<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

|X|      Annual Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the fiscal year Ended December 31, 2000

[ ]      Transition Report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the transition period from ______________ to
         ______________ (No fee required)


                              PLUS SOLUTIONS, INC.
                              (Name of Registrant)

          NEVADA                        000-28331             88-0412455
(State or other jurisdiction of        (Commission          (I.R.S. Employer
incorporation or organization)         File Number)       Identification Number)

              14677 MIDWAY ROAD, SUITE 206, ADDISON, TEXAS, U.S.A.
                    (Address of principal executive officers)

                                      75001
                                   (Zip Code)

                                  972-687-0090
                         (Registrant's telephone number,
                              including area code)

Securities registered under Section 12(b) of the Exchange Act:

<TABLE>
<CAPTION>
                                                       NAME OF EACH EXCHANGE
      TITLE OF EACH CLASS                               ON WHICH REGISTERED
      -------------------                               -------------------
<S>                                                    <C>
            None                                           Not applicable
</TABLE>

Securities registered under Section 12(g) of the Exchange Act:

                    COMMON STOCK, PAR VALUE $0.001 PER SHARE
                                (Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. |X| Yes [ ]
No

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

State issuer's revenues for its most recent fiscal year: $0

At March 30, 2001, there were 39,240,000 shares of the Issuer's common stock
outstanding. The aggregate market value of common stock held by non-affiliates
of the Issuer (based on the closing bid and asked price for the Common Stock on
the OTC Bulletin Board system on March 28, 2001) was approximately $.0312.


<PAGE>   2
                              PLUS SOLUTIONS, INC.

                                  ANNUAL REPORT

                                     FOR THE

                       FISCAL YEAR ENDED DECEMBER 31, 2000




                                TABLE OF CONTENTS

                                   ----------

<TABLE>

<S>                                                                            <C>
Description of Our Business ................................................    3
Plan of Operation ..........................................................    8
Financing Arrangements .....................................................   10
Information About Our Capital Stock ........................................   13
Forward-Looking Statements .................................................   14
Exhibits and Reports .......................................................   15
Index to Financial Statements ..............................................  F-1
</TABLE>



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<PAGE>   3




                           DESCRIPTION OF OUR BUSINESS

         We are a development-stage company that provides Internet-based
business-to-business e-commerce solutions. We have developed Expressorder(TM), a
global business-to-business e-commerce service that enables buyers and suppliers
to automate business transactions on the Internet. Our ExpressBuyer(TM) service
enables businesses to automate their purchasing methods. Our ExpressSeller(TM)
service enables businesses to offer a catalog of their products over the
Internet.

         We have focused on the recruiting of quality information technology and
engineering professionals. We utilize established testing methods to ensure that
our professionals are properly qualified. We also review candidates' technical
backgrounds and conduct preliminary interviews prior to referring candidates to
our customers. By attracting the most qualified professionals, we believe that
we will be able to attract high quality customers who require the services of
such professionals.

         The Company has not had significant operations or revenues to date.
However, we intend to seek financing to expand our operations and commence
full-scale marketing and customer implementation of our services. If such
financing is not made available to us, however, we may not be able to implement
our plan of development and business strategy or implement any Expressorder(TM)
solutions. Even if such financing is made available, we must successfully
implement our plans to develop our business and implement our business strategy.

         We intend to develop a strong internal marketing team to market our
services to targeted businesses and organizations in North America and Europe.
In addition, we will employ marketing support personnel to assist the marketing
team in the preparation of presentations, proposals, research and other related
administrative tasks. As industry relationships are built, individuals with
specific industry knowledge will be employed to leverage such relationships.

         We will use carefully targeted advertising, such as print advertising
in industry publications, to market our services to targeted businesses and
organizations. It is anticipated that such advertising will highlight the
competitive advantages of Expressorder(TM) relative to the products and services
of our competitors. We have also established an Internet site to assist our
marketing efforts. As part of our continuing public relations efforts, we will
attempt to arrange media coverage of our services by television, radio and print
media, and participation in industry conferences.

         We will continue to develop and improve our Expressorder(TM) solution
system. We anticipate that such continued development and improvement will be
critical to maintaining a competitive advantage over other e-commerce solution
providers and providing maximum value to our customers.

         We will look for value-added strategic alliances with partners that
enable us to enter targeted industries, gain access to technology or potential
customers, or establish revenue sharing opportunities. Potential alliance
partners include advertising agencies, accounting firms, software or
technology-based businesses, and other e-commerce vendors. During the
development of Expressorder(TM), we initiated efforts to contact potential
alliance partners and explore mutually beneficial arrangements. As a result of
these efforts, we became a member of International Business Machines Corp.'s
PartnerWorld program in March 2000. This program provides us with co-marketing
opportunities with IBM and customers investigating IBM products on IBM's site on
the world wide web.

         During the development of Expressorder(TM), we contacted potential
customers to establish relationships and industry knowledge and to solicit input
regarding our services. As a result, Expressorder(TM) has been reviewed and
evaluated by senior managers of several large businesses. We believe that these
relationships may be leveraged to identify potential customers and improve the
quality of our services.

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         We intend to target corporations and other organizations in a broad
range of industries that we believe will most benefit from our outsourced,
turnkey solutions offered by Expressorder(TM). We believe these organizations
will be the most likely beneficiaries of an automated, reliable, robust and
scalable e-commerce solution and can provide strong customer references. In
addition, the large number and variety of implementation circumstances involved
in serving these organizations will rigorously test our products and assist us
in designing a robust, reliable and scalable solution.

         We believe a loyal base of reference customers affords us a significant
competitive advantage. Therefore, we intend to devote significant resources
towards customer satisfaction. We will employ a variety of customer satisfaction
programs to promote superior customer satisfaction.

