<PAGE>
                    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, 2002

                          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)

                               516 292 2023
                           (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. [X]

         Revenues for the issuer's fiscal year ended December 31, 2002 were
$3,553.

         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 March
5, 2003: $464,158.44 based on the close of the Company's common stock on March
4, 2003 at $.03 per share.

         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
24,574,091 shares of common  stock  outstanding as of March 5, 2003.

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


<PAGE>



  This  report  includes  "forward-looking  statements" within the meaning of
Section  27A  of  the  Securities  Act of 1933 and Section 21E of the Securities
Exchange  Act of 1934. For example, statements included in this report regarding
our  financial  position,  business  strategy and other plans and objectives for
future  operations, and assumptions and predictions about future product demand,
supply,  manufacturing,  costs,  marketing  and  pricing  factors  are  all
forward-looking  statements.  When  we  use  words  like "intend," "anticipate,"
"believe,"  "estimate,"  "plan"  or  "expect,"  we  are  making  forward-looking
statements.  We  believe that the assumptions and expectations reflected in such
forward-looking  statements are reasonable, based on information available to us
on  the  date  hereof,  but  we  cannot  assure  you  that these assumptions and
expectations  will  prove  to  have been correct or that we will take any action
that  we  may presently be planning. We have disclosed certain important factors
that  could  cause  our  actual  results  to  differ materially from our current
expectations  elsewhere  in  this  report.  You  should  understand  that
forward-looking  statements  made  in  this  report are necessarily qualified by
these  factors.  We  are  not  undertaking  to  publicly  update  or  revise any
forward-looking statement if we obtain new information or upon the occurrence of
future  events  or  otherwise.






                                        i


<PAGE>

                                     PART I

ITEM 1.  DESCRIPTION OF THE BUSINESS

We are a company created to act as a holding company for
late-stage developmental or early-stage commercial companies. We were
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. We 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 26, 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, 2002, the Interbank exchange rate was
(pound) 1.57650 to $1.00.

BUSINESS AND ACQUISITION STRATEGY

We plan to acquire diversified, wholly-owned subsidiaries which are late-stage
development or early-stage commercial companies, with opportunities in niche
markets. Additionally, we intend to own and manage assets from a variety of
locations each having protection either by deed or intellectual property rights.
We intend 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.

We acquired Designer Appliances Ltd., and will actively seeking additional
acquisitions where appropriate to our strategy. Torbay Holdings has completed
agreements to acquire intellectual property rights. We have subsequently filed
with the United States Patent and Trademark Office for a registered trademarks
upon the product previously called "Project KAT" which was launched commercially
as the Quill Mouse. The Quill Mouse product in clinical trials presented to the
company, eliminates known mechanical circumstances that add to the risk of
repetitive strain injury from the use of the computer mouse.

Designer Appliances Subsidiaries. Wherever possible in strategic geographies a
subsidiary under the Designer Appliance brand will be sought to be incorporated
so as to establish and maintain a subsidiary brand to support the product mark.

All subsidiary companies will sell all the companies products as they become
available.

In the US we have Incorporated Designer Appliances, Inc., a Delaware company, as
a wholly owned subsidiary. This subsidiary is responsible for sales of the
Company's products in the United States and will enter into distribution
agreements in other US serviceable countries.


<PAGE>

DESIGNER APPLIANCES, LTD.

Designer Appliances, Ltd. is organized under the laws of the United Kingdom and
will mirror the Sales and Marketing Activities of Designer Appliances Inc but in
the geography of Europe or regions more easily serviced from Europe.


OPERATIONS


PRODUCT IPR

The only IPR to be exploited at this time in a product at this time is the Quill
Mouse and in a subsequent event this product offering has been further extended
by the development of Nib Click-Less software. Together these products are known
as the Virtually Hands Free Mousing System as there is minimal requirement by
the user to employ the muscles of their fingers hands.

Other as yet unexploited IPR reside in the 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. We 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.

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.

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.

<PAGE>
Products Offered For Sale

The Quill Mouse computer mouse.
--------------------------

In July 2001, we entered into a definitive purchase agreement with two
individuals who held the intellectual property rights and a third individual who
was involved in the design drawings for the software and know-how for the
computer mouse product now referred to as the Quill (formally known as the
"KAT"). Under the terms of the agreement, we acquired all of the sellers'
rights, title and interests in the KAT in exchange for 220,000 convertible
preferred shares. These shares will be convertible into 2,200,000 shares of
common stock upon the satisfaction of certain financial performance requirements
under the agreement's terms. Under this agreement an additional 200,000
convertible preferred shares are also to be issued if and when a patent is
granted which patent has been applied for. Such patent rights were granted in
January 2002. These additional preferred shares are convertible under the
identical financial performance requirements. In the event that the financial
performance requirements are not achieved within five years from the signing of
the agreement, then these preferred shares will convert on a 1:1 basis of common
stock. As such, on April 22, 2002 we issued an aggregate of 420,000 convertible
preferred shares.

The Quill Mouse design, without altering the way an individual works, maintains
the hand used to maneuver the computer mouse, in a "neutral" or low
biomechanical load position, similar to a hand shake position while using a
mouse and without requiring the user to grip. It is larger than an ergonomic
mouse so it is more comfortable to use. Quill Mouse keeps the users hand, wrist
and lower forearm within certain critical angles so as not to overly extend the
median nerve. The overall impact of this design allows for the user of the Quill
Mouse to move any point on the computer screen cursor without having to grip
with the muscles of the hand, which the Company believes is unique and is not
offered or provided by any other manufacturer.

Nib Software.

In February 2003 we entered into an agreement to acquire the rights to certain
software and now have the rights to make developments to this software platform.
We believe that this software helps reduce the mechanical burden of pressing
mouse buttons translating into millions of actuation reductions a year and
extends further the corporate objective of low biomechanical load in regards to
the computer mouse input task. We intend to use the combination of our Quill
Mouse and Nib software bundled together as the "VHF system" (virtually hands
free) to allow the user minimal use of the fingers muscles of the hand on the
computer mouse.

We will develope our E-Quill-Liberator Software that we
believe will help manage injuries typically associated with using a computer
mouse such as Cumulative Trauma Disease (CTD) or Repetitive Strain Injury (RSI)
and Carpal Tunnel Syndrome (CTS). The mouse driver software supplied will have a
user de-selectable default that prompts users to take a 15 minute break every
two hours, which is a recommendation of the OSHA and published in their
Ergonomic Report: Office and Clerical, extracts relating to TW921209, Computer
Layout & Design. The E-Quill-Liberator software suite will extend fatigue
management and make recommendations as to how users might seek to alleviate
observed sensations in specific limb zones by offering a series of exercises.
The information, securely contained on the users personal computer, would be
used to suggest breaks and exercises customized to suit their individual body
mechanics.




<PAGE>

SALES & MARKETING

Designer Appliances intends image promote and accelerate early sales through
Its website and advertising in targeted magazines in different media and
geographic locations.

Designer Appliances Inc, has Internet Web site, www.quillmouse.com for the
purpose of advertising and selling it's Quill Mouse and Nib Software products. A
new website www.quillmouse.co.uk has been secured and is prepared ready for
sales in the UK by Designer Appliances Ltd.

Additionally, we maintain an Internet Web Site located at
www.Torbayholdingsinc.net to market our corporate activities

Sales have commenced from the US subsidiaries website and orders taken on the
web are processed and transferred to the companies outsourced US warehouse
facility from which they are shipped.  Notification of shipment is then made by
the warehouse at which point the credit card used to place the order is debited.
Orders are not debited or cash collected until a shipment is conformed.

Distributors have and are being appointed in the US and other geographies and
shipments to Canada, Holland, the UK, Scandanavia, New Zealand as part of
confirmed orders or in the process of account set up.

Linkage to numerous other sites that advise users as to RSI issues have been
made, which will providing information as to product availability do not
themselves sell products.


MAJOR COMPETITORS

Designer Appliances believes, in the area of its domestic appliance products
(excluding the computer mouse) 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.

Competition in the computer mouse product sector is typically global by most
product providers. Major players in the computer mouse supply sector may
include, but not be limited to, Logitech, Kensington and Microsoft all of whom
offer global ergonomic mouse product supplies. In terms of market
differentiation, we are the only provider, to our knowledge, of a biomechanical
mouse product. We have also applied for a registration of our unregistered
trademark "Computer Biomechanics" in addition to registrations pending for
"Quill Mouse" and the "E-Quill-Liberator" trademark, which is close to
registration.

Further expansion of the company's Patent position is also in progress.



<PAGE>
<TABLE>
<CAPTION>
PATENTS AND TRADEMARKS

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

<S>                                            <C>
Telstar I vacuum cleaner design protection     British design registration No. 2066378
The name "Telstar"                             British trademark registration No. 2209241
The name "Sputnik"                             British trademark registration No. 2209243

The tabletop design for the Telstar II,
Sputnik or Telestar Space Station              British design registration No. 2082459
The combined vacuum and table product          British design registration No. 2085669
The "Mistral" table top fan design             British design registration No. 2066377
The name "Mistral"                             British trademark registration No. 2209473
The name " Wurlitzer"                          British trademark no. 2209244
UK Patent Grant; Hand Held Manipulation
     Device eg Computer Mouse or Joy Stick     British patent No. BG2328496


US Patent and Trademark Office
- --------------------------------
Trademark "Quill MLOuse"                       US trademark Pending
Trademark "E-Quill-Liberator"                  US trademark application No. 78/105096
Trademark "Computer Biomechanics"              US trademark Pending

</TABLE>

All of the above patents expire on the fourteenth year from the date the patent
was granted. The trademarks expire on the tenth year from the date the trademark
was granted.

In October, 2002, our subsidiary, Designer Appliances, Inc., entered into a
distribution agreement with Micwil Computer Consulting whereby Micwil shall
serve as a distributor of the Quill in the territory of Canada. The distribution
agreement is for a term of 12 months without an option to renew.

Recent Events

In April 2003, the company signed a term sheet to sell up to $250,000 of its 12%
convertible  debentures  together  with  the  issuance  of  warrants to purchase
500,000  shares  of our common stock. We are negotiating the final terms of such
agreements  and are working with counsel and the investors to finalize the terms
of  such  agreements.

EMPLOYEES

We have two full-time employees and two part-time employees, including our
executive officers, neither of which have formal employment agreements with us.



