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


                                 AMENDMENT NO. 2

                                       TO

                                   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, 1999

                          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.)

                         MAISON SAUMAREZ, ROUTE DE COBO
                 CASTEL, GUERNSEY, C.I. GY5 7RZ, UNITED KINGDOM
                    (Address of principal executive offices)

                                011 44 1481 46044
                           (Issuer's Telephone Number)

 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)

     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,
1999.

     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.
$0 (No trading market for the common stock currently exists).

     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
5,100,000 shares outstanding as of March 31, 2000.

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

<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                           Page
                                                                                           ----
<S>                 <C>                                                                    <C>
PART I

         ITEM 1.     DESCRIPTION OF THE BUSINESS...........................................1
         ITEM 2.     DESCRIPTION OF PROPERTY...............................................4
         ITEM 3.     LEGAL PROCEEDINGS.....................................................4
         ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................4

PART II

         ITEM 5.     MARKET FOR TORBAY HOLDINGS' COMMON EQUITY AND
                     RELATED STOCKHOLDER MATTERS...........................................4
         ITEM 6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                     FINANCIAL CONDITION AND RESULTS OF OPERATIONS.........................5
         ITEM 7.     FINANCIAL STATEMENTS..................................................6
         ITEM 8.     CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE................................6

PART III

         ITEM 9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
                     CONTROL PERSONS OF TORBAY HOLDINGS; COMPLIANCE
                     WITH SECTION 16(A) OF THE EXCHANGE ACT................................7
         ITEM 10.    EXECUTIVE COMPENSATION................................................8
         ITEM 11.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                     AND MANAGEMENT........................................................9
         ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................12
         ITEM 13.    EXHIBITS AND REPORTS ON FORM 8-K.....................................12
</TABLE>

<PAGE>



                                     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, 1999,  the  Interbank  exchange  rate was
(pound)0.6186 to $1.00, or $1.6165 to (pound)1.

BUSINESS AND ACQUISITION STRATEGY

     Torbay  Holdings  plans to acquire  late stage  development  or early stage
commercial activities, with opportunities in niche markets. Torbay Holdings will
issue convertible  preferred stock, which will be converted 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.  However, no such acquisitions
will be completed until Torbay Holdings raises additional  capital sufficient to
finance the operations of newly acquired subsidiaries.


<PAGE>



     DESIGNER APPLIANCES, LTD.

OPERATIONS

     Prior to the acquisition of the design by Designer  Applicances,  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 Telestar 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. Torbay Holdings
anticipates  that the Telstar I will be built to British  Electric  Approval and
German TUV  standards,  which  relate to  electrical  safety  and  manufacturing
practices.  This  product  is  expected  to sell for  (pound)150  to stores  and
(pound)300 retail.

     Telstar II  Designer  Vacuum  Cleaner/Table.  This is the  Telstar I vacuum
cleaner with 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  partially  developed  and,  development  will be  completed  as finances
permit.  This  product is  expected  to sell for  (pound)60-70  to stores and to
retail for (pound)100-125.

     Designer Appliances has begun development of additional products, including
a toaster,  a kettle,  space heater and heated hearth screen.  See  "Trademarks"
herein.

MARKETING

     Designer  Appliances intends to operate directly in the United Kingdom with
its own sales team.  Potential  distributors have been identified to expand this
activity across Europe. Management believes that contracts may be finalized when
production  and payment  schedules can be predicted with  reasonable  certainty.
These  distributors  will  purchase  products  and bear all  costs of sales  and
distribution in their  territories.  Non-critical  component  supply of "off the
shelf" items will be limited to preferred  suppliers of  appropriate  components
who provide  warranties and  indemnities  for delays in production and shipping.
Management   believes  that  manufacturing   contracts  can  be  finalized  when
production  and payment  schedules can be predicted with  reasonable  certainty.
Critical  components  such as product  body parts which are specific to Designer
Appliances' products will be dual sourced.

     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


                                        2

<PAGE>



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.

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 is diverse.