EXPRESSORDER(TM)

         Expressorder(TM) consists of two components which can be implemented
together or separately, depending on the individual needs of the customer. Our
ExpressBuyer(TM) service enables businesses to automate their purchasing
methods. ExpressBuyer(TM) is a robust, scalable and reliable service that
enables an organization to reduce processing costs and improve productivity by
automating the procurement cycle and linking end-users throughout an
organization with internal administration and financial systems.
ExpressBuyer(TM) also enables organizations to reduce the cost of operating
resources by channeling purchases to preferred suppliers. Our ExpressSeller(TM)
service enables businesses to offer a catalog of products over the Internet
through a fully automated transaction. As a complete solution package,
Expressorder(TM) provides a business-to-business e-commerce platform.

         We believe Expressorder(TM) provides the following benefits to our
customers:

         Stand-alone, easily implemented solution. Expressorder(TM) is a
stand-alone service that can easily be initiated with any size company. It does
not require integration into a company's operational systems package or changes
in the existing business processes. It can also serve as an extension and
enhancement of, rather than a replacement for, a supply chain management system,
increasing the efficiencies of these systems.

         Speed of implementation. Expressorder(TM) is an outsourced, turnkey
solution that can be quickly installed and implemented. We estimate that
Expressorder(TM) can be fully implemented for a customer in as little as three
to five months.

         Cost of implementation. Unlike most currently available purchasing
solutions, Expressorder(TM) does not require the customer to add substantial
additional hardware, software or employees to its current business plan. Because
it does not rely on the scarce internal technology resources of our customers,
the total cost of Expressorder(TM) will be significantly less than that of most
competing solution systems.

         User friendly, Internet-based interfaces. The Internet browser-based
user interface of our EXPRESSORDER(TM) services enables users throughout an
organization to take full advantage of Expressorder(TM) from their desktop and
with minimal training. Online help information provides automated assistance for
less experienced users through the acquisition process, while an advanced user
interface makes the system more productive for experienced users.

         Automation of e-commerce transactions. Expressorder(TM) provides
flexible workflow capable of streamlining and automating even the most complex
e-commerce transactions. This flexible workflow can be customized for the unique
processes of an organization and can be tailored to respond to user input,
specific events or any extrinsic or intrinsic data relevant to the transaction.

         Information access and compilation. Expressorder(TM) provides powerful
analytical and reporting tools that enable businesses to evaluate data collected
throughout the process of acquiring, receiving and paying for goods and
services. By employing these analytical tools, an organization can analyze

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purchasing patterns to streamline the procurement process, negotiate more
favorable terms with preferred suppliers and gain insight into additional
savings opportunities.

         Multi-platform compatibility. Expressorder(TM) functions on common
Internet browser software. As a result, it is completely compatible with
virtually all computer operating systems, including Microsoft Windows and
Windows NT, Apple Macintosh and standard Linux/Unix systems.

         Fully customizable and scalable. Expressorder(TM) can be fully
customized as either a buying or selling solution, or both, depending on the
individual needs of our customers. In addition, Expressorder(TM) is fully
scalable and may be reconfigured to suit a customer's ongoing needs.

EXPRESSBUYER(TM)

         ExpressBuyer(TM) is our purchasing component that enables an
organization to reduce processing costs and improve productivity by automating
purchasing methods. We believe ExpressBuyer(TM) offers the following benefits to
our customers:

         Automation of procurement procedures and resulting costs reduction and
productivity increases. ExpressBuyer(TM) automates the procurement of goods and
services and significantly reduces processing costs and increases productivity.
ExpressBuyer(TM) enables an organization to streamline and automate complex
business processes. By operating without a complete re-engineering of the
customers existing systems, ExpressBuyer(TM) takes advantage of investments in
financial, human resource and enterprise resource planning systems. As a result,
our services allow organizations to focus on value-added activities such as
negotiating better discounts with preferred suppliers. In addition, our
customers can order and receive requested items more quickly and with less
effort, improving overall productivity.

         Compilation and analysis of buying data. ExpressBuyer(TM) enables
organizations to maximize procurement economies of scale, lowering the overall
costs of goods and services. ExpressBuyer(TM) provides reporting tools on buying
patterns, enabling organizations to negotiate more favorable contracts with
suppliers. ExpressBuyer(TM) also routes transactions to preferred suppliers
automatically. Moreover, ExpressBuyer(TM) is accessible on every desktop, is
easy-to-use and streamlines the procurement process. These benefits minimize the
frustration to end-users that often results in maverick buying, further enabling
organizations to take advantage of negotiated discounts with preferred
suppliers.

EXPRESSSELLER(TM)

         ExpressSeller(TM) is our supplier service component that enables
suppliers to offer their complete line of proprietary or vended products over
the Internet and process fully automated sales transactions. We believe
ExpressSeller(TM) offers the following benefits:

         Ability to offer complete line of products and services on the
Internet. ExpressSeller(TM) enables suppliers to offer their complete catalog of
goods and services over the Internet, which provides suppliers with greater
access to new and existing customers through a global presence and 24-hour
availability. In addition, by making available Internet-based catalog
capabilities, ExpressSeller(TM) enables suppliers to differentiate and market
their goods and services in their preferred format.

         Integration of sales data with suppliers. ExpressSeller(TM) allows a
business to integrate their sales with multiple customers to more effectively
control inventory and take advantage of "just in time" supply systems.

         Sales costs reduction. ExpressSeller(TM) enables businesses to reduce
sales costs. By automating catalog sales transactions, a business can reduce the
costs associated with, and reduce the potential for, error inherent in
paper-based ordering and payment processes. Product information can be
distributed electronically, reducing the distribution costs of printed catalogs.
In addition, suppliers can utilize their existing investments in inventory
control and delivery systems, including catalogs and product web pages.