<PAGE>
                                  RISK  FACTORS

         An investment in our common stock is speculative in nature and involves
a high degree of risk. You should carefully consider the following risks and the
other  information contained in this report. The price of our common stock could
decline  due  to  any  of  these  risks,  and you could lose all or part of your
investment.  You  also  should  refer  to the other information included in this
report,  including  the  financial  statements  and  related  notes  thereto. In
addition,  the  risks  described  below are not the only ones facing us. We have
described  only the risks we consider material. However, there may be additional
risks  that  we  view  as  not  material or of which we are not presently aware.

         If  any  of  the  events  described  below were to occur, our business,
prospects,  financial  condition  or results of operations or cash flow could be
materially  adversely  affected. When we say that something could or will have a
material adverse effect on it, we mean that it could or will have one or more of
these  effects.

WE HAVE NOT EARNED SIGNIFICANT REVENUES AND WE HAVE HAD LOSSES SINCE OUR
INCEPTION. WE EXPECT LOSSES TO CONTINUE IN THE FUTURE AND THERE IS A RISK WE MAY
NEVER BECOME PROFITABLE.

We had a net loss of $1,571,853 for the year ended December 31, 2002. Because we
increased our product development and manufacturing activities, we anticipate
that we will incur operating expenses in connection with continued development,
testing and manufacturing of our proposed products, and expect these expenses
will result in continuing and, perhaps, significant operating losses until such
time, if ever, that we are able to achieve adequate product sales levels.
Revenues and profits, if any, will depend upon various factors, including
whether we will be able to manufacture and market our appliance and computer
products.

THERE IS UNCERTAINTY AS TO OUR CONTINUATION AS A GOING CONCERN.

Our audited financial statements for the fiscal year ended December 31, 2002,
reflect a net loss of $1,571,853, and a stockholders' deficit of
$522,447. These conditions raise substantial doubt about our ability to continue
as a going concern if sufficient additional funding is not acquired or
alternative sources of capital developed to meet our working capital needs. We
need approximately $500,000 to fund our operations through 2004 if we do not
generate any revenues. If we continue to incur losses, we may not be able to
fund continuing business operations, which could lead to the limitation or
closure of some or all of our operations.


<PAGE>

OUR CURRENT AND POTENTIAL COMPETITORS, SOME OF WHOM HAVE GREATER RESOURCES AND
EXPERIENCE THAN WE DO, MAY DEVELOP PRODUCTS AND TECHNOLOGIES THAT MAY CAUSE
DEMAND FOR, AND THE PRICES OF, OUR PRODUCTS TO DECLINE.

The general appliances industry is competitive as well as the general computer
products industry which includes several companies which have achieved
substantially greater market share than we have, and have longer operating
histories, have larger customer bases, have substantially greater financial,
development and marketing resources than we do. We expect our competition to
intensify as the Internet continues to grow. Existing or future competitors may
develop or offer products that are comparable or superior to ours at a lower
price, which could harm our business, results of operations and financial
condition.

AS A DEVELOPER IN THE APPLIANCES INDUSTRY, WE MAY EXPERIENCE SUBSTANTIAL COST
OVERRUNS IN MANUFACTURING AND MARKETING OUR PRODUCTS, AND MAY NOT HAVE
SUFFICIENT CAPITAL TO SUCCESSFULLY COMPLETE ANY OF OUR PROJECTS.

In the household appliances and furnishings industry the commercial success of
any product is often dependent on factors beyond the control of the company,
including, but not limited to, market acceptance and retailers' prominently
shelving and selling the products. We may experience substantial cost overruns
in manufacturing and marketing our products, and may not have sufficient capital
to successfully complete any of our projects. We may not be able to manufacture
or market our products because of industry conditions, general economic
conditions, competition from existing or new manufacturers and distributors, or
lack of acceptance for our products by consumers or retail outlets.

IF WE ARE NOT ABLE TO CONTRACT WITH RETAIL OUTLETS TO SELL OUR PRODUCTS, WE MAY
NOT BE ABLE TO CONTINUE TO OPERATE.

We intend to market our non-computer appliance products through upscale
department stores, boutiques and designer outlets. We do not currently have any
arrangements or agreements with any such stores to carry our products once
produced. We may not be able to locate retail outlets to stock our products,
what shelving space prominence those outlets will give our products, or whether
our products will be given a lower profile in the future. We intend to market
our computer related and ergonomic products through distributors and by using
the Internet.


WE MAY NOT BE ABLE TO PROTECT OUR PATENTS, TRADEMARKS AND PROPRIETARY AND/OR
NON-PROPRIETARY RIGHTS, AND, WE MAY INFRINGE UPON THE PATENTS, COPYRIGHTS,
TRADEMARKS AND PROPRIETARY RIGHTS OF OTHERS.

Notwithstanding the pending registration of certain trade names with the United
States Patent and Trademark Office, and the grant of a patent and trade marks by
the British Patent Office, we may not be able to enforce against use of any of
our marks or patents. If we are not able to prevent competitors from using the
same or similar names, marks, concepts or appearances, we may not have the
financial resources necessary to protect our marks against infringing use.

WE MAY, IN THE FUTURE, ISSUE ADDITIONAL SHARES OF OUR COMMON STOCK WHICH WOULD
REDUCE INVESTORS PERCENT OF OWNERSHIP AND MAY DILUTE OUR SHARE VALUE.

Our certificate of incorporation authorizes the issuance of 100,000,000 shares
of common stock, par value $.0001 per share, and 20,000,000 shares of preferred
stock, par value $.0001 per share. The future issuance of all or part of our
remaining authorized common stock may result in substantial dilution in the
percentage of our common stock held by our then existing shareholders. We may
value any common or preferred stock issued in the future on an arbitrary basis.
The issuance of common stock for future services or acquisitions or other
corporate actions may have the effect of diluting the value of the shares held
by our investors, and may lower the price of our common stock.



<PAGE>

OUR 12% DEBENTURES ARE CONVERTIBLE BY THE DEBENTURE HOLDERS INTO SHARES OF OUR
COMMON STOCK AT ANY TIME. AS SUCH, PURCHASERS OF OUR COMMON STOCK COULD
EXPERIENCE SUBSTANTIAL DILUTION OF THEIR INVESTMENT UPON CONVERSION OF SUCH
SECURITIES.

Our 12% convertible debentures are convertible into such number of shares of
common stock as is determined by dividing the principal amount thereof by the
lesser of (a) fifty percent of the average of the lowest three trading prices
for the common stock during the twenty trading day period ending one trading day
prior to the date the conversion notice is sent by the holder to the borrower
and (b) $.05 per share. The number of shares of common stock issuable upon
conversion of our convertible debentures will increase if the market price of
our stock declines, which will cause dilution to our existing stockholders.

THE CONTINUOUSLY ADJUSTABLE CONVERSION PRICE FEATURE OF OUR CONVERTIBLE
DEBENTURES MAY ENCOURAGE INVESTORS TO MAKE SHORT SALES IN OUR COMMON STOCK,
WHICH COULD HAVE A DEPRESSIVE EFFECT ON THE PRICE OF OUR COMMON STOCK.

The convertible debentures are convertible into shares of our common stock at a
50% discount to the trading price of the common stock prior to the conversion.
The significant downward pressure on the price of the common stock as the
selling stockholder converts and sells material amounts of common stock could
encourage short sales by investors. This could place further downward pressure
on the price of the common stock. The selling stockholder could sell common
stock into the market in anticipation of covering the short sale by converting
their securities, which could cause the further downward pressure on the stock
price. In addition, not only the sale of shares issued upon conversion or
exercise of debentures, warrants and options, but also the mere perception that
these sales could occur, may lower the market price of the common stock.



<PAGE>
A DEFAULT BY US UNDER OUR 12% DEBENTURES WOULD ENABLE THE HOLDERS OF OUR 12%
DEBENTURES TO TAKE CONTROL OF SUBSTANTIALLY ALL OF OUR ASSETS.

Our 12% debentures are secured by a security agreement under which we pledged
substantially all of our assets, including our goods, fixtures, equipment,
inventory, contract rights and receivables. A default by us under the 12%
debentures would enable the holders to take control of substantially all of our
assets. The holders of our 12% debentures have no operating experience in the
industry which could force us to substantially curtail or cease our operations.


THE APPLICATION OF THE "PENNY STOCK REGULATION" COULD HARM THE MARKET PRICE OF
OUR COMMON STOCK

Our securities may be deemed a penny stock. Penny stocks generally are equity
securities with a price of less than $5.00 per share other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
Stock Market, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system. Our
securities may be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
together with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the "penny stock rules" require the delivery, prior
to the transaction, of a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell our securities and may have the effect of reducing the level of trading
activity of our common stock in the secondary market. The foregoing required
penny stock restrictions will not apply to our securities if such securities
maintain a market price of $5.00 or greater. We can give no assurance that the
price of our securities will reach or maintain such a level.

SHARES OF OUR TOTAL OUTSTANDING SHARES THAT ARE RESTRICTED FROM IMMEDIATE RESALE
BUT MAY BE SOLD INTO THE MARKET IN THE FUTURE COULD CAUSE THE MARKET PRICE OF
OUR COMMON STOCK TO DROP SIGNIFICANTLY, EVEN IF OUR BUSINESS IS DOING WELL.

As of March 5, 2003, we have 23,574,091 shares of our common stock
issued and outstanding of which 7,522,185 shares are restricted shares. Rule 144
provides, in essence, that a person holding "restricted securities" for a period
of one year may sell only an amount every three months equal to the greater of
(a) one percent of a company's issued and outstanding shares, or (b) the average
weekly volume of sales during the four calendar weeks preceding the sale. The
amount of "restricted securities" which a person who is not an affiliate of our
company may sell is not so limited, since non-affiliates may sell without volume
limitation their shares held for two years if there is adequate current public
information available concerning our company. In such an event, "restricted
securities" would be eligible for sale to the public at an earlier date. The
sale in the public market of such shares of Common Stock may lower market
prices of our Common Stock.

<PAGE>

ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES

Our officers and directors reside outside the United States. We anticipate that
a substantial portion of the assets that may be developed or acquired by us will
be located outside the United States and, as a result, it may not be possible
for investors to effect service of process within the United States upon the
officers or directors, or to enforce against our assets or against such person
judgements obtained in United States courts predicated upon the liability
provisions, and most particularly the civil liability provisions, of the United
States securities laws or state corporation or other law.


