and confidentiality agreements with consultants. In
     connection with our license agreements with third parties, we seek to
     control access to and distribution of our technology, documentation and
     other proprietary information. Even with all of these precautions, it is
     possible for someone else to copy or otherwise obtain and use our
     proprietary technology without our authorization or to develop similar
     technology independently. Effective trademark, copyright and trade secret
     protection may not be available in every country in which our services are
     made available through the Internet, and policing unauthorized use of our
     proprietary information is difficult and expensive. We cannot be sure that
     the steps we will take will prevent misappropriation of our proprietary
     information. This misappropriation could have a material adverse effect on
     our business. In the future, we may need to go to court to enforce our
     intellectual property rights, to protect our trade secrets or to determine
     the validity and scope of the proprietary rights of others. This litigation
     might result in substantial costs and diversion of resources and management
     attention.

-    We plan to license from third parties, certain technologies incorporated
     into our website. As we introduce new services that incorporate new
     technologies, we may be required to license additional technology from
     third parties. We cannot be sure that these third-party technology licenses
     will continue to be available on commercially reasonable terms, if at all.

-    Critical Accounting Policies and Estimates

a) Revenue Recognition

We recognize agency revenues on hotel, cruise and car rental reservations at the
earlier of notification of the amount of the commission from a commission
clearinghouse or a supplier or on receipt of the commissions from an individual
supplier. Override commissions are recognized each period based upon our
projected and actual attainment of predetermined target sales levels. Where
historical financial data is not available to project the target sales levels,
we record the override commission upon receipt of the commission from the
supplier.

Our merchant revenues are derived from transactions where we are the merchant of
record and determine the price. We have agreements with suppliers for blocks of
inventory that we sell and these sales generate the majority of our total
merchant revenues. We do not have purchase obligations for unsold inventory.
Recognition of merchant revenue occurs on the date the traveler uses the
inventory, such as the date of airline departure or hotel stay.

                                       16

<PAGE>

b) Reserves

Accounting estimates are an integral part of the financial statements prepared
by management and are based on management's current judgments. Those judgments
are normally based on knowledge and experience about past and current events and
on assumptions about future events.

We are potentially subject to a concentration of credit risk from our accounts
receivable. Also, we record a reserve against the use of fraudulent credit cards
on our Web sites and customer service related chargebacks.

-    We are subject to other risks and uncertainties common to growing
     technology-based companies, including rapid technological change, growth
     and commercial acceptance of the Internet, dependence on third-party
     technology, challenges to patents, new service introductions and other
     activities of competitors, dependence on key personnel, international
     expansion, and limited operating history. In addition, we are subject to
     uncertainty caused by economic, political and transportation climates and
     events, such as the September 11, 2001 terrorist activities, which may
     impact future demand for the products and services that we sell.

Regulatory and legal uncertainties could harm our business.

The laws and regulations applicable to the travel industry affect us and our
travel suppliers. We are subject to laws and regulations relating to the sale of
travel services, including those prohibiting unfair and deceptive practices and
those requiring us to register as a seller of travel, comply with disclosure
requirements and participate in state restitution funds. In addition, many of
our travel suppliers and computer reservation systems providers are heavily
regulated by the United States and other governments. Our services are
indirectly affected by regulatory and legal uncertainties affecting the
businesses of our travel suppliers and computer reservation systems providers.

We are also subject to laws and regulations applicable to businesses generally
and online commerce. Currently, few laws and regulations directly apply to the
Internet and commercial online services. Moreover, there is currently great
uncertainty about whether or how existing laws governing issues such as property
ownership, sales and other taxes, libel and personal privacy apply to the
Internet and commercial online services. It is possible that laws and
regulations may be adopted to address these and other issues. Further, the
growth and development of the market for online commerce may prompt calls for
more stringent consumer protection laws. New laws or different applications of
existing laws would likely impose additional burdens on companies conducting
business online and may decrease the growth of the Internet or commercial online
services. In turn, this could decrease the demand for our products and services
increase our cost of operations or otherwise hurt our business.

The market price for our common stock is likely to be highly volatile and
subject to wide fluctuations in response to factors including the following:

     o    Actual or anticipated variations in our quarterly operating results.

     o    Announcements of technological innovations or new services by us or
          our competitors.

     o    Changes in financial estimates by securities analysts.

     o    Conditions or trends in the Internet or online commerce industries.

     o    Changes in the economic performance or market valuations of other
          Internet, online commerce or travel companies.

     o    Announcements by us or our competitors of significant acquisitions,
          strategic partnerships, joint ventures or capital commitments.

     o    Additions or departures of key personnel.

     o    Release of lock-up or other transfer restrictions on our outstanding
          shares of common stock or sales of additional shares of common stock.

     o    Potential litigation



                                       17

<PAGE>

The market prices of the securities of Internet-related and online commerce
companies have been especially volatile. Broad market and industry factors may
adversely affect the market price of our common stock, regardless of our actual
operating performance. In the past, following periods of volatility in the
market price of their stock, many companies have been the subject of securities
class action litigation. If we were sued in a securities class action, it could
result in substantial costs and a diversion of management's attention and
resources and would adversely affect our stock price.

Future sales of substantial amounts of common stock in the public market could
adversely affect prevailing market prices. Sales of substantial amounts of our
common stock in the public market after the restrictions lapse could adversely
affect the prevailing market price and impair our ability to raise equity
capital in the future.

We will need to raise additional capital in order to remain competitive in the
online travel services industry. This capital may not be available on acceptable
terms, if at all.

We will not be able to fund our growth if we lack adequate resources. If we
raise additional funds by issuing equity or convertible debt securities, the
percentage ownership of our stockholders will be diluted. Any securities could
have rights, preferences and privileges senior to those of the common stock.


Item 2.  DESCRIPTION OF PROPERTY
         -----------------------

The Company maintains its corporate offices in Aliso Viejo, California. The
Company leased office space under an operating lease, which expired in April of
2005. The Company was advised that the building was being sold and the Company
would be required to vacate. The Company acquired new office space and moved in
February 2005, subsequent to the year ended December 31, 2004. The Company
occupies approximately 6,135 square fees pursuant to the lease agreement entered
on February 15, 2005. The Company pays $1.80 per square foot for the first 0-12
months, full service gross; $1.85 per square foot, full service gross for the
next 13-24 months, and $1.90 per square, full service gross for the next 25-36
months. The lease agreement is for a term of 36 months with an option to extend
for a period of three years.

Rental expense was $70,860 and $47,000 for the years ended December 31, 2004 and
2003, respectively.

We believe that our existing facilities are adequate to meet our current needs
and that suitable additional or alternative space will be available in the
future on commercially reasonable terms, although we have no assurance that
future terms would be as favorable as our current terms.

The Company has not invested in any real property at this time nor does the
Company intend to do so. The Company has no formal policy with respect to
investments in real estate or investments with persons primarily engaged in real
estate activities.


Item 3.  LEGAL PROCEEDINGS
         -----------------

In March, 2004 a former employee of the Company who was terminated prior to the
acquisition of Joystar, filed a lawsuit in Orange County Superior Court for
breach of contract and specific performance relating to the exercise of options,
among other causes of action. A proposed settlement has been submitted to the
Company in which the Company will issue an additional 300,000 shares and a cash
payment of $12,700 for cost. As of the date of this report, this agreement has
not yet been finalized. The Company's financial statements do not reflect any
adjustment to record the possible settlement.

An independent third party stockbroker has filed a lawsuit against the Company
for refusal to register certain shares to them. A proposed settlement has been
submitted by the Company in which the Company will register an additional
138,600 shares. As of the date of this report, this agreement has not yet been
finalized. The Company's financial statements do not reflect any adjustment to
record the possible settlement.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

No matter was submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fourth quarter of the fiscal year ended
December 31, 2004.

                                       18

<PAGE>

                                     PART II

Item 5.  Market for the Registrant's Common Equity and Related Stockholder
         -----------------------------------------------------------------
         Matters
         -------

PUBLIC MARKET

Joystar's common stock trades under the symbol JYSR on the NASD Over The Counter
Bulletin Board (OTCBB). There were 115 shareholders of record as of April 7,
2005. The price of the Company's common stock as of April 7, 2005 WAS $0.46
(OPEN) AND $0.42 (CLOSE).

The company's high and low closing bid and close information for the fiscal
years ended December 31, 2004 and 2003 is listed below as provided by the NASD
OTC Bulletin Board. Quotations reflect inter-dealer prices, without retail
mark-up, markdown, or commission and may not represent actual transactions.