                                       5

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CUSTOMER SERVICE, TRAINING AND SUPPORT

         We believe that customer satisfaction will be essential to our
long-term success and we intend to offer comprehensive customer assistance
programs. Our technical support will provide dependable and timely resolution of
customer technical inquiries and will be available to customers by telephone,
over the Internet or by electronic mail. We will offer complete education and
training to our customers and partners to develop the knowledge and skills to
successfully use our services.

RESEARCH AND DEVELOPMENT

         Substantially all of the research and development regarding
Expressorder(TM) has been outsourced to various consultants. During 1998, 1999
and 2000, we estimate that Plus Solutions incurred total development costs
related to Expressorder(TM) of approximately $199,000, in addition to the
devotion of substantial management resources, during that period. We believe the
development of Expressorder(TM) is substantially complete and any further
resources devoted to research and development will be used to make ongoing
improvements to Expressorder(TM) in response to market demands. We intend to
continue to outsource such development to consultants.

         We cannot be sure that continuing development of Expressorder(TM) will
be completed or that, if completed, it will have the features or quality
necessary to make it successful in the marketplace. Further, despite input by
potential customers and our internal quality control, errors could be found in
Expressorder(TM) that we have not anticipated. We may not be able to
successfully correct these errors in a timely and cost effective manner. If we
are not able to further develop or enhance our services in a timely and
cost-effective basis, or if these new developments or enhancements do not have
the features or quality necessary to make them successful in the marketplace,
our business will be seriously harmed.

COMPETITION

         The market for e-commerce solutions is intensely competitive, evolving
and subject to rapid technological change. The intensity of competition has
increased and is expected to further increase in the future. This increased
competition is likely to result in price reductions and reduced gross margins,
any one of which could seriously harm our business. Competitors vary in size and
in the scope and breadth of the products and services offered. We believe the
primary competitors in the e-commerce solutions market are Ariba, Captura
Software, Clarus, Commerce One, Concur Technologies, Extensity, GE Information
Services, Intelysis, and Netscape Communications. We also expect to encounter
competition from major enterprise software developers, such as Oracle,
PeopleSoft and SAP. In addition, because there are relatively low barriers to
entry in the e-commerce solutions market, we expect additional competition from
other established and emerging companies.

         We believe that the principal competitive factors affecting our market
include:

         o        existing customer base

         o        capabilities, quality and performance of products and services

         o        ability to configure and improve products and services based
                  on market demands and customer requirements

         o        individual requirements of buyers and suppliers in particular
                  industries

         o        customer service and satisfaction

         o        capabilities of core technology

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         Although we believe that our services will compete favorably with
respect to these factors, the market for e-commerce solutions is relatively new
and is evolving rapidly. Even if we are currently competitive, we may not be
able to maintain our competitive position against current and potential
competitors, especially those with significantly greater financial, marketing,
service, support, technical and other resources.

         Many of our competitors have longer operating histories, significantly
greater financial, technical, marketing and other resources than us,
significantly greater name recognition and a larger existing base of customers.
In addition, many of our competitors have well-established relationships with
potential customers and have extensive knowledge of key industries. Current and
potential competitors have established or may establish cooperative
relationships among themselves or with third parties to increase the ability of
their products to address customer needs. Accordingly, it is possible that new
competitors or alliances among competitors may emerge and rapidly acquire
significant market share. We also expect that competition will increase as a
result of consolidation of the e-commerce solutions industry.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

         We will depend on our ability to develop and maintain the proprietary
aspects of our technology. To protect our proprietary technology, we will rely
primarily on a combination of contractual provisions, confidentiality
procedures, trade secrets, and patent, copyright and trademark laws.

         We intend to license rather than sell the software technology in
Expressorder(TM) and we will require our customers to enter into license
agreements, which impose restrictions on their ability to utilize the software.
In addition, we will avoid disclosure of our trade secrets through a number of
means, including but not limited to, requiring those persons with access to our
proprietary information to execute confidentiality agreements with us and
restricting access to our software source code. We will attempt to protect our
software, documentation and other written materials under trade secret and
copyright laws, which afford only limited protection. We cannot be sure that any
of our proprietary rights will be successfully protected since the validity,
enforceability and protection of proprietary rights in Internet-related
industries are still evolving.

         We rely on technology that we license from third parties to perform key
functions with respect to Expressorder(TM). If we are unable to continue to
license any of this software on commercially reasonable terms, our business may
be harmed unless equivalent technology can be readily licensed or developed, and
integrated into our services.

         We intend to file applications to trademark the terms "Expressorder",
"ExpressBuyer" and "ExpressSeller" in the United States and other countries.
These trademark applications are subject to review by applicable government
authorities, may be opposed by private parties, and may not be approved by such
authorities.

         Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products or to obtain and use
information that we regard as proprietary. Policing unauthorized use of our
products is difficult, and while we are unable to determine the extent to which
piracy of our software products exists, software piracy can be expected to be a
persistent problem. In addition, the laws of some foreign countries do not
protect our proprietary rights to as great an extent as do the laws of the
United States. Our means of protecting our proprietary rights may not be
adequate and our competitors may independently develop similar technology,
duplicate our products or design around our intellectual property.

         There has been a substantial amount of litigation in the software and
Internet industries regarding intellectual property rights. It is possible that
in the future third parties may claim that we or our current or potential future
products infringe their intellectual property. We expect that software product
developers and providers of e-commerce solutions will increasingly be subject to
infringement claims as the number of products and competitors in our industry
segment grows and the functionality of products in different industry segments
overlaps. Any such claims, whether or not they have merit, could result in
costly

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litigation, cause development delays or require us to enter into royalty or
licensing agreements. Such royalty or licensing agreements, if required, may not
be available on commercially reasonable terms, which could seriously harm our
business.

