<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549
--------------------------------------------------------------------------------
                                   FORM 10-Q


      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
                             Exchange Act of 1934

For the quarterly period ended September 30, 1999  Commission File No. 2-91651-D

                               PEACOCK FINANCIAL
                                  CORPORATION
<TABLE>
<CAPTION>
<S>                                                               <C>
---------------------------------------------------------------------------------------------------------
                      COLORADO                                                  87-0410039
---------------------------------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization)    (I.R.S. Employer Identification Number)
---------------------------------------------------------------------------------------------------------
</TABLE>
                            2531 SAN JACINTO STREET
                             San Jacinto, CA 92583
             (Address and zip code of principal executive offices)

                                (909) 652-3885
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
                              [X] YES   [ ] NO


Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
<S>                                                             <C>
---------------------------------------------------------------------------------------------------------
                 COMMON STOCK                                   32,185,056 SHARES OUTSTANDING
               $0.001 PAR VALUE                                   AS OF SEPTEMBER 30, 1999
---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                         PEACOCK FINANCIAL CORPORATION
                              REPORT ON FORM 10Q

                       QUARTER ENDED SEPTEMBER 30, 1999

TABLE OF CONTENTS
--------------------------------------------------------------------------------
                                                                      Page
                                                                     Number
                                                                     ------

PART I.                   FINANCIAL INFORMATION

              ITEM 1.     FINANCIAL STATEMENTS (UNAUDITED)

                          *   CONSOLIDATED BALANCE SHEETS
                              AS OF SEPTEMBER 30, 1999, AND
                              DECEMBER 31, 1998                       3 & 4

                          *   CONSOLIDATED STATEMENTS OF
                              OPERATIONS THREE MONTHS ENDED
                              SEPTEMBER 30, 1999 AND 1998             5 & 6

                          *   CONSOLIDATED STATEMENTS OF
                              CHANGES IN STOCKHOLDERS' EQUITY
                              AS OF SEPTEMBER 30, 1999                7 & 8

                          *   CONSOLIDATED STATEMENTS OF
                              CASH FLOWS AS OF SEPTEMBER 30,
                              1999 AND SEPTEMBER 30, 1998             9 & 10

                          *   NOTES TO CONSOLIDATED FINANCIAL
                              STATEMENTS                                11

              ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS
                          OF FINANCIAL CONDITION AND RESULTS
                          OF OPERATIONS                             12, 13 & 14


PART II.                  OTHER INFORMATION AND SIGNATURES              15

                                     Page 2
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
                          Consolidated Balance Sheets


                                    ASSETS

<TABLE>
<CAPTION>
                                                                   September 30,          December 31,
                                                                       1999                  1998
                                                                   ----------             ----------
<S>                                                                <C>                    <C>
CURRENT ASSETS

  Cash and cash equivalents                                            59,701                    -0-
  Notes receivable                                                    317,893                 19,300
  Due from related party                                               (5,348)                 2,396
                                                                   ----------             ----------

    Total Current Assets                                              372,246                 21,696


FIXED ASSETS, at cost, net of accumulated depreciation
  of $83,034 and $80,299, respectively                                  2,610                366,780


OTHER ASSETS

  Notes receivable - related parties                                  114,000                114,000
  Developer fees receivable                                            58,728                154,077
  Development costs                                                 1,216,036              1,216,036
  Investments in limited partnerships                               1,224,292              1,224,292
  Other investments                                                   901,730                200,000
  Licensing rights                                                     30,000                 30,000
  Other assets                                                         48,151                 29,201
                                                                   ----------             ----------
    Total Other Assets                                              3,592,937              2,967,606
                                                                   ----------             ----------

    TOTAL ASSETS                                                   $3,967,793             $3,356,082
                                                                   ==========             ==========
</TABLE>

      The accompanying notes are an integral part of these consolidated
                             financial statements.