ITEM 2.  DESCRIPTION OF PROPERTY

We operate out of an office space made available at no cost to us by Mr. A. G.
Lane. The address is 4 Mulford Place, Suite 2G, Hempstead, NY, 11550 and is to
be our registered address until such time as permanent office facilities in the
New York area can be acquired or leased.

Currently, Designer Appliances has no facilities as its employees work from
home. On April 16, 2002 we contracted with Dynapoint, Inc., located in
California, for Dynapoint to provide warehousing and logistics facilities for
our Quill product. We believe that our properties are adequate for our current
and immediately foreseeable operating needs. We do not have any policies
regarding investments in real estate, securities or other forms of property.


ITEM 3.           LEGAL PROCEEDINGS

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



<PAGE>
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 authorized 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.

     The  following table sets forth the range of high and low bid quotations of
our  common  stock  for the periods indicated. The prices represent inter-dealer
quotations,  which  do not include retail markups, markdowns or commissions, and
may  not  represent  actual  transactions.



                                            HIGH            LOW
                                           -------         ------
YEAR  ENDED  DECEMBER  31,  2001

First Quarter                              $4.87            $4.00
Second  Quarter                            $4.62            $3.00
Third  Quarter                             $2.30            $0.25
Fourth  Quarter                            $0.50            $0.25

YEAR  ENDED  DECEMBER  31,  2002

First Quarter                              $0.39            $0.11
Second  Quarter                            $0.29            $0.04
Third  Quarter                             $0.16            $0.05
Fourth  Quarter                            $0.28            $0.03



SECURITY  HOLDERS

     At March 5, 2003, there were 24,574,091 shares of Torbay Holdings' common
stock  outstanding, which were held of record by approximately 373 stockholders,
not including persons or entities who hold the stock in nominee or "street" name
through  various  brokerage  firms.

Dividends

         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.

Recent Sale of Unregistered Securities

    We  believe  that  each  transaction  listed  below  was  exempt  from  the
registration  requirements  of  the  Securities Act of 1933 by virtue of Section
4(2) thereof or Regulation D promulgated thereunder. All recipients had adequate
access,  through  their  relationships with us, to information about us. Some of
the  holders  of  the  shares  issued below may have subsequently transferred or
disposed  of  their shares.

     In July, 2002, the Company sold 562,353 shares of the Company's common
stock to Mr. Thomas A. Marchant, now a director of the Company, at a purchase
price of $.085 per share for an aggregate purchase price of $47,800. Such shares
were physically delivered by the transfer agent on or about October 21, 2002.

     In October 2002, the Company issued 500,000 shares of its restricted common
stock to one entity pursuant to a consulting agreement for services to the
Company. Such agreement has been subsequently cancelled and, as such, a stop
order has been placed on the 500,000 shares. Such shares, however, still remain
part of the Company's calculated issued and outstanding total of 24,574,091
until cancelled by the Company's transfer agent.

     In October 2002 we granted an option to one individual to purchase 100,000
shares of our common stock, exercisable on or after October 17, 2003, at an
exercise price of $.21 per share. Such option is for a term of five years.

     In October 2002, the Company issued an aggregate of 228,572 of the
Company's common stock to four individuals for their services rendered to
Designer Appliances, Inc. Such shares were valued at $.21 per share or an
aggregate of $48,000. The Company also issued 571,249 shares of its common stock
to William Thomas Large and 285,714 shares to Alexander Gordon Lane for services
rendered to the Company. Such restricted shares were also valued at $.21 per
share.

     In December, the Company issued warrants in connection with the sale of its
convertible  debentures. The Company issed 585,000 warrants exercisable at $.05
per share for a term of three years. We believe that such transaction was exempt
from  the  registration  requirements of the Securities Act of 1933 by virtue of
Section  4(2)  thereof  or  Regulation  D  promulgated  thereunder.


<PAGE>

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

OVERVIEW


Torbay Holdings is a 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 two subsidiaries, Designer Appliances
Ltd. ("Designer Appliances") and Designer Appliances, Inc. ("DAI") (a Delaware
corporation) and will actively be seeking additional and appropriate
acquisitions. Torbay Holdings has acquired valuable intellectual property rights
including UK Patent for a computer mouse that is thought to be beneficial to
computer mice users with regards to the area of treatment and prevention of
repetitive strain injury. The UK patent is the basis for further patent
applications that may result in an extent of the scope and geography of the
company's current patent position. The company has made achieved what it
believes are significant technical developments that will be sort patent
protection, though there is no guarantee that such developments will proceed to
a patent.


<PAGE>
Torbay Holdings sells and markets Quill Mouse computer mouse and software. The
Company's products are designed to attract a premium, price in the upper sectors
of its market. There is no assurance that Torbay Holdings through its
subsidiaries will be able to successfully maintain manufacture or market these
items.

In July 2001, the Company entered into a purchase agreement with two individuals
who held the intellectual property rights, software and know-how to a computer
mouse known as the "QUILL MOUSE". Under the terms of the agreement, the Company
acquired all of the sellers' rights, title and interest in the QUILL MOUSE in
exchange for 220,000 Series 1 Convertible Preferred Shares. These shares will be
convertible 1:10 into 2,200,000 shares of common stock upon the QUILL MOUSE
generating $1,000,000 net profit after tax averaged over four fiscal quarters
within five years from the signing of the agreement. However, if the $1,000,000
net profit requirement is not met within five years from the signing of the
agreement, then these preferred shares will convert 1:1 into 220,000 shares of
common stock. Since the $1,000,000 net profit requirement is a contingency, the
convertible preferred shares were valued based on the 1:1 conversion ratio using
the value of recent cash sales of the common stock at $.10 per share, for a
total fair value of $22,000. The preferred shares were issued on April 22, 2002.

The agreement also calls for the issuance of an additional 200,000 shares of
Series 1 Convertible Preferred Stock upon the Company receiving an approval for
the patent rights to the QUILL MOUSE. Such patent rights were granted in January
2002 and the 200,000 preferred shares were issued on April 22, 2002.


<PAGE>
RESULTS OF  OPERATIONS  FOR THE YEARS ENDED  DECEMBER  31, 2002 AND DECEMBER 31,
2001

     Torbay  Holdings  incurred  a  net  loss of  $1,571,853, or $.08 per share
compared to a net loss of $418,184, or $.03 per share, for the year ended
December 31, 2001. The increase in net loss reflects the increase in operating
expenses and interest and financing costs over the prior period. Torbay Holdings
generated revenues of $3,553 for the year ended December 31, 2002.

Torbay Holdings' total operating expenses increased $570,336 to $971,952 for the
year ended December 31, 2002 from $401,616 for the year ended December 31, 2001.
This increase in expenses is attributed primarily to a $118,231 increase in
professional fees, a $513,062 increase in consulting fees, $63,245 increase in
selling expenses and a $50,246 increase in other general and administrative
expenses, offset by a decrease in $174,448 in directors and compensation.

     Torbay Holdings' loss from operations increased by $567,296 from $401,616
at December 31, 2001 to $968,912 at December 31, 2002.

The increase in these expenses reflect the commencement of sales and marketing
activity.

LIQUIDITY AND CAPITAL RESOURCES

         Torbay  Holdings,  including its subsidiaries  have
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 and as of this filing small and insubstantial revenues
from sales. 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
$803,848 from the sale of its securities and $174,985 from loan proceeds.
Designer Appliances issued promissory notes in an aggregate amount of $161,650
for the cost of purchasing the intellectual property rights to its products,
which was repaid in full by Torbay Holdings from subscription proceeds in 1999.

Torbay Holdings has had minimal sales and revenue of $3,553 at December 31,
2002. Since inception, Torbay Holdings and its subsidiaries have focused on
organizational activities and research and development of Torbay Holdings'
products and marketing strategies. Management estimates that it will require
approximately $0.25 million for the calendar year 2003 to promote sales of its
Quill Mouse product. Management anticipates that revenue generation from the
sales of the computer mouse, if at the levels anticipated, could generate cash
to commence the introduction of the Company's other products and allow for
access to bank credit instruments thereby reducing the extent of outside funds
required. 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.  Torbay  Holding's audited financial
statements raise substantial doubt about Torbay's ability to continue as a going
concern if sufficient additional funding are not acquired or alternative sources
of capital developed or revenues from Quill Mouse sales do not meet Torbay's
working capital needs.

<PAGE>


NEW ACCOUNTING PRONOUNCEMENTS

     In June 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 146, " Accounting for Costs
Associated with Exit or Disposal Activities" (FAS 146).  FAS 146, which will be
effective for exit or disposal activities initiated after December 31, 2002, is
not expected to have a material impact on the company's results of operation,
financial position or cash flows.

     In December 2002, the FASB issued Statement of Financial Accounting
Standards No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure" (FAS 148), which amends FAS 123, "Accounting for Stock-Based
Compensation", transition requirements when voluntarily changing to the fair
value based method of accounting for stock-based compensation and also amends
FAS 123 disclosure requirements.  FAS 148 is not expected to have a material
impact on the company's results of operations, financial position or cash flow.

<PAGE>
CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     In December, 2001, the SEC issued a cautionary advice to elicit more
precise disclosure in this Item 7, MD&A, about accounting policies management
believes are most critical in portraying the company's financial results and in
requiring management's most difficult subjective or complex judgments. The
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make judgments and estimates.

     We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.

     Revenues from sales of products are recognized when goods are shipped to
customers. The Company provides a warranty on goods for two years from the date
of sale. The Company has not established a warranty reserve at December 31, 2002
since the amount is not material.

Impact Of Inflation

     Inflationary factors have not had a significant effect on our operations.





<PAGE>
ITEM 7. FINANCIAL STATEMENTS

         The consolidated  audited financial statements for the period ended
December 31, 2002 are included in this Annual Report on Form  10-KSB following
Item 13.


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  table  below  sets  forth  certain  information with respect to Torbay
Holdings'  directors  and  executive officers as of March 5, 2003.


        Name                            Position
-------------------------       -----------------------

Alexander Gordon Lane           Chairman, Director and acting Secretary

William Thomas Large            Chief Executive Officer, President and Director

Thomas A. Marchant              Director

     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.

         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 he 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.

<PAGE>
         William  Thomas  Large,  46,  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.

