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

                                   FORM 10-KSB

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2000

                          Commission File No.: 0-25417

                              TORBAY HOLDINGS, INC.
                 (Name of small business issuer in its charter)

         DELAWARE                                      52-2143186
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                     Identification No.)

                           4 Mulford Place, Suite 2G,
                              Hempstead, NY, 11550
                    (Address of principal executive offices)

                                011 44 1481 46044
                           (Issuer's Telephone Number)
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<S>                                                                      <C>
   Securities registered under Section 12(b) of the Exchange Act:         None

   Securities registered under Section 12(g) of the Exchange Act:         Common Stock, $.0001 par value
                                                                                  (Title of Class)
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         Check whether the issuer (1) has filed all reports required to be filed
by  Section  13 or 15(d) of the  Exchange  Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),  and
(2) has been subject to such filing  requirements for the past 90 days. Yes X No
__

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

         There were no revenues for the issuer's  fiscal year ended December 31,
2000.

         State the aggregate  market value of the voting and  non-voting  common
equity held by  non-affiliates  computed by  reference to the price at which the
common equity was sold, as of a specified date within the last 60 days. On April
5, 2001: $26,478,125.

         State the number of shares  outstanding of each of the issuer's classes
of common equity, as of the latest  practicable date. Torbay Holdings,  Inc. had
6,350,000  shares of common  stock  outstanding  and 700,000  shares of Series I
preferred stock outstanding as of December 31, 2000.

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

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                                TABLE OF CONTENTS
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                                                                                                               Page
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PART I

<S>           <C>                                                                                                <C>
         ITEM 1.        DESCRIPTION OF THE BUSINESS...............................................................1
         ITEM 2.        DESCRIPTION OF PROPERTY...................................................................5
         ITEM 3.        LEGAL PROCEEDINGS.........................................................................6
         ITEM 4.        SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.......................................6

PART II

         ITEM 5.        MARKET FOR TORBAY HOLDINGS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................6
         ITEM 6.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.....6
         ITEM 7.        FINANCIAL STATEMENTS......................................................................8
         ITEM 8.        CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.........8

PART III

         ITEM 9.        DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF TORBAY HOLDINGS;
                        COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.........................................9
         ITEM 10.       EXECUTIVE COMPENSATION...................................................................10
         ITEM 11.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                        MANAGEMENT...............................................................................11
         ITEM 12.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........................................14
         ITEM 13.       EXHIBITS AND REPORTS ON FORM 8-K.........................................................14

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                                     PART I

ITEM 1.  DESCRIPTION OF THE BUSINESS

GENERAL

         Torbay  Holdings is a  development  stage  company  created to act as a
holding  company  for  late-stage   developmental   or  early-stage   commercial
companies.  Torbay  Holdings  was  incorporated  on March 24, 1999 as a Delaware
corporation named Acropolis Acquisition  Corporation,  which changed its name to
Torbay  Holdings,  Inc. on July 14,  1999.  Torbay  Holdings  acquired  Designer
Appliances,  Limited,  a United  Kingdom  corporation  which has  developed  and
anticipates  marketing  household  appliances  designed  to be  attractive  to a
premium, upscale market, as a wholly-owned subsidiary on July 19, 1999.

         On October  27,  1999,  Torbay  Acquisition  Corporation,  a  reporting
company  under the  Securities  Exchange  Act of 1934,  as amended,  merged into
Torbay Holdings. Torbay Holdings became a successor issuer to Torbay Acquisition
Corporation  pursuant to Rule 12g-3(a) of the General Rules and  Regulations  of
the Securities and Exchange Commission.

         All  references  to  "dollars,"  "U.S.  dollars,"  "$," or "US$" are to
United  States  dollars,  and all  references  to "pounds" or  "(pound)"  are to
British pounds  sterling.  As of December 31, 2000, the Interbank  exchange rate
was (pound)0.6699 to $1.00, or $1.4928 to (pound)1.

BUSINESS AND ACQUISITION STRATEGY

         Torbay Holdings plans to acquire diversified, wholly-owned subsidiaries
which are  late-stage  development  or early-stage  commercial  companies,  with
opportunities in niche markets. Additionally, Torbay Holdings intends to own and
manage assets from a variety of locations each having  protection either by deed
or  intellectual   property   rights.   Torbay  Holdings   intends  to  purchase
subsidiaries on an equity  participation  basis and issue convertible  preferred
stock, which will be convertible to common stock upon the attainment of a profit
objective of a specified  subsidiary  or product line within a given time frame,
in exchange for the  outstanding  voting stock of the  subsidiary.  In this way,
value is not delivered to the incoming  businesses  until such businesses  reach
specified  profitability targets.  Torbay Holdings expects such profitability to
be  reflected  in the share  price of its common  stock,  thereby  limiting  the
dilution caused by its acquisitions.

         Each subsidiary  acquired will have the potential and opportunity to be
divested as a stand alone entity once the business has  established  itself as a
profitable entity, or if a suitable offer is received. Torbay Holdings will fund
each subsidiary with a loan secured by the intellectual property rights or other
assets of the subsidiary. The loan would be repaid at a rate 50% per annum, upon
completion of an initial public offering or sale of the subsidiary. In addition,
Torbay Holdings would hold 20% equity in the newly formed public entity.

         Members of the board of  directors  of Torbay  Holdings  will be active
participants  in  the  management  and  operation  of its  subsidiaries.  Torbay
Holdings expects that significant  direct involvement and the time allocation of
its  directors  will  be  required  in  the  period  immediately  following  the
acquisition  of a subsidiary.  Consequently,  Torbay  Holdings  estimates that a
maximum of three or four start up  subsidiaries  will be  manageable  during the
first  twelve  months  following  their  acquisition.  However,  as a subsidiary
becomes  profitable this time demand on Torbay Holdings directors will diminish,
allowing them the  opportunity  to assume a similar role in newly other acquired
subsidiaries.

         Torbay  Holdings  currently owns one  subsidiary,  Designer  Appliances
Ltd., and is actively seeking additional acquisitions.  In fact, Torbay Holdings
has agreements in principle to acquire the intellectual property right assets of
Health Smart, a business comprising valuable intellectual property rights in the
area of treatment and prevention of repetitive strain injury, as a subsidiary of
Designer  Appliances.  Health Smart has developed a personal computer pointer or
computer mouse product that reportedly  eliminates the risk of repetitive strain
injury from the use of the computer mouse.  Negotiations for a second subsidiary
company,  Aquarius Ltd., a mobile tire and toxic waste processing business, have
been  concluded  without  an  agreement  being  reached.  Torbay  Holdings  will
therefore focus on making Designer Appliances,  profitable. Likewise, no further
acquisitions will be completed until Torbay Holdings raises  additional  capital
sufficient to finance the operations of newly acquired subsidiaries.

<PAGE>

DESIGNER APPLIANCES, LTD.

         Designer  Appliances,  Ltd. is  organized  under the laws of the United
Kingdom  as a  company  that  is  seeking  to  exploit  innovations  in  design,
technology, and product concepts in the designer sector of the appliance market.
Designer  Appliances owns the designs to attractive vacuum cleaners that convert
into  glass-top  tables  when not in use as  vacuums.  In addition to the vacuum
cleaners,  Designer Appliances has plans for a voice-activated desk top fan with
a heating element and a transparent  toaster which also serves as a radio.  Such
products are targeted at executive  apartments in London,  Paris, Milan, and New
York where design aesthetics and living space are at a premium.

OPERATIONS

         Prior to the  acquisition  of the design by  Designer  Appliances,  300
units of the Telstar I vacuum  cleaner were produced for testing and  marketing.
See "Products." Designer Appliances initially intends to subcontract manufacture
of the product  components to the companies who  manufactured the components for
these models and who are equipped and experienced to do so.  Responsibility  for
the final  product  assembly  will be managed by Designer  Appliances  to ensure
product quality.

PRODUCTS

         Telstar I  Designer  Vacuum  Cleaner.  The  Telstar I  Designer  Vacuum
Cleaner is a rocket shaped cylinder vacuum cleaner made of polished aluminum and
incorporating  the latest in filtration  technology.  It is bagless and features
the High Efficiency  Particle  Arrester (HEPA) medical grade filter that removes
allergens in dirt associated with asthma. It has a large (50ft.) cleaning radius
that typically allows cleaning an entire floor without stopping.  Early versions
of the Telstar  have  obtained  British and  European  approvals  for German TUV
standards, which relate to electrical safety and manufacturing practices. United
States approvals are  anticipated.  This product is expected to sell for between
(pound)150 and (pound)165 to stores and (pound)300 retail. Initial manufacturing
costs are expected to be between (pound)80 and (pound)100 per unit.

         Telstar II Designer Vacuum Cleaner/Table.  The Telstar I vacuum cleaner
has a glass tabletop accessory.  When not in use, the vacuum cleaner serves as a
base for the glass  tabletop  and the entire unit appears as an  attractive  and
functional  coffee  table.  This  product is designed for an  environment  where
storage space is at a premium. Torbay Holdings may choose to market this product
under the name "Sputnik" or as the "Telstar Space  Station".  The tabletop model
has been  developed as a working  prototype  and  additional  expenditure,  when
available,  is  planned on  testing,  tooling  and  packaging.  This  product is
expected to sell for  (pound)100 to  (pound)125  above the cost of the Telstar I
vacuum cleaner.