EMPLOYEES

         As of October 31, 2000, we had a total of 4 employees, all of whom were
management personnel. All of these employees are located in the our principal
executive offices in Addison, Texas. None of our employees is represented by a
collective bargaining agreement and we have never experienced any work stoppage.
We consider our relations with our employees to be good.

         Our future operating results depend in significant part on the
continued service of our senior management personnel. Our future success will
also depend on our ability to attract and retain highly qualified technical,
marketing and management personnel. Competition for these personnel is intense,
and we may not be able to retain our key personnel or attract these personnel in
the future.

BUSINESS LOCATIONS

         The Company's only business location is its principal executive offices
located at 14677 Midway Road, Suite 206, Addison, Texas 75001. The phone number
at this location is (972) 687-0090. We lease approximately 1,300 square feet of
office space at this location.

                                PLAN OF OPERATION

         Plus Solutions, Inc, a Texas corporation, was organized in October
1998. To avoid confusion, we will refer to the Plus Solutions organized as a
Texas corporation as "Texas Plus Solutions". Before March 10, 2000, Texas Plus
Solutions pursued the business we now pursue. On March 10, 2000, Texas Plus
Solutions was acquired by Sound Designs, Inc., a Nevada corporation that had
been organized in September 1998. Although Sound Designs acquired Texas Plus
Solutions, Texas Plus Solutions was considered the acquiring entity for
accounting purposes. Following the acquisition, Sound Designs adopted the
management and business plan of Texas Plus Solutions and subsequently changed
its corporate name to Plus Solutions, Inc. in May 2000.

         We have not generated any revenues from our current business, which we
commenced after and as a result of the acquisition of Texas Plus Solutions. In
addition, Texas Plus Solutions never generated any revenues prior to its
acquisition by Sound Designs. Although Sound Designs generated nominal revenues
prior to the acquisition of Texas Plus Solutions, we have abandoned the business
pursued by Sound Designs prior to the acquisition of Texas Plus Solutions. As a
result, we consider the nominal revenues generated by Sound Designs while
pursuing a line of business that we have abandoned to be immaterial and we have
chosen not to discuss the operations of Sound Designs prior to the acquisition
of Texas Plus Solutions.

         We are considered a development-stage company. We have experienced
cumulative operating losses, and our operations are subject to risks and
uncertainties, including, among others, risks associated with technology and
regulatory trends, growth competition by entities with greater financial and
other resources, and the need for additional capital. We cannot assure you that
we will be successful in becoming profitable or generating positive cash flow in
the future. Our fiscal year ends on December 31 of each calendar year.

PLAN OF OPERATION

         We have commenced marketing our products to potential customers. We
intend to implement our Expressorder products in a limited number of customers
so that we may provide each customer with adequate service and support.
Following these initial implementations of Expressorder, we intend to

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increase our sales force and expand our marketing efforts to garner additional
customers. In addition, we also intend to establish strategic partnerships with
providers of other electronic commerce products and services to increase the
efficacy and efficiency of our Expressorder products.

LIQUIDITY AND CAPITAL RESOURCES

         As a result of the financing arrangements described under the section
titled "Financing Arrangements", we believe the initial $1,000,000 financing
will enable us to continue our operations for approximately three to six months.
However, while management believes our current financing arrangements will
continue to provide additional funds to the Company in addition to the initial
$1,000,000, we cannot assure you that these additional funds will be made
available. If such additional funds are not made available, we may have to cease
operations if replacement funding is not available.

         The availability of funds in excess of $1,000,000 under our current
financing arrangements is dependent on the amount of our common stock owned by
each of the four investors providing the financing. Each investor does not have
any obligation to provide financing to us, other than such investor's allocated
share of the initial $1,000,000 financing, if such additional financing would
result in the investor owning more than 9.9% of our outstanding common stock in
the form of convertible notes. Since the amount of common stock into which the
convertible notes may be converted is dependent on the market price of our
common stock, we may be unable to require the investors that are parties to our
current financing arrangements to provide funding in excess of $1,000,000 if our
stock price remains low or loses value. In addition, as the market price of our
common stock declines, the amount of common stock into which the convertible
notes may be converted increases proportionally. If financing in excess of
$1,000,000 is not available to us under our current financing arrangements, we
may need to secure additional financing in three to six months to continue
implementation of our business plan. If we fail to acquire such additional
financing, we may be forced to delay the full implementation of our business
plan or we may be unable to continue our business at all.

RESEARCH AND DEVELOPMENT

         We anticipate research and development costs of approximately $100,000
during the next 12 months to provide enhancements and added functionality to our
Expressorder(TM) product. Our anticipated expenditures may vary as a result of
the number and type of customers which we serve, products and services offered
by our competitors, and developments in the marketplace for our products and
services.

EQUIPMENT AND CAPITAL EXPENDITURES

         We currently plan capital expenditures for equipment and software
during the next 12 months totaling approximately $125,000. We believe such
expenditures will include additional Internet data servers, additional
communication equipment, a customer support call management system and upgrades
of support software to support our Expressorder(TM) product. These expenditures
will be tied to the number and type of customers which use our products, the
specific product support requirements of those customers, and the volume of
transactions processed.

EMPLOYEES

         We anticipate adding 30 additional employees during the next 12 months.
We anticipate that the majority of these employees will be in the areas of sales
and marketing, product development and support, and customer service and
support. In addition, we anticipate adding a small number of administrative
employees. The number and timing of such hirings will be a function of our
success in acquiring customers, business volume, market opportunities, and the
general business climate.