                                     Page 3
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
                          Consolidated Balance Sheets


                     LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                September 30,         December 31,
                                                                                    1999                 1998
                                                                                 ----------           ----------
<S>                                                                              <C>                  <C>
CURRENT LIABILITIES

  Accounts payable                                                                 $227,193             $227,743
  Bank overdraft                                                                        -0-                4,509
  Other current liabilities                                                         263,746              280,982
  Lines of credit                                                                     2,677                6,365
  Notes payable - current portion                                                   422,322              753,060
  Note payable to stockholder                                                        51,198               57,058
                                                                                 ----------           ----------

    Total Current Liabilities                                                       967,136            1,329,717


LONG-TERM DEBT

  Notes payable - long term                                                         730,296              864,501
                                                                                 ----------           ----------
    Total Liabilities                                                             1,697,432            2,194,218


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

  Preferred stock:  10,000,000 shares authorized at $0.01
   par value; 672,300 and 672,300 shares issued and
   outstanding, respectively                                                          6,723                6,723

  Common stock:  250,000,000 shares authorized at
   $0.001 par value; 32,185,056 and 20,750,370
   shares issued and outstanding, respectively                                       32,185               20,750
  Capital reserve                                                                    (3,666)                 -0-
  Additional paid-in capital                                                      4,512,972            3,519,882
  Accumulated deficit                                                            (2,277,853)          (2,385,491)
                                                                                 ----------           ----------

    Total Stockholders' Equity                                                    2,270,361            1,161,864

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                       $3,967,793           $3,356,082
                                                                                 ==========           ==========
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                     Page 4
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
                     Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                            For 9 Months Ended                       For 3 Months Ended
                                                    ------------------------------------       ----------------------------------
                                                     September 30,         September 30,       September 30,         September 30,
                                                         1999                  1998                1999                 1998
                                                       --------            -----------           ---------            ---------
<S>                                                    <C>                 <C>                 <C>                  <C>
REVENUES

  Home building and development sales                  $    -0-               $453,412          $     -0-              $139,544
  Property management and administration income           2,755                  3,300                385                 1,200
  Investment banking income                             600,000                    -0-                -0-                   -0-
  Other income                                           20,121                 14,283             16,297                 4,697
                                                       --------             ----------            --------             --------
    Total Revenues                                      622,876                470,995             16,682               145,441

EXPENSES

  Home building and development costs                       -0-                540,602                -0-               139,544
  General and administrative                            466,953                883,188            144,053               393,930
  Depreciation and amortization                           2,735                  2,817                -0-                   939
                                                       --------             ----------            --------             --------
    Total Expenses                                      469,688              1,426,607             144,053              534,413
                                                       --------             ----------            --------             --------

INCOME (LOSS) FROM CONTINUING OPERATIONS                153,188               (955,612)           (127,371)            (388,972)

OTHER INCOME (EXPENSE)

  Interest income                                         7,556                    -0-               7,556                  -0-
  Interest expense                                      (99,951)               (72,443)            (29,676)             (24,264)
  Other expense                                             -0-                 (2,400)                800               (1,600)
  Gain (loss) on investments                             45,000                    -0-                 -0-                  -0-
                                                       --------            -----------           ---------            ---------
    Total Other Income (Expense)                        (47,395)               (74,843)            (21,320)             (25,864)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
  INCOME TAXES                                          105,793             (1,030,455)           (148,691)            (414,836)

  Income taxes                                              -0-                    -0-                 -0-                  -0-
                                                       --------            -----------           ---------            ---------
NET INCOME (LOSS) FROM CONTINUING OPERATIONS           $105,793            ($1,030,455)          ($148,691)           ($414,836)
                                                       ========            ===========           =========            =========

</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.