         -------------- ------------ ------------ ------------ ------------
         DATE           OPEN         HIGH         LOW          CLOSE*
         -------------- ------------ ------------ ------------ ------------
         JAN-04         2.20         3.20         1.90         2.79
         -------------- ------------ ------------ ------------ ------------
         FEB-04         2.65         3.00         2.05         2.25
         -------------- ------------ ------------ ------------ ------------
         MAR-04         2.25         3.00         0.84         1.95
         -------------- ------------ ------------ ------------ ------------
         APR-04         1.65         2.17         1.18         1.40
         -------------- ------------ ------------ ------------ ------------
         MAY-04         1.35         2.10         1.05         2.00
         -------------- ------------ ------------ ------------ ------------
         JUN-04         1.85         2.15         0.44         1.12
         -------------- ------------ ------------ ------------ ------------
         JUL-04         1.30         1.30         0.51         0.95
         -------------- ------------ ------------ ------------ ------------
         AUG-04         0.93         1.09         0.45         0.68
         -------------- ------------ ------------ ------------ ------------
         SEP-04         0.67         1.98         0.67         1.40
         -------------- ------------ ------------ ------------ ------------
         OCT-04         1.30         1.80         1.03         1.03
         -------------- ------------ ------------ ------------ ------------
         NOV-04         1.03         1.59         0.90         0.96
         -------------- ------------ ------------ ------------ ------------
         DEC-04         1.01         1.05         0.57         0.75
         -------------- ------------ ------------ ------------ ------------
         JAN-03         0.01         0.01         0.01         0.01
         -------------- ------------ ------------ ------------ ------------
         FEB-03         0.01         0.01         0.01         0.01
         -------------- ------------ ------------ ------------ ------------
         MAR-03         0.01         0.07         0.01         0.02
         -------------- ------------ ------------ ------------ ------------
         APR-03         0.02         0.04         0.01         0.04
         -------------- ------------ ------------ ------------ ------------
         MAY-03         0.03         0.03         0.03         0.03
         -------------- ------------ ------------ ------------ ------------
         JUN-03         0.03         1.00         0.03         0.68
         -------------- ------------ ------------ ------------ ------------
         JUL-03         0.68         0.68         0.40         0.55
         -------------- ------------ ------------ ------------ ------------
         AUG-03         0.55         2.35         0.55         2.10
         -------------- ------------ ------------ ------------ ------------
         SEP-03         2.08         2.40         1.05         1.80
         -------------- ------------ ------------ ------------ ------------
         OCT-03         1.80         2.05         1.60         1.90
         -------------- ------------ ------------ ------------ ------------
         NOV-03         1.90         2.00         1.55         2.00
         -------------- ------------ ------------ ------------ ------------
         DEC-03         2.00         2.25         1.35         2.20
         -------------- ------------ ------------ ------------ ------------

* Historical data provided by Commodity Systems, Inc.



                                       19

<PAGE>

DIVIDENDS

The Company does not expect to pay any dividends at this time. The payment of
dividends, if any, will be contingent upon the Company's revenues and earnings,
if any, capital requirements, and general financial condition. The payment of
any dividends will be within the discretion of the Company's Board of Directors
and may be subject to restrictions under the terms of any debt or other
financing arrangements that the Company may enter into in the future. The
Company presently intends to retain all earnings, if any, for use in the
Company's business operations and accordingly, the Board does not anticipate
declaring any dividends in the foreseeable future.

RECENT SALES OF UNREGISTERED SECURITIES

The Company acquired all of the issued and outstanding common stock of Joystar,
Inc., a Nevada corporation ("Joystar") in exchange for the issuance by the
Company of a total of 13,880,599 newly issued restricted shares of common voting
stock dated as of June 10, 2003.

The Company issued 215,000 shares of common stock in payment of invoices for
professional services of $15,000 in June, 2003.

The Company issued the 400,000 shares as of November 14, 2003 and recorded
compensation expense of $63,000 for the year ended December 31, 2004 and $25,750
for period ended December 31, 2003.

Pursuant to an employment agreement for a Vice President of Business
Development, the Company issued the 2,000,000 shares on November 14, 2003 and
recorded compensation expense of $210,000 for the year ended December 31, 2004
and $87,500 for period ended December 31, 2003.

On November 11, 2003 the Company issued 28,571 common shares of restricted stock
for services valued at the market price of the Company's stock on that date of
$1.80, $51,428.

During the quarter ended September 30, 2003, the Company sold in its private
placement a total of 316,267 shares of its common stock at a purchase price of
$1.50 per share, for the total purchase price of $474,400. During the quarter
ended June 30, 2003, the Company sold 60,000 shares of its common stock at a
purchase price of $1.50 in its private placement.

The shares of the Company's common stock were issued and sold in reliance upon
the exemption provided by Section 4(2) and Section 506 of Regulation D of the
Securities Act of 1933. The offers and sales in the Company's private placement
were made to accredited investors only.

         During the year ended December 31, 2004, the Company issued 642,223
         shares of common stock in a private placement for a total sales price
         of $692,185 an average sales price of $1.08 per share. During 2003 and
         2004 the Company has received subscriptions to purchase 537,333 shares
         of common stock for $704,800 and authorized 150,000 shares subscribed
         for additional officers compensation $90,000 at December 31, 2004. Such
         150,000 shares have not been issued yet.

         During the year ended December 31, 2004 the Company issued 1,475,133
         shares of common stock for services valued at the fair market value
         price of the Company's stock on the dates issued $1,507,942 an average
         of $1.02 a share.

The shares issued in the private placements set forth above were issued in
reliance upon the exemption from registration set forth in Section 4(2) of the
Securities Act and Regulation D (Rules 505 and/or 506) promulgated under the
Securities Act. The shares were offered and sold to investors who were
"accredited investors" as defined in the Securities Act.

         Loans payable to shareholder at December 31, 2003, $83,295 were
         converted to 60,000 shares of common stock during the year ended
         December 31, 2004.

                                       20

<PAGE>

         As of November 8, 2004, the Company commenced its private placement
         offering of up to $1,000,000 of units consisting of four shares of
         common stock and one warrant to purchase a share of common stock at an
         exercise price of $1.25 per share. Each unit is being sold at $2.00
         purchase price. The units are offered by the Company to accredited
         investors only in reliance on Section 505/506 of the Regulation D of
         the Securities Act of 1933. The Company issued 100,000 units (400,000
         shares, $200,000) that were subscribed as of December 31, 2004 in
         February and March 2005.

The shares issued in the private placements set forth above were issued in
reliance upon the exemption from registration set forth in Section 4(2) of the
Securities Act and Regulation D (Rules 505 and/or 506) promulgated under the
Securities Act. The shares were offered and sold to investors who were
"accredited investors" as defined in the Securities Act.


         The Company has issued 320,000 shares of common stock for services
         rendered in February and March 2005 valued at $200,000.


Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
         ---------------------------------------------------------

The information contained in this section has been derived from our consolidated
financial statements and should be read together with our consolidated financial
statements and related notes included elsewhere in this annual report. The
discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those expressed or
implied in these forward-looking statements as a result of various factors,
including those set forth at the end of this section under "Factors That May
Impact Our Results of Operations".

Overview

Joystar specializes in selling complex travel products including cruises,
vacation packages and group travel through its national sales force of over
1,300 of independent travel agents. As of April 14, 2005 the Company's
membership was 1,385 agents. The Company's goal is to expand the size of our
agency including offering superior value and making our services available to
all. The effect of having such a massive and growing network of independent and
home-based travel retailers all booking under the Joystar Agency umbrella is
intended to significantly increase our sales and revenue, and building a strong
brand recognition.

The thousands of travel agents who have migrated home or plan to make the move
to a home-based operation are creating a virtual "land grab" in the host travel
agency model. In the 3rd quarter of 2004, while still in the development stage
of programs for professional agents and a program for developing new travel
retailers, the Company made a strategic move to focus solely on experienced
travel professionals. Our decision was based on the following factors:

     -    Weak value proposition to professional agents from competition

     -    Highly fragmented competition

     -    No dominant player existed

At the same time, because Joystar was an entrant to the travel industry, it had
not yet advanced through the productivity and commission levels that the
supplier community sets. By focusing on catering solely to professional agents,
Joystar believes it could accomplish an absolutely vital goal maximizing the
Company's commission levels. To accomplish this Joystar developed the most
lucrative and highly rewarding in the Company's opinion, compensation plan in
the industry. Over and above the cash compensation, we offer all our agents a
stock option in the Company to tie them to our success.