         Mistral  I  Desktop  Fan.  This is a  desktop  fan,  cased in  polished
aluminum,  which utilizes a design similar to the Telstar I Vacuum Cleaner.  The
Mistral  I fan is  designed  and ready for  manufacturing  development.  Further
innovations  being  considered  for the Mistral I include voice  activations  of
stop, start, speed, swivel movement,  hot, and cold. This product is expected to
sell for (pound)70 to stores and to retail for (pound)130.

         KAT  Computer  Mouse.  Designer  Appliances  has added the KAT Computer
Mouse  to its  product  line  for  three  reasons.  First,  Designer  Appliances
considers computers to be domestic appliances.  Second, the computer mouse is an
integral  component  of  the  home  computer.  Third,  the  design  aspects  and
functionality  of the KAT Computer  Mouse fit exactly with  Designer  Appliances
domestic  appliance  product line. The design of the KAT Computer Mouse is to be
purchased  under an  arrangement  whereby its  designers  receive  approximately
$200,000  cash and 100,000  shares of  preferred  stock of Designer  Appliances,
convertible  into 1,000,000  shares of common stock of Designer  Appliances when
net profits from the product reach $1,000,000.  The KAT Computer Mouse is unique
in its biomechanical design in that it reduces tension on the nerves in the arm,
which pass through the carpel tunnel region of the wrist.

         Wurlitzer Toaster.  The Wurlitzer Toaster is in the design stage and is
anticipated to follow Designer  Appliances'  `retro' theme, while  incorporating
modern technology.  The product is expected to have two chrome ends in the shape
of fins  with  central  glass  panels to allow for the  toasting  process  to be
observed. Designer Appliances is also considering incorporating an FM radio with
this product for practicality.

         Thalia Kettle.  The Thalia Kettle will  incorporate a `retro' design in
order to be marketed with the Wurlitzer  Toaster.  The product is anticipated to
have instant heat delivery,  rapid boil and other potentially  patentable design
aspects.
                                       2
<PAGE>

         Heated  Hearth  Screens.  Designer  Appliances  intends to develop  and
market  designer,  heated hearth  screens using chrome and glass in  conjunction
with a flat heating element to offer background convection heat when the fire is
not being  used.  The  concept of heated  hearth  screen may also be expanded to
encompass a space heater product in the future.

         Clockwork Razor.  Designer Appliances has reached an agreement with the
inventor of Clockwork Razors. This product has the ability to offer two or three
shaves from a short winding of the mechanism,  thereby  eliminating the need for
batteries,  cords,  or electric  charges.  The Clockwork Razor will be made from
stainless  steel.  The mechanism used to power this product is  proprietary  and
will undergo the patent protection process.

MARKETING

         Designer  Appliances  intends image promote and accelerate  early sales
through public  relations and  advertising in life style  magazines in different
media and geographic  locations.  It is investigating  advertising  through Gold
Card  catalogues  and  branded  merchandising  goods,  and has  had  discussions
regarding marketing in Mercedes lifestyle magazine.

         Designer  Appliances  intends to operate directly in the United Kingdom
with its own sales team and through  selected mail order means.  Established and
known distribution networks have been identified to expand this activity through
Europe. In North America, an appliance  distribution company has been identified
that  distributes  appliances  and  designer  goods,  such  as  Fendi  products.
Principles  of an  agreement  with the  North  American  distributor  have  been
reached,  but no  relationship  has been  formalized.  Management  believes that
contracts  may  be  finalized  when  production  and  payment  schedules  can be
predicted with reasonable  certainty.  These  distributors  will likely purchase
products and bear all costs of sales and distribution in their territories.

         Designer  Appliances  will  have  its  own Web  site  for  purposes  of
promoting   its  products.   At  present,   Designer   Appliances   has  secured
`designerappliances'  and  `designer-appliances'  on both .co.uk and .com domain
names.

         The sales  objectives  are in what is believed to be a niche  sector of
the  appliance  market which  addresses  the most  expensive end of that market.
Sales  activity will be focused upon designer  retail outlets such as The Conran
Shops, Harrods and Selfridges.  No contracts have been entered into to date, and
there is no assurance  that any  contracts  will be entered  into, or if entered
into, that any such contracts can be maintained.


                                       3
<PAGE>


MAJOR COMPETITORS

         Designer  Appliances  believes that there is no single major competitor
in the United  Kingdom  and  Europe  competing  in the  upscale  small  domestic
appliance  sector.  Designer  Appliances  is  not  aware  of  a  competitor  who
manufactures  and sells a vacuum  cleaner  protected  by a similar  design.  See
"Trademarks" herein.  Designer Appliances is not aware of a competitor who sells
a vacuum  cleaner that  converts to a piece of furniture  when it is not in use.
The market for its other anticipated  products,  as well as market  competitors,
are diverse.

PATENTS AND TRADEMARKS

         The  British  Patent  Office  has  granted  the  following  Design  and
Trademark registrations made by Designer Appliances:
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<S>                                                   <C>
Telstar I vacuum cleaner design protection            British design registration no. 2 066 378
The name "Telstar"                                    British trademark registration no. 2 209 241
The name "Sputnik"                                    British trademark registration no. 2 209 243
The tabletop design for the Telstar II, Sputnik or
Telestar Space Station                                British design registration no. 2 082 459
The combined vacuum and table product                 British design registration no. 2 085 669
The "Mistral" table top fan design                    British design registration no. 2 066 377
The name "Mistral"                                    British trademark registration no. 2 209 473
The name " Wurlitzer"                                 British trademark no. 2 209 244
</TABLE>

EMPLOYEES

         Torbay  Holdings has 2 full-time  employees and 3 part-time  employees,
including its executive officers.

ITEM 2.  DESCRIPTION OF PROPERTY

OFFICES/PROPERTY

         Torbay Holdings has withdrawn from its obligations  with regards to the
lease of office space in the parish of Castel,  Guernsey, in the Channel Islands
of Great Britain.  Torbay  Holdings had a one-year lease which expired on August
30, 2000, with a rent of (pound)5,200 per annum.

         The Company now works out of an office space made  available at no cost
by Mr. A. G. Lane.  The address is 4 Mulford  Place,  Suite 2G,  Hempstead,  NY,
11550 and is to be the  registered  address of Torbay  Holdings Inc.  until such
time as permanent office facilities in the New York area can be acquired.

         Currently, Designer Appliances has no facilities, but realtor databases
disclose the general  availability  in the South  Manchester  area of the United
Kingdom, for office, warehouse / final assembly facilities comprising some 2,500
- 5,000 square feet. It is  anticipated  that Torbay  Holdings will lease such a
facility when financing is available to do so.

                                       4

<PAGE>


ITEM 3.           LEGAL PROCEEDINGS

         As of the date of this Form 10-KSB,  Torbay  Holdings is not a party to
any  litigation,  and  management  has no knowledge of any threatened or pending
litigation against Torbay Holdings.

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

         None.


                                     PART II

ITEM 5.  MARKET FOR TORBAY  HOLDINGS'  COMMON  EQUITY  AND  RELATED  STOCKHOLDER
         MATTERS

         Torbay  Holdings' common stock was authourized to trade on December 23,
2000  on the  over-the-counter  market  with  quotations  available  on the  OTC
Electronic  Bulletin  Board under the symbol  "TRBY." No trades  occurred  until
January 3, 2001.  There was no established  trading market for Torbay  Holdings'
common stock during the year ended  December 31, 2000.  At April 5, 2001,  there
were 6,350,000 shares of Torbay Holdings' common stock  outstanding,  which were
held of record by  approximately  320  stockholders,  not  including  persons or
entities  who hold  the  stock in  nominee  or  "street"  name  through  various
brokerage firms.

         Torbay  Holdings has not paid a dividend since its  incorporation.  The
Board of Directors may consider the payment of cash  dividends,  dependent  upon
the results of  operations  and  financial  condition  of Torbay  Holdings,  tax
considerations,   industry  standards,   economic   considerations,   regulatory
restrictions,  general business factors and other  conditions.  Torbay Holdings'
ability to pay dividends may be dependent upon the dividend payments it receives
from Designer Appliances.

ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

PLAN OF OPERATION

OVERVIEW

         Torbay  Holdings is a  development  stage  company  created to act as a
holding  company  for  late-stage  developmental,   or  early-stage  commercial,
companies with  opportunities in niche markets.  Torbay Holdings  currently owns
one subsidiary,  Designer  Appliances Ltd., and is actively  seeking  additional
acquisitions.  Torbay  Holdings has  agreements  in principle to acquire  Health
Smart, a business comprising valuable  intellectual  property rights in the area
of treatment  and  prevention of repetitive  strain  injury,  as a subsidiary of
Designer Appliances.  A second subsidiary company under consideration,  although
full due diligence has yet to be completed,  is Aquarius Ltd., a mobile tire and
toxic waste processing business. However, no such acquisitions will be completed
until  Torbay  Holdings  raises  additional  capital  sufficient  to finance the
operations of newly acquired subsidiaries.

         Through Designer Appliances,  Torbay Holdings has developed and intends
to market household  appliances designed to be attractive to a premium,  upscale
market.  Management  believes  that  they  have  identified  an under  exploited
opportunity in the premium-priced  market for household and domestic appliances,
featuring  attractively  designed  exteriors.  There is no assurance that Torbay
Holdings will be able to successfully manufacture or market these items.

RESULTS OF  OPERATIONS  FOR THE YEARS ENDED  DECEMBER  31, 2000 AND DECEMBER 31,
1999

         Torbay  Holdings  incurred a net loss of $422,400,  or $0.08 per share,
for the year ended  December 31, 2000 compared to $623,926,  or $0.13 per share,
for the period  from March 24,  1999  (inception)  to  December  31,  1999.  The
decrease in net loss reflects the decrease in operating  expenses over the prior
period.  Torbay  Holdings  did not  generate  any  revenues  for the year  ended
December 31, 2000 or for the period from March 24, 1999  (inception) to December
31, 1999.