                                     Page 5
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
               Consolidated Statements of Operations (Continued)
<TABLE>
<CAPTION>

                                               For 9 Months Ended                       For 3 Months Ended
                                         ---------------------------------       ----------------------------------
                                         September 30,       September 30,       September 30,        September 30,
                                             1999                1998                1999                 1998
                                         ----------           ----------         ----------            ----------
<S>                                      <C>                 <C>                 <C>                  <C>
NET INCOME (LOSS)                        $  105,793          ($1,030,385)         ($148,691)            ($414,836)
                                         ==========           ==========         ==========            ==========

EARNINGS (LOSS) PER SHARE                $     0.01           $    (0.07)        $    (0.01)           $    (0.03)
                                         ==========           ==========         ==========            ==========

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING               31,756,963           14,705,959         32,066,796            10,375,373
                                         ==========           ==========         ==========            ==========

</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.


                                     Page 6
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
                Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>

                                       Preferred Stock                  Common Stock                 Additional
                                  --------------------------         -----------------------          Paid-in         Accumulated
                                     Shares           Amount         Shares           Amount          Capital          Deficit
                                     -------          ------         ------           ------          ---------       -----------
<S>                                <C>              <C>            <C>              <C>               <C>               <C>
Balance December 31, 1996            672,300          $6,723        10,695,295        $10,695          $2,215,474       ($1,074,064)

Common stock issued for cash             -0-             -0-           422,002            422              59,618               -0-


Stock issued for services                -0-             -0-           646,500            647              83,459               -0-

Accrued dividends                        -0-             -0-               -0-            -0-             (23,172)              -0-

Net income (loss) for the
  year ended December 31,
  1997                                   -0-            -0-               -0-            -0-                 -0-           222,009
                                     -------           -----        ----------         ------           ---------         ---------

Balance, December 31, 1997           672,300           6,723        11,763,797         11,764           2,335,379          (852,055)
                                     -------           -----        ----------         ------           ---------         ---------

Common stock issued for cash             -0-             -0-         1,609,413          1,609             217,456               -0-

Common stock issued for services         -0-             -0-         3,108,040          3,108             599,967               -0-

Common stock issued on
  conversion of debentures               -0-             -0-         1,559,834          1,560             104,033               -0-

Common stock issued for
  investments and
  licensing rights                       -0-             -0-         2,420,000          2,420             257,580               -0-

Common stock issued under
  failed financing package               -0-             -0-           289,286            289              28,639               -0-

Accrued dividends                        -0-             -0-               -0-            -0-             (23,172)              -0-

Net income (loss) for the
  period ended December 31,
  1998                                   -0-             -0-               -0-            -0-                 -0-        (1,533,436)
                                     -------           -----        ----------         ------           ---------         ---------

Balance, December 31, 1998           672,300           6,723        20,750,370         20,750           3,519,882        (2,385,491)
                                     -------           -----        ----------         ------           ---------         ---------
</TABLE>

       The accompanying notes are an integral part of these consolidated
                             financial statements.


                                     Page 7
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
          Consolidated Statements of Stockholders' Equity (Continued)
<TABLE>
<CAPTION>

                                                    Preferred Stock              Common Stock               Additional
                                                ---------------------------------------------------------    Paid-in     Accumulated
                                                Shares         Amount        Shares         Amount           Capital      Deficit
                                                -------       ------       ----------       -------         ---------   ----------
<S>                                             <C>           <C>          <C>            <C>               <C>        <C>
Balance, December 31, 1998                      672,300       $6,723       20,750,370       $20,750         3,519,882  ($2,385,491)
                                                -------       ------       ----------       -------         ---------   ----------
Common stock issued for cash                        -0-          -0-         9,349,815        9,350           668,553          -0-

Common stock issued for services                    -0-          -0-             8,571            9               600          -0-

Common stock issued on conversion of debentures     -0-          -0-           826,300          826            41,315          -0-

Common stock issued for investments and
  licensing rights                                  -0-          -0-         1,250,000        1,250           300,000           -0-

Peacock International Corp                          -0-          -0-              -0-           -0-               -0-         1,845

Accrued dividends                                   -0-          -0-              -0-           -0-           (17,379)          -0-

Net income (loss) for the year ended
  September 30, 1999                                -0-          -0-              -0-           -0-               -0-       105,793

Balance September 30, 1999                      672,300       $6,723       32,185,056       $32,185         4,512,971   ($2,277,853)
                                                -------       ------       ----------       -------         ---------   ----------
</TABLE>


       The accompanying notes are an integral part of these consolidated
                             financial statements.