Unlike our competitors who charge fees ranging from $150-$7,995 for similar
programs, Joystar introduced a zero fee program, Agent Advantage Pro. Benefits
included a free consumer Web site, and free access to "Agents Only" site. Our
obvious strategy here was to build market share by signing on new home-based
professional agents and to attract existing professional, home based agents away
from our competing host agencies.

                                       21

<PAGE>

Because of our value proposition, we have been very successful in signing up new
agents and eroding our competitors' market share. In just nine months, Joystar
signed up over 1300 travel agents making it one of the fastest growing and
largest agencies in the industry. However, in the first quarter of 2005, the
Company still had one major goal to accomplish after the travel agents signed
up, and that was to get 100% of them actively booking with Joystar's agency ID.
(IATAN #or telephone number depending on the supplier.) For the last quarter of
2004, bookings were nacent because Joystar's commission levels were still lower
than that of our more mature competitors (10%-12% compared to 14-16%).

Although our agents were booking some trips through us, we recognized that we
would have to wait until our commission levels reached that of our competitors
before we began to see the massive volumes of bookings that thousands of
professional agents can generate.

In the first quarter of 2005, Joystar's commission levels with our preferred
suppliers increased substantially. With the opening of the Miami Cruise Center
in March, 2005, the enhanced commission levels that Joystar can now offer
Independent travel agents are some of the most competitive in the industry in
the Company's opinion.

Bookings in 2005 are rapidly escalating. Since opening the Miami Cruise Center
in March, 2005, we have been able to offer our agents much higher commission
levels. In the first two months of 2005 we booked approximately one million
dollars in sales. In March, 2005, we booked approximately one million dollars in
sales and we are on track to book sales over $1,500,000 in April, 2005. Based on
this rate of increase, we expect to be booking approximately $5,000,000 per
month in gross travel sales by the end of the second quarter. Each month we are
adding 200-300 agents who we believe will book approximately $150,000 each in
complex travel annually. Furthemore, based on our rapidly increasing size in
terms of agents and their corresponding bookings, we will likely be at the same
or higher levels of commissions than our competitors by the end of the second
quarter of 2005. There are no assurances that the Company will be successful in
its endeavors and expectations.

 Once these levels are met, Joystar will be able to concentrate on reinforcing
its dominant position in the industry. We are on target to hit 2,000
professional agent members by the end of the second quarter and believe that the
economies of scale and resulting critical mass will allow for a substantial leap
in both booking volume and number of new travel agents. We believe we will have
3,500-4,000 agents by the end of the year and be at over 100 million dollars in
annualized sales going into 2006.

According to a recent report issued by Credit Suisse/ First Boston, there are
currently 15,000 to 20,000 professional, home based agents. This number is
expected to grow to approximately 50,000 agents by 2010. In the management's
opinion, Joystar is on track to have an approximate twenty percent market share
by year end and aims to increase that to thirty percent market share by the end
of 2007.

In order to fund the Company's growth, we have engaged an NASD member firm to
provide investment banking services. The Company intends to raise approximately
5 million dollars in 2005 and apply for a listing on the American Stock Exchange
in the fourth quarter. There are no assurances that such steps will be taken.

Our business is dependent on the health and growth of the travel industry.
Travel is highly sensitive to traveler safety concerns, and thus declines after
acts of terrorism that affect the safety of travelers. The terrorist attacks of
September 11, 2001, resulted in a decrease in new travel bookings worldwide and
may reduce our revenues in future quarters. The long-term effects of these
events could include, among other things, a protracted decrease in demand for
air travel due to fears regarding additional acts of terrorism, military
responses to acts of terrorism and increased costs and reduced operations by
airlines due, in part, to new security directives adopted by the Federal
Aviation Administration. These effects, depending on their scope and directives,
which we cannot predict at this time, together with any future terrorist
attacks, could significantly impact our long-term results of operations or
financial condition.


                                       22

<PAGE>

RESULTS OF OPERATIONS

For the Fiscal Year Ended December 31, 2004 Compared to the Fiscal Year Ended
-----------------------------------------------------------------------------
December 31, 2003
-----------------

The Company has been in the development stage since its inception.

Revenues for the year ended December 31, 2004 increased to $69,000 from $43,000
for the year ended December 31, 2003. The increase of $26,000 (60%), although in
dollars is not significant, is a step forward and our accelerated signing up of
additional travel agents as of the last quarter of 2004 and first quarter of
2005 should produce substantial increases in revenues for 2005.

Marketing and sales expenses for the year ended December 31, 2004 increased to
$1,453,000 from $401,000 for the year ended December 31, 2003. The increase of
$1,052,000, (263%) is due to the production of an infomercial and stock issued
for marketing services.

General and Administrative expenses for the year ended December 31, 2004
increased to $1,967,000 from $655,000 for the year ended December 31, 2003. The
increase of $1,312,000 (200%) is due primarily to the increased salaries and
wages of $488,000, increase in use of independent contractors - $349,000,
increased legal and accounting expenses related to SEC filings and lawsuit -
$136,000, increased rent of $24,000, increased utilities of $20,000, increased
insurance expense of $16,000, increased travel of $63,000 and an increase in all
other general and administrative expenses of $229,000.

Interest expense for the year ended December 31, 2004 decreased to $0 as
compared to $5,644 in the year ended December 31, 2003.

Net loss for the year ended December 31, 2004 increased to $3,371,000 from
$1,018,000 for the year ended December 31, 2003. The increase in loss $2,353,000
(231%) was primarily due to the increased expenses detailed.

LIQUIDITY AND CAPITAL RESOURCES

The Company had a cash balance of $283,869 at December 31, 2004 as compared to
$136,319 at December 31, 2003.

The Company had negative working capital at December 31, 2004. The Company has
been able to raise sufficient capital to continue operations by its securities.
In 2002 the Company raised $105,000, in 2003 - $673,800 and in 2004, $692,185.
The Company has funded certain expenses by issuing shares for compensation and
services. During the year ended December 31, 2003 the Company issued 3,453,571
shares valued at $1,098,728, of which $204,478 were for 2003 expenses, $273,000
were for 2004 and $621,250 were deferred to future year expenses. In the year
ended December 31, 2004 the Company issued 1,475,133 shares valued at $1,507,942
for services.

The Company expects to finance the capital needed with additional issuances
of its securities. In order to fund the Company's growth, the Company has
engaged an NASD member firm to provide investment banking services. The Company
intends to raise approximately 5 million dollars in 2005. There is no assurance
that the Company will be able to secure such financing.


Item 7. FINANCIAL STATEMENTS
        --------------------

The consolidated financial statements of the Company required to be included in
Item 7 are listed in this index, and follow this page:

         Report of Independent Certified Public Accountant            F-1

         Financial Statements
           Consolidated Balance Sheets                                F-2
           Consolidated Statements of Operations                      F-3
           Consolidated Statement of Shareholders' Equity             F-4
           Consolidated Statements of Cash Flows                      F-5
           Notes to Consolidated Financial Statements                 F-6

                                       23

<PAGE>


                REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

Board of Directors and Stockholders
Joystar, Inc.