         Thomas A. Marchant has served as a member of our board of directors
since July 11, 2002. Thomas A. Marchant, joined Ford Motor Company in 1985 as
Financial Sales Manager of Ford Credit Canada. Mr. Marchant directed a sales
and marketing operation to institutional investors in the Commercial Paper and
Medium Term Note Markets. In 1991 Mr. Marchant transferred to Ford World
Headquarters in Dearborn, Michigan and assumed responsibility for consolidation
and launch of the Canadian Treasury funding operation.  Prior to joining Ford,
Mr. Marchant held various positions with Greenshields Incorporated, one of
Canada's foremost investment banking firms, First National Bank of Chicago,
Grindlays Bank and Merrill Lynch.

ITEM 10.          EXECUTIVE COMPENSATION


SALARY COMPENSATION

The following table sets forth a summary for the fiscal years ended, of the cash
and non-cash compensation awarded, paid or accrued by us to our President and
our most highly compensated officers other than the CEO, who served in such
capacities at the end of fiscal 2002 (collectively, the "Named Executive
Officers"). No other of our executive officers earned in excess of $100,000 in
total annual salary.

                 SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION
                 ----------------------------------------------


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

                                  2002    47,663.60
William Thomas Large              2001     (1)      --          --
Chief Executive Officer           2000    96,990

Alexander Gordon Lane             2002    28,696.50
Chairman and Secretary            2001      0       --          --

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

(1) Mr. Large is eligible for a performance-related bonus of up to 100% of his
annual salary. In 2001 we issued 1,200,000 shares of common stock valued at $.10
per share to Mr. Large. We also paid to Mr. Large $30,815 in the form of
Directors compensation.


<PAGE>

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 AND
         RELATED STOCKHOLDER MATTERS

     The  following  table sets forth certain information as of the date of this
Report  regarding  the  beneficial ownership of our common stock held by each of
our  executive  officers  and directors, individually and as a group and by each
person  who  beneficially owns in excess of five percent of the common stock. 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. 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.  The  inclusion  in  this  section of any shares deemed
beneficially owned does not constitute an admission by that person of beneficial
ownership  of  those  shares.

<TABLE>
<CAPTION>

                                                Amount and Nature       Percent
                                                      Of                  of
                             Position with        Beneficial            Common
Stock Name and Address      Torbay Holdings       Ownership (1)       Outstanding (1)
-----------------------------------------------------------------------------------------
<S>                             <C>               <C>                   <C>
Alexander Gordon Lane          Secretary, Director    982,777               3.99%
4 Milford Place
Hempstead, New York 11550

William Thomas Large           President, Chief     8,599,582(2)           34.99%
c/o 91 Tulip Avenue            Executive Officer
 Lily Building., Apt. A4       and Director
Floral Park, NY 11001

Thomas A. Marchant             Director               602,353               2.45%
c/o Torbay Holdings, Inc.
4 Milford Place
Hempstead, New York 11550

All Directors and Executive Officers                10,184,712(2)          41.44%
as a Group (3 persons)
</TABLE>
-----------------------------------

(1)Based upon 24,574,091 shares outstanding as of March 5, 2003.

(2)Includes 120,000 shares of common stock owned by Mr. Large's minor children.
   Such figure does not include 333,333 shares of common stock purchased by
   Mr. Large which shares have not yet been issued to him.

<PAGE>

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

RELATED TRANSACTIONS

     Gordon  Lane,  the Chairman of the Company, having loaned to the Company an
amount  of  $45,310 as of the date of this Report, on March 26, 2002 converted a
portion of such loan into 297,063 shares of the Company's restricted common
stock. Additionally, the Company's President, Thomas Large, purchased from the
Company 333,333 shares of the Company's restricted common stock during 2002 for
an aggregate purchase price of $40,000.

     In  2001 the Company issued 2,200,000 shares of its common stock, valued at
$.10  per share, to Mr. Large. The Company also paid to Mr. Large $30,815 in the
form  of  Director's  compensation.

     In July, 2002, the Company sold 562,353 shares of the Company's common
stock to Mr. Thomas A. Marchant, now a director of the Company, at a purchase
price of $.085 per share for an aggregate purchase price of $47,800. Such shares
were physically delivered by the transfer agent on or about October 21, 2002.

       In October 2002, the Company  issued 571,249 shares of its common stock
to William Thomas Large and 285,714 shares to Alexander Gordon Lane for services
rendered to the Company. Such restricted shares were valued at $.21 per
share.

<PAGE>

ITEM 13.  CONTROLS AND PROCEDURES

     (a)     Evaluation of Disclosure Controls and Procedures.
             ------------------------------------------------

     Within the 90 days prior to the date of this Annual Report for the year
ended December 31, 2002, we carried out an evaluation, under the supervision and
with the participation of our management, including the company's Chairman and
Chief Executive Officer and the Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 (the
"Exchange Act"), which disclosure controls and procedures are designed to insure
that information required to be disclosed by a company in the reports that it
files under the Exchange Act is recorded, processed, summarized and reported
within required time periods specified by the SEC's rules and forms.  Based upon
that evaluation, the Chairman and the Principal Financial Officer concluded that
our disclosure controls and procedures are effective in timely alerting them to
material information relating to the company (including our consolidated
subsidiaries) required to be included in the company's period SEC filings.

     (b)     Changes in Internal Control.
             ---------------------------

     Subsequent to the date of such evaluation as described in subparagraph (a)
above, there were no significant changes in our internal controls or other
factors that could significantly affect these controls, including any corrective
action with regard to significant deficiencies and material weaknesses.

Procedures for effective systems control for an organization of our size are
being Reviewed in regards to necessary compliance and effectiveness.



<PAGE>

ITEM 14.          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     Manufacturing Agreement between the Company and Dynapoint, Inc. dated
         April 16, 2002(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 by reference to the Company's Form 10-KSB filed with the
     Commission on April 29, 2002

         (b)      Reports on Form 8-K.

         The Company did not file a Current Report on Form 8-K for the fourth
quarter of the fiscal year ended December 31, 2002.

         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.

<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001




<PAGE>
<TABLE>
<CAPTION>


                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES



                                    CONTENTS
                                   ----------
<S>                <C>                   <C>

PAGE                1       INDEPENDENT AUDITORS' REPORT

PAGE                2       CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2002

PAGE                3       CONSOLIDATED  STATEMENTS OF OPERATIONS  AND OTHER
                            COMPREHENSIVE  INCOME (LOSS) FOR THE
                            YEARS ENDED DECEMBER 31, 2002 AND 2001

PAGES             4 - 5     CONSOLIDATED  STATEMENT  OF CHANGES IN  STOCKHOLDERS'
                            DEFICIENCY  FOR THE YEARS  ENDED
                            DECEMBER 31, 2002 AND 2001

PAGES             6 - 7     CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS
                            ENDED DECEMBER 31, 2002 AND 2001

PAGES            8 - 22     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
                            DECEMBER 31, 2002


</TABLE>

<PAGE>





                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors of:
Torbay Holdings, Inc. and Subsidiaries

We have audited the accompanying  consolidated balance sheet of Torbay Holdings,
Inc.  and  Subsidiaries  as of December  31,  2002 and the related  consolidated
statements of  operations  and other  comprehensive  income  (loss),  changes in
stockholders'  deficiency  and cash flows for the years ended  December 31, 2002
and 2001. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

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 consolidated
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  consolidated  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  Subsidiaries  as of December 31, 2002, and the results of their  operations
and  their  cash  flows for the  years  ended  December  31,  2002 and 2001,  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 11 to
the consolidated financial statements, the Company has a net loss of $1,571,853,
a negative cash flow from operations of $497,417,  a working capital  deficiency
of $644,065 and a  stockholders'  deficiency  of $522,447.  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 11. 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 4, 2003

<PAGE>
<TABLE>
<CAPTION>


                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                             AS OF DECEMBER 31, 2002


                                     ASSETS
<S>                                                                                                                  <C>

CURRENT ASSETS
 Cash                                                                                                  $             59,403
 Accounts receivable, net                                                                                             1,620
 Inventory                                                                                                           65,453
 Prepaid expense                                                                                                     15,748
                                                                                                          -------------------
     Total Current Assets                                                                                           142,224
                                                                                                          -------------------

PROPERTY AND EQUIPMENT - NET                                                                                         22,661
                                                                                                          -------------------

OTHER ASSETS
 Intangible assets                                                                                                   97,957
 Deposits                                                                                                             1,000
                                                                                                          -------------------
     Total Other Assets                                                                                              98,957
                                                                                                          -------------------

TOTAL ASSETS                                                                                           $            263,842
------------
                                                                                                          ===================

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
 Accounts payable and accrued expenses                                                                 $            226,626
 Loan payable - officer                                                                                               9,663
 Notes payable                                                                                                      550,000
                                                                                                          -------------------
     Total Current Liabilities                                                                                      786,289
                                                                                                          -------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
 Preferred stock, $.0001 par value, 20,000,000 shares authorized, 420,000
 issued and outstanding                                                                                                  42
 Common stock, $.0001 par value, 100,000,000 shares authorized, 20,912,617
 issued and outstanding                                                                                               2,091
 Common stock to be issued (539,568 shares)                                                                              54
 Additional paid-in capital                                                                                       2,652,336
 Accumulated deficit                                                                                             (3,035,354)
 Accumulated other comprehensive loss                                                                               (12,657)
 Deferred equity based expense                                                                                     (128,959)
                                                                                                          -------------------

TOTAL STOCKHOLDERS' DEFICIENCY                                                                                     (522,447)
                                                                                                          -------------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                         $            263,842
----------------------------------------------
                                                                                                          ===================



</TABLE>


          See accompanying notes to consolidated financial statements.
                                        2
<PAGE>


                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS AND
                        OTHER COMPREHENSIVE INCOME (LOSS)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


<TABLE>
<CAPTION>
                                                                         2002                     2001
                                                                  --------------------      ------------------
<S>                                                                       <C>                      <C>

SALES - NET                                                    $               3,553     $              -

COST OF SALES                                                                    513                    -
                                                                  --------------------      ------------------

GROSS PROFIT                                                                   3,040                    -
                                                                  --------------------      ------------------

OPERATING EXPENSES
 Selling expenses                                                             63,245                    -
 Consulting fees                                                             550,562                  37,500
 Professional fees                                                           181,043                  62,812
 Directors fees and compensation                                              76,367                 250,815
 Other general and administrative                                            100,735                  50,489
                                                                  --------------------      ------------------
         Total Operating Expenses                                              971,952                 401,616
                                                                  --------------------      ------------------

(LOSS) FROM OPERATIONS                                                      (968,912)               (401,616)