PATENTS AND TRADEMARKS

     The British  Patent Office has granted the  following  Design and Trademark
registrations made by Designer Appliances:

<TABLE>
<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,                British design registration no. 2 082 459
Sputnik or Telstar Space Station

The combined vacuum and table product                  British trademark registration no. 2 085 669

The "Mistral" table top fan design                     British design registration no. 2 066 377
                                                       and trademark registration no. 2 209 473

Wurlitzer                                              British trademark registration no. 2 209 244
</TABLE>

     REAL ESTATE

     In addition to its acquisition strategy, Torbay Holdings intends to own and
manage hotel properties in a variety of locations. Torbay Holdings believes that
the asset value of these  properties will underpin the value of Torbay Holdings'
equity investments in its subsidiaries and that the income from these properties
will provide revenue and funding of both property and subsidiary activities.

     EMPLOYEES

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


                                        3

<PAGE>



ITEM 2. DESCRIPTION OF PROPERTY

OFFICES/PROPERTY

     Torbay  Holdings  currently  leases  office  space in the parish of Castel,
Guernsey,  in the  Channel  Islands  of Great  Britain.  Torbay  Holdings  has a
one-year lease expiring August 30, 2000, and the rent is (pound)5,200 per annum.

     Currently,  Designer  Appliances  has no  facilities,  but has identified a
manufacturing   facility  in  South  Manchester,   United  Kingdom,   containing
approximately  2,500 - 5,000 square feet,  which it anticipates to lease when it
has the financing to do so.

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

TRADING OF SHARES

     There is  currently no trading  market for Torbay  Holdings  common  stock.
However,  Torbay  Holdings  expects  that its common stock will be traded on the
over-the-counter  market with  quotations  available  through the OTC Electronic
Bulletin  Board  (OTC  Bulletin  Board).  Equitrade  Securities  Corporation  is
expected  to make a market in the common  stock by  developing  and  maintaining
historical  stock trading records,  soliciting  potential buyers and sellers and
attempting to match buy and sell orders.  In  connection  with its market making
activities,  Equitrade  may buy or sell  shares  from  time to time  for its own
account.  However,  Equitrade will not be subject to any obligation with respect
to such  efforts.  If the  common  stock  cannot be quoted and traded on the OTC
Bulletin Board, it is expected that the transactions in the common stock will be
reported in the pink sheets of the National Quotation Bureau, Inc.

RESALES OF THE SECURITIES UNDER STATE SECURITIES LAWS

     The National Securities Market Improvement Act of 1996 ("NSMIA") limits the
authority  of  states to  impose  restrictions  upon  sales of  securities  made
pursuant to Sections 4(1) and 4(3) of the Securities Act of companies which file
reports under Sections 13 or 15(d) of the Securities  Exchange Act. Sales of the
securities in the  secondary  market may be made pursuant to Section 4(1) of the
Securities Act (sales other than by an issuer,  underwriter  or broker).  Torbay
Holdings  expects  that its stock will be listed for trading on the OTC Bulletin
Board  and that  Torbay  Holdings  shares  will be  eligible  for  resale in the
secondary market in each state.


                                        4

<PAGE>
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.
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  underexploited
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.

     In addition  to its  acquisition  strategy,  Torbay  Holdings  will own and
manage hotel properties in a variety of locations. Torbay Holdings believes that
the asset value of these  properties will underpin the value of Torbay Holdings'
equity investments in its subsidiaries and that the income from these properties
will provide revenue and funding of both property and subsidiary activities.

RESULTS AND PLAN OF OPERATIONS

     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
approximately  $1,000,000 for the calendar year 2000 and a total  capitalization
of  $1,400,000  over the next two  years for  Designer  Appliances  to  commence
manufacturing   and  marketing   operations.   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.  Torbay Holdings believes that the line of credit will allow
it to meet its working capital needs for the next twelve months. 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.