                                     Page 8
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                       For the 9 Months Ended
                                                                  September 30,        September 30,
                                                                  ------------         -------------
                                                                     1999                   1998
                                                                   ---------              ---------
<S>                                                                <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES

  Net income (loss)                                                 $105,793            ($1,030,385)
  Adjustments to reconcile net loss to net
   cash used by operating activities:
  Depreciation and amortization                                        2,735                  2,817
  Changes in operating assets and liabilities:
  (Increase) decrease in accounts and notes receivable              (203,244)                51,022
  (Increase) decrease in accounts receivable - related parties         7,744                (23,132)
  (Increase) decrease in other assets                               (720,680)                  (735)
  Increase (decrease) in accounts payable                               (550)                (7,962)
  Incresae (decrease) in other liabilities                           (20,924)                40,287
                                                                   ---------              ---------
    Net Cash Used by Operating Activities                          ($829,126)             ($968,088)
                                                                   =========              =========
CASH FLOWS FROM INVESTING ACTIVITIES

  Construction in progress                                               -0-                374,222
  Purchase of property and equipment                                 364,170                (20,884)
                                                                   ---------              ---------

    Net Cash Used by Investing Activities                           $364,170               $353,338
                                                                   =========              =========

CASH FLOWS FROM FINANCING ACTIVITIES

  Due to (from) shareholders                                          (5,860)               (10,158)
  Repayment of notes payable                                        (330,738)              (123,346)
  Repayment of long-term borrowings                                 (134,205)               (12,280)
  Stock issued for cash                                              999,969                753,389
                                                                   ---------              ---------
    Net Cash Provided by Financing Activities                       $529,166               $607,605
                                                                   =========              =========
</TABLE>

      The accompanying notes are an integral part of these consolidated
                             financial statements.

                                     Page 9
<PAGE>

                 PEACOCK FINANCIAL CORPORATION AND SUBSIDIARY
                 (Formerly Connectivity and Technology, Inc.)
               Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
                                                          For the 9 Months Ended
                                                     September 30,        September 30,
                                                     ------------         ------------
                                                         1999                 1998
                                                       -------               ------
<S>                                                  <C>                   <C>
NET INCREASE IN CASH                                   $64,210              ($7,145)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        (4,509)              14,777
                                                       -------               ------

CASH AND CASH EQUIVALENTS AT END OF PERIOD             $59,701               $7,632
                                                       -------               ------

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES

  Common stock issued for debentures                   $51,565                  -0-
  Common stock issued for debt                          $8,452                  -0-
  Common stock issued for services                    $300,000             $470,275


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

  Interest paid, net of amount capitalized             $50,424              $25,999
  Income taxes paid                                        -0-                  -0-

</TABLE>

      The accompanying notes are an integral part of these consolidated
                             financial statements.

                                    Page 10
<PAGE>

                         PEACOCK FINANCIAL CORPORATION
                       NOTES TO THE FINANCIAL STATEMENTS
                              SEPTEMBER 30, 1999


1.   The interim financial statements area prepared pursuant to the requirements
     for reporting on Form 10-QSB.  The December 31, 1998 balance sheet data was
     derived  from  audited  financial  statements  but  does  not  include  all
     disclosures  required by  generally  accepted  accounting  principles.  The
     interim  financial  statements and notes thereto  included in the Company's
     report on Form 10-KSB for the year ended  December 31, 1998. In the opinion
     of management,  the interim financial statements reflect all adjustments of
     a normal recurring nature necessary for a fair statement of the results for
     the interim periods presented.