                                       5
<PAGE>
         Torbay  Holdings'  total  operating   expenses  decreased  $204,787  to
$420,265 for the year ended  December 31, 2000 from $625,052 for the period from
March 24, 1999  (inception)  to December 31, 1999.  This decrease in expenses is
attributed  primarily to a $146,052  decrease in consulting  fees and a one-time
$247,325  expense  incurred for the impairment of intangible  assets acquired by
Designer  Appliances in June of 1999.  The decrease in consulting  fees reflects
the decreased use of consultants after the formation of Designer Appliances, its
merger into Torbay Holdings and the merger and acquisition by Torbay Holdings of
an inactive  public  company.  The loss from  impairment  of  intangible  assets
reflects Torbay Holdings' decision at December 31, 1999, in accordance with SFAS
No.  121, to write down to their net  realizable  value of zero  registered  and
unregistered  design rights in certain products acquired by Designer  Appliances
for $161,650 from an unaffiliated  third party in June of 1999 and  intellectual
property acquired by Designer  Appliances for $113,155 from Mr. Large in June of
1999. The decreases in operating  expenses were  partially  offset by a $140,575
increase  in  director's  fees due to payment  to Mr Large for the  intellectual
property and a $42,912 increase in selling,  general and administrative expenses
due  to Mr  Large  relocating  the  operational  center  for  the  company  from
Manchester,  UK, to New York and a $25,215 increase in professional  fees due to
the increased costs of operating as a public company.

LIQUIDITY AND CAPITAL RESOURCES

         Torbay  Holdings,  including its subsidiary  Designer  Appliances,  has
incurred  start-up  costs,  including  administrative  costs  and  research  and
development costs. To date, Torbay Holdings has received funds from sales of its
securities  and from loans.  It has primarily used the proceeds from the sale of
the  securities  of Designer  Appliances  (prior to becoming a  subsidiary)  for
payment  of  operating  costs to date.  Since  inception,  Torbay  Holdings  has
received an aggregate of $743,848 from the sale of its  securities  and $150,000
from loan proceeds. Designer Appliances issued a promissory note in an aggregate
amount of $161,650 for the cost of purchasing the  intellectual  property rights
to its  products,  which  has  been  repaid  in full  by  Torbay  Holdings  from
subscription proceeds.

         Torbay  Holdings  has  had  insignificant  sales  and  revenue.   Since
inception,  Torbay Holdings and its subsidiary  Designer Appliances have focused
on  organizational  activities and research and development of Torbay  Holdings'
products and marketing  strategies.  Management  estimates  that it will require
between  $5.5million  and $9.0  million for the calendar  year 2001.  The higher
figure  assumes  payment  on  delivery  and 90 days  debtors,  the lower  figure
assuming zero debtor days which reflects, though in the extreme, the expectation
that most goods will be supplied on letters of credit.  Designer Appliances will
require  between $6.5 million and $18.2  million on the same basis over the next
two years to support  manufacturing  and  marketing  operations  at the  planned
levels.  These  figures  include  an  allocation  of $1.11  million  in  capital
expenditure,  primarily  for tooling costs which in early  discussions  with one
potential  manufacturer  suggest  may  possibly  be  amortized  into the cost of
product supply.  Intellectual  property rights and development costs are planned
at $1.8  million  and sales and  marketing  $6.2  million for this  period.  The
acquisition of additional subsidiaries would also require additional capital.

         Torbay  Holdings'  ability to develop its  operations is dependent upon
its receiving additional capital financing. Torbay Holdings may raise capital by
the sale of its equity  securities,  through an offering of debt securities,  or
from borrowing from a financial institution.  During April 2000, Torbay Holdings
entered into a share purchase agreement with Douglaston  Investments  Limited, a
finance and investment company.  The agreement  stipulates that an interest free
open  line of  credit  for up to  $10,000,000  will be  established  for  Torbay
Holdings  in  exchange  for an option to  purchase  35% of its then  issued  and
outstanding stock. Funding was conditioned upon the company's common stock being
acceptable  to trade in the public  market.  The option will be granted upon the
date of the receipt of the funds. The option price is set at $2.85 per share and
expires 90 days following the repayment of the credit provided.

         On April 9, 2001,  Torbay  Holdings  received  notice  that the funding
under the agreement  would be provided by Tillotson  Pte Limited,  an investment
partner of Douglaston  Investments,  and that an initial draw of $2.0 million on
the line of credit  would be  provided  no later than April,  20,  2001.  Torbay
Holdings  believes  that the line of credit  will  allow it to meet its  working
capital needs for the next twelve months.

         The financial  statements  appearing elsewhere in this report have been
prepared assuming that Torbay Holdings will continue as a going concern.  Torbay
Holdings'  ability to continue its  operations is dependent  upon its receipt of
revenues  through sales of its products or through raising capital through debt,
equity  financing,  or borrowing.  Torbay Holdings believes that the $10,000,000
open line of credit will be sufficient to pay its currently anticipated expenses
including  payment  of  salaries,  rent and  payments  to  professionals  and to
continue its developmental  and marketing  operations for the next 12 months. If
additional funds are required,  Torbay Holdings will endeavor to sell additional
securities.  If  sufficient  additional  funding  is not  acquired,  alternative
sources developed, or revenues from sales not
                                       6
<PAGE>

received,  Torbay Holdings could be required to curtail its operations and there
would be substantial doubt about our ability to continue as a going concern.

ITEM 7. FINANCIAL STATEMENTS

         The consolidated  audited financial statements for the period March 22,
1999  (inception) to December 31, 2000 are included in pages F-1 through F-15 of
this  Annual  Report on Form  10-KSB.  This  includes  the  following  financial
statements:

         o Independent Auditors' Report;

         o Consolidated Balance Sheet as of December 31, 2000;

         o Consolidated  Statements of Operations and Other Comprehensive Income
           (Loss) for the Year Ended  December 31, 2000 and for the Periods from
           March 24, 1999  (Inception)  to December  31, 1999 and March 24, 1999
           (Inception) to December 31, 2000;

         o Consolidated   Statements   of   Changes  in   Shareholders'   Equity
           (Deficiency)  for the  Period  form  March 24,  1999  (Inception)  to
           December 31, 2000;

         o Consolidated Statements of Cash Flows for the Year Ended December 31,
           2000 and for the Periods from March 24, 1999  (Inception) to December
           31, 1999 and March 24, 1999 (Inception) to December 31, 2000; and

         o Notes to Consolidated Financial Statements as of December 31, 2000.

ITEM 8. CHANGES AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
        DISCLOSURE

         None.


                                    PART III

ITEM 9. DIRECTORS,  EXECUTIVE OFFICERS,  PROMOTERS AND CONTROL PERSONS OF TORBAY
        HOLDINGS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

DIRECTORS AND EXECUTIVE OFFICERS

         The  following  table sets forth  certain  information  with respect to
Torbay Holdings' directors and executive officers as of December 31, 2001:

<TABLE>
<CAPTION>

Name                                Position                                                     Term Expires
<S>                                 <C>                                                              <C>
Francis Guy Lewis Askham            Chairman and Director                                            2001
Colin Peter Gervaise-Brazier        Director                                                         2001
Alexander Gordon Lane               Secretary and Director                                           2001
William Thomas Large                Chief Executive Officer, President and Director                  2001
</TABLE>

         Torbay Holdings currently has four directors. All directors hold office
until the next annual  meeting of  stockholders  and until their  successors are
elected.  Officers are elected to serve,  subject to the discretion of the Board
of Directors,  until their  successors are  appointed.  Directors do not receive
cash  compensation  for their services to Torbay Holdings as directors,  but are
reimbursed for expenses actually incurred in connection with attending  meetings
of the Board of Directors.

         Francis  Guy  Lewis  Askham,  69,  Chairman  and a  director  of Torbay
Holdings,  has served in such  capacities  since October  1999.  Mr. Askham is a
Chartered  Accountant  and  consultant,  and continues in such  capacities.  Mr.
Askham graduated from Hustpierpoint College, Sussex, England, and is a Fellow of
the  Fellow  Institute  of  Chartered  Accountants  in England  and  Wales,  the
Institute of Directors and the Royal Society of Arts Manufacturing and Commerce.
Mr. Askham also has served as a director and chairman of Wilshaw plc since 1991,
a director of GS Telecoms Ltd since August 1996, a director and deputy  chairman
of  Southampton   Leisure  Holdings  plc  since  January  1997,  a  director  or
International  Energy  Group plc since  1983,  and was  formerly a  director  of
Baldwin plc, M&W plc, Rhino Group plc, and Cityvision  plc, all located in Great
Britain.

                                       7
<PAGE>

         Colin Peter  Gervaise-Brazier,  57,  Director of Torbay  Holdings,  has
served in such capacity since  September  1999. Mr.  Gervaise-Brazier  served as
President and Chief Executive  Officer of Torbay Holdings from September 1999 to
September 2000, and has been a retailing  executive in Great Britain for over 25
years. From October 1995 until September 1999, Mr.  Gervaise-Brazier was General
Manager of Vale Garage, Ltd., the G.M. Vauxhall Motors franchise for the Isle of
Guernsey, and also attended Vauxhall College, Luton, England. Since August 1999,
Mr.  Gervaise-Brazier has also been Chief Executive Officer and a director of GS
Telecom Ltd.