LIQUIDITY AND CAPITAL RESOURCES

     Torbay Holdings, including its subsidiary Designer Appliances, has incurred
start-up  costs,  including  administrative  costs and research and  development
costs.  As of December 31, 1999,  Torbay  Holdings  had not  established  a bank
account  because it and its  subsidiary,  Designer  Appliances,  had  focused on
organizational  activities  and research  and  development  of Torbay  Holdings'
products and marketing  strategies  and had not yet  commenced  operations as of
that date. In lieu of a bank account,  costs and expenses had been  disbursed on
behalf of Torbay Holdings through an attorney escrow account. As of December 31,
1999, the balance of the escrow  account was $1,631 which  represents the net of
$495,700  of funds  received  for  common  stock  issuances,  $150,000  of funds
disbursed for consulting,  acquisition and registration costs,  $12,669 of funds
disbursed for accounting fees and $331,400 transferred to Designer Appliances as
working  capital  used in  conducting  its  operations.  As of the  date of this
report,  the Company has opened bank  accounts  and is no longer  utilizing  the
attorney  escrow  account to collect or disburse  funds on its behalf.

     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  $600,000  from the sale of its  securities.  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 had a net loss of $625,052 from  operating  activities for
the period March 22, 1999 (inception) through December 31, 1999.

                                        5

<PAGE>



     The cash flow of Torbay  Holdings from financing  activities from inception
to December 31, 1999 was  primarily  from the receipt of proceeds  from sales of
securities.

     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
or equity financing or borrowings.

     We believe that the  $10,000,000  open line of credit will be sufficient to
pay our currently  anticipated expenses including payment of salaries,  rent and
payments  to  professionals  and to continue  our  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 received,  we would be required to curtail our 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 24, 1999
(inception)  to December 31, 1999 are included in pages F-1 through F-13 of this
Annual Report on Form 10-KSB. This includes the following financial statements:

     Report of Independent Auditors
     Consolidated Balance Sheets-- At December 31, 1999;
     Consolidated Statements of Operations-- Year Ended December 31, 1999;
     Consolidated  Statements of Changes in  Shareholders'  Equity -- Year Ended
     December 31, 1999;
     Consolidated Statements of Cash Flows -- Year Ended December 31, 1999; and
     Notes to Consolidated Financial Statements -- Year Ended December 31, 1999

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

     None.


                                        6

<PAGE>



                                    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 March 31, 2000:

<TABLE>
<CAPTION>
NAME                                POSITION                                        TERM EXPIRES
<S>                                <C>                                             <C>
Francis Guy Lewis Askham            Chairman and Director                           2000
Colin Peter Gervaise-Brazier        President, Chief Executive Officer and          2000
                                    Director
Alexander Gordon Lane               Secretary and Director                          2000
William Thomas Large                Vice President and Director                     2000
</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,  68, 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. Mr. Askham has
also served as a director and chairman of Wilshaw plc since 1991, a director and
deputy  chairman of  Southampton  Leisure  Holdings  plc since  January  1997, a
director of GS Telecoms,  Inc.  since  August 1999, a director of  International
Energy  Group plc,  and was  formerly a director of Baldwin  plc, M & W plc, and
Rhino Group plc, all located in Great Britain and all of whose  securities trade
on the London Stock Exchange.

     Colin Peter Gervaise-Brazier,  56, President, Chief Executive Officer and a
director of Torbay Holdings, has served in such capacities since September 1999.
Mr. Gervaise-Brazier 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. Mr.  Gervaise-Brazier  attended Elizabeth College,  Guernsey, and also
attended senior management courses at Vauxhall College,  Luton,  England.  Since
August 1999, Mr.  Gervaise-Brazier  has also been Chief Executive  Officer and a
director of GS Telecom Ltd., an electronic  retailing company whose stock trades
on the NASD Bulletin Board.

     Alexander Gordon Lane, 58, 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 1993 to 1998, he was


                                        7

<PAGE>



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,  44, has been Vice President and a director of Torbay
Holdings  since July 1999 and  President 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 1998, 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(pound)12,000  per year. He earns no other remuneration from
Torbay Holdings or its subsidiary.