OTHER EXPENSES
 Interest and financing costs                                               (602,941)                   -
 Loss on disposal of fixed assets                                               -                    (16,568)
                                                                  --------------------      ------------------
       Total Other Expenses                                                 (602,941)                (16,568)
                                                                  --------------------      ------------------

NET (LOSS)                                                                (1,571,853)               (418,184)

OTHER COMPREHENSIVE INCOME (LOSS)
   Foreign currency translation gain (loss)                                  (13,105)                  1,457
                                                                  --------------------      ------------------

COMPREHENSIVE (LOSS)                                           $          (1,584,958)    $          (416,727)
--------------------
                                                                  ====================      ==================

NET LOSS PER SHARE - BASIC AND DILUTED                         $               (0.08)    $             (0.03)
                                                                  ====================      ==================

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
DURING THE PERIOD - BASIC AND DILUTED                                     18,899,861              11,982,993
                                                                  ====================      ==================

</TABLE>

          See accompanying notes to consolidated financial statements.
                                        3
<PAGE>


<TABLE>
<CAPTION>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                  Preferred Stock               Common Stock             Common Stock To Be       Additional
                                                                                               Issued               Paid-in
                               Shares        Amount         Shares         Amount        Shares       Amount        Capital
                              ----------    ----------    ------------    ----------    ---------    ---------    ------------
<S>                            <C>            <C>            <C>             <C>          <C>          <C>             <C>
Balance, December 31,
 2000                          700,000   $        70       6,350,000   $       635         -      $     -      $     774,311

Issuance of common stock
 for compensation and
 services                         -             -          2,450,000           245         -            -            244,755

Issuance of common stock
 for cash                         -             -            600,000            60         -            -             59,940

Preferred stock
 converted to common
 stock                        (700,000)          (70)      7,000,000           700         -            -               (630)

Common stock to be
 issued for consulting
 services                         -             -               -             -         500,000           50          49,950

Foreign currency
 translation gain                 -             -               -             -            -            -               -

Net loss for the year
 ended December 31, 2001          -             -               -             -            -            -               -
                              ----------    ----------    ------------    ----------    ---------    ---------    ------------

Balance, December 31,
 2001                             -             -         16,400,000         1,640      500,000           50       1,128,326

Issuance of common stock
 for cash and warrants
 exercised                        -             -            935,686            93         -            -             92,707

Common stock issued for
 placement fee                    -             -            300,000            30         -            -             26,970

Issuance of common stock
 for professional
 services                         -             -          1,646,535           165         -            -            337,147

Common shares issued              -             -            500,000            50      (500,000)        (50)           -

Amortization of deferred
 consulting expense               -             -               -             -            -            -               -

</TABLE>

<TABLE>
<CAPTION>
   Deficit
   Accumulated     Accumulated      Deferred
     During            Other         Equity
   Development     Comprehensive       Based
      Stage        Income (Loss)      Expense        Total
   ------------    --------------    ----------    ----------
<S>                  <C>              <C>         <C>
$  (1,045,317)  $        (1,009)  $      -      $  (271,310)

         -                 -             -          245,000

         -                 -             -           60,000

         -                 -             -             -

         -                 -          (37,500)       12,500

         -                1,457          -            1,457

     (418,184)             -             -         (418,184)
   ------------    --------------    ----------    ----------
   (1,463,501)              448       (37,500)     (370,537)

         -                 -             -           92,800

         -                 -             -           27,000

         -                 -             -          337,312

         -                 -             -             -

         -                 -           37,500        37,500
</TABLE>

          See accompanying notes to consolidated financial statements
                                        4

<PAGE>


                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>

                                                                                      Common Stock To Be       Additional
                                 Preferred Stock              Common Stock                 Issued                Paid-in
                             Shares        Amount        Shares         Amount       Shares        Amount        Capital
                           -----------   -----------   -----------   -----------   -----------   -----------   -----------
<S>                            <C>       <C>                         <C>                         <C>           <C>
Preferred stock issued
 in acquisition of
 intangible assets             420,000   $        42            --   $        --            --   $        --   $    41,958

Issuance of common stock
 to settle  note payable            --            --       833,333            83            --            --        99,917

Issuance of common stock
 to settle officer loan             --            --       297,063            30            --            --        35,617

Stock to be issued for
 computer software and
 service contract                   --            --            --            --       539,568            54        64,694

Beneficial conversion
 feature on convertible
 debentures                         --            --            --            --            --            --       500,000

Warrants issued as part
 of convertible
 debentures for
 financing costs                    --            --            --            --            --            --       209,000

Warrants issued to a
 director                           --            --            --            --            --            --        95,000

Warrants issued to a
 consultant                         --            --            --            --            --            --        21,000

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

Net loss for the year
 ended December 31, 2002            --            --            --            --            --            --            --
                           -----------   -----------   -----------   -----------   -----------   -----------   -----------
BALANCE,
 DECEMBER 31, 2002             420,000   $        42    20,912,617   $     2,091       539,568   $        54   $ 2,652,336
                           ===========   ===========   ===========   ===========   ===========   ===========   ===========



                              Deficit
                            Accumulated    Accumulated     Deferred
                              During          Other         Equity
                            Development   Comprehensive      Based
                                Stage      Income (Loss)     Expense         Total
                             -----------    -----------    -----------    -----------
Preferred stock issued
 in acquisition of
 intangible assets           $        --    $        --    $        --    $    42,000

Issuance of common stock
 to settle  note payable              --             --             --        100,000

Issuance of common stock
 to settle officer loan               --             --             --         35,647

Stock to be issued for
 computer software and
 service contract                     --             --             --         64,748

Beneficial conversion
 feature on convertible
 debentures                           --             --             --        500,000

Warrants issued as part
 of convertible
 debentures for
 financing costs                      --             --       (128,959)        80,041

Warrants issued to a
 director                             --             --             --         95,000

Warrants issued to a
 consultant                           --             --             --         21,000

Foreign currency
 translation loss                     --        (13,105)            --        (13,105)

Net loss for the year
 ended December 31, 2002      (1,571,853)            --             --     (1,571,853)
                             -----------    -----------    -----------    -----------
BALANCE,
 DECEMBER 31, 2002           $(3,035,354)   $   (12,657)   $  (128,959)   $  (522,447)
                             ===========    ===========    ===========    ===========
</TABLE>


          See accompanying notes to consolidated financial statements
                                        5

<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
<TABLE>
<CAPTION>

                                                                                 2002         2001
                                                                             ------------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                          <C>           <C>
Net loss                                                                     $(1,571,853)  $(418,184)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization                                                      1,634         334
Stock and warrants issued for services and placement fee                         469,062     257,500
Deferred consulting expense recognized                                            37,500           -
Loss on disposal of fixed assets                                                       -      16,568
Beneficial conversion feature on convertible debt for financing costs            500,000           -
Warrants issued as part of convertible debt                                       80,041           -
(Increase) decrease in:
Inventory                                                                        (65,453)          -
Accounts receivable                                                               (1,620)          -
Prepaid expenses                                                                   6,293           -
Increase (decrease) in:
Accounts payable and accrued expenses                                             46,979      56,618
                                                                             ------------  ----------
Net Cash Used In Operating Activities                                           (497,417)    (87,164)
                                                                             ------------  ----------


CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of intangibles                                                           (2,000)          -
Purchases of property and equipment                                              (23,245)          -
                                                                             ------------  ----------
Net Cash Used In Investing Activities                                            (25,245)          -
                                                                             ------------  ----------


CASH FLOWS FROM FINANCING ACTIVITIES:
Payments under capital leases                                                    (14,351)     (3,077)
Proceeds from issuance of common stock                                            92,800      60,000
Short-term loans                                                                       -       3,614
Proceeds from loan payable - officer                                              20,325      10,785
Proceeds from issuance of notes payable                                          500,000           -
                                                                             ------------  ----------
Net Cash Provided By Financing Activities                                        598,774      71,322
                                                                             ------------  ----------

EFFECT OF EXCHANGE RATE CHANGES ON CASH                                          (16,754)      2,387
                                                                             ------------  ----------

INCREASE (DECREASE) IN CASH                                                       59,358     (13,455)

CASH - BEGINNING OF PERIOD                                                   $        45   $  13,500
                                                                             ------------  ----------

CASH - END OF PERIOD                                                         $    59,403   $      45
-------------------                                                          ============  ==========

Cash paid during the period for:
Interest                                                                     $         -   $   1,082
                                                                             ============  ==========
</TABLE>

          See accompanying notes to consolidated financial statements

                                       6
<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                     CONSOLIDTAED STATEMENTS OF CASH FLOWS
                 FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During 2002, the Company received  approval for the previously  acquired British
patent  rights on  intellectual  property.  Pursuant  to the  asset  acquisition
agreement,  the  Company  issued in April 2002 an  additional  200,000  Series 1
Convertible  Preferred  Shares  valued  at  $20,000,  which  is  included  as an
intangible asset and in preferred stock.

During  2002,  the Company  issued  833,333  shares of common  stock  valued for
financial  accounting  purposes  at $.12 per  share  based  upon a  recent  cash
offering price to settle a $100,000 note payable. No gain or loss was recognized
on the transaction.

During  2002,  the Company  issued  297,063  shares of common  stock  valued for
financial  accounting  purposes  at $.12 per  share  based  upon a  recent  cash
offering  price  to  settle  $35,647  of an  officer  loan.  No gain or loss was
recognized on the transaction.

During 2002, the Company entered into an agreement to acquire a software license
agreement with an estimated useful life of three years and one-year  maintenance
contract in exchange  for 539,568  common  shares to be issued.  The shares were
valued for financial  accounting purposes at $.12 per share based on the closing
price on the effective date of the agreement for an aggregate  value of $64,748,
which the  Company  allocated  $53,957 to the  software  license  agreement  and
$10,791 to the maintenance contract.

During 2002,  the Company  issued  500,000 shares of common stock for consulting
services to be rendered. Per the agreement,  the shares were valued based on the
average  closing  price of the  Company's  stock during the month  preceding the
effective date of the agreement for an aggregate  value of $86,250.  The Company
recognized $75,000 as an expense and $11,250 as a prepaid expense in 2002.

During 2002,  the Company  issued  warrants to acquire an aggregate of 1,500,000
shares of the Company's  common stock having an aggregate value of $209,000,  of
which, $80,041 was recognized during the year and $128,959 remains as a deferred
financing cost.

During 2001, the Company acquired  intellectual  property rights in exchange for
220,000 Series 1 Convertible  preferred shares to be issued,  valued at $22,000.
The shares were physically issued in April 2002.