         Alexander Gordon Lane, 59, Secretary and a Director of Torbay Holdings,
has served in such capacities  since October 1999. Mr. Lane has been a Financial
Consultant  since 1998 and continues in such capacity.  Mr. Lane has been in the
financial  services  business for over 30 years. From 1976 to 1983 her served as
Treasurer of Grindlays Bank PLCC, New York, and in 1983 he was a founding member
of International  Money Brokers which was acquired by Traditional North America.
From 1993 to 1998, he was a principal of Intercontinental Exchange Partners, New
York, as a capital  markets broker in the interest and foreign  exchange  areas.
Mr. Lane has an aeronautics degree from Wandsworth Technical College in London.

         William  Thomas  Large,  45,  has been  President  and Chief  Executive
Officer  since  September  2000 and a  Director  of  Torbay  Holdings  and Chief
Executive  Officer of Designer  Appliances since October 1998. From October 1996
until October 1998, Mr. Large was Chairman,  Chief Executive Officer, a Director
and a major  stockholder  of DeltaTheta  Ltd., a heating and cooling  technology
company in Cheshire, England. From February 1997 until September 1999, Mr. Large
also  served as a director of  DeltaMonitor  Ltd, a medical  devices  company in
Cheshire,  England. From December 1996 until June 1997, Mr. Large also served as
a director of  SoundAlert  Ltd, a company that  manufactured  emergency  vehicle
sirens.  From  September  1994  until  July 1996,  Mr.  Large was a Director  of
AromaScan  plc, a publicly  listed  instrumentation  and  technology  company in
Cheshire,  England. Mr. Large graduated from Manchester Metropolitan University,
in Manchester, England, and is the author or co-author of eight articles and two
books relating to biochemical analysis.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section  16(a) of the  Exchange  Act  requires  that  Torbay  Holdings'
directors,  executive officers,  and any person holding more than ten percent of
Torbay  Holdings common stock,  file with the SEC reports of ownership  changes,
and that such individuals furnish Torbay Holdings with copies of the reports.

         Torbay  Holdings  believes  that  none of its  executive  officers  and
directors have complied with all Section 16(a) filing requirements applicable to
them.  Torbay  Holdings is working with its executive  officers and directors to
ensure that each of them complies with his Section 16(a) filing  obligations  as
soon as possible.

ITEM 10.          EXECUTIVE COMPENSATION

SALARY COMPENSATION

         Mr. Askham currently  receives no salary from Torbay Holdings.  He will
receive a salary of $18,000 per year. He earns no other remuneration from Torbay
Holdings or its subsidiary.

         Mr.  Gervaise-Brazier's  salary is $90,000 per year.  He earns no other
remuneration from Torbay Holdings or its subsidiary.

         Mr.  Lane  currently  receives  no salary  from  Torbay  Holdings,  but
receives $2,500 per month for out of pocket expenses  associated with the use of
his offices as temporary  office space for Torbay Holdings and for the use of an
automobile.  Mr. Lane will  receive a salary of $80,000 per year upon receipt of
the funds under  Torbay  Holdings'  $10,000,000  line of credit with  Douglaston
Investments.

         Mr.  Large's  salary  is  $90,000  per  year.  He  is  eligible  for  a
performance bonus of up to 100% of his base salary.



                                       8
<PAGE>


         The following  table sets forth cash and noncash  compensation  for the
fiscal  year  ended  December  31,  2000  awarded  to or earned  by Colin  Peter
Gervaise-Brazier, Director and former President and Chief Executive Officer, and
by William Thomas Large,  President,  Chief Executive  Officer and Director.  No
other officer's total annual salary and bonus for 2000 exceeded $100,000.
<TABLE>
<CAPTION>

                                           Summary Compensation Table

                                                                        Annual Compensation

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

           Name and Principal                                                                  All Other
               Positions                    Year       Salary($)         Bonus($)           Compensation($)

<S>                                         <C>         <C>    <C>       <C>                     <C>
Colin Peter Gervaise-Brazier, Director      2000        96,990 (1)         --                     --

William Thomas Large,                       2000        96,990             -- (2)                 --
     Chief Executive Officer
</TABLE>

     ----------------------------------
(1)  Reflects amount paid to Mr.  Gervaise-Brazier  for service as President and
     Chief  Executive  Officer  of  Torbay  Holdings  from  January  1,  2000 to
     September 2000.

(2)  Mr. Large is eligible for a performance-related  bonus of up to 100% of his
     annual salary.

EMPLOYMENT AGREEMENTS

         Torbay Holdings has not entered into any employment agreements with its
executive  officers or other  employees to date.  Torbay Holdings may enter into
employment agreements with them in the future.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

PRINCIPAL SHAREHOLDERS OF TORBAY HOLDINGS

         The following  table contains  common stock  ownership  information for
persons  known to Torbay  Holdings  to  "beneficially  own" 5% or more of Torbay
Holdings  common stock as of March 31, 2001.  In general,  beneficial  ownership
includes  those shares that a person has the power to vote,  sell,  or otherwise
dispose.  Beneficial  ownership  also includes  that number of shares,  which an
individual  has the right to acquire  within 60 days (such as stock  options) of
the date this table was  prepared.  Two or more  persons may be  considered  the
beneficial owner of the same shares. We obtained the information provided in the
following  table from  filings  with the SEC and with Torbay  Holdings.  In this
Annual Report on Form 10-KSB,  "voting power" is the power to vote or direct the
voting of shares, and "investment power" includes the power to dispose or direct
the disposition of shares.

                                       9
<PAGE>
<TABLE>
<CAPTION>

                                                                     Amount and Nature of

Name and Address of Beneficial Owner                                 Beneficial Ownership           Percent(1)
------------------------------------                                 --------------------           ----------

<S>                                                                         <C>                        <C>
Armadillo Worldwide Limited                                                 500,000                    7.87%
       P.O. Box 313, Anson Court
       La Route des Camps
       St. Martins
       Guernsey, Channel Islands


Brewin Dolphin
         Guernsey Office of Brewin Dolphin Securities                       580,000                    9.13%
         PO Box 288 Les Vardes House
         La Charroterie
         St. Peter Port
         Guernsey, GYI 3RN
Colin Peter Gervaise-Brazier                                                525,000(3)                 8.27%
         President, Director
         La Belle Epoque
         Les Treacheries
         L'Islet St. Sampsons
         Guernsey, Channel Islands GY2 4SN
D.J. Limited                                                                500,000(2)                 7.87%
         10 Queen Street
         P.O. Box HM114
         Hamilton HMEX
         Bermuda
David G. Jones                                                               70,000(2)                11.81%
         10 Queen Street
         P.O. Box HM 1154
         Hamilton HMEX
         Bermuda
Direct Trustees Limited                                                     500,000                    7.87%
         P.O. Box 307
         Guernsey GY1 3SH
         United Kingdom
INC Limited                                                                 500,000                    7.87%
         c/o Trident Corporate Services (Bahamas) Limited
         1st Floor, Kings Court
         Bay Street
         P.O. Box N-3944
         Nassau, Bahamas
Kevin W. Haddon-Harris                                                      770,000(2)                12.13%
         48 Par La Ville Road
         Hamilton, Bermuda HM11
Martyn Paul Trebert                                                         508,000                    8.00%
         Pleinmont, Torteaval
         Guernsey, Channel Islands GY8 0P
         United Kingdom
Mercator Trustees Limited                                                   420,000                    6.61%
         PO Box 336, Anson Court
         Les Champs
         St. Martins
         Guernsey, GYI 3UQ
</TABLE>


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

(1)  Based upon 6,350,000 shares of common stock outstanding.


                                       10
<PAGE>


(2)  Includes common stock underlying Series 1 Convertible  Preferred Stock. The
     stated amount  assumes  conversion on a 1:1 ratio,  and a  then-outstanding
     capitalization of 6,350,000 common shares after conversion.

(3)  Includes 150,000 shares owned by Colin Peter  Gervaise-Brazier  and 375,000
     shares owned by Joanna  Dorothy  Gervaise-Brazier,  Mr.  Gervaise-Brazier's
     wife.

                                       11
<PAGE>


SECURITY OWNERSHIP OF MANAGEMENT

     The following  table shows the number of shares of Torbay  Holdings  common
stock  beneficially  owned by each  director,  named  executive  officer and all
directors  and named  executive  officers of Torbay  Holdings as a group,  as of
April 5, 2001. Except as otherwise  indicated,  each person and each group shown
in the table has sole voting and investment  power with respect to the shares of
common stock listed next to their name.

<TABLE>
<CAPTION>

                                                                        Amount and Nature     Percent of
                                                 Position with            of Beneficial       Common Stock
             Name and Address                   Torbay Holdings           Ownership (1)          Outstanding (1)
------------------------------------------      ---------------           -------------          ---------------
<S>                                        <C>                                <C>                   <C>
                                                Chairman, Director               50,000(2)                  *
Francis Guy Lewis Askham
         Spinney Corner Church Lane
         Brashfield
         Romsey Harris 505OQH
         United Kingdom
Colin Peter Gervaise-Brazier                    Director                        525,000(3)                 8.27%
         La Belle Epoque
         Les Treacheries
         L'Islet St. Sampsons
         Guernsey,
         Channel Islands GY2 4SN
         United Kingdom                         Secretary, Director              45,000                     *
Alexander Gordon Lane
         4 Milford Place
         Hempstead, New York 11550
William Thomas Large                            President, Chief                119,000(4)                 1.84%
         c/o 91 Tulip Avenue                    Executive Officer &
        Lily Building., Apt. A4                 Director
        Floral Park, NY  11001
All Directors and Executive Officers as a                                       744,000(4)                11.50%
Group (4 persons)



</TABLE>

----------------------------------
* Less than one percent of the total outstanding shares of common stock.