     Mr.  Gervaise-Brazier's  salary is(pound)60,000 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 (pound) 60,000 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,   1999   awarded  to  or  earned  by  Colin   Peter
Gervaise-Brazier,  President and Chief Executive Officer,  and by William Thomas
Large, Vice President. No other officer's total annual salary and bonus for 1999
exceeded $100,000.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                      ANNUAL COMPENSATION
                                                       -------------------------------------------------
    NAME AND PRINCIPAL                                                                     ALL OTHER
         POSITIONS                           YEAR       SALARY($)         BONUS($)       COMPENSATION($)
------------------------------------        ------      ---------         --------      ----------------
<S>                                       <C>          <C>              <C>            <C>
Colin Peter Gervaise-Brazier,                1999         96,990             --                --
     President and Chief Executive
     Officer
William Thomas Large,                        1999         96,990             --(1)             --
     Vice President
</TABLE>
----------
(1)  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, 2000.  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>
NAME AND ADDRESS OF                                             AMOUNT AND NATURE OF
BENEFICIAL OWNER                                                BENEFICIAL OWNERSHIP               PERCENT(1)
---------------------------                                     --------------------               -------
<S>                                                            <C>                                <C>
Armadillo Worldwide Limited
  P.O. Box 313, Anson Court
  La Route des Camps                                               500,000                          9.71%
  St. Martins
  Guernsey, Channel Islands

INC Limited
  c/o Trident Corporate Services (Bahamas) Limited
  1st Floor, Kings Court
  Bay Street                                                       500,000                          9.71%
  P.O. Box N-3944
  Nassau, Bahamas

Direct Trustees Limited
  P.O. Box 307
  Guernsey GY1 3SH                                                 500,000                          9.71%
  United Kingdom

D.J. Limited
  10 Queen Street
  P.O. Box HM114                                                   500,000(2)                       9.71%
  Hamilton HMEX
  Bermuda

David G. Jones
  10 Queen Street
  P.O. Box HM 1154                                                 750,000(2)                      14.56%
  Hamilton HMEX
  Bermuda

Kevin W. Haddon-Harris
  48 Par La Ville Road                                             770,000(2)                      14.95%
  Hamilton, Bermuda HM11

Martyn Paul Trebert
  Pleinmont, Torteaval
  Guernsey, Channel Islands GY8 0P                                 508,000                          9.86%
  United Kingdom

Colin Peter Gervaise-Brazier
  President, Director
  La Belle Epoque
  Les Treacheries                                                  525,000(3)                      10.19%
  L'Islet St. Sampsons
  Guernsey, Channel Islands GY2 4SN
</TABLE>
---------

(1)  Based upon 5,100,000 shares of common stock outstanding.
(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 5,850,000 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.


                                       10

<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
March 31, 2000. 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       OUTSTANDING (1)
---------------------------------          ---------------------         --------------------  ---------------
<S>                                       <C>                           <C>                    <C>
Francis Guy Lewis Askham
  Spinney Corner Church Lane
  Brashfield                                Chairman, Director                   50,000(2)            *
  Romsey Harris 505OQH
  United Kingdom

Colin Peter Gervaise-Brazier
  La Belle Epoque
  Les Treacheries                           President, Chief
  L'Islet St. Sampsons                      Executive Officer,                  525,000(3)           10.19%
  Guernsey,                                 Director
  Channel Islands GY2 4SN
  United Kingdom

Alexander Gordon Lane
  4 Milford Place                           Secretary, Director                  50,000               *
  Hempstead, New York 11550

William Thomas Large
  38 Chapel Lane
  Bucklow Hill, Knutsford                   Vice President,                     119,000(4)            2.03%
  Cheshire WA16 6RH                         Director
  United Kingdom

All Directors and Executive Officers as a                                       744,000(4)           12.72%
Group (4 persons)
</TABLE>

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

(1)  Based upon 5,100,000 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 5,850,000
     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.


                                       11

<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, 1999,  Designer
Appliances owed (pound)8,000 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

     (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)

         27.1  Financial Data Schedule. (Filed in electronic format only) (4)

----------------------
     (1)  Incorporated  herein by reference  in the Current  Report on Form 8-K,
          filed with the  Securities  and  Exchange  Commission  on November 12,
          1999.


                                       12

<PAGE>

     (2)  Incorporated herein by reference in 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  in  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 in  the initial filing of this Annual
          Report  on  Form  10-KSB as filed  with  the Securities  and  Exchange
          Commission on May 12, 2000.