                                    Page 11
<PAGE>

ITEM 2.       MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS


This Form 10-QSB contains forward looking statements within the meaning of
section 27A of the Securities Act of 1993 and section 21E of the Securities
Exchange Act of 1934. The Company's actual results could differ materially from
those set forth in the forward looking statements.


MANAGEMENT DISCUSSION
Peacock Financial Corporation (Company) is a diversified company that makes
direct investments in and provides management services to emerging businesses.
The Company intends to continue expanding through the internal development of
its present operations and as well as the acquisition of additional business
ventures. Since filing with the SEC to become a Business Development Corporation
in September of 1998, the Company has formed two new affiliate operating
companies with substantial ownership positions in each, and has made significant
investments in three emerging growth companies.

CURRENT OPERATING COMPANIES CONSIST OF THE FOLLOWING:
----------------------------------------------------
Peacock Real Estate Development Corporation (PDC): is a wholly owned subsidiary
with a 23 year operating history of successful real estate development in
California and Oregon. Through a broad corporate background and network of
affiliates, PDC has the capability of designing, building and managing any real
estate project in the continental United States. Current holdings are focused in
the San Jacinto Valley, CA, where the Company controls approximately 450
residential lots, 30 acres of commercially zoned property, and 11 acres zoned
for senior apartments. Most of these assets are in the master planned community
of Rancho San Jacinto, developed by PDC.

Vir-Tek Company (VTC): was formed as a partnership between Mr. Virgil Woolfolk
and Peacock Financial Corporation. Mr. Woolfolk controls 51% of VTC, and the
Company 49%. This partnership was formed to take advantage of recent federal
legislation allocating 3% of all federally funded projects to Disabled Veteran
Business Enterprises (DVBE) under which VTC qualifies. VTC is currently
obtaining the necessary accreditation while pursuing strategic alliances with a
variety of major companies that contract with governmental agencies. These
companies are highly experienced in engineering, environmental assessments and
construction, and have extensive track records in governmental contracting.

DOTCOM Ventures, LLC (DCV): was formed for the purpose of pursuing revenue and
equity opportunities in the Internet and E-commerce industry, while assisting
the Company in the identification and development of Internet related
investments. The Company owns 51% of DCV. DCV has a talented team experienced in
the successful launch of multiple Internet and technology start-up companies.
DCV currently has three contracts with companies to design new websites. DCV
also will assist the Company with website upgrades and marketing materials.

                                    Page 12


<PAGE>

CURRENT EMERGING GROWTH INVESTMENT HOLDINGS CONSIST OF THE FOLLOWING:
---------------------------------------------------------------------
Solutions Media, Inc (SMI): and its Spinrecords.Com, is a development stage
company that licenses, develops, and markets musical recordings for direct file
transfer, or "downloading", to consumers over the Internet through the new
innovative technology commonly referred to as MP3. SMI has stated its intention
to file with the SEC for an Initial Public Offering and has retained the firm of
Brobek, Phleger & Harrison as SEC counsel. The Company currently owns 800,000
shares of common stock in SMI and intends on distributing 300,000 shares to its
stockholders prior to the Public Offering.

San Diego Soccer Development Corporation (SDSDC): was founded to develop, own
and run a professional soccer team in San Diego, CA, with the ultimate goal of
becoming a major league soccer franchise. SDSDC operates as the San Diego
"FLASH" soccer club and competes in the A-League in America's Division II
professional league. SDSDC recently filed a Form 10-SB with the SEC. SDSDC stock
is expected to be trading on the OTC-BB exchange before the end of 1999. Recent
press releases include an application with the world Indoor Soccer League to
play the 2000 indoor season under the "FLASH" logo. SDSDC has acquired a 75%
ownership position in the Riverside Soccer Development Corporation, a Division
III soccer club, and will serve as a farm team for the "FLASH". The Company
currently owns 500,000 common shares of SDSDC. The Company's CEO is a member of
the SDSDC Board of Directors.