(1)  Based upon 6,350,000 shares outstanding as of March 31, 2000.
(2)  Shares of common stock are directly owned by the individual.
(3)  Includes 150,000 shares owned by Colin Peter  Gervaise-Brazier  and 375,000
     shares owned by Joanna  Dorothy  Gervaise-Brazier,  Mr.  Gervaise-Brazier's
     wife.
(4)  Includes the common stock underlying  Series 1 Convertible  Preferred Stock
     held in the amount of 107,000 shares  individually  by Mr. Large and 12,000
     shares given by Mr. Large to his minor children.  The amount stated assumes
     conversion on a 1:1 ratio, and an outstanding  capitalization  of 6,469,000
     common  shares  after  conversion.  Each  share  of  Series  1  Convertible
     Preferred  Stock is  convertible  into ten shares of common stock of Torbay
     Holdings  at such  time or times,  if any,  that the  subsidiary  of Torbay
     Holdings,  whose common  shares were  acquired in exchange for the Series 1
     Convertible  Preferred  Stock,  (Designer  Appliances)  has  returned a net
     profit to Torbay  Holdings of  $1,000,000 in any one year within five years
     of issuance of such Series 1  Convertible  Preferred  Shares.  In the event
     that after such five year term the Series 1  Convertible  Preferred  Shares
     have  not  been so  converted,  each  share  not  then  converted  shall be
     automatically converted into one share of common stock of Torbay Holdings.

                                       12
<PAGE>


ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATED TRANSACTIONS

         Pursuant to a Deed of Assignment  of  Intellectual  Property  Rights by
William Thomas Large to Designer  Appliances Ltd. dated June 10, 1999, Mr. Large
assigned all of his right, title and interest in and to the design rights to the
vacuum cleaner products,  toaster,  fan, kettle,  space heater and heated hearth
screen   products  now  being   developed  by  Torbay   Holdings.   Mr.  Large's
consideration  for the  assignment  consisted  of  20,000  shares  of  Series  1
Convertible  Preferred Stock of Torbay Holdings,  valued at  (pound)20,000,  and
(pound)50,000  in cash to be paid  within  six  months of the date  thereof.  At
December 31, 2000,  Designer  Appliances  owed no further  consideration  of the
(pound)50,000  to Mr. Large.  The terms of the assignment were not the result of
arms-length negotiations.

POSSIBLE CONFLICTS OF INTEREST

         Certain members of Torbay  Holdings'  management are also in management
positions with other companies and currently devote less than their full time to
the business of Torbay Holdings. There can be no assurance that devotion of less
than their full time will not have an adverse  effect on the  business of Torbay
Holdings. In addition, certain members of management may experience conflicts of
interest with respect to  allocation of business time among Torbay  Holdings and
any other companies in which they hold management positions.  See "Directors and
Executive Officers" herein.

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>

<S>     <C>
         (a)      Exhibits.  The  following  exhibits are either  filed as part of this report or are  incorporated
                  herein by reference:

                  2.1      Agreement  and  Plan  of  Merger  between  Torbay  Acquisition  Corporation  and  Torbay
                           Holdings, Inc.(1)
                  3.1      Certificate of Incorporation of Torbay Holdings, Inc., as amended(1)
                  3.2      By-Laws of Torbay Holdings, Inc.(1)
                  4.1      Certificate  of  Designation  with respect to Series 1  Convertible  Preferred  Stock of
                           Torbay Holdings, Inc.(1)
                  4.2      Form of Common Stock Certificate(2)
                  10.1     Deed of  Assignment  of  Intellectual  Property  Rights by W.  Thomas  Large to Designer
                           Appliances Ltd. dated June 10, 1999(3)
                  10.2     Agreement among Michael Beard,  3T Designs Ltd. and Designer  Appliances Ltd. dated June
                           12, 1999 with respect to registered and unregistered design rights (2)
                  10.3     Share Purchase  Agreement  between  Torbay  Holdings,  Inc. and  Douglaston  Investments
                           Limited (4)
                  21.1     Subsidiaries of Torbay Holdings, Inc.(3)

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

                  (1)      Incorporated  herein  by  reference  to  the  Current Report on Form 8-K,  filed  with the  Securities
                           and Exchange Commission on November 12, 1999.
                  (2)      Incorporated   herein  by  reference  to  the   Registration   Statement  on  Form  SB-2
                           (Registration  No.  333-93847),  filed with the  Securities  and Exchange  Commission on
                           December 30, 1999.
                  (3)      Incorporated  herein by  reference  to  Amendment  No. 1 to the  Current  Report on Form
                           8-K/A, filed with the Securities and Exchange Commission on January 10, 2000.
                  (4)      Incorporated herein by reference to the Annual Report on Form 10-KSB for the year ended December 31,
                           1999, filed with the Securities and Exchange Commission on May 12,2000, as amended.

</TABLE>

                                       13
<PAGE>


         (b)      Reports on Form 8-K.

                  A Current Report on Form 8-K was filed with the Securities and
                  Exchange  Commission on November 12, 1999. An Amended  Current
                  Report on Form 8-K/A was also filed on January 10, 2000.

         This Form 10-KSB contains certain forward looking statements consisting
of estimates with respect to the financial condition,  results of operations and
business of Torbay  Holdings,  Inc.  that are subject to various  factors  which
could cause actual  results to differ  materially  from these  estimates.  These
factors  include:  changes in general,  economic and market  conditions,  or the
development of an adverse interest rate  environment that adversely  affects the
interest  rate  spread  or  other  income   anticipated  from  Torbay  Holdings'
operations and investments.

                                       14
<PAGE>


SIGNATURES

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

TORBAY HOLDINGS, INC.

By:   /s/ William Thomas Large
     ------------------------------------
      President and Chief Executive Officer

         In accordance  with 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>
<CAPTION>

            Name                                             Title                               Date
            ----                                             -----                               ----

<S>                                              <C>                                            <C>
/s/ Francis Guy Lewis Askham                     Chairman of the Board and a Director              April 13, 2001
------------------------------------
Francis Guy Lewis Askham


/s/ Colin Peter Gervaise-Brazier                 Director                                          April 13, 2001
------------------------------------
Colin Peter Gervaise-Brazier

/s/ Alexander Gordon Lane                        Secretary and a Director                          April 13, 2001
------------------------------------
Alexander Gordon Lane

/s/ William Thomas Large                         President, Chief Executive Officer and a          April 13, 2001
---------------------------                      Director (principal executive officer)
William Thomas Large
</TABLE>


<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                        CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000






<PAGE>









                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)



                                    CONTENTS


PAGE                 1        INDEPENDENT AUDITORS' REPORT

PAGE                 2        CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2000

PAGE                 3        CONSOLIDATED  STATEMENTS OF OPERATIONS  AND  OTHER
                              COMPREHENSIVE  INCOME (LOSS) FOR  THE  YEAR  ENDED
                              DECEMBER 31, 2000 AND FOR THE  PERIODS  FROM MARCH
                              24, 1999 (INCEPTION)  TO  DECEMBER  31,  1999  AND
                              MARCH 24, 1999 (INCEPTION) TO DECEMBER 31, 2000

PAGE                 4        CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS'
                              EQUITY (DEFICIENCY) FOR THE PERIOD FROM MARCH  24,
                              1999 (INCEPTION) TO DECEMBER 31, 2000

PAGE               5 - 6      CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR
                              ENDED  DECEMBER  31,  2000  AND  FOR  THE  PERIODS
                              FROM MARCH 24, 1999 (INCEPTION)  TO  DECEMBER  31,
                              1999 AND MARCH 24, 1999  (INCEPTION)  TO  DECEMBER
                              31, 2000

PAGES             7 - 15      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  AS  OF
                              DECEMBER 31, 2000



<PAGE>




                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors of:
Torbay Holdings, Inc. and Subsidiary
(A Development Stage Company)

We have audited the accompanying  consolidated balance sheet of Torbay Holdings,
Inc. and  Subsidiary (a  development  stage company) as of December 31, 2000 and
the related consolidated statements of operations and other comprehensive income
(loss), changes in stockholders' equity (deficiency) and cash flows for the year
ended  December 31, 2000 and for the periods from March 24, 1999  (inception) to
December 31, 1999 and March 24, 1999  (inception)  to December  31, 2000.  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 audit.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  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 consolidated  financial statements referred to above present
fairly in all material respects, the financial position of Torbay Holdings, Inc.
and  Subsidiary (a  development  stage company) as of December 31, 2000, and the
results of their operations and their cash flows for the year ended December 31,
2000 and for the periods  from March 24, 1999  (inception)  to December 31, 1999
and March 24,  1999  (inception)  to  December  31,  2000,  in  conformity  with
accounting principles generally accepted in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 10 to
the consolidated  financial  statements,  the Company has accumulated  losses of
$1,045,317  since  inception,  a working  capital  deficiency  of $130,849 and a
stockholders'  deficiency of $271,310.  These factors  raise  substantial  doubt
about its ability to continue as a going concern.  Management's plans concerning
this  matter  are also  described  in Note  10.  The  accompanying  consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

WEINBERG & COMPANY, P.A.