We have audited the accompanying balance sheets of Joystar, Inc. (a development
stage enterprise) (the Company) as of December 31, 2004 and 2003, and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the years then ended and for the period from inception (May 23, 2001)
through December 31, 2004. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
 financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Joystar, Inc. as of December
31, 2004 and 2003, and the results of its operations and cash flows for the
years then ended and for the period from inception (May 23, 2001) through
December 31, 2004 in conformity with accounting principles generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed further in Note 3, the
Company has been in the development stage since its inception (May 23, 2001) and
continues to incur significant losses. The Company's viability is dependent upon
its ability to obtain future financing and the success of its future operations.
These factors raise substantial doubt as to the Company's ability to continue as
a going concern. Management's plan in regard to these matters is also described
in Note 3. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

/s/ Mendoza Berger & Company, LLP



Irvine, California
March 24, 2005


                                      F-1


<PAGE>


                                  JOYSTAR, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS
________________________________________________________________________________

                                                     December 31,   December 31,
                                                        2004           2003
                                                     -----------    -----------
ASSETS

Current assets:
   Cash                                              $   283,869    $   136,319
   Other receivables                                         100          2,000
   Prepaid expenses                                       16,265          8,042
                                                     -----------    -----------
    Total current assets                                 300,234        146,361

Property and equipment, net                               37,327         22,690
                                                     -----------    -----------

    Total assets                                     $   337,561    $   169,051
                                                     ===========    ===========


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
   Accounts payable                                  $   144,416    $   132,198
   Accrued salaries                                      172,038        150,235
   Accrued payroll taxes                                 203,970         48,239
   Accrued rent                                           35,000         35,000
   Loans from officers                                   259,834         83,795
                                                     -----------    -----------
     Total current liabilities                           815,258        449,467

Commitments and contingency                                   --             --

Stockholders' equity (deficit):
   Preferred stock, no par value, 10,000,000
      shares authorized; none issued                          --             --
   Common stock, no par value, 50,000,000
      shares authorized; 23,228,633 and
      21,051,277 shares issued and outstanding
      at December 31, 2004 and 2003, respectively      4,178,663      1,895,241
   Stock issued for deferred compensation               (621,250)      (894,250)
   Stock subscribed not issued, 887,333 shares
      and 118,667 shares at December 31, 2004
      and 2003, respectively                             794,800        176,800
   Deficit accumulated during development stage       (4,829,910)    (1,458,207)
                                                     -----------    -----------
     Total stockholders' equity (deficit)               (477,697)      (280,416)
                                                     -----------    -----------
     Total liabilities and stockholders'
       equity (deficit)                              $   337,561    $   169,051
                                                     ===========    ===========



    The accompanying notes are an integral part of these financial statements


                                      F-2


<PAGE>
<TABLE>


                                       JOYSTAR, INC.
                                  STATEMENTS OF OPERATIONS
_________________________________________________________________________________________
<CAPTION>
                                                                               Cumulative
                                                                              amounts from
                                            For the year     For the year    inception (May
                                           ended December   ended December    23, 2001) to
                                            December 31,     December 31,     December 31,
                                               2004              2003             2004
                                            ------------     ------------     ------------
<S>                                         <C>
Income:
  Travel agent programs and commissions     $     68,995     $     43,170     $    118,428
                                            ------------     ------------     ------------


Operating expenses:
  General and administrative                   1,987,475          655,535        2,850,243
  Marketing and sales                          1,453,223          400,868        1,976,509
                                            ------------     ------------     ------------
Total operating expenses                       3,440,698        1,056,403        4,826,752
                                            ------------     ------------     ------------

Loss from operations before
  interest and taxes                          (3,371,703)      (1,013,233)      (4,708,324)
Interest expense                                      --            5,644            5,644
Provision for taxes - State                           --               --
                                            ------------     ------------     ------------

Net loss                                    $ (3,371,703)    $ (1,018,877)    $ (4,713,968)
                                            ============     ============     ============

Loss per share                              $      (0.15)    $      (0.06)
                                            ============     ============

Weighted average number of common shares
outstanding                                   21,863,227       18,106,979
                                            ============     ============




         The accompanying notes are an integral part of these financial statements


                                            F-3
</TABLE>



<PAGE>

<TABLE>

                                                           JOYSTAR, INC.
                                                   (A DEVELOPMENT STAGE COMPANY)
                                            STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                        FROM INCEPTION (MAY 23, 2001) TO DECEMBER 31, 2004
_________________________________________________________________________________________________________________________________
<CAPTION>
                                                                                                       Deficit
                                                  COMMON STOCK           Stock issued      Stock       Accumulated      Total
                                            ---------------------------      for         Subscribed    During the    Stockholders'
                                             Number of                     Deferred         not        Development      Equity
                                               Shares        Amount      Compensation      Issued        Stage         (Deficit)
                                            ------------   ------------  ------------   ------------  ------------   ------------
<S>                                          <C>           <C>           <C>            <C>           <C>            <C>
Balance at inception - May 23, 2001                  --    $        --   $        --    $        --   $        --    $        --
Stock issued for services                    16,715,000         16,715            --             --            --         16,715
Net loss                                             --             --            --             --       (16,715)       (16,715)
                                            ------------   ------------  ------------   ------------  ------------   ------------
Balance at December 31, 2001                 16,715,000         16,715            --             --       (16,715)            --
Stock issued various dates for cash
 at $1.50 per share                              70,667        105,998            --             --            --        105,998
Net loss                                             --             --            --             --      (306,673)      (306,673)
                                            ------------   ------------  ------------   ------------  ------------   ------------
Balance at December 31, 2002                 16,785,667        122,713            --             --      (323,388)      (200,675)
Shares canceled by majority
 shareholder                                 (3,000,000)            --            --             --            --             --
Stock issued various dates
 for cash at $1.50 per share                     94,932        142,300            --             --            --        142,300
                                            ------------   ------------  ------------   ------------  ------------   ------------
Balance June 11, 2003 date of
 acquisition of Joystar, Inc. shares
 in a reverse merger                         13,880,599        265,013            --             --      (323,388)       (58,375)
Cancel Joystar shares                       (13,880,599)            --            --             --            --             --
Advanced Refrigeration shares
 outstanding at June 11, 2003                 3,322,840             --            --             --            --             --
Issue Advanced Refrigeration
 Technologies, Inc. shares                   13,880,599             --            --             --      (115,942)      (115,942)
Stock issued pursuant to the stock
 option plan June 11, 2003 at
 market value of stock $0.03 per
 share                                          810,000         24,300            --             --            --         24,300
Stock issued for services                       215,000         15,000            --             --            --         15,000
Stock issued for past and future
 compensation                                 2,400,000      1,008,000            --             --            --      1,008,000
Future compensation deferred until earned            --             --      (894,250)            --            --       (894,250)
Stock issued various dates for cash
 at between $0.50 and $1.50 per share           394,267        531,500            --             --            --        531,500
Stock issued for services                        28,571         51,428            --             --            --         51,428
Stock subscribed not issued 118,667 shares           --             --            --        176,800            --        176,800
Net loss                                             --             --            --             --    (1,018,877)    (1,018,877)
                                            ------------   ------------  ------------   ------------  ------------   ------------
Balance at December 31, 2003                 21,051,277      1,895,241      (894,250)       176,800    (1,458,207)      (280,416)

Stock issued for services                     1,475,133      1,507,942            --             --            --      1,507,942
Stock issued for cash                           642,223        692,185            --             --            --        692,185
Stock issued for note payable                    60,000         83,295            --             --            --         83,295
Deferred compensation earned                         --             --       273,000             --            --        273,000
Stock subscribed not issued 768,666 shares           --             --            --        618,000            --        618,000
Net loss                                             --             --            --             --    (3,371,703)    (3,371,703)
                                            ------------   ------------  ------------   ------------  ------------   ------------
Balance December 31, 2004                    23,228,633    $ 4,178,663   $  (621,250)    $  794,800   $(4,829,910)   $  (477,697)
                                            ============   ============  ============   ============  ============   ============



                             The accompanying notes are an integral part of these financial statements

                                                               F-4
</TABLE>


<PAGE>
<TABLE>

                                         JOYSTAR, INC.
                                   STATEMENTS OF CASH FLOWS
______________________________________________________________________________________________
<CAPTION>
                                                                                   Cumulative
                                                                                  amounts from
                                                  For the year   For the year    inception (May
                                                     ended           ended        23, 2001) to
                                                  December 31,    December 31,    December 31,
                                                     2004            2003             2004
                                                  -----------     -----------     -----------
<S>                                               <C>
Cash flows from operating activities:
   Net loss                                       $(3,371,703)    $(1,018,877)    $(4,713,968)

Adjustments to reconcile net loss to net cash
 used in operating activities:
    Depreciation                                        8,765           2,608          11,373
    Stock issued for services                       1,780,942         204,478       2,002,135
Changes in assets and liabilities:
    Increase in prepaid expenses                       (8,223)         (8,042)        (16,265)
    Increase in other receivables                       1,900          (2,000)           (100)
    Increase in accounts payable                       12,218         122,480         144,416
    Increase in accrued salaries and
      payroll taxes                                   177,534         116,663         376,008
    Increase in accrued rent                               --         (19,000)         35,000
                                                  -----------     -----------     -----------

       Net cash used by operations                 (1,398,567)       (601,690)     (2,161,401)
                                                  -----------     -----------     -----------

Cash flows from investing activities:
    Acquisition of property and equipment             (23,402)        (22,892)        (48,700)
                                                  -----------     -----------     -----------