San Francisco Soccer Development Corporation (SFSDC): was founded for the same
purpose as SDSDC in San Francisco. SFSDC operates as the San Francisco "SEALS"
and competes in the A-League. The Company currently owns 200,000 shares of SFDSC
common stock, with an option to purchase an additional 200,000 shares at fifty
cents ($0.50) per share. The Company expects SFSDC to file a Form 10SB with the
SEC in the year 2000.

IPO/Emerging Growth, LLC: is an investment vehicle formed and managed by Mr.
Michael Brette of Capital Asset Management. Mr. Brette is also a Director of the
Company. IPO/Emerging Growth, LLC was formed to raise capital to acquire
positions in emerging growth companies and to take them public through the
Company in what is known as a "spin-off" process. The Company holds an
investment position in IPO/Emerging Growth, LLC, currently valued at
$100,000.00.

ANALYSIS OF FINANCIAL CONDITION
Management believes that the key to a successful Business Development
Corporation is the ability to produce ongoing revenues and profits from
operating subsidiaries which will allow for an orderly due diligence process
when investing in start-up and emerging growth companies.

The Company has formed three operating subsidiaries which are strategically
positioned to produce both revenues and profits in the near future. These
subsidiaries contain key personnel and have niche opportunities which have
matured to the point of producing cash flow and bottom line profits to the
Company.

The Company's investments are about to mature with Solutions Media, Inc.
expected to file its IPO soon and San Diego Soccer Development Corporation
expected to be trading its stock on the OTC-BB exchange before year end.

                                    Page 13

<PAGE>

It is management's belief that these two investments are substantially
undervalued and that the Solutions Media, Inc. investment could produce a
"windfall" profit to the company.

Results of Operations - Three months ended  September 30, 1999,  compared to the
three months ended September 30, 1998.

Revenues.  Revenues for the three months ended September 30, 1999,  decreased by
$128,759 or 89% to $16,682 from  $145,441  for the three months ended  September
30, 1998. This decrease resulted from reduction in home building.

Expenses.  Total  expenses  for the  three  months  ended  September  30,  1999,
decreased  by $390,360 or 73% to $144,053  from  $534,413  for the three  months
ended  September  30, 1998.  This  decrease  resulted  from lower home  building
development  costs.  General and  administrative  expenses  for the three months
ended  September 30, 1999 decreased by $249,877 or 64% to $144,053 from $393,930
for the three months ended September 30, 1998, primarily due to the streamlining
of our operations resulting in lower salaries.


Results of Operations - Nine months ended  September  30, 1999,  compared to the
nine months ended September 30, 1998

Revenues.  Revenues for the nine months ended  September 30, 1999,  increased by
$151,881 or 25% to $622,876  from  $470,995 for the nine months ended  September
30,  1998.  This  increase  resulted  from fees charged for  investment  banking
services as well as an increase in administrative income.

Expenses.  Total expenses for the nine months ended September 30, 1999,
decreased by $956,918 or 67% to $469,689 from $1,426,607 for the nine months
ended September 30, 1998. This decrease resulted from lower home building
development costs. General and administrative expenses for the nine months ended
September 30, 1999, decreased by $416,234 or 48% to $466,954 from $883,188 for
the nine months ended September 30, 1998, primarily due to the streamlining of
our operations resulting in lower salaries.

Changes in Financial Condition, Liquidity and Capital Resource.

For the nine months ended  September 30, 1999, the Company funded its operations
and capital  requirements  partially  with its own capital  and  partially  with
proceeds from stock offerings. As of September 30, 1999, the Company had cash of
$59,701.


                                    Page 14

<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 thereunto duly authorized.


                                           PEACOCK FINANCIAL CORPORATION
                                           Registrant


November 12, 1999                          /s/ Steven R. Peacock
-------------------------------            ---------------------------------
Date                                       Steven R. Peacock
                                           President and Chief Executive Officer


November 12, 1999                          /s/ Lisa Martinez
-------------------------------            ---------------------------------
Date                                       Lisa Martinez
                                           Secretary


                                    Page 15