Boca Raton, Florida
March 20, 2001

<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                             AS OF DECEMBER 31, 2000


                                     ASSETS

CURRENT ASSETS
  Cash                                                            $    13,500
                                                                  -----------
     Total Current Assets                                              13,500
                                                                  -----------

PROPERTY AND EQUIPMENT - NET                                           28,813
                                                                  -----------

OTHER ASSETS
  Deposits                                                              1,000
                                                                  -----------
     Total Other Assets                                                 1,000
                                                                  -----------

TOTAL ASSETS                                                      $    43,313
                                                                  ===========

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable and accrued expenses                           $   123,029
  Loan payable - stockholder                                           14,200
  Obligations under capital lease                                       7,120
                                                                  -----------
     Total Current Liabilities                                        144,349
                                                                  -----------

LONG-TERM LIABILITIES
  Notes and loans payable                                             150,000
  Obligations under capital leases                                     20,274
                                                                  -----------
     Total Long-Term Liabilities                                      170,274
                                                                  -----------

TOTAL LIABILITIES                                                     314,623
                                                                  -----------

STOCKHOLDERS' DEFICIENCY

 Preferred stock, $.0001 par value, 20,000,000 shares authorized,          70
    700,000 Series 1 convertible shares issued and outstanding
 Common stock, $.0001 par value, 100,000,000 shares authorized,           635
  6,350,000 issued and outstanding
  Additional paid-in capital                                          774,311
  Accumulated deficit during development stage                     (1,045,317)
  Accumulated other comprehensive loss                                 (1,009)
                                                                  -----------

TOTAL STOCKHOLDERS' DEFICIENCY                                       (271,310)
                                                                  -----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                    $    43,313
                                                                  ===========

          See accompanying notes to consolidated financial statements.

                                        2


<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
                          COMPREHENSIVE INCOME (LOSS)

<TABLE>
<CAPTION>

                                                                                                 March 24, 1999      March 24, 1999
                                                                              Year Ended         (Inception) to     (Inception) to
                                                                          December  31, 2000    December 31, 1999  December 31, 2000
                                                                          ------------------    -----------------  -----------------
<S>                                                                            <C>                 <C>               <C>
INCOME                                                                        $        --          $        --       $        --
                                                                              -----------          -----------       -----------

EXPENSES
 Directors fees                                                                   143,075                2,500           145,575
 Professional fees                                                                121,492               96,277           217,769
 Consulting fees                                                                   52,926              198,978           251,904
 Depreciation and amortization                                                     10,710               30,822            41,532
 Loss from impairment of intangible assets                                             --              247,325           247,325
 Other selling, general and administrative                                         92,062               49,150           141,212
                                                                              -----------          -----------       -----------

NET LOSS                                                                         (420,265)            (625,052)       (1,045,317)

OTHER COMPREHENSIVE INCOME (LOSS)
   Foreign currency translation gain (loss)                                        (2,135)               1,126            (1,009)
                                                                              -----------          -----------       -----------

COMPREHENSIVE LOSS                                                            $  (422,400)         $  (623,926)      $(1,046,326)
                                                                                                                     -----------
                                                                              ===========          ===========       ===========

NET LOSS PER SHARE - BASIC AND DILUTED                                        $     (0.08)         $     (0.13)      $     (0.21)
                                                                              ===========          ===========       ===========

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING
 THE PERIOD - BASIC AND DILUTED                                                 5,153,279            4,973,322         5,074,807
                                                                              ===========          ===========       ===========

</TABLE>


          See accompanying notes to consolidated financial statements.

                                        3


<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
     CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
       FOR THE PERIOD FROM MARCH 24, 1999 (INCEPTION) TO DECEMBER 31, 2000

<TABLE>
<CAPTION>


                                                                                                           Deficit
                                                                                                         Accumulated
                                                                                         Additional        During
                                              Preferred Stock         Common Stock        Paid-in       Development
                                             Shares    Amount      Shares       Amount     Capital          Stage
                                             ------    ------      ------       ------     -------       -----------
<S>                                         <C>       <C>        <C>          <C>         <C>          <C>
Issuance of common stock to founder              --   $   --     5,000,000    $   500    $        --    $        --

Cancellation of original founder shares          --       --    (5,000,000)      (500)            --             --

Issuance of preferred stock for             700,000       70            --         --         31,098             --
 acquisition of subsidiary

Issuance of common stock for cash and            --       --     4,850,000        485        599,515             --
 subscriptions

Issuance of common stock in connection           --       --       250,000         25            343             --
 with merger

Foreign currency translation gain                --       --            --         --             --             --

Net loss for the period from March 24,
 1999 (inception) to December 31, 2000           --       --            --         --             --       (625,052)
                                           --------   ------   -----------    -------    -----------    -----------

Balance, December 31, 1999                  700,000   $   70     5,100,000    $   510    $   630,956    $  (625,052)

Issuance of common stock                         --       --        50,000          5             --             --

Issuance of common stock for cash                --       --     1,200,000        120        144,860             --

Uncollected subscriptions receivable             --       --            --         --         (1,505)            --

Foreign currency translation loss                --       --            --         --             --             --

Net loss for the year ended December 31,
 2000                                            --       --            --         --             --       (420,265)
                                           --------   ------   -----------    -------    -----------    -----------

BALANCE, DECEMBER 31, 2000                  700,000   $   70     6,350,000    $   635    $   774,311    $(1,045,317)
                                           ========   ======   ===========    =======    ===========    ===========






                                           Accumulated
                                              Other
                                           Comprehensive
                                            Income (Loss)           Total
                                           --------------           -----
<C>                                           <C>                <C>

Issuance of common stock to founder           $    --            $    500

Cancellation of original founder shares            --                (500)

Issuance of preferred stock for                    --              31,168
 acquisition of subsidiary

Issuance of common stock for cash and              --             600,000
 subscriptions

Issuance of common stock in connection             --                 368
 with merger

Foreign currency translation gain               1,126               1,126

Net loss for the period from March 24,
 1999 (inception) to December 31, 2000             --            (625,052)
                                              -------         -----------


Balance, December 31, 1999                    $ 1,126            $  7,610

Issuance of common stock                           --                   5

Issuance of common stock for cash                  --             144,980

Uncollected subscriptions receivable               --              (1,505)

Foreign currency translation loss              (2,135)             (2,135)

Net loss for the year ended December 31,
 2000                                              --            (420,265)
                                              -------         -----------

BALANCE, DECEMBER 31, 2000                    $(1,009)          $(271,310)
                                              =======         ===========







</TABLE>


          See accompanying notes to consolidated financial statements.

                                       4

<PAGE>



                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>


                                                                                          March 24, 1999       March 24, 1999
                                                                      Year Ended          (Inception) to       (Inception) to
                                                                    December 31, 2000    December 31, 1999    December 31, 2000
                                                                    -----------------    -----------------    -----------------
<S>                                                                   <C>               <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                                                             $  (420,265)      $  (625,052)           $(1,045,317)
 Adjustments to reconcile net loss to net cash used in operating
 activities:
  Depreciation and amortization                                            10,710            30,822                 41,532
  Option deposit charged to operations                                     15,000                --                 15,000
  Loss on impaired assets                                                      --           247,325                247,325
  (Increase) decrease in:
  Attorney's escrow                                                         1,631            (1,631)                    --
  Accounts receivable                                                         441              (441)                    --
  Increase (decrease) in:
  Accounts payable and accrued expenses                                    58,065            64,963                123,028
                                                                      -----------       -----------            -----------
     Net Cash Used In Operating Activities                               (334,418)         (284,014)              (618,432)
                                                                      -----------       -----------            -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Deposits                                                                 (1,000)          (15,000)               (16,000)
  Purchase of property and equipment                                           --           (45,939)               (45,939)
                                                                      -----------       -----------            -----------
     Net Cash Used In Investing Activities                                 (1,000)          (60,939)               (61,939)
                                                                      -----------       -----------            -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Obligations (payments) under capital leases                              (9,960)           37,354                 27,394
  Proceeds from issuance of common stock                                  144,980           548,868                693,848
  Subscriptions receivable                                                 50,000                --                 50,000
  Due to related party                                                    (12,932)          (69,055)               (81,987)
  Due to creditors                                                             --          (161,650)              (161,650)
  Proceeds from loan payable - stockholder                                 14,200                --                 14,200
  Proceeds from issuance of notes and loans payable                       150,000                --                150,000
                                                                      -----------       -----------            -----------
     Net Cash Provided By Financing Activities                            336,288           355,517                691,805
                                                                      -----------       -----------            -----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                       940             1,126                  2,066
                                                                      -----------       -----------            -----------

INCREASE IN CASH AND CASH EQUIVALENTS                                       1,810            11,690                 13,500

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                       $    11,690       $        --            $        --
                                                                      -----------       -----------            -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD                             $    13,500       $    11,690            $    13,500
                                                                      ===========       ===========            ===========

Cash paid during the period for:
  Interest                                                            $     3,453       $       964            $     4,417
                                                                      ===========       ===========            ===========


</TABLE>

          See accompanying notes to consolidated financial statements.

                                       5

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                         (A DEVELOPMENT STAGE COMPANY)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS




SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

In June 1999,  DAL  purchased  all  interests  relating  to the  registered  and
unregistered design rights of certain products from an individual.  DAL issued a
promissory  note for $161,650 in exchange for the rights (See  paragraph  one of
Note 4). The note was paid in its entirety prior to December 31, 1999.

On June 10, 1999,  DAL  purchased  intellectual  property  rights from a related
party. DAL issued 20,000 shares of its common stock valued at $31,168 and a note
payable in the amount of $81,987 (See  paragraph two of Note 4). The Company has
paid this note in its  entirety  by making  principal  payments  of $12,932  and
$69,055 on the note through December 31, 2000 and 1999, respectively.


          See accompanying notes to consolidated financial statements.