      Net cash used by investing activities           (23,402)        (22,892)        (48,700)
                                                  -----------     -----------     -----------

Cash flows from financing activities:
   Loans from officers                                259,334          21,218         259,334
   Issuance of common stock                           692,185         673,800       1,555,778
   Stock subscribed not issued                        618,000         176,800         794,800
   Payment of debt in reverse acquisition                  --        (115,942)       (115,942)
                                                  -----------     -----------     -----------

     Net cash provided by financing activities      1,569,519         755,876       2,493,970
                                                  -----------     -----------     -----------

Increase in cash                                      147,550         131,294         283,869
Cash at the beginning of the year                     136,319           5,025              --
                                                  -----------     -----------     -----------

Cash at the end of year                           $   283,869     $   136,319     $   283,869
                                                  ===========     ===========     ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
  Issuance of stock and stock subscribed
    ($22,500) for services                        $ 1,802,692     $   204,478     $ 2,023,885
  Income taxes paid                               $     2,585     $        --     $     2,585
  Shares issued for shareholder loan              $    83,295     $        --     $    83,295
  Interest paid                                   $        --     $     5,644     $     5,644



          The accompanying notes are an integral part of these financial statements

                                             F-5
</TABLE>


<PAGE>


                                  JOYSTAR, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
          AND CUMULATIVE FROM INCEPTION (MAY 23, 2001) TO DECEMBER 31, 2004

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

1. BASIS OF PRESENTATION
   ---------------------

On June 11, 2003, Joystar, Inc. (formerly Advanced Refrigeration Technologies,
Inc. a California corporation) (" the Company") acquired all of the issued and
outstanding common stock of Joystar, Inc., a Nevada corporation ("Joystar") in
exchange for the issuance by the Company of a total of 13,880,599 newly issued
restricted shares of common voting stock to the Joystar shareholders pursuant to
the Agreement and Plan of Reorganization dated as of June 10, 2003. Prior to the
issuance of the shares, the Company had 3,322,840 shares of common stock issued
and outstanding. Subsequent to the exchange there were 17,203,439 shares issued
and outstanding. The shareholders of Joystar own 81% of the common stock
outstanding of the Company after the issuance of the 13,880,599 shares.

The acquisition of Joystar by the Company on June 11, 2003 has been accounted
for as a purchase and treated as a reverse acquisition since the former owners
of Joystar controlled 81% of the total shares of Common Stock of the Company
outstanding immediately following the acquisition.

On this basis, the historical financial statements prior to June 11, 2003 have
been restated to be those of the accounting acquirer Joystar. The historical
stockholders' equity prior to the reverse acquisition has been retroactively
restated (a recapitalization) for the equivalent number of shares received in
the acquisition after giving effect to any difference in par value of the
issuer's and acquirer's stock. The original 3,322,840 shares of common stock
outstanding prior to the exchange reorganization have been reflected as an
addition in the stockholders' equity account of the Company on June 11, 2003.

As of June 4, 2004 Joystar, Inc., a Nevada corporation and wholly owned
subsidiary of the Company), was officially merged with and into Joystar, Inc., a
California Corporation (formerly Advanced Refrigeration Technologies, Inc.). In
connection with the merger the Company provided for the name change from
Advanced Refrigeration Technologies, Inc. to Joystar, Inc. The merger and the
name change was approved by the Company's Board of Directors. The Company no
longer files consolidated financial statements. This merger had no effect on
income for this or any prior period reported.

The Company has been in the development stage since its inception May 23, 2001.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
   ------------------------------------------

         Principles of Consolidation
         ---------------------------
         The consolidated financial statements include the accounts of the
         Company, and its wholly owned subsidiary Joystar, Inc.. All material
         inter-company balances and transactions have been eliminated in
         consolidation.

         REVENUE RECOGNITION
         --------------------
         The Company recognizes revenue when the earnings process is complete.
         The Company records revenues from travel related sales transactions
         where the Company both purchases from the supplier and sells to the
         customer the requested travel service. This is reflected in the
         Consolidated Statement of Operations at the net amount, which reflects
         the gross amount charged to the customer less the cost paid to the
         supplier. The Company also receives commissions from travel suppliers
         for processing reservations. (To date all revenues have been derived
         from such transactions.)


                                      F-6


<PAGE>



         Revenues derived in the future from annual memberships or other
         activities where a time factor is involved will be deferred over the
         appropriate period and recognized as earned.

         PROPERTY AND EQUIPMENT
         ----------------------
         Property and equipment is stated at cost and depreciated using the
         straight-line method over the estimated useful life of the assets,
         which is seven years for furniture and equipment and three years for
         computer equipment.

         USE OF ESTIMATES
         ----------------
         The preparation of financial statements in accordance with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities, and the reported amounts of revenues and expenses
         during the reporting period. Actual results could differ from those
         estimates.

         INCOME TAXES
         ------------
         Deferred income taxes are reported using the liability method. Deferred
         tax assets are recognized for deductible temporary differences and
         deferred tax liabilities are recognized for taxable temporary
         differences. Temporary differences are the differences between the
         reported amounts of assets and liabilities and their tax bases.
         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 effects of changes in tax
         laws and rates on the date of enactment.

         NET LOSS PER SHARE
         ------------------
         In February 1997, the Financial Accounting Standards Board (FASB)
         issued SFAS No. 128 "Earnings Per Share" which requires the Company to
         present basic and diluted earnings per share, for all periods
         presented. The computation of loss per common share (basic and diluted)
         is based on the weighted average number of shares actually outstanding
         during the period. The Company has no common stock equivalents, which
         would dilute earnings per share.

         FAIR VALUE OF FINANCIAL INSTRUMENTS
         -----------------------------------
         Financial instruments consist principally of cash and various current
         liabilities. The estimated fair value of these instruments approximates
         their carrying value.

         NEW ACCOUNTING PRONOUNCEMENTS
         -----------------------------
         In December 2004 the FASB issued revised SFAS No. 123R, "Share-Based
         Payment". SFAS No. 123R sets accounting requirements for "share-based"
         compensation to employees and requires companies to recognize in the
         income statement the grant-date fair value of stock options and other
         equity-based compensation. SFAS No. 123R is effective in interim or
         annual periods beginning after june 15, 2005. The Company will be
         required to adopt SFAS No. 123R in its third quarter of fiscal 2005 and
         currently discloses the effect on net (loss) income and (loss) earnings
         per share of the fair value recognition provisions of SFAS No. 123,
         "Accounting for Stock-Based Compensation". The Company is currently
         evaluating the impact of the adoption of SFAS 123R on its financial
         position and results of operations, including the valuation methods and
         support for the assumptions that underlie the valuation of the awards.

                                      F-7


<PAGE>


3. GOING CONCERN
   ------------

         The accompanying financial statements, which have been prepared in
         conformity with accounting principles generally accepted in the United
         States of America, contemplates the continuation of the Company as a
         going concern. However, the Company has been in the development stage
         since its inception (May 23, 2001), sustained significant losses and
         has used capital raised through the issuance of stock and debt to fund
         activities. Continuation of the Company as a going concern is
         contingent upon establishing and achieving profitable operations. Such
         operations will require management to secure additional financing for
         the Company in the form of debt or equity.

         Management believes that actions currently being taken to revise the
         Company's funding requirements will allow the Company to continue its
         development stage operations. However, there is no assurance that the
         necessary funds will be realized by securing debt or through stock
         offerings.


4. PROPERTY AND EQUIPMENT
   ----------------------

         Property and equipment consist of the following:

                                            DECEMBER 31, 2004  DECEMBER 31, 2003
                                            -----------------  -----------------

         Office furniture                    $       24,511     $       11,900
         Computers                                   24,189             13,398
                                             ---------------    ---------------

                                                     48,700             25,298
         Less: accumulated depreciation              11,373              2,608
                                             ---------------    ---------------

                                             $       37,327     $       22,690
                                             ===============    ===============

5. CAPITAL STOCK
   -------------

         COMMON STOCK
         ------------
         On November 2, 2001, the Company issued 16,715,000 restricted shares of
         common stock at $0.001 per share totaling $16,715 for services rendered
         in connection with the start up of the Company.

         At various dates in 2002, the Company issued for cash of $105,998,
         70,667 shares of common stock at $1.50 per share through a private
         placement, pursuant to provisions of Section 4(2) of the Securities Act
         of 1933 and Rule 506 of Regulation D.