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                             FINANCING ARRANGEMENTS

         On September 27, 2000, we entered into a subscription agreement with
four investors, The Keshet Fund L.P., Keshet L.P., Nesher Ltd., and Talbiya B.
Investments Ltd., which provided for an $8.5 million long-term financing
commitment. The financing was arranged by KCM Ltd., a New York, New York
investment firm. We initially sold to the investors a total of $500,000 of our
8% convertible notes for a purchase price equal to the principal amount of each
note. In November 2000, we sold the investors an additional $250,000 of our
convertible notes for a purchase price equal to the principal amount. As a
result, each investor currently holds 8% convertible note in the amount set
forth below:

<TABLE>
<S>                                                           <C>
                  The Keshet Fund L.P. ................       $185,000
                  Keshet L.P. .........................        390,000
                  Nesher Ltd. .........................         85,000
                  Talbiya B. Investments Ltd. .........         90,000
                                                              --------
                  TOTAL ...............................       $750,000
</TABLE>

         The full principal amounts of the convertible notes must be paid on
September 27, 2003. The convertible notes incur interest at the rate of 8% per
year, which interest is paid quarterly. The convertible notes are a general
obligation of Plus Solutions and payment of principal and interest under the
notes is not secured by any specific assets.

         The offering of the convertible notes to the investors was a private
offering made in reliance on Rule 506 of Regulation D under the United States
Securities Act. Each of the investors represented to us in the Subscription
Agreement that it qualifies as an accredited investor under Regulation D.

PURCHASE OF ADDITIONAL NOTES

         We have the right to require the investors to purchase additional
convertible notes. In order to exercise this right, we must meet several
conditions, among which are:

         o        we have an effective registration statement under the United
                  States Securities Act that covers at least 200% of the shares
                  of our common stock issuable upon conversion of the total
                  amount of outstanding convertible notes and 100% of the shares
                  of our common stock issuable upon exercise of outstanding
                  warrants issued as finders fees

         o        we are a reporting company under the United States Securities
                  Exchange Act

         o        there has been no material adverse change in our business and
                  no event of default under the convertible notes

         o        our common stock is listed on a securities trading market and
                  there is no outstanding trading halt or stop order regarding
                  the listing, quotation or trading of our common stock

In addition, we may not require any investor to purchase an amount of
convertible notes that, together with the other convertible notes and shares of
our common stock held by the investor, would result in the investor beneficially
owning more than 9.9% of our outstanding common stock. In addition, during any
calendar month, we may not require the investors to purchase an amount of
convertible notes greater than the lesser of (1) $1,500,000; or (2) 10% of the
weighted average aggregate market price of the volume of our common stock traded
each day for the 30 trading days immediately preceding the issuance.

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         If these conditions and limitations are met, each investor may be
required to purchase additional convertible notes up to the maximum amounts set
forth below:

<TABLE>

<S>                                                        <C>
                  The Keshet Fund L.P. ....................$1,650,000
                  Keshet L.P. ............................. 3,225,000
                  Nesher Ltd. ............................. 1,275,000
                  Talbiya B. Investments Ltd. ............. 1,350,000
                                                           ----------
                  TOTAL ...................................$7,500,000
</TABLE>

         As of March 28, 2001, The Keshet Fund L.P. and Keshet L.P. each
beneficially owned 9.9% or more of our outstanding common stock. As a result,
unless we issue a substantial number of additional shares of our common stock
pursuant to other financing arrangements, acquisitions or strategic
partnerships, we will not be able to require The Keshet Fund L.P. and Keshet
L.P. to purchase additional convertible notes under the current financing
arrangements.

CONVERSION RIGHTS

         The convertible notes may be converted into shares of our common stock
at the option of the holder of each note. Each convertible note may be partially
or fully converted into common stock. The number of shares into which each note
may be converted is calculated by dividing the principal amount of the note,
plus any accrued but unpaid interest on the note, by a conversion price. The
conversion price of the convertible notes issued pursuant to the initial
issuance in September 2000 is the lesser of (1) $.10 or (2) the average of the
three lowest bid prices for our common stock during the 90 trading days
preceding the conversion date. The conversion price of all convertible notes
issued after the initial issuance, including the convertible notes issued in
November 2000, is 84% of the lowest closing price for our common stock on the
principal stock market on which our common stock is traded during the 10 trading
days immediately preceding the date of conversion. The conversion price also may
be adjusted upon the occurrence of specified events, including any division or
combination of shares of our common stock and any recapitalization or
restructuring.

         If we are unable to deliver stock certificates as a result of the
conversion of a convertible note in a timely manner, we may be required to pay a
late fee and other penalties to the holder of the note. If we are prohibited
from issuing such stock certificates, we may be required to redeem the notes at
130% of their principal amount. Unless an investor provides us with 75 days
notice, an investor may not convert any amount of a convertible note if, after
the conversion, the investor would beneficially own more than 9.9% of our
outstanding common stock.

REGISTRATION RIGHTS

         We are required to file a registration statement under the United
States Securities Act that covers the resale by the investors of at least 200%
of the shares of our common stock issuable upon conversion of the total amount
of outstanding convertible notes and 100% of the shares of our common stock
issuable upon exercise of outstanding warrants issued as finders fees. We must
maintain the effectiveness of this registration statement until the latest of
(1) six months after the expiration of the warrants issued as finders fees; (2)
twelve months after the last maturity date of all outstanding convertible notes;
or (3) two years after the last date of issuance of a convertible note. We
currently estimate that, as a result of these requirements, we will be required
to maintain the effectiveness of this registration statement until March 2008.

         Even though we have filed the registration statement regarding the
shares of our common stock underlying the currently outstanding convertible
notes and finders warrants, the investors may require us to file an additional
registration statement which covers the resale of the shares designated by the
investors until September 2004. The investors also have the right to include
shares of our common stock they hold in a registration statement we intend to
file for our own account of for the account of another stockholder.