(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.


                                       13

<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                  October 2, 2000
------------------------------------------        a Director
Francis Guy Lewis Askham



/s/ Colin Peter Gervaise-Brazier                  Director                                   October 2, 2000
-----------------------------------------
Colin Peter Gervaise-Brazier

/s/Alexander Gordon Lane                                                                     October 2, 2000
------------------------------------------        Secretary and a Director
Alexander Gordon Lane

/s/William Thomas Large                           President, Chief Executive Officer and a   October 2, 2000
------------------------------------------        Director (principal executive officer and
William Thomas Large                              financial officer)

</TABLE>
                                       14


<PAGE>


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

                                    CONTENTS

<TABLE>
<S>          <C>        <C>
PAGE           1         INDEPENDENT AUDITORS' REPORT

PAGE           2         CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1999

PAGE           3         CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER COMPREHENSIVE LOSS FOR THE PERIOD FROM
                         MARCH 24, 1999 (INCEPTION) TO DECEMBER 31, 1999

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

PAGE           5         CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM MARCH 24, 1999 (INCEPTION)
                         TO DECEMBER 31, 1999

PAGES          8 - 13    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999
</TABLE>



<PAGE>
                    [LETTERHEAD OF WEINBERG & COMPANY, P.A.]

                          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, 1999 and
the related consolidated  statements of operations and other comprehensive loss,
changes in  stockholders'  equity  and cash flows for the period  from March 24,
1999  (inception)  to December  31, 1999.  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 audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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, 1999, and the
results of its  operations and its cash flows for the period from March 24, 1999
(inception)  to  December  31,  1999,  in  conformity  with  generally  accepted
accounting principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
consolidated  financial  statements,  the  Company  has  accumulated  losses  of
$625,052 since inception and has a working capital deficiency of $20,340.  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 9.
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

April 19, 2000

<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                             AS OF DECEMBER 31, 1999


                                     ASSETS
<TABLE>
<S>                                                                     <C>
CURRENT ASSETS
  Cash                                                                     $            11,690
  Due from attorney's escrow                                                             1,631
  Subscription receivable                                                               51,500
  Accounts receivable                                                                      441
                                                                              ------------------
     Total current assets                                                               65,262
                                                                              ------------------
PROPERTY AND EQUIPMENT - NET                                                            42,598
                                                                              ------------------

OTHER ASSETS
  Deposits                                                                              15,000
                                                                              ------------------
     Total other assets                                                                 15,000
                                                                              ------------------

TOTAL ASSETS                                                               $           122,860
------------                                                                  ==================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                         $            64,964
  Due to related party                                                                  12,932
  Obligations under capital lease                                                        7,706
                                                                              ------------------
     Total current liabilities                                                          85,602

LONG-TERM LIABILITES
  Obligations under capital leases                                                      29,648
                                                                              ------------------
     TOTAL LIABILITIES                                                                 115,250
                                                                              ------------------

STOCKHOLDERS' EQUITY

  Preferred stock, $.0001 par value, 20,000,000 shares authorized,
     700,000 Series 1 convertible shares issued and outstanding                             70
  Common stock, $.0001 par value, 100,000,000 shares authorized,                           510
     5,100,000 issued and outstanding
  Additional paid-in capital                                                           630,956
  Accumulated deficit during development stage                                        (625,052)
  Accumulated other comprehensive income                                                 1,126
                                                                              ------------------
     TOTAL STOCKHOLDERS' EQUITY                                                          7,610
                                                                              ------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                 $           122,860
------------------------------------------                                    ==================
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       2

<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
          CONSOLIDATED STATEMENT OF OPERATIONS AND OTHER COMPREHENSIVE
                                      LOSS
       FOR THE PERIOD FROM MARCH 24, 1999 (INCEPTION) TO DECEMBER 31, 1999

<TABLE>
<S>                                                                      <C>
INCOME                                                                    $        --
                                                                          -----------

EXPENSES

   Accounting fees                                                             50,357
   Consulting fees                                                            198,978
   Depreciation and Amortization                                               30,822
   Legal and professional                                                      45,920
   Loss from impairment of intangible assets                                  247,325
   Other selling, general and administrative                                   51,650
                                                                          -----------