                                       6


<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A) ORGANIZATION AND BUSINESS OPERATIONS

         Torbay  Holdings,  Inc.  (a  development  stage  company)  ("THI")  was
         incorporated   in  Delaware  under  the  name   Acropolis   Acquisition
         Corporation on March 24, 1999 to serve as a vehicle to effect a merger,
         exchange  of  capital  stock,  asset  acquisition,  or  other  business
         combination with a domestic or foreign private business.

         In July 1999,  THI  effected an  Agreement  and Plan of  Reorganization
         whereby THI acquired all of the issued and  outstanding  securities  of
         Designer Appliances Limited ("DAL"), a United Kingdom  Corporation,  in
         exchange for an aggregate of 700,000  shares of the Company's  Series 1
         Convertible  Preferred  Stock  (See  Note  9(A)).  As a  result  of the
         agreement, DAL became a wholly owned subsidiary of the Company. DAL has
         developed  and intends to market  household  appliances  designed to be
         attractive to a premium, upscale market.

         THI and DAL are herein referred to as (the "Company").

         On October 26, 1999, the Company  entered into and consummated a merger
         agreement whereby the Company acquired all of the outstanding shares of
         common  stock of Torbay  Acquisition  Corp.  ("TAC")  in  exchange  for
         250,000 shares of its common stock.  The  acquisition was accounted for
         using the purchase method of accounting.  At the time of the merger TAC
         was an inactive  Delaware  shell  corporation  and a reporting  company
         under the  Securities  Exchange  Act of 1934,  as amended.  The Company
         remained  as the  surviving  entity  and became  the  successor  issuer
         pursuant to rule 12g-3(a) of the General Rules and  Regulations  of the
         Securities and Exchange Commission.

         (B) PRINCIPLES OF CONSOLIDATION

         The accompanying consolidated financial statements include the accounts
         of the  Company  and  its  wholly  owned  active  subsidiary  DAL.  All
         significant intercompany transactions and balances have been eliminated
         in consolidation.

         (C) BASIS OF PRESENTATION

         The financial  statements  are prepared in accordance  with  accounting
         principles  generally  accepted in the United  States of  America.  The
         basis of  accounting  differs  from  that  used in the  United  Kingdom
         statutory  financial   statements  of  DAL.  Adjustments  are  made  to
         translate  the  statutory  financial  statements  of DAL to  conform to
         accounting  principles  generally  accepted  in the  United  States  of
         America.  The  financial  statements  are  expressed  in United  States
         dollars.  The functional  currency of DAL is the British pound sterling
         (See Note 1 (J)).

                                       7

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


         (D) USE OF ESTIMATES

         The  preparation  of  the  financial   statements  in  conformity  with
         generally accepted  accounting  principles  requires management to make
         estimates and  assumptions  that affect the reported  amounts of assets
         and liabilities and disclosures of contingent assets and liabilities at
         the  date of the  financial  statements  and the  reported  amounts  of
         revenues and expenses during the reporting period. Actual results could
         differ from those estimates.

         (E) CASH AND CASH EQUIVALENTS

         For purposes of the statement of cash flows, the Company  considers all
         highly liquid investments  purchased with an original maturity of three
         months or less to be cash equivalents.

         (F) PROPERTY AND EQUIPMENT

         Property  and   equipment   are  stated  at  cost,   less   accumulated
         depreciation.  Expenditures  for maintenance and repairs are charged to
         expense as  incurred.  Depreciation  for office  equipment  is provided
         using a declining balance method over the estimated useful lives of the
         assets of four years. Depreciation for motor vehicles is provided using
         the straight-line  method over the estimated useful lives of the assets
         of four years.

         (G) LONG-LIVED ASSETS

         Statement of Financial  Accounting  Standards No. 121,  "Accounting for
         the  Impairment  of  Long-lived  Assets to be Disposed Of" ("SFAS 121")
         requires   the  Company  to  review   long-lived   assets  and  certain
         identifiable  assets  related to those assets for  impairment  whenever
         circumstances  and  situations  change such that there is an indication
         that the carrying  amounts may not be recoverable.  If the undiscounted
         future  cash  flows of the  enterprise  are less  than  their  carrying
         amounts,  their  carrying  amounts  are  reduced  to fair  value and an
         impairment loss is recognized.

         (H) INCOME TAXES

         The Company  accounts for income taxes under the  Financial  Accounting
         Standard  Board  Statement of Financial  Accounting  Standards No. 109,
         "Accounting for Income Taxes"  ("Statement  109"). Under Statement 109,
         deferred tax assets and  liabilities  are recognized for the future tax
         consequences   attributable   to  differences   between  the  financial
         statement carrying amounts of existing assets and liabilities and their
         respective tax basis.  Deferred tax assets and liabilities are measured
         using  enacted  tax rates  expected  to apply to taxable  income in the
         years in which those temporary differences are expected to be recovered
         or settled.  Under Statement 109, the effect on deferred tax assets and
         liabilities  of a change  in tax rates is  recognized  in income in the
         period that includes the enactment date.

                                       8

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


         (I) RECENT ACCOUNTING PRONOUNCEMENTS

         The  Financial  Accounting  Standards  Board has recently  issued a new
         accounting pronouncement, Statement No. 133, "Accounting for Derivative
         Instruments and Hedging Activities",  as amended by Statement No's. 137
         and 138,  that  establishes  accounting  and  reporting  standards  for
         derivative  instruments and related  contracts and hedging  activities.
         This  statement is effective  for all fiscal  quarters and fiscal years
         beginning  after June 15, 2000. The Company  believes that its adoption
         of  these  pronouncements  will  not  have  a  material  effect  on the
         Company's financial position or results of operations.

         (J) FOREIGN CURRENCY TRANSLATION

         The functional currency of DAL is the British pound sterling. Financial
         statements for this entity are translated into United States dollars at
         year-end  exchange  rates as to assets  and  liabilities  and  weighted
         average  exchange rates as to revenues and expenses.  Capital  accounts
         are  translated  at their  historical  exchange  rates when the capital
         transactions occurred (See Note 1(K)).

         (K) COMPREHENSIVE INCOME (LOSS)

         The  Company  accounts  for  Comprehensive   Income  (Loss)  under  the
         Financial  Accounting Standards Board Statement of Financial Accounting
         Standards No. 130,  "Reporting  Comprehensive  Income"  ("Statement No.
         130").  Statement No. 130  establishes  standards for reporting and the
         display of  comprehensive  income and its components,  and is effective
         for fiscal years beginning after December 15, 1997.

         The foreign currency  translation  gains (See Note 1(J)) resulting from
         the  translation  of the  financial  statements  of DAL,  expressed  in
         British pound sterling,  to United States dollars are reported as Other
         Comprehensive  Income  (Loss) in the  Statement  of  Operations  and as
         Accumulated Other Comprehensive  Income (Loss) in Stockholders'  Equity
         (Deficiency)  and in the Statement of Changes in  Stockholders'  Equity
         (Deficiency).

         (L) LOSS PER SHARE

         Basic and diluted  loss per common  share for all periods  presented is
         computed based on the weighted average common shares outstanding during
         the year as defined by Statement of Financial Accounting Standards, No.
         128,  "Earnings  Per  Share".  The  assumed  exercise  of common  stock
         equivalents  was not utilized  since the effect was  anti-dilutive.  At
         December  31,  2000 and  1999,  there  were  700,000  preferred  shares
         outstanding,  which are  convertible  to a maximum of 7,000,000  common
         shares that could  potentially  dilute  future  earnings per share (See
         Note 9(A)).

                                       9

<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


NOTE 2   STOCK SUBSCRIPTION RECEIVABLE

         On July 23,  1999,  the  Company  issued  4,850,000  common  shared  to
         individuals.  The Company has received  $598,500  ($495,700 through the
         attorney's escrow and $102,800  directly) towards this issuance and the
         remaining  $1,500 has been deemed  uncollectable  at December 31, 2000,
         and charged to additional paid-in capital (See Note 9(B)).

NOTE 3   PROPERTY AND EQUIPMENT

         Property and equipment at December 31, 2000 consists of the following:

         Office equipment                               $        2,119
         Motor vehicles                                          3,360
         Motor vehicles under capital lease                     36,965
                                                        --------------
                                                                42,444
         Less Accumulated depreciation                         (13,631)
                                                        --------------
                                                        $       28,813
                                                        ==============

         Depreciation  expense for the year ended December 31, 2000 and 1999 was
         $10,710 and $3,341, respectively.

NOTE 4   INTANGIBLE ASSETS AND IMPAIRMENT LOSS

         In June 1999,  DAL,  which was not a subsidiary  of the Company at that
         time,  entered  into an  agreement  for the  purchase of all  interests
         relating to the  registered and  unregistered  design rights of certain
         products. The total purchase price paid was $161,650,  represented by a
         promissory note issued to the seller by DAL and acquired by the Company
         in the  acquisition  discussed  in Note 1(A).  The note was paid in its
         entirety  prior to December 31, 1999, and the rights have been assigned
         to the Company.

         On June 10, 1999,  DAL,  which was not a  subsidiary  of the Company at
         that  time,  entered  into an  agreement  with a related  party for the
         purchase of  intellectual  property  rights for certain  products.  The
         total purchase price for these rights was $113,155,  which  represented
         the original cost basis to the seller  party.  DAL issued 20,000 shares
         of its common stock valued at $31,168 based on the par value,  since no
         other basis for valuation existed,  and a note payable in the amount of
         $81,987 to the seller.  Pursuant to the  acquisition  discussed in Note
         1(A),  the Company  acquired  the note  payable  (which was paid in its
         entirety at December 31, 2000) and issued  preferred  stock in exchange
         for the $31,168 of common stock (See Note 9(A)).