         At various dates in 2003, the Company issued for cash of $673,800,
         489,199 shares of common stock at $0.50 to $1.50 per share through a
         private placement, pursuant to provisions of Section 4(2) of the
         Securities Act of 1933 and Rule 506 of Regulation D.

         COMMON STOCK SPLIT
         ------------------
         On November 1, 2001, the Board of Directors of the Company approved a
         stock split of the Company's common stock at a ratio of 1,000 for 1.
         All references in the accompanying financial statements to the number
         of common stock and per share amounts reflect the stock split.

                                      F-8


<PAGE>

         STOCK CANCELED
         --------------
         A majority shareholder canceled 3,000,000 shares of stock in
         anticipation of the acquisition of Advanced Refrigeration Technologies,
         Inc. on June 11, 2003.

         STOCK ISSUED IN REVERSE MERGER JUNE 11, 2003
         ---------------------------------------------
         The Company acquired all of the issued and outstanding common stock of
         Joystar, Inc., a Nevada corporation ("Joystar") in exchange for the
         issuance by the Company of a total of 13,880,599 newly issued
         restricted shares of common voting stock dated as of June 10, 2003.

         STOCK ISSUED UNDER STOCK OPTION PLAN AND FOR PAYMENT OF SERVICES
         ----------------------------------------------------------------
         The Company issued 810,000 shares of common stock pursuant to the
         Company's Stock Option Plans on June 11, 2003 valued at the market
         price of the stock on that date $0.03.

         The Company issued 215,000 shares of common stock in payment of
         invoices for professional services of $15,000 in June, 2003.

         On July 30, 2003 the Company entered into a two and three year
         employment Agreements with two employees. The agreement provided for
         100,000 and 300,000 Shares of restricted common stock to be issued. The
         value of the compensation was based on the stock price on the agreement
         date of $0.42, a total $168,000. The Company issued the 400,000 shares
         November 14, 2003 and recorded compensation expense of of $63,000 for
         the year ended December 31, 2004 and $25,750 for period ended December
         31, 2003. The deferred compensation was $78,750 at December 31, 2004.

         On July 30, 2003 the Company entered into a four-year employment
         agreement for a Vice President of Business Development. The agreement
         provides for 2,000,000 shares of restricted Common stock to be issued.
         The value of the compensation was based on the stock price on the
         agreement date of $0.42, a total of $840,000. The Company issued the
         2,000,000 shares November 14, 2003 and recorded compensation expense of
         $210,000 for the year ended December 31, 2004 and $87,500 for period
         ended December 31, 2003. The deferred compensation was $542,500 at
         December 31, 2004.

         On November 11, 2003 the Company issued 28,571 common shares of
         restricted stock for services valued at the market price of the
         Company's stock on that date $1.80, $51,428.

         During the year ended December 31, 2004, the Company issued 642,223
         shares of common stock in a private placement for a total sales price
         of $692,185 an average sales price of $1.08 per share. During 2003 and
         2004 the Company has received subscriptions to purchase 537,333 shares
         of common stock for $704,800 and authorized 150,000 shares subscribed
         for additional officers compensation $90,000 at December 31, 2004.

         During the year ended December 31, 2004 the Company issued 1,475,133
         shares of common stock for services valued at the fair market value
         price of the Company's stock on the dates issued $1,507,942 an average
         of $1.02 a share.

         Loans payable to shareholder at December 31, 2003, $83,295 were
         converted to 60,000 shares of common stock during the year ended
         December 31, 2004.

         On August 27, 2004 the Company agreed to grant options to purchase
         150,000 share of common stock under the Company's 2003 Equity
         Compensation Plan at $0.66 per share, 110% of the market price on that
         date. The options had not been issued at December 31, 2004

                                      F-9


<PAGE>

         As of November 8, 2004, the Company commenced its private placement
         offering of up to $1,000,000 of units consisting of four shares of
         common stock and one warrant to purchase a share of common stock at an
         exercise price of $1.25 per share. Each unit is being sold at $2.00
         purchase price. The units are offered by the Company to accredited
         investors only in reliance on Section 505 of the Regulation D of the
         Securities Act of 1933. 100,000 units have been subscribed as of
         December 31, 2004.


6. LEGAL PROCEEDINGS
   -----------------

         In March, 2004 a former employee of the Company who was terminated
         prior to the acquisition of Joystar, filed a lawsuit in Orange County
         Superior Court for breach of contract and specific performance relating
         to the exercise of options, among other causes of action. A proposed
         settlement has been submitted to the Company in which the Company will
         issue an additional 300,000 shares and a cash payment of $12,700 for
         cost. As of the date of this report, this agreement has not yet been
         finalized. The Company's financial statements do not reflect any
         adjustment to record the possible settlement.

         An independent third party stockbroker has filed a lawsuit against the
         Company for refusal to register certain shares to them. A proposed
         settlement has been submitted by the Company in which the Company will
         register an additional 138,600 shares. As of the date of this report,
         this agreement has not yet been finalized. The Company's financial
         statements do not reflect any adjustment to record the possible
         settlement.

 7. STOCK OPTIONS
    -------------

         The Board of Directors has approved in April, 2003 a Company stock
         option plan, which was amended by the Company in July, 2003. All the
         shares (480,000 shares) under 2002 Equity and Stock Option Plan were
         issued in June, 2003. In July, 2003, the Company approved 2003 Equity
         Compensation Plan which provides for the grant to directors, officers,
         employees and consultants of the Company of stock based awards and
         options to purchase up to an aggregate of 2,500,000 shares of Common
         Stock. No grants have been made yet under 2003 Equity Compensation
         Plan.


                                      F-10


<PAGE>

         On June 11, 2003 the Company granted and issued a total of 810,000
         shares under the 2000 and 2002 stock compensation plans for services to
         the Company. The valuation of the shares issued were at the market
         price on the Grant date $0.03, $24,300.

 8. INCOME TAXES
    ------------

         The components of the deferred tax asset is as follows:

                                           DECEMBER 31, 2004   DECEMBER 31, 2003
                                           -----------------   -----------------
         Deferred tax assets:
           Net operating loss carry-forward  $    1,665,000      $     530,000

         Less: valuation allowance               (1,665,000)          (530,000)
                                             ---------------     --------------

         Net deferred tax assets             $           --      $          --
                                             ===============     ==============

         The Company's operations are headquartered in the State of California
         and are subject to California state income taxes. The Company had
         available approximately 4,170,000 and $1,328,000 of unused Federal and
         State net operating loss carry-forwards at December 31, 2004 and
         December 31, 2003, respectively that may be applied against future
         taxable income. These net operating loss carry-forwards expire through
         2023 for Federal purposes. There is no assurance that the Company will
         realize the benefit of the net operating loss carry-forwards.

         SFAS No. 109 requires a valuation allowance to be recorded when it is
         more likely that some or all of the deferred tax assets will not be
         realized. At December 31, 2004 and 2003, valuations for the full amount
         of the net deferred tax asset were established due to the uncertainties
         as to the amount of the taxable income that would be generated in
         future years.


         Reconciliation of the differences between the statutory tax rate and
         the effective income tax rate is as follows:
<TABLE>

                                              DECEMBER 31, 2004     DECEMBER 31, 2003
                                              -----------------     -----------------
<S>                                           <C>                   <C>
         Statutory federal tax (benefit) rate         (34.00)%              (34.00)%
         Statutory state tax (benefit) rate            (5.83)%               (5.83)%
                                              -----------------     -----------------

         Effective tax rate                           (39.83)%              (39.83)%

         Valuation allowance                            39.83%               39.83%
                                              -----------------     -----------------

         Effective income tax rate                       0.00%                0.00%
                                              =================     =================
</TABLE>

                                      F-11


<PAGE>

9. COMMITMENTS
   -----------

         OPERATING LEASE
         ---------------
         The Company leased office space under an operating lease, which expired
         in April of 2005. The Company was advised that the building was being
         sold and the Company would be required to vacate. The Company acquired
         new office space and moved in February 2005, subsequent to the year
         ended December 31, 2004. The new lease is for 36 months with an option
         to renew for 36 months.

           Future payments on the operating lease are as follows:

                           2005                           $     110,430
                           2006                           $     135,584
                           2007                           $     139,265
                           2008                           $      23,313



         Rental expense was $70,860 and $47,000 for the years ended December 31,
         2004 and 2003, respectively.

10. OFFICERS LOAN PAYABLE
    ----------------------

         The Company has an unsecured loan dated December 15, 2004, payable to
         officers $259,834 due on December 15, 2005 with interest at 6%.