During 2001, the Company terminated a capital lease for an automobile,  reducing
equipment  and a capital  lease  liability of $26,534 and $9,966,  respectively,
which resulted in a loss on disposal of $16,568.


                                       7
<PAGE>


                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002



NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


(A)  ORGANIZATION  AND  BUSINESS  OPERATIONS

Torbay  Holdings,  Inc.  ("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.  As a result of the agreement,
DAL  became  a  wholly owned subsidiary of THI.  DAL intends to market household
appliances  designed  to  be  attractive  to  a premium, upscale market.  DAL is
currently an inactive company, but is expected to begin marketing the QUILL (see
below)  in  Europe  in  2003.

On October 26, 1999, THI entered into and consummated a merger agreement whereby
THI acquired all of the outstanding shares of common stock of Torbay Acquisition
Corp.  ("TAC").  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.  THI  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.

On  November  10,  2002,  THI  authorized the purchase of 200 shares (all of the
authorized  and  outstanding  shares  at  the time) of Designer Appliances, Inc.
("DAI"), a Delaware company incorporated June 17, 2002, for a deminimus purchase
price  and  DAI  became a wholly owned subsidiary of THI (See Note 10).  DAI was
acquired  to market and sell the Company's products (currently, the QUILL mouse,
a  left-handed  and right-handed computer mouse) in North America.  Sales of the
QUILL  mouse  commenced  in  the  fourth  quarter  of  2002.

Prior  to  the  fourth  quarter  of  2002,  financial  statements  were prepared
indicating  the  entity  was  a  development  stage  company.

(B)  PRINCIPLES  OF  CONSOLIDATION

The  consolidated  financial  statements for 2002 include the accounts of Torbay
Holdings, Inc. and its wholly owned subsidiaries Designer Appliances Limited and
Designer  Appliances,  Inc.,  collectively  (the  "Company").  The  consolidated
financial  statements for 2001 include the accounts of Torbay Holdings, Inc. and
its  wholly  owned  subsidiary  Designer  Appliances  Limited.  All  significant
intercompany  transactions  and  balances have been eliminated in consolidation.



                                       8
<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002

(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.

(D)  USE  OF  ESTIMATES

The  preparation  of  the  financial  statements  in  conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities and 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

Cash  includes  cash  on  deposit  at  financial  institutions.

(F)  INVENTORY

Inventory  is stated at the lower of cost or market using the first-in first-out
method.  The  cost  includes  expense  of  freight-in transportation.  Inventory
consists  of  only  finished  goods,  which include left-handed and right-handed
computer  mice  for sale to customers.  The inventory is produced by an overseas
vendor  using  the  Company's  equipment.

(G)  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  is  computed  using  the  straight-line  method over the estimated
useful  lives  of  five  to  seven  years.

(H)  INTELLECTUAL  PROPERTY  RIGHTS

The  Company  capitalizes  the costs to acquire intellectual property rights and
amortizes  them over their estimated useful life of 10 years commencing in 2003.
The  costs  associated  with  registration  of  the  related  patent  and  other
unrecovered  costs  of  any  successful legal suit are capitalized and amortized
over  the  lesser  of  20  years  or the remaining useful life of the underlying
asset.


                                       9
<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002



(I)  IMPAIRMENT  OF  LONG-LIVED  ASSETS

The  Company  reviews  long-lived  assets  for  impairment  under  Statement  of
Financial  Accounting  Standards  No.  144,  "Accounting  for  the Impairment or
Disposal  of  Long-Lived  Assets."  Long-lived  assets  to  be held and used are
reviewed  for  impairment  whenever  events or changes in circumstances indicate
that  the  carrying  amount  of  an  asset may not be recoverable.  The carrying
amount  of  a  long-lived  asset is not recoverable if it exceeds the sum of the
undiscounted cash flows expected to result from the use and eventual disposition
of  the asset.  Long-lived assets to be disposed of are reported at the lower of
carrying amount or fair value less cost to sell.  During the year ended December
31,  2002, the Company determined that there were no long-lived assets that were
impaired.

(J)  REVENUE  RECOGNITION

Revenues  from  sales  of  products  are  recognized  when  goods are shipped to
customers.  The Company provides a warranty on goods for two years from the date
of  sale.  The  Company  has  not established a warranty reserve at December 31,
2002  since  the  amount  is  not  material.

(K)  WEBSITE  EXPENSES

The  Company follows the AICPA's Statement of Position 98-1, "Accounting for the
Costs  of  Computer Software Developed or Obtained for Internal Use" (SOP 98-1),
in  accounting  for its website expenses.  Accordingly, costs to obtain computer
software  from  third  parties  obtained  for  internal  use are capitalized and
amortized over their estimated useful life of 5 years commencing in 2003.  Costs
incurred in operating a website that have no future benefits are expensed in the
current  period.  Costs  incurred  in  operating  the website that have a future
benefit  are  capitalized  in  accordance  with  SOP 98-1 and amortized over the
respective  future  periods  that  are  expected  to  benefit  from the changes.

(L)  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.



                                       10
<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002




(M)  SEGMENT  ACCOUNTING

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of  an Enterprise and Related Information", ("SFAS 131"), requires that a public
business enterprise report a measure of segment profit or loss, certain specific
revenue  and  expense items, and segment assets.  It requires reconciliations of
total  segment revenues, total segment profit or loss, total segment assets, and
other  amounts  disclosed  for  segments  to  corresponding  amounts  in  the
enterprise's  general-purpose financial statements.  It requires that all public
business  enterprises  report  information  about  the revenues derived from the
enterprise's  products or services (or groups of similar products and services),
about the countries in which the enterprise earns revenues and holds assets, and
about  major  customers regardless of whether that information is used in making
operating  decisions.  However, this Statement does not require an enterprise to
report  information  that is not prepared for internal use if reporting it would
be  impracticable.  The  Company  has  only one product consisting of its "Quill
Computer  Mouse."  Due  to  the  immateriality  of  sales  during 2002,  segment
information  is  not  presented.

(N)  FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The  carrying amounts of certain financial instruments, including cash, accounts
receivable,  accounts  payable,  accrued expenses, and notes payable approximate
their  fair  value  as of December 31, 2002 because of the relatively short-term
maturity  of  these  instruments.

(O)  RECENT  ACCOUNTING  PRONOUNCEMENTS

In  April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No.
4,  44,  and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS  No. 145 rescinds the provisions of SFAS No. 4, which requires companies to
classify  certain  gains  and  losses from debt extinguishments as extraordinary
items,  eliminates  the  provisions  of  SFAS No. 44 regarding transition to the
Motor  Carrier  Act  of 1980 and amends the provisions of SFAS No. 13 to require
that certain lease modifications be treated as sale leaseback transactions.  The
provisions of SFAS No. 145 related to classification of debt extinguishments are
effective  for  fiscal  years  beginning  after  May  15,  2002,  with  earlier
application  encouraged.

In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
Costs."  SFAS No. 146 applies to costs associated with an exit activity
(including restructuring) or with a disposal of long-lived assets.  Those
activities can include eliminating or reducing product lines, terminating
employees and contracts and relocating plant facilities or personnel.  Under
SFAS No. 146, the Company will record a liability for a cost associated with an
exit or disposal activity when that liability is incurred and can be measured at
fair value.  SFAS No. 146 will require the Company to disclose information about
its exit and disposal activities, the related costs, and changes in those costs
in the notes to the interim and annual financial statements that include the
period in which an exit activity is initiated and in any subsequent


                                       11
<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002
period until the activity is completed.  SFAS No. 146 is effective prospectively
for  exit or disposal activities initiated after December 31, 2002, with earlier
adoption  encouraged.  Under  SFAS  No.  146,  a  company  cannot  restate  it's
previously  issued  financial  statements and the new statement grandfathers the
accounting for liabilities that a company had previously recorded under Emerging
Issues  Task  Force  Issue  94-3.

In  December  2002,  the  FASB  issued SFAS No. 148, "Accounting for Stock-Based
Compensation-Transition  and  Disclosure  -  an  amendment of FASB Statement No.
123."  SFAS  No.  148  amends  SFAS  No.  123,  "Accounting  for  Stock  Based
Compensation"  and  provides  alternative methods for accounting for a change by
registrants to the fair value method of accounting for stock-based compensation.
Additionally, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to
require  disclosure in the significant accounting policy footnote of both annual
and  interim  financial  statements  of  the  method  of  accounting  for  stock
based-compensation  and  the  related  pro-forma  disclosures when the intrinsic
value  method continues to be used.  The statement is effective for fiscal years
beginning  after  December 15, 2002, and disclosures are effective for the first
fiscal  quarter  beginning  after  December  15,  2002.

Management  does  not expect the impact from these statements' pronouncements to
have  a  material  impact  on  the  Company's consolidated financial position or
results  of  operations.

(P)  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.

(Q)  COMPREHENSIVE  (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 gain (loss) 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
Statements of Operations and as Accumulated Other Comprehensive Income (Loss) in
the  Statement  of  Changes  in  Stockholders'  Deficiency.





                                       12

<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002



(R)  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  would  be  anti-dilutive.

(S)  STOCK  OPTIONS  AND  WARRANTS

In  accordance  with Statement of Financial Accounting Standards No. 123, ("SFAS
123")  the  Company has elected to account for stock options and warrants issued
to  employees under Accounting Principles Board Opinion No. 25 ("APB Opinion No.
25")  and  related  interpretations.  The Company accounts for stock options and
warrants  issued  to  non-employees  for services under the fair value method of
SFAS  123.  Compensation  cost  for  stock  based  compensation to employees and
non-employees  is recorded on the date of grant based on the quoted market price
of  the  Company's  common  stock.

(T)  RECLASSIFICATION

Certain  amounts  from  prior  periods  have been reclassified to conform to the
current  year  presentation.


NOTE 2 PROPERTY AND EQUIPMENT

       Property and equipment at December 31, 2002 consisted of the following:
<TABLE>
<CAPTION>

<S>                                                                                                    <C>

       Manufacturing equipment                                                                  $            20,000
       Computer equipment                                                                                     2,583
       Office equipment                                                                                       2,939
                                                                                                   ------------------
                                                                                                             25,522
       Less accumulated depreciation                                                                         (2,861)
                                                                                                   ------------------

                                                                                                $            22,661
                                                                                                   ==================

       Depreciation  expense for the year ended  December  31, 2002 and 2001 was
       $1,634 and $334, respectively.