                                       11

<PAGE>   12

FINDERS FEES AND WARRANTS

         Upon any sale of convertible notes under the subscription agreement, we
must pay to Alon Enterprises Ltd. finders fees in the form of cash and warrants
to purchase shares of our common stock. The cash finders fees are equal to 10%
of the total cash consideration paid by the investors for the convertible notes
issued pursuant to such sale. The warrant finders fees enable Alon Enterprises
to purchase a number of shares of our common stock equal to 12% of the number of
shares of our common stock into which the convertible notes issued pursuant to
such sale may be converted, calculated at the date of issuance, at an exercise
price equal to 105% of the lowest closing bid price for our common stock on the
principal stock market on which our common stock is traded during the 10 trading
days immediately preceding the date of the sale of convertible notes. The
finders warrants expire on the fifth anniversary of their date of issuance.
Although the exercise price is established upon the issuance of the finders
warrant, the exercise price may be adjusted upon the occurrence of specified
events, including any division or combination of shares of our common stock, any
recapitalization or restructuring, or any issuance of our common stock for a
purchase price less that the current exercise price.

         Pursuant to the provisions of the subscription agreement, we issued a
finders warrant to Alon Enterprises in September 2000 that is exercisable for
2,000,000 shares of our common stock at the exercise price of $.1365 per share.
In addition, we issued finders warrants in November 2000 exercisable for
1,000,000 shares of our common stock at the exercise price of $.065625 per
share.

         If we do not require the investors to purchase at least $2,000,000 of
convertible notes during each 12 month period ending September 27, 2001, 2002
and 2003, we must issue additional warrants to Alon Enterprises. The $2,000,000
of convertible notes during each 12 month period does not include the $500,000
of convertible notes issued on September 27, 2000, but does include any
convertible notes that we request the investors to purchase but the investors
refuse to purchase because of the 9.9% beneficial ownership limitation. The
number of shares of our common stock that may be acquired pursuant to such
additional finders warrants are equal to the difference between the number of
shares of our common stock that might have be acquired pursuant to warrants that
would have been issued had we sold $2,000,000 of convertible notes during the
preceding 12 month period and the number of shares of our common stock that can
be acquired pursuant to finders warrants that were actually issued during such
period.

OTHER PROVISIONS

         We made representations and warranties regarding Plus Solutions and the
offering of the convertible notes that are customary in transactions similar to
the sale of the convertible notes. The investors also made customary
representations and warranties regarding their qualification as accredited
investors and their investment intentions regarding the convertible notes.

         We and the investors each agreed to indemnify the other for damages
arising from a breach of the agreement. We also agreed to customary mutual
indemnification with respect to the registration rights conferred to the
investors.

         Other than securities issued to our directors and employees or
securities issued pursuant to mergers, acquisitions or strategic partnerships,
we may not offer for sale any securities of Plus Solutions until 180 days after
the effectiveness of the registration statement under the United States
Securities Act that covers the resale by the investors of the shares of our
common stock held by them. Until September 27, 2001, we must offer the investors
a right of first refusal with respect to any financing transaction proposed by a
third party, on the same terms and conditions as those proposed by such party.

                                       12

<PAGE>   13

                       INFORMATION ABOUT OUR CAPITAL STOCK

COMMON STOCK TRADING HISTORY

         Our common stock is traded on the Nasdaq OTC Bulletin Board system
under the symbol "PLSO". The closing high and low price for our common stock at
the end of each quarter since our common stock commenced trading is set forth
below:

<TABLE>
<CAPTION>
                  DATE                                   HIGH          LOW
                  ----                                   ----          ---
<S>                                                      <C>          <C>
                  March 31, 2000 ....................... $7.63        $5.09

                  June 30, 2000 ........................ $5.63        $0.31

                  September 30, 2000 ................... $0.66        $0.09

                  December 31, 2000..................... $0.14        $0.05
</TABLE>

         On February 28, 2001, the low price for our common stock was $0.05 and
the high price was $0.05. On February 28, 2001, there were approximately 50
record holders of our common stock.

DIVIDENDS

         Our present policy is to retain earnings, if any, to finance future
growth. We have never paid cash dividends with respect to our common stock and
have no present intention to pay cash dividends with respect to our common
stock. Our Series A Preferred Stock receives semi-annual dividends of $.07125
per share that cumulate if unpaid.

RECENT PRIVATE OFFERINGS

         In September 1998, we sold 1,000,000 shares of our common stock to our
founders in a private transaction pursuant to Section 4(2) of the Securities Act
for aggregate consideration of $2,500. All of these shares were canceled in
January 2000.

         In March 1999, we sold 1,200,000 shares of our common stock to
approximately 34 persons with whom our founders had pre-existing relationships
in a private offering pursuant to Rule 504 under the Securities Act for
aggregate consideration of $60,000.

         On March 10, 2000, we closed the Agreement and Plan of Merger with
Texas Plus Solutions. Pursuant to the merger agreement, Texas Plus Solutions
became our wholly-owned subsidiary. As consideration for the merger, the
stockholders of Texas Plus Solutions received an aggregate of 23,340,000 shares
of our common stock. The offering of our common stock to the stockholders of
Texas Plus Solutions, each of whom qualifies as an "accredited investor", in
accordance with the merger agreement was made pursuant to Rule 506 under the
Securities Act.