NET LOSS                                                                     (625,052)

OTHER COMPREHENSIVE INCOME
   Foreign currency translation gains                                           1,126
                                                                          -----------

COMPREHENSIVE LOSS                                                        $  (623,926)
------------------                                                        ===========

NET LOSS PER SHARE - BASIC AND DILUTED                                    $     (0.13)
                                                                          ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING
THE PERIOD - BASIC AND DILUTED                                              4,972,872
                                                                          ============
</TABLE>








                                       3


<PAGE>



                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                       FOR THE PERIOD FROM MARCH 22, 1999
                        (INCEPTION) TO DECEMBER 31, 1999
          See accompanying notes to consolidated financial statements.






<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
       FOR THE PERIOD FROM MARCH 22, 1999 (INCEPTION) TO DECEMBER 31, 1999

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

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

Issuance of preferred
  stock for acquisition
  of subsidiary            700,000          70             --           --      31,098            --            --          31,168

Issuance of common
  stock for cash and
  subscriptions                 --          --      4,850,000          485     599,515            --            --         600,000

Issuance of common
  stock in connection
  with merger                   --          --        250,000           25         343            --            --             368

Foreign currency
  translation gain              --          --             --           --          --            --         1,126           1,126

Net loss for the
  period from
  March 24, 1999
  (inception) to
  December 31, 1999             --          --             --           --          --      (625,052)           --         (625,052)
                         ---------    ---------    ----------    ----------   ---------   -----------    ---------     ------------
BALANCE,
DECEMBER 31, 1999          700,000    $      70     5,100,000    $      510   $ 630,956   $ (625,052)    $   1,126     $      7,610
-----------------        =========    =========    ==========    ==========   =========   ===========    =========     ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       5

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
       FOR THE PERIOD FROM MARCH 24, 1999 (INCEPTION) TO DECEMBER 31, 1999


<TABLE>
<S>                                                              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                        $(625,052)
   Adjustments to reconcile net loss to net cash used
    in operating activities:
   Depreciation and amortization                                      30,822
   Loss on impaired assets                                           247,325
   (Increase) decrease in:
   Attorney's escrow                                                  (1,631)
   Accounts receivable                                                  (441)
   Increase (decrease) in:
   Accounts payable                                                   64,963
                                                                    --------
     Net cash used in operating activities                          (284,014)
                                                                    --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Deposit on potential investment                                   (15,000)
   Purchase of property and equipment                                (45,939)
                                                                    --------
     Net cash used in investing activities                           (60,939)
                                                                    --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Obligations under capital leases                                   37,354
   Proceeds from issuance of common stock                            548,868
   Due to related party                                              (69,055)
   Due to creditors                                                 (161,650)
                                                                    --------
     Net cash provided by financing activities                       355,517
                                                                    --------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                1,126
                                                                    --------

INCREASE IN CASH AND CASH EQUIVALENTS                                 11,690

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                           --
                                                                    --------

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

Cash paid during the period for:
  Interest                                                          $    964
                                                                    ========
</TABLE>

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 5). 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 5). The Company has
paid $69,055 on the note through December 31, 1999.


                                       6

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
       FOR THE PERIOD FROM MARCH 24, 1999 (INCEPTION) TO DECEMBER 31, 1999

          See accompanying notes to consolidated financial statements.

































                                       7


<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 1999


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 8
(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  Generally  Accepted
Accounting  Principles 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  United  States  Generally  Accepted  Accounting  Principles.  The  financial
statements are expressed in United States  dollars.  The functional  currency of
DAL is the British pound sterling (See Note 1 (J)).

(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


                                       8

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 1999


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"  (SFAS121")  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.

(I) RECENT ACCOUNTING PRONOUNCEMENTS

The  Financial  Accounting  Standards  Board has  recently  issued  several  new
accounting  pronouncements.   Statement  No.  133,  "Accounting  for  Derivative
Instruments  and  Hedging   Activities",   as  amended  by  Statement  No.  137,
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


                                       9

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 1999


The functional currency of DAL is 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)).