NOTE 3 INTANGIBLE ASSETS

       In 2001,  the  Company  entered  into a  purchase  agreement  to  acquire  intellectual  $            44,000
       property  rights,  software and know-how to a computer  mouse in exchange for preferred




                                       13
<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       stock having an aggregate fair value of $42,000.  Also in 2002, the Company paid $2,000
       to protect the intellectual property rights (See Note 9(A))
       In 2002,  the Company  entered  into an  agreement  to acquire  computer  software  and
       licenses for a website in exchange  for common stock having an aggregate  fair value of
       $53,957 (See Note 9(B))                                                                               53,957
                                                                                                   ------------------

                                                                                                $            97,957
                                                                                                   ==================

NOTE 4 ACCOUNTS PAYABLE AND ACCRUED EXPENSES

       The following  schedule reflects accounts payable and accrued expenses as
of December 31, 2002:

       Accounts payable                                                                         $           165,915
       Accrued interest payable                                                                              22,900
       Other accrued liabilities                                                                             37,811
                                                                                                      ------------------

                                                                                                $           226,626
                                                                                                   ==================
</TABLE>

NOTE 5 LOAN PAYABLE - OFFICER

       The Company has received  advances  from an officer who provided  funding
       for working capital  requirements used to pay operating expenses incurred
       by the Company.  During 2002,  $35,647 of this payable was converted into
       297,063  shares  of  the  Company's   common  stock.   The  advances  are
       non-interest  bearing and due on demand.  As of December 31, 2002, $9,663
       was due to this officer.

NOTE 6 NOTES PAYABLE

       In order to provide  working  capital  and  financing  for the  Company's
       expansion,  as of May 15,  2002,  the Company  entered  into a securities
       purchase agreement and related agreements with four accredited  investors
       (the  "Purchasers")  for the  purchase of $500,000 of the  Company's  12%
       convertible  debentures in two traunches of $250,000 each. The debentures
       bear interest at a rate of 12% per annum,  payable either quarterly or at
       the time of  conversion  in  common  stock or cash at the  option  of the
       Purchasers.  On May 15, 2002, the Company  received the first traunche of
       $250,000.  On August 21,  2002,  the  agreement  was amended  whereby the
       Company  received  $55,000 of the second  traunche  on August 21 with the
       balance of $195,000 to be  received by the Company  within five  business
       days following the effective date of the registration  statement filed to
       register  the common  shares  discussed  in the fourth  paragraph of this
       note.  The  remaining  $195,000  (net of  legal  and  consulting  fees of
       $56,250)  was  received  December  10,  2002.  Interest  expense  on  the
       debentures,  in the amount of  $22,900,  has been  accrued and charged to
       operations for the year ended December 31, 2002.

                                       14
<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       As  part  of the  agreement,  the  Purchasers  received  three-year  term
       warrants  to  purchase 3 shares of the  Company's  common  stock for each
       $1.00  invested  exercisable  at $.05 per  share.  The fair  value of the
       warrants issued in May, August and December amounted to $111,000, $10,000
       and $88,000,  respectively,  using the Black-Scholes option pricing model
       in  accordance  with SFAS 123 with the  following  assumptions:  dividend
       yield of zero,  expected  volatility  of 258%,  167% and 413%,  risk-free
       interest  rate of 4%,  3% and 3% and an  expected  life of  three  years,
       respectively. Accordingly, an aggregate of $80,041 has been recognized as
       interest  and  financing  costs and an  aggregate  of  $128,959  has been
       recorded as deferred  financing  costs which shall be amortized  over the
       remaining life of the convertible debentures.

       The debentures are convertible  into shares of common stock at the lesser
       of $0.05 per share or the average of the lowest  three  intraday  trading
       prices  of a share  of  common  stock  during  the  twenty  trading  days
       immediately  preceding  conversion  date discounted by 50% (See Note 12).
       Pursuant to the rules and  regulations  of the SEC  regarding  beneficial
       conversion  features,  the Company has expensed as interest and financing
       costs the  excess of the fair  market  value of the  common  stock at the
       debenture  issuance date over the  conversion  price which amounted to an
       aggregate  of  $500,000  (limited  to total  equity  raised) and has been
       included in additional paid-in capital.

       The Company has reserved  28,000,000  shares of authorized  but un-issued
       common  stock for  issuance to the  convertible  debenture  holders  upon
       exercise  in full of the entire  principal  amount of  $500,000  plus the
       accrued interest upon conversion into shares of common stock. The Company
       will also, on a best efforts basis, register 200% of the shares of common
       stock underlying the warrants to be issued and the shares of common stock
       into which the convertible debentures may be converted.
<TABLE>
<CAPTION>

       The following schedule reflects notes payable at December 31, 2002:
<S>     <C>

       Notes payable,  bearing 12% interest  payable  quarterly,  convertible to shares of     $            500,000
        common stock (see above),  unsecured,  due at various dates  through  December 10,
        2003

       Note payable,  non-interest  bearing (See Note 9(E) for warrants  issued in lieu of
        interest),  convertible  to shares of common stock at $1.50 per share,  unsecured,
        due March 23, 2003 (this note is currently being renegotiated)                                       50,000
                                                                                                  -------------------

           Total - All Short-Term                                                              $            550,000
                                                                                                  ===================

</TABLE>

                                       15
<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002

<TABLE>
<CAPTION>


NOTE 7 INCOME TAXES

       The American  parent  company and its American  subsidiary and the United
       Kingdom  subsidiary  file  separate  tax  returns.   Income  tax  expense
       (benefit) for the years ended December 31, 2002 and 2001 is summarized as
       follows:
<S>                                                                                   <C>                 <C>

                                                                                   2002                   2001
                                                                             ------------------     -----------------
       Current:
         Federal                                                          $              -                     -
         State                                                                           -                     -
         Foreign                                                                         -                     -

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

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

       The American  parent  company and its American  subsidiary's  tax expense
       differs from the  "expected" tax expense for the years ended December 31,
       2002 and 2001 (computed by applying U.S. Federal Corporate tax rate of 34
       percent to income before taxes), as follows:

                                                                                   2002                   2001
                                                                             ------------------     -----------------

       Computed "expected" tax expense (benefit)                          $          (527,708)   $          (46,283)
       Effect of unused net operating loss carryforwards                              527,708                46,283
                                                                             ------------------     -----------------

                                                                          $              -       $             -
                                                                             ==================     =================

       The tax effects of temporary  differences  that give rise to  significant
       portions of deferred tax assets for the American  parent  company and its
       American subsidiary at December 31, 2002 are as follows:

                                                                                   2002                   2001
                                                                             ------------------     -----------------
       Deferred tax assets:
         Net operating loss carryforwards                                 $           700,775    $          173,067
                                                                             ------------------     -----------------
         Total gross deferred tax assets                                              700,775               173,067
         Less valuation allowance                                                    (700,775)             (173,067)
                                                                             ------------------     -----------------

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

</TABLE>

                                       16


<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       At December  31,  2002,  the  American  parent  company and its  American
       subsidiary  had  net  operating  loss   carryforwards   of  approximately
       $2,061,100  for income tax purposes,  available to offset future  taxable
       income expiring on various dates through 2022. The valuation allowance at
       December 31, 2001 was $173,067. The net change in the valuation allowance
       during the year ended December 31, 2002 was an increase of $527,708.

       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,  2002  and  2001.  The  subsidiary's  available  net
       operating  loss  carryforward  of  approximately  $507,900  results  in a
       deferred tax asset of $152,370  (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 AGREEMENT

       The  Company  leased a  vehicle  under a  capital  lease.  The  agreement
       stipulated monthly installment  payments for a 36-month period commencing
       in September 1999 with the last payment  including a balloon  payment due
       in 2002.  During 2001, the lease was terminated and the Company  returned
       the vehicle to the lessor.  At December 31,  2001,  there was a remaining
       unpaid balance of $14,351 due on this lease which was  subsequently  paid
       off by the Company .

       (B) MANUFACTURING AGREEMENT

       In April 2002, the Company entered into a manufacturing agreement with an
       independent  contractor to manufacture the QUILL computer mouse under the
       terms and conditions  enumerated in such agreement.  The Company does not
       have a fixed purchase commitment under this agreement. However, according
       to the terms of the agreement, there is a minimum order quantity of 5,000
       pieces.  Production  began at the beginning of October 2002 and shipments
       began at the end of October  2002.  The Company  ordered and  received an
       aggregate of 5,000 pieces during 2002.

       (C) SERVICE AND CONSULTING AGREEMENTS

       In July 2001, the Company  entered into an agreement with a consultant to
       provide corporate  promotional  services to the Company. In consideration
       for the  providing  of these  promotional  services,  the Company  issued
       250,000 shares of common stock to the consultant in August 2001 (See Note
       9(B)).  The Company will also  reimburse the  consultant for itemized and
       invoiced costs associated with providing the promotional services.

                                       17
<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       On September  26,  2001,  the Company  entered into a one-year  corporate
       financing  consultancy agreement with a consultant to specifically assist
       with  potential   financial   requirements,   mergers  and  acquisitions,
       corporate  capitalization  and  strategic  development.  For these future
       services the consultant received 500,000 shares of common stock valued at
       $0.10 per share for a total of  $50,000.  Certificates  for these  shares
       were not  physically  issued by the  Company  until  April 2002 (See Note
       9(B)).

NOTE 9 STOCKHOLDERS' DEFICIENCY

       (A) PREFERRED STOCK

       The Company designated 700,000 shares of its preferred stock as "Series 1
       Convertible  Preferred  Stock".  The par value of the series was  $.0001.
       Each preferred share was  convertible  into ten shares of common stock of
       the Company. Each share of the Series 1 stock was entitled to one vote on
       all matters on which such stockholders were lawfully entitled to vote and
       were 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 Note 1(A)).

       In May 2001,  the 700,000  shares of preferred  stock were converted into
       7,000,000 shares of common stock at par value.