         On August 1, 2000, we sold 100,000 shares of our Series A Preferred
Stock and a warrant exercisable for 25,000 shares of our common stock to David
Ballard for total cash consideration of $75,000. Shares of our Series A
Preferred Stock are not convertible into our common stock and do not vote,
except with respect to matters regarding which the holders of Series A Preferred
Stock are required to vote by Nevada law. The warrant allows the holder to
purchase up to 25,000 shares of our common stock for an exercise price of $.35
per share. The warrant expires on August 1, 2001. The offering of our Series A
Preferred Stock to David Ballard, who qualifies as an "accredited investor", was
made pursuant to Rule 506 under the Securities Act.

                                       13

<PAGE>   14

         On September 27, 2000, we closed the initial $500,000 of the $8.5
million long-term financing commitment with The Keshet Fund L.P., Keshet L.P.,
Nesher Ltd., and Talbiya B. Investments Ltd. The offering of our convertible
notes to the investors, each of whom qualifies as an "accredited investor", was
made pursuant to Rule 506 under the Securities Act.

         On November 29, 2000, we closed an additional $250,000 of the $8.5
million long-term financing commitment with The Keshet Fund L.P., Keshet L.P.,
Nesher Ltd., and Talbiya B. Investments Ltd. The offering of our convertible
notes to the investors, each of whom qualifies as an "accredited investor", was
made pursuant to Rule 506 under the Securities Act.

                           FORWARD-LOOKING STATEMENTS

         The information in this report contains forward-looking statements
within the meaning of Section 27A of the United States Securities Act of 1933
and Section 21E of the United States Securities Exchange Act of 1934. Such
statements are based upon current expectations that involve risks and
uncertainties that may be outside of our control. Any statements contained
herein that are not statements of historical fact may be deemed to be
forward-looking statements. For example, words such as "may," "will," "should,"
"estimates," "predicts," "potential," "continue," "strategy," "believes,"
"anticipates," "plans," "expects," "intends," and similar expressions are
intended to identify forward-looking statements. Our actual results and the
timing of certain events may differ significantly from the results discussed in
the forward-looking statement.

                                       14


<PAGE>   15

                              EXHIBITS AND REPORTS

EXHIBITS

         We have included or incorporated by reference the following exhibits to
this Annual Report.

       EXHIBIT    DESCRIPTION

         2.1      Agreement and Plan of Merger dated as of February 21, 2000 by
                  and among Sound Designs, Inc., SD Acquisition, Inc., and Plus
                  Solutions, Inc. This exhibit is incorporated by reference from
                  Exhibit 2.1 to our Current Report on Form 8-K filed March 27,
                  2000.

         3.1      Certificate of Incorporation. This exhibit is incorporated by
                  reference from Exhibit 3.1 to our Registration Statement on
                  Form 10 filed December 1, 1999.

         3.2      Certificate of Amendment to Certificate of Incorporation dated
                  May 31, 2000.

         3.3      Bylaws. This exhibit is incorporated by reference from Exhibit
                  3.2 to our Registration Statement on Form 10 filed December 1,
                  1999.

         4.1      Subscription Agreement dated September 27, 2000 among Plus
                  Solutions, Inc. and the subscribers executing the same. This
                  exhibit is incorporated by reference from Exhibit 4.1 to our
                  Current Report on Form 8-K filed October 12, 2000.

REPORTS

         During our fiscal year ended December 31, 2000, we filed two current
reports on Form 8-K under the Securities Exchange Act, our current report dated
March 27, 2000, as amended May 26, 2000, and our current report dated October
12, 2000.

                                       15

<PAGE>   16










     PLUS SOLUTIONS, INC.
     (A DEVELOPMENT STAGE COMPANY)

     Financial Statements
     Year Ended December 31, 2000,
     Each of the Two Years in the Period Ended
     December 31, 2000, and
     Period From October 5, 1998 (Date of Inception) to
     December 31, 2000, and
     Independent Auditors' Report

<PAGE>   17

    INDEX OF FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>                                                                                           <C>
Independent Auditors' Report ................................................................ F-2

Financial Statements:

 Balance Sheet as of December 31, 2000 ...................................................... F-3

 Statement of Operations for the Years Ended December 31, 2000 and 1999, and Period
  from October 5, 1998 (Date of Inception) to December 31, 2000 ............................. F-4

 Statement of Stockholders' Equity (Deficit) for the Years Ended December 31, 2000
  and 1999, and Period from October 5, 1998 (Date of Inception) to
  December 31, 2000 ......................................................................... F-5

 Statement of Cash Flows for the Years Ended December 31, 2000 and 1999, and Period
  from October 5, 1998 (Date of Inception) to December 31, 2000 ............................. F-6

 Notes to Financial Statements .............................................................. F-7
</TABLE>


     F-1

<PAGE>   18

INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
   Plus Solutions, Inc.:

We have audited the accompanying balance sheet of Plus Solutions, Inc. (a
development stage company) (the "Company") as of December 31, 2000, and the
related statements of operations, stockholders' equity (deficit) and cash flows
for each of the two years in the period ended December 31, 2000, and for the
period from October 5, 1998 (date of inception) to December 31, 2000. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at December 31, 2000, and the
results of its operations and its cash flows for each of the two years in the
period ended December 31, 2000, and for the period from October 5, 1998 (date of
inception) to December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying financial statements for the year ended December 31, 2000, have
been prepared assuming that the Company will continue as a going concern. The
Company is in the development stage at December 31, 2000. As discussed in Note 1
to the financial statements, the Company has experienced cumulative operating
losses, and its operations are subject to certain risks and uncertainties,
including risks associated with technology and regulatory trends, growth
competition by entities with greater financial and other resources, and the need
for additional capital. These matters raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


/s/ Deloitte & Touche LLP


Dallas, Texas
February 2, 2001




                                      F-2
<PAGE>   19

PLUS SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEET
DECEMBER 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<S>                                                             <C>
ASSETS

CURRENT ASSETS:
   Cash                                                         $    145,609
   Prepaid expenses                                                      100
                                                                ------------