                                       10

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


         The cost of the above design rights and  intellectual  property  rights
         were  capitalized as purchased  research and development and were being
         amortized over a five-year period.  Amortization expense for the period
         ended December 31, 1999 was $27,481.  On December 31, 1999, the Company
         evaluated the  realization of these assets in accordance  with SFAS 121
         and wrote down the assets to their net  realizable  value of zero.  The
         write-down is reflected as an impaired loss of $247,325 in 1999.

NOTE 5   LOAN PAYABLE - STOCKHOLDER

         The  Company  has  received   advances   aggregating   $14,200  from  a
         stockholder that provided funding for working capital requirements used
         to pay  operating  expenses  incurred by the Company.  The advances are
         non-interest bearing and due on demand.

NOTE 6   NOTES AND LOANS PAYABLE

         The following schedule reflects notes and loans payable at December 31,
         2000:

<TABLE>
<CAPTION>

<S>                                                                                           <C>
         Loan payable,  non-interest  bearing (See Note 9(C) for warrants  issued in lieu
          of  interest),  convertible  to  shares of  common  stock at $1.50  per  share,
          unsecured, due by March 30, 2003                                                     $   100,000

         Note payable,  non-interest  bearing (See Note 9(C) for warrants  issued in lieu
          of  interest),  convertible  to  shares of  common  stock at $1.50  per  share,
          unsecured, due by March 23, 2003                                                          50,000
                                                                                               -----------

             Total - All Long-Term                                                             $   150,000
                                                                                               ===========

</TABLE>


NOTE 7   INCOME TAXES

         The American  parent  company and its United  Kingdom  subsidiary  file
         separate tax returns.  Income tax expense (benefit) for the years ended
         December 31, 2000 and 1999 is summarized as follows:

                                                    2000      1999
                                                    ----      ----
         Current:
           Federal                                $    --        --
           State                                       --        --
           Foreign                                     --        --

         Deferred:
           Federal and state                           --        --
           Foreign                                     --        --
                                                  -------   -------

         Income tax expense (benefit)             $    --   $    --
                                                  =======   =======

                                      11
<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


         The parent  company's  tax  expense  differs  from the  "expected"  tax
         expense for the years ended  December  31, 2000 and 1999  (computed  by
         applying U.S. Federal Corporate tax rate of 34 percent to income before
         taxes), as follows:

                                                        2000        1999
                                                        ----        ----
         Computed "expected" tax expense (benefit)    $(67,980)   $(58,804)
         Effect of net operating loss carryforwards     67,980      58,804
                                                      --------    --------
                                                            --          --
                                                      ========    ========

         The tax effects of temporary  differences that give rise to significant
         portions of deferred tax assets at December 31, 2000 are as follows:

                                                  2000         1999
                                                  ----         ----
         Deferred tax assets:
           Net operating loss carryforwards     $ 126,784    $  58,804
                                                ---------    ---------
           Total gross deferred tax assets        126,784       58,804
           Less valuation allowance              (126,784)     (58,804)
                                                ---------    ---------

         Net deferred tax asset                 $      --    $      --
                                                =========    =========

         At December  31,  2000,  the parent  company had a net  operating  loss
         carryforward  of  approximately   $372,900  for  income  tax  purposes,
         available to offset  future  taxable  income  expiring on various dates
         through 2020. The valuation allowance at December 31, 1999 was $58,804.
         The net  change  in the  valuation  allowance  during  the  year  ended
         December 31, 2000 was an increase of $67,980.

         The  United  Kingdom  subsidiary  has  also  incurred  substantial  net
         operating losses which result in no income tax expense or (benefit) for
         the years ended December 31, 2000 and 1999. The subsidiary's  available
         net operating loss carryforward of approximately  $426,100 results in a
         deferred tax asset of $127,830 (computed by applying the United Kingdom
         tax rate of 30%) which has been fully offset by a valuation allowance.

NOTE 8   COMMITMENTS AND CONTINGENCIES

         (A) CAPITAL LEASE AGREEMENTS

         The  Company  leases a vehicle  under a capital  lease.  The  agreement
         stipulates   monthly   installment   payments  for  a  36-month  period
         commencing in September 1999 with the last payment  including a balloon
         payment.  The  ownership of the car will transfer to the Company at the
         end of the lease.

         Future  minimum  principal  lease  payments under capital leases are as
         follows at December 31:

                    2001                                   $     7,120
                    2002                                        20,274
                                                           -----------
                                                                27,394
                    Less current portion                         7,120
                                                           -----------
                                                           $    20,274
                                                           ===========

                                       12

<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


         (B) OPERATING LEASE AGREEMENTS

         The Company leases a vehicle under an operating lease. This lease has a
         remaining  term expiring in September  2002.  The Company's  subsidiary
         leases office space under a month-to-month  operating lease that can be
         curtailed given thirty days notice.

         Future minimum lease payments under operating  leases are as follows at
         December 31:

                      2001             $     9,914
                      2002                   6,610
                                       -----------
                                       $    16,524
                                       ===========

         (C) LINE OF CREDIT

         The Company  entered  into a funding and share  purchase  agreement  in
         April  2000,  as amended in April 2001,  with a finance and  investment
         company.  The agreement  stipulates  that an interest free open line of
         credit for up to  $10,000,000  will be  established  for the Company in
         exchange  for  an  option  to  purchase  35%  of the  then  issued  and
         outstanding  stock of the Company.  The agreement calls for the Company
         to receive an initial draw down of  $2,000,000  upon the  establishment
         and  execution  of the line of credit.  The option will be granted upon
         the date of the receipt of the funds.  The option price is set at $2.85
         per share and expires 90 days  following  the  repayment  of the credit
         provided.  The line of credit  has not been  fully  established  and no
         funds have been received through the date of this report.

NOTE 9   STOCKHOLDERS' DEFICIENCY

         (A) PREFERRED STOCK

         The Company is authorized to issue 20,000,000 shares of preferred stock
         at $.0001 par value,  with such  designations,  voting and other rights
         and  preferences as may be determined from time to time by the Board of
         Directors.

         The Company designated 700,000 shares of its preferred stock as "Series
         1 Convertible  Preferred Stock". The par value of the series is $.0001.
         Each  share is  convertible  into ten  shares  of  common  stock of the
         Company at such time that the subsidiary of the Company, for which such
         shares were used for the acquisition thereof, has returned a net profit
         to the Company of  $1,000,000  in any one year within five years of the
         issuance of such shares.  In the event that after such  five-year  term
         the shares have not been  converted,  each share not converted shall be
         automatically  converted into one share of common stock of the Company.
         Each share of the Series 1 stock is entitled to one vote on all matters
         on which such  stockholders  are lawfully  entitled to vote and are not
         entitled to receive dividends.

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<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000


         In July 1999, the Company issued 700,000 shares of Series 1 Convertible
         Preferred Stock valued at $31,168  pursuant to an Agreement and Plan of
         Reorganization with Designer Appliances Limited (See Notes 1(A) and 4).

         (B) COMMON STOCK

         The Company is authorized to issue  100,000,000  shares of common stock
         at $.0001 par value. The Company  originally issued 5,000,000 shares to
         TPG Capital  Corporation  in exchange  for $500.  They later  cancelled
         those shares.

         At  December  31,  2000,   there  were  6,350,000   shares  issued  and
         outstanding.   Stock   certificates   for  1,200,000  shares  were  not
         physically  issued until January 2, 2001, but such shares were paid for
         and effectively issued at December 31, 2000.
         On July 23, 1999, the Company issued  4,850,000  shares of common stock
         to various  parties for gross  proceeds of  $600,000.  At December  31,
         2000,  the Company  had  received  funds of $598,500  towards the stock
         issuance.  The  remaining  subscription  receivable  of $1,500 has been
         deemed uncollectable and charged to additional paid-in capital.

         On October 26, 1999,  the Company  issued  250,000 shares of its common
         stock to TPG Capital  Corporation  in  connection  with the merger with
         Torbay Acquisition Corp. (See Note 1(A)).

         During 2000,  the Company  issued 50,000 shares at par value to various
         stockholders under a subscription agreement.

         Effective  December 31, 2000,  the Company issued  1,200,000  shares of
         common stock for cash in the  aggregate of $144,980.  Certificates  for
         these shares were not physically issued by the Company until January 2,
         2001.

         (C) WARRANTS

         In Connection  with the $100,000 loan (See Note 6), the Company  issued
         100,000 warrants,  which are convertible at the rate of one warrant per
         one share of common stock at an exercise price of $1.75 per share.

         In  Connection  with the $50,000 note (See Note 6), the Company  issued
         50,000  warrants,  which are  convertible  into 50,000 shares of common
         stock at an exercise price of $1.75 per share.

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<PAGE>
                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2000

NOTE 10  GOING CONCERN

         As reflected in the accompanying financial statements,  the Company has
         accumulated  losses of $1,045,317  since  inception,  a working capital
         deficiency of $130,849 and a stockholders'  deficiency of $271,310. The
         ability of the Company to continue as a going  concern is  dependent on
         the  Company's  ability to raise  additional  funds and  implement  its
         business plan. The financial  statements do not include any adjustments
         that might be necessary if the Company is unable to continue as a going
         concern.

         Management's  plans include  obtaining an open line of credit for up to
         $10,000,000  in exchange  for an option to purchase  shares  which will
         provide  the  Company  with the  funds it  requires  to  implement  its
         business plan (See Note 8(C)).


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