       In July 2001,  the Company  entered  into a purchase  agreement  with two
       individuals  who held the  intellectual  property  rights,  software  and
       know-how to a computer mouse known as the "QUILL". Under the terms of the
       agreement,  the Company  acquired all of the sellers'  rights,  title and
       interest  in the  QUILL in  exchange  for  220,000  Series 1  convertible
       preferred  shares.  The  agreement  also  calls  for the  issuance  of an
       additional  200,000 shares of Series 1 convertible  preferred shares upon
       the Company receiving an approval for the United Kingdom patent rights to
       the QUILL, which was granted in January 2002. These preferred shares will
       convert  1:10  into  4,200,000  shares  of  common  stock  upon the QUILL
       generating  $1,000,000  net profit  after tax  averaged  over four fiscal
       quarters within five years from the signing of the agreement. However, if
       the $1,000,000  net profit  requirement is not met within five years from
       the signing of the agreement,  then these  preferred  shares will convert
       1:1 into 420,000 shares of common stock.  Since the $1,000,000 net profit
       requirement  is a  contingency,  the  convertible  preferred  shares were
       valued based on the 1:1  conversion  ratio using the value of recent cash
       sales of the common  stock at $.10 per  share,  for a total fair value of
       $42,000,  of which  $20,000 and $22,000 was  recognized in 2002 and 2001,
       respectively.  The 420,000 preferred shares were issued on April 22, 2002
       (See Note 3).


                                     18

<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       (B) COMMON STOCK

       During 2002, the Company  entered into an agreement to acquire a software
       license  agreement  with an  estimated  useful  life of three  years  and
       one-year maintenance contract in exchange for 539,568 common shares to be
       issued. The shares were valued for financial  accounting purposes at $.12
       per  share  based  on the  closing  price  on the  effective  date of the
       agreement for an aggregate value of $64,748,  which the Company allocated
       $53,957 to the software license  agreement and $10,791 to the maintenance
       contract.

       During  2002,  the  Company  received  an  aggregate  of $47,800  for the
       purchase of shares under an option agreement effective October 29, 2002.

       On October 17, 2002, the Company  authorized the issuance of an aggregate
       of 1,085,535 common shares for services  rendered by several  individuals
       (of which  856,963  shares were to two  officers)  valued for  accounting
       purposes  at $.21 per  share  (the  most  recent  closing  price)  for an
       aggregate  amount of $227,962,  which was recognized as an expense during
       2002.

       On October 23, 2002, the Company entered into a six-month  agreement with
       a consultant  whereby the  consultant  shall (1)  distribute via targeted
       email a two-page  "Highlighter"  to attract new investors and (2) design,
       develop and market a website for the Company.  In return,  the consultant
       shall receive for each month:  (1) for months one through three,  $30,000
       (at the average trading price of the previous month) of restricted common
       stock of the Company and (2) for months four through six,  $30,000 in the
       form of half cash and half  stock or all cash or all stock by  agreement.
       Payments  shall be made  quarterly  and 500,000  common  shares  shall be
       issued upon execution of the  agreement.  The  commencement  date of this
       contract has been delayed as the Company  contends the services  have not
       yet begun.

       In May 2002, the Company issued 40,000 shares of common stock for $5,000.

       In May 2002, the Company issued 300,000 common shares having a fair value
       of  $27,000  as a  consultant  fee in  connection  with  the  convertible
       debentures issued in May 2002 (See Note 6).

       In March 2002,  a $100,000  long-term  note  payable was  converted  into
       833,333 shares of restricted common stock at $0.12 per share.

       In March 2002, the President of the Company  purchased  333,333 shares of
       restricted  common  stock for a total price of $40,000 in exchange  for a
       subscription  receivable.  The Company  received  the $40,000  during the
       second quarter of 2002.

       In March 2002, loans payable to a stockholder  amounting to $35,647 as of
       that date were converted into 297,063 shares of restricted common stock.


       In January  2002,  the Company  issued  61,000 shares of common stock for
       services having a fair value of $23,100.


                                    19


<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       During 2001, the Company issued  2,200,000  common shares valued at $0.10
       per share for executive  compensation and 250,000 common shares valued at
       $0.10 per share for  services  (See Note 8(C)).  The  aggregate  value of
       these shares was $245,000.

       In August 2001, the Company  issued  600,000 shares of restricted  common
       stock at $0.10 per share for a total proceeds of $60,000.

       In  September  2001,  the  Company  entered  into  a  one-year  financial
       consulting  agreement whereby the Company issued 500,000 shares of common
       stock having a fair value of $50,000 in exchange for these  services (See
       Note  8(C)).  These  common  shares  were  issued  in April  2002 and are
       reflected  in the  financial  statements  as common stock to be issued at
       December 31,  2001.  The cost of the  agreement  was  amortized  over its
       one-year  life  and  consulting   expense  of  $37,500  and  $12,500  was
       recognized during 2002 and 2001, respectively.

       (C) COMMON STOCK TO BE ISSUED

       On May 31,  2002,  the  Company  entered  into an  agreement  to  acquire
       computer  software and licenses and a one-year  service  contract for the
       establishment of a website,  database  management for users and products,
       inventory  management,  and point of sale service. The seller agreed that
       they would  accept  payment in common  stock of the Company  amounting to
       539,568  shares to be issued  having an  aggregate  fair value of $64,748
       based on the most recent  closing price of $0.12 per share.  Based on the
       vendor's  estimated  price for the software and service  contract,  a pro
       rata  allocation  was made to  intangible  assets of $53,957  and prepaid
       service expenses of $10,791, respectively. In addition, $6,293 of expense
       was recognized  for the portion of the service  contract that was used as
       of December 31, 2002.

       (D) WARRANTS

       On October 17, 2002, the Company  authorized the issuance of an option to
       a consultant  to purchase up to 100,000  common  shares at $.21 per share
       exercisable after one year and expiring after three years. The fair value
       of the option was calculated using the  Black-Scholes  pricing model with
       the following assumptions: dividend yield of zero, expected volatility of
       357%,  risk-free  interest rate of 2.0% and an expected life of two years
       and amounted to $21,000, which was recognized as an expense during 2002.

       On October 29, 2002,  the effective  date of the  agreement,  the Company
       elected a new  non-executive  member to the Company's Board of Directors.
       In connection  with this  election,  the Company  granted said director a
       one-year  option  exercisable  immediately  to  purchase  up  to  588,235
       restricted  shares of the Company's  common stock at $.085 per share. The
       fair value of the warrants was calculated using the Black-Scholes pricing
       model with the following  assumptions:  dividend yield of zero,  expected
       volatility of 170%,  risk-free interest rate of 2.0% and an expected life
       of one year and  amounted to $95,000,  which shall be  recognized  during
       2002.

                                       20


<PAGE>
                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       In connection  with a $100,000  loan received in March 2000,  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.
       Using the  Black-Scholes  model, the warrants were valued at $0 using the
       following  assumptions;  no annual dividend,  volatility of 0%, risk-free
       interest rate of 6.19% and a term of three years.

       In  connection  with a $50,000 note  received in March 2000,  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.  Using  the
       Black-Scholes  model,  the warrants were valued at $0 using the following
       assumptions;  no annual dividend,  volatility of 0%,  risk-free  interest
       rate of 6.19% and a term of three years.

NOTE 10 GOING CONCERN

       As reflected in the accompanying financial statements,  the Company has a
       net loss of $1,571,853, a negative cash flow from operations of $497,417,
       a working capital  deficiency of $644,065 and a stockholders'  deficiency
       of $522,447.  These factors raise  substantial doubt about its ability to
       continue as a going concern.  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  additional financing for which they
       are currently in active negotiations with several financing  institutions
       and increasing sales of the QUILL computer mouse.

NOTE 11 SUBSEQUENT EVENTS

       On February 5, 2003, the Company  entered into a two-month  non-exclusive
       agreement with a consultant to provide strategic planning  services.  The
       agreement  calls for the  consultant  to receive up to  2,000,000  shares
       whereby  1,251,000  shares of S-8 registered  shares were issued upon the
       effective  date of the agreement for the initial  period.  This agreement
       expired on  February  4, 2003 and has not been  extended.  The  1,251,000
       shares  were  issued  on  February  5,  2003  and  valued  for  financial
       accounting purposes at $62,500, the fair market value of the common stock
       on  the  effective  date  of  the  agreement  based  on  concurrent  cash
       offerings.


                                    21

<PAGE>

                     TORBAY HOLDINGS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2002


       On February 6, 2003,  the Company  entered into a one-year  non-exclusive
       agreement with a consultant to provide strategic planning  services.  The
       agreement   calls  for  the  consultant  to  receive  250,000  shares  of
       restricted  common stock upon the effective date of the agreement for the
       initial  period.  The  consultant  is entitled to an  additional  500,000
       shares upon the consultant's  identifying and introducing and the Company
       closing on  agreements  with  European  community  contacts.  The 250,000
       shares are to be issued and were valued for financial accounting purposes
       at $15,000,  the fair market value of the common  stock on the  effective
       date of the agreement based on concurrent cash offerings.

       On February 7, 2003,  the Company  entered into an agreement  whereby the
       Company received the exclusive  license of software named NIB Version1.0,
       which  automatically  actuates  contextual  menus  in  computer  programs
       without  the  need  to  use  or  click  a  computer   mouse  button.   In
       consideration,  the Company has agreed to issue 100,000  shares of common
       stock valued for financial accounting purposes at $6,000, the fair market
       value of the common stock on the effective date of the agreement based on
       concurrent cash  offerings.  Also, the Company is required to pay royalty
       payments to the  consultant at a rate of $3 per copy of the software that
       is  distributed  in any manner.  The minimum  royalties  are $500 for the
       second quarter of 2003, $1,000 for the third quarter for 2003, $2,000 for
       the fourth quarter of 2003 and $3,000 per quarter thereafter. The term of
       the  agreement  is perpetual  provided  the Company  continues to pay the
       royalty payments within 120 days after the end of each quarter and abides
       by the other terms of the agreement.

       As of April 4,  2003,  a portion  of the notes  payable  in the amount of
       $60,000 were converted into 5,666,422 shares of common stock.




                                       22



<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.



Dated: April 11, 2003
                                   TORBAY HOLDINGS, INC.

                                    By:   /s/ William Thomas Large
                                         ---------------------------
                                        President and Chief Executive Officer
                                        Principal Executive Officer and
                                        Principal Accounting 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>
<S>                                <C>                                  <C>
Name                               Title                                Date
----                               -----                                ----


/s/ Alexander Gordon Lane         Chairman, Secretary and a Director    April 11, 2003
--------------------------------
Alexander Gordon Lane

/s/ William Thomas Large          President, Chief Executive Officer    April 11, 2003
--------------------------------  and Director
William Thomas Large


/s/ Thomas A. Marchant
--------------------------------  Director                              April 11, 2003
Thomas A. Marchant

</TABLE>

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