11. SUBSEQUENT EVENT
    -----------------
         As of November 8, 2004, the Company commenced its private placement
         offering of up to $1,000,000 of units consisting of four shares of
         common stock and one warrant to purchase a share of common stock at an
         exercise price of $1.25 per share. Each unit is being sold at $2.00
         purchase price. The units are offered by the Company to accredited
         investors only in reliance on Section 505 of the Regulation D of the
         Securities Act of 1933. The Company issued 100,000 units (400,000
         shares, $200,000) that were subscribed as of December 31, 2004 in
         February and March 2005.

         The Company has issued 320,000 shares of common stock for services
         rendered in February and March 2005 valued at $200,000.


                                      F-12



<PAGE>

Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        ---------------------------------------------------------------
        FINANCIAL MATTERS
        -----------------

         There have been no change in auditors nor disagreements on accounting
         and financial matters with the auditors and accountants.

Item 8-A. CONTROLS AND PROCEDURES
          -----------------------

         Our Chief Executive Officer and Chief Financial Officer (our principal
executive officer and principal financial officer, respectively) have concluded,
based on their evaluation as of December 31, 2004, that the design and operation
of our "disclosure controls and procedures" (as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934, as amended ("Exchange Act")) are effective
to ensure that information required to be disclosed by us in the reports filed
or submitted by us under the Exchange Act is accumulated, recorded, processed,
summarized and reported to our management, including our Chief Executive Officer
and Chief Financial Officer, as appropriate to allow timely decisions regarding
whether or not disclosure is required.

         During the quarter ended December 31, 2004, there were no changes in
our internal controls over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act) that have materially affected, or are reasonably likely
to materially affect, our internal controls over financial reporting.

Item 8B. OTHER INFORMATION
         -----------------

         The Company has an unsecured loan dated December 15, 2004, payable to
         William M.Alverson, its Chief Executive Officer in the amount of
         $259,834, due on demand with interest at 6%.



                                       24

<PAGE>


                                    PART III

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

The Directors and Executive Officers of the Company, and their ages, are as
follows:

Name                      Age           Position
----                      ---           --------

William Alverson           40           Director, Chief Executive Officer and
                                        Chief Financial Officer

Katherine West             35           Director and Executive Vice President

William Fawcett            50           Director

William M. Alverson, Chief Executive Officer, Chief Financial Officer and
Director. Mr. Alverson has been an officer and director of the Company since its
inception. Mr. Alverson has spent the last fifteen years working in the
financial and travel services industries. He began his career as a financial
advisor at American Express. He also served as Chairman and Chief Executive
Officer at a financial services firm where he guided private companies through
their first rounds of financing and public listings. In 1995, Mr. Alverson
founded and served as Chairman and CEO of Travelmax, Inc. Under his leadership,
that company grew from seven to 220 employees handling the back office support
to over 44,000 travel agents nationwide. Since then he has been active in
financing and consulting to both private and public companies including Baby
Genius, Inc. and FreeRealTime.com. He is married to Katherine West, the
co-founder of the Company.

Katherine West, Executive Vice President and Director. West has been the Officer
and Director of the Company since the inception of Joystar, Inc. Mrs. West
supervises the Vice President of Agent Services and Vice President of Travel
Services. Additionally, she is responsible for the day to day management and
supervision of customer service, human resources, accounting, budget, payroll
and contracts. Mrs. West began her management career in the travel industry in
1989 with Thrifty Car Rental where she was responsible for the franchise's
operations, reporting, forecasting, and accounting & tax preparation. From 1992
to 1996 she held the position of Senior Account Executive with Metromedia
Communications, Inc. During her career with the telecom giant, she consistently
exceeded revenue targets with a primary focus on small to mid-sized businesses
and trade associations. She is married to William M. Alverson, the founder of
the Company.

William Fawcett, was appointed by the Board of Directors of Joystar
as the director of the Company in November, 2004. Mr. Fawcett has an MBA from
Harvard Business School, is a graduate of Loyola Law School and also graduated
with honors from Boston College. Mr. Fawcett is on the Dean's Graduate School
Advisory Board for Concordia University and is a professor for Concordia's
Master of Business Administration (MBA) Entrepreneurial program. In addition to
being an outside Director for Joystar, he also serves on the Board of Directors
of Case Post, Inc. Fawcett has been the recipient of the Jordan Whitney Award
for Infomercial Excellence, the Aurora Award for the Best Infomercial in 1997,
Two Clios for production of direct-response TV commercials, a Cannes Film Award
for Best Sports Documentary and a Spanish Infomercial Telemundo Award Best in
Class. Other major accomplishments include writing with Peter Uberroth and Phil
Donohue, "Sober Graduation," the model for high schools; the
Nationally-acclaimed off-Broadway women's show "Breaking Free," and produced,
wrote and directed "Celebrity Salute to City of Hope" infomercial.

KEY EMPLOYEES (NON EXECUTIVE EMPLOYEES)

BILL MORRIS - Senior Vice President Business Development. Mr. Morris is a
34-year travel professional with extensive experience in multiple fields of the
travel industry including retail travel, wholesale tours and operations, charter
operations, and franchise operations and supervises the Vice President of Agent
Services and Vice President of Travel Services. Additionally he is responsible
for meetings of preferred suppliers. He has authored training manuals for
cruises, tours, sales and marketing, and mining leisure business from corporate
accounts. Mr. Morris worked in the Corporate Travel Consortium Industry for
seven years with such companies as Hickory Travel Systems where he was
responsible for preferred supplier negotiations, agent training, meetings, a
leisure travel reservation center to handle travel fulfillment for multiple
travel clubs and Websites.

                                       25

<PAGE>

LARRY NORMAN, CTC, MCC, - Senior Vice President of Sales & Marketing. Mr. Norman
brings more than eighteen (18) years of travel industry experience and over
thirty-five (35) years of direct sales and management experience to his role at
Joystar. He oversees sales and market planning for Joystar's home based agents.
His industry experience includes President and CEO of Surfside Trips `n Travels
in Surfside, Florida, where he built Vacation and Cruise Club to consist of over
65,000 members; and President and CEO of Ambassador Travel and Cruises.
Experience includes presenting workshops for travel industry trade
organizations, ASTA (American Society of Travel Agents); NACOA (National
Association of Cruise Only Agencies); and ARTA (Association of Retail Travel
Agents). Larry developed training for Norwegian Cruise Line; American Express;
International Tours Inc.; GalaxSea Cruise and Tours; Hickory Travel Systems, and
has been a popular! workshop presenter at each of the Travel Trade/CLIA (Cruise
Line International Association) Cruise-A-Thons. In 1996, TRAVEL TRADE named him
"The Educator of the Year."

JO BEEMER - Vice President of Agency Operations. Ms. Beemer brings more than 15
years of travel industry experience to her roll, overseeing Joystar's travel
Agent Hosting and support services to our rapidly expanding sales force of
experienced, home-based travel agents. Ms. Beemer's management background and
experience providing business and leisure travelers with exceptional service
will bring tremendous insight to Joystar's global network of independent travel
agents. Her industry experience includes Managing Partner of a Specialty Tour
Company, Quality Control Manager for online travel channel, Corporate Travel
Counselor and Supervisor responsible for over 75 reservation agents. She has
held positions at industry leaders including 1-800-FLY-CHEAP, American Express
BTO, AAA Travel, and Travel and Transport.

JEANNINE GODSEY, ACC., - Vice President of Sales & Marketing, Vacation Division.
Ms Godsey brings with her over 14 years of travel sales, marketing and
communications experience along with her love for travel and music. For the last
five years she has had extensive consulting and sales experience in the travel
industry. Prior to that, Ms. Godsey specialized in travel marketing
communications in the national advertising division of the ORANGE COUNTY
REGISTER. Ms. Godsey's ability to build and maintain relationships with major
vacation suppliers has lead to her great success and respect in the industry.
She's always willing to do whatever it takes to fashion a dream holiday package
for her clients no matter how great or small. Ms. Godsey volunteers her spare
time to coordinate special events and travel for local and national youth and
college sports teams.