COMPREHENSIVE INCOME

The Company  accounts for  Comprehensive  Income 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 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 in
the Statement of Operations and as  Accumulated  Other  Comprehensive  Income in
Stockholders' Equity and in the Statement of Changes in Stockholders' Equity.

(L) LOSS PER SHARE

Basic and diluted loss per common  share for the period ended  December 31, 1999
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, 1999,  there were
700,000 preferred shares which were convertible to a maximum of 7,000,000 common
shares that could potentially dilute future earnings per share (See Note 8 (A)).

NOTE 2 - DUE FROM ATTORNEY'S ESCROW

THI has yet to  establish  a bank  account.  The  Company's  attorney  has  been
collecting and disbursing  funds on behalf of the Company via an escrow account.
As of December  31,  1999,  the balance of the escrow  account was $1,631  which
represents the net of $495,700 of funds received for common stock issuances (See
Note 8 (B)), $150,000 of funds disbursed for acquisition and registration costs,
$12,669 of funds disbursed for accounting  fees and $331,400  transferred to its
subsidiary, DAL.

NOTE  3 - STOCK SUBSCRIPTION RECEIVABLE

On July 23, 1999, the Company issued 4,850,000 common shared to individuals. The
Company  has  received  $548,500  ($495,700  through the  attorney's  escrow and
$52,800  indirectly) towards this issuance and the remaining $51,500 is shown as
a stock  subscription  receivable.  This amount has been classified as a current
asset,  instead of a  reduction  of equity,  since the funds  were  received  in
January 2000, prior to the issuance of the accompanying  consolidated  financial
statements.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1999 consists of the following:

<TABLE>
<S>                                                         <C>
 Office equipment                                             $  2,294
 Motor vehicles                                                  3,637
 Motor vehicles under capital lease                             40,008
                                                               -------
                                                                45,939
  Less Accumulated depreciation                                  3,341
                                                               -------
                                                              $ 42,598
                                                               =======
</TABLE>


                                       10

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 1999


Depreciation expense for the period ended December 31, 1999 was $3,341.

NOTE 5 - 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  (See Note 6).  Pursuant  to the  acquisition
discussed  in Note  1(A),  the  Company  acquired  the note  payable  and issued
preferred stock in exchange for the $31,168 of common stock (See Note 8 (A)).

The cost of the above  design  rights  and  intellectual  property  rights  were
capitalized as purchased research and development and are 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  writedown is  reflected as an impaired  loss of
$247,325 in 1999.

NOTE 6 - NOTES PAYABLE

The Company  acquired an agreement  and the related note payable of $81,987 (See
paragraph  two of Note 5). The Company has repaid  $69,055 of this note and owes
$12,932 as of December 31, 1999.

NOTE 7 - 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:

<TABLE>
<S>                                                  <C>
              2000                                      $  7,706
              2001                                         9,362
              2002                                        20,286
                                                        ---------
                                                          37,354
                Less current portion                       7,706
                                                        ---------
                                                        $ 29,648
                                                        =========
</TABLE>


                                       11

<PAGE>

                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 1999


(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:

<TABLE>
<S>                                           <C>
                 2000                          $ 10,931
                 2001                            10,931
                 2002                             8,048
                                                --------
                                               $ 29,910
                                                ========
</TABLE>

NOTE 8 - 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 shareholders are lawfully entitled to vote and are not entitled to
receive dividends.

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 5).

(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.

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, 1999,  the Company had
received funds of $548,500 towards the stock issuance. The remaining proceeds to
be received are classified as a current stock  subscription  receivable asset of
$51,500 (See Note 3). On October 26, 1999, the Company issued


                                       12

<PAGE>


                      TORBAY HOLDINGS, INC. AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 1999


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

NOTE 9 - GOING CONCERN

As reflected in the  accompanying  financial  statements,  the Company had a net
loss of $625,052 and a working capital deficiency of $20,340. 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 up to $10,000,000 in
exchange for an option to purchase shares (See Note 10).

NOTE 10 - SUBSEQUENT EVENTS

During April 2000, the Company  entered into a share  purchase  agreement 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 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.














                                       13