ROBIN MOORE - Vice President of Agent Services. Mrs. Moore brings more than 20
years of travel industry experience to her role, which includes overseeing
travel agent training and customer service. Robin's management training
background and well-rounded knowledge of the industry will allow Joystar to
provide superior training and support programs to a global network of Joystar
Independent Travel Agents. Mrs. Moore's travel industry experience includes 12
years in Operations Management. In addition to overseeing the day-to-day
activities of 80+ agents, Moore has been responsible for negotiating air and
hotel contracts, analyzing equipment, systems, and procedures, and negotiating
discounts and commissions with more than 100 vendors. She has authored the
training manuals that have launched the careers for thousands of Travel Agents.

COMMITTEES

The Company does not currently have standing audit, nominating or compensation
committees of the Board of Directors, or committees performing similar
functions.

CODE OF BUSINESS CONDUCT AND ETHICS

         Our code of business conduct and ethics, as approved by our board of
directors, is available in our SEC filings with the Commission. It will also be
available on our website at www.joystar.com.

         We intend to satisfy the disclosure requirement under Item 10 of Form
8-K relating to amendments to or waivers from provisions of the code that relate
to one or more of the items set forth in Item 406(b) of Regulation S-B, by
describing on our Internet Website, within five business days following the date
of a waiver or a substantive amendment, the date of the waiver or amendment, the
nature of the amendment or waiver, and the name of the person to whom the waiver
was granted.

         Information on our Internet website is not, and shall not be deemed to
be, a part of this report or incorporated into any other filings we make with
the Securities and Exchange Commission.

                                       26

<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934, as amended, or
the Exchange Act, requires our executive officers and directors, and persons who
beneficially own more than 10% of a registered class of our common stock, to
file initial reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission, or the SEC. These officers, directors and
stockholders are required by SEC regulations to furnish us with copies of all
such reports that they file.

         Based solely upon a review of copies of such reports furnished to us
during the fiscal year ended December 31, 2004 and thereafter, or any written
representations received by us from reporting persons that no other reports were
required, we believe that, during our fiscal 2004, all Section 16(a) filing
requirements applicable to our reporting persons were met, however, some of the
filings may have been filed late.


Item 10. Executive Compensation
         ----------------------

         The following table sets forth information concerning the annual and
long-term compensation for services rendered during the last three fiscal years
to our company in all capacities as an employee by our Chief Executive Officer
and our other executive officers whose aggregate cash compensation exceeded
$100,000 (collectively, the "named executive officers") during fiscal 2004 shown
below.

Summary Compensation Table

                                                           Awards
                                                           ------
                                            Annual                     Other
Name and Position               Year        Salary        Bonus     Compensation
--------------------------------------------------------------------------------

William Alverson                2004         180,000                 $60,000 (2)
                                2003         120,000
CEO and CFO                     2002          46,000

Katherine West                  2004          88,500                 $30,000 (2)
                                2003          60,000
Executive VP                    2002          35,000

Rick R. McEwan                  2004            -0-        -0-          -0-
                                2003            -0-        -0-          -0-
former President(1)             2002          18,000       -0-          -0-

Allan E. Schrum                 2004            -0-        -0-          -0-
former Vice President           2003            -0-        -0-          -0-
Engineering (1)                 2002           4,500       -0-          -0-

Clare C. Schrum                 2004            -0-        -0-          -0-
former Secretary,               2003            -0-        -0-          -0-
Chief Financial Officer (1)     2002          13,500       -0-          -0-


(1) Positions were held until June, 2003.

(2) On August 27, 2004, the Company authorized 100,000 shares of common stock to
be issued to Mr. Alverson and 50,000 shares of common stock to be issued to Ms.
West for services rendered in fiscal year ended December 31, 2004 valued at
$60,000 and $30,000, respectively. As of the date of this report, such 150,000
shares have not been issued yet.

On August 27, 2004, the Company approved a grant of options to purchase 150,000
shares of common stock under the Company's 2003 Equity Compensation Plan at
$0.66 per share, 110% of the market price on that date to the Company's
executive officers (100,000 options to be issued to Mr. Alverson and 50,000
options to be issued to Ms. West)for services rendered in the fiscal year ended
December 31, 2004. The options had not been issued as of the date of this
report.

COMPENSATION OF DIRECTORS

         The Company reimburses each Director for reasonable expenses (such as
travel and out-of-pocket expenses) in attending meetings of the Board of
Directors. Directors are not separately compensated for their services as
Directors.

                                       27

<PAGE>

EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS

         The Company has not yet finalized the employment agreements with the
Company's Chief Executive Officer, William M. Alverson and Katherine T. West,
the Company's Executive Officer. The Company's Board of Directors approved the
major terms of such employment agreements which include an annual salary of
$180,000 for Mr. Alverson and the issuance of 100,000 shares of common stock and
an option to purchase 100,000 shares of the Company's common stock. Ms. West's
compensation includes an annual salary of $88,500, the issuance of 50,000 shares
of common stock and an option to purchase 50,000 shares of the Company's common
stock. None of the above shares or options have been issued yet.


Item 11. Securities Ownership of Certain Beneficial Owners and Management
         ----------------------------------------------------------------

The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of April 7, 2005, by
(i) each person who is known by the Company to be the beneficial owner of more
than five percent (5%) of the issued and outstanding shares of common stock,
(ii) each of the Company's directors and executive officers, and (iii) all
directors and executive officers as a group.

                                                          Percent of
                                     Number of            Outstanding
        Name and Address            Voting Shares        Voting Shares
        ----------------            -------------        -------------

     William M. Alverson             12,198,000 (1)          50.91%
     Director, President
     CFO & Secretary
     95 Argonaut St. First Floor
     Aliso Viejo, CA 92656

     Katherine T. West               12,198,000 (2)          50.91%
     Director, Ex.VP
     95 Argonaut St. First Floor
     Aliso Viejo, CA 92656

     William Fawcett                    100,000 (3)            *%
     95 Argonaut St. First Floor
     Aliso Viejo, CA 92656


     All directors and officers      12,298,000              51.00%
     as a group (2 persons)

(1)      Includes 1,552,000 shares of common stock held by Katherine T. West
         with respect to which shares Mr. Alverson, her husband, disclaims
         beneficial ownership.

(2)      Includes 10,646,000 shares of common stock held by William Alverson
         with respect to which shares Ms. West, his wife, disclaims beneficial
         ownership.

The Company had 23,957,633 shares of common stock issued and outstanding as of
April 7, 2005. The Company had 115 shareholders as of April 7, 2005.


Item 12. Certain Relationships and Related Transactions
         ----------------------------------------------

         The Company has an unsecured loan dated December 15, 2004, payable to
         William M.Alverson, its Chief Executive Officer in the amount of
         $259,834, due on demand with interest at 6%.

         In March, 2005, Katherine T. West, the Company's director and Executive
         Vice President loaned the Company an amount equal to $105,997.

                                       28

<PAGE>

                                     PART IV

Item 13. Exhibits
         --------


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

                        Exhibit 31      CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                        AND CHIEF FINANCIAL OFFICER PURSUANT
                                        TO SECTION 302 OF THE SARBANES-OXLEY ACT

                        Exhibit 32      CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                        AND CHIEF FINANCIAL OFFICER PURSUANT TO
                                        SECTION 906 OF THE SARBANES-OXLEY ACT

Item 14. Principal Fees and Services.
         ----------------------------

Set forth below are fees paid to the Company's independent accountants for the
past two years for the professional services performed for the Company.

Audit Fees: During 2004 and 2003 the Company paid Mendoza Berger & Company LLP a
total of $10,000 and $7,700 for professional services rendered in connection
with performance of our independent audits for the years ending December 31,
2003 and 2002, respectively.

All Other Fees: During 2004 and 2003 the Company paid Mendoza Berger & Company
LLP a total of $28,833.50 and $11,000 for professional services rendered in
connection with the reviews of the form 10-QSB's for the years ended December
31, 2004 and 2003, respectively.

Tax Fees: None

                                       29

<PAGE>

                                   SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.

                                        JOYSTAR, INC.

Dated: April 15, 2005                   By:  /s/ William M. Alverson
                                        --------------------------------
                                        William M. Alverson,
                                        Chief Executive Officer, Chief Financial
                                        Officer And Secretary

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

<TABLE>
<S>                         <C>                                             <C>
/s/ William M. Alverson           Chief Executive Officer, Chief
                                   Financial Officer and Director           Date: 4/15/05
------------------------    (principal executive and financial officer)
   William M. Alverson

/s/ Katherine T. West                        Director                       Date: 4/15/05
------------------------
   Katherine T. West

/s/ William Fawcett                          Director                       Date: 4/15/05
------------------------
   William Fawcett
</TABLE>


                                       30