       Total current assets                                          145,709

PROPERTY AND EQUIPMENT - Net (Note 3)                                 89,757

PRODUCT DEVELOPMENT COSTS - Net (Note 1)                             191,160

DEFERRED FINANCING COSTS (Note 1)                                     70,139
                                                                ------------

TOTAL                                                           $    496,765
                                                                ============


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
   Deferred compensation                                        $    102,283
   Accrued professional fees                                         102,327
   Accrued interest and other                                          7,178
   Notes payable (Note 4)                                             68,317
                                                                ------------

       Total current liabilities                                     280,105

CONVERTIBLE NOTES PAYABLE - Net of discount of $221,750 (Note 4)     528,250

COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS' EQUITY (DEFICIT) (Note 5):
   Series A voting preferred stock, $.001 par value; 8,000,000
      shares authorized; 100,000 shares issued and outstanding        82,125
   Common stock, $.001 par value; 100,000,000 shares authorized;
      39,240,000 shares issued and outstanding                        39,240
   Common stock warrants                                             310,000
   Additional paid-in capital                                      8,675,394
   Deficit accumulated during the development stage since
      October 5, 1998                                             (9,418,349)
                                                                ------------

       Total stockholders' equity (deficit)                         (311,590)
                                                                ------------

TOTAL                                                           $    496,765
                                                                ============
</TABLE>

See notes to financial statements.

                                      F-3

<PAGE>   20

PLUS SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000 AND 1999, AND
PERIOD FROM OCTOBER 5, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                           CUMULATIVE
                                                                                             FROM
                                                          2000              1999           INCEPTION
                                                      ------------      ------------      ------------
<S>                                                   <C>               <C>               <C>
REVENUES                                              $         --      $         --      $         --

OPERATING EXPENSES:
   Salaries and benefits                                   530,122         1,145,559         1,754,534
   General and administrative                              554,666           897,992         7,364,860
   Depreciation and amortization expense                    48,248            21,177            73,670
                                                      ------------      ------------      ------------

           Total operating expenses                      1,133,036         2,064,728         9,193,064
                                                      ------------      ------------      ------------

OPERATING LOSS                                          (1,133,036)       (2,064,728)       (9,193,064)

INTEREST AND OTHER EXPENSE - Net                          (210,286)           (2,373)         (218,160)
                                                      ------------      ------------      ------------

NET LOSS                                                (1,343,322)       (2,067,101)       (9,411,224)

PREFERRED STOCK - Dividends                                 (7,125)                             (7,125)
                                                      ------------      ------------      ------------

NET LOSS AVAILABLE TO COMMON STOCKHOLDERS             $ (1,350,447)     $ (2,067,101)     $ (9,418,349)
                                                      ============      ============      ============

LOSS PER SHARE - Basic and diluted                    $      (0.04)     $      (0.10)
                                                      ============      ============

WEIGHTED AVERAGE COMMON AND COMMON
    EQUIVALENT SHARES OUTSTANDING - Basic
    and diluted                                         36,490,000        20,574,041
                                                      ============      ============
</TABLE>


See notes to financial statements.


                                      F-4

<PAGE>   21

PLUS SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED DECEMBER 31, 2000 AND 1999, AND
PERIOD FROM OCTOBER 5, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                           CONVERTIBLE        COMMON STOCK        COMMON     ADDITIONAL
                            PREFERRED    ----------------------    STOCK       PAID-IN      DUE FROM     ACCUMULATED
                              STOCK        SHARES      AMOUNT     WARRANTS     CAPITAL     STOCKHOLDER     DEFICIT        TOTAL
                           -----------   ----------  ----------  ----------  -----------   -----------   ------------  -----------
<S>                        <C>           <C>         <C>         <C>         <C>           <C>          <C>            <C>
BALANCE AS OF
   OCTOBER 5, 1998          $      --            --  $       --  $       --  $       --    $     --     $        --    $        --

   Issuance of preferred
      stock for services,
      516,379 shares          767,500                                                                                      767,500

   Issuance of common
      stock for services                 17,257,592   5,130,028                                                          5,130,028

   Issuance of common
      stock for cash                        336,404     100,000                                                            100,000

   Conversion of preferred
      stock, 105,949 shares  (157,472)      529,743     157,472                                                                 --

   Issuance of common
      stock for due from
      stockholder                            67,281      20,000                             (20,000)                            --

   Net loss                                                                                               (6,000,801)    (6,000,801)
                             --------    ----------   ---------  ----------  ----------    --------     -----------    -----------
BALANCE AS OF
   DECEMBER 31, 1998          610,028    18,191,020   5,407,500          --          --     (20,000)     (6,000,801)        (3,273)

   Issuance of common
      stock for services                  2,563,255     761,958                                                            761,958

   Issuance of common
      stock for cash                        533,571     190,250                 374,981                                    565,231

   Conversion of preferred
      stock, 410,431 shares  (610,028)    2,052,154     610,028                                                                 --

   Stock options granted to
      employees                                                                 760,000                                    760,000

   Collection of due from
      stockholder                                                                            20,000                         20,000

   Conversion of shares
      upon merger (Note 2)                           (6,946,396)              6,946,396                                         --

   Net loss                                                                                              (2,067,101)    (2,067,101)
                             --------    ----------   ---------  ----------  ----------    --------     -----------    -----------
BALANCE AS OF
   DECEMBER 31, 1999               --    23,340,000      23,340          --   8,081,377          --      (8,067,902)        36,815

   Issuance of preferred
      stock for cash,
       100,000 shares          75,000                                                                                       75,000

   Issuance of common
      stock for cash                        300,000         300                 349,686                                    349,986

   Issuance of common
      stock warrants                                                310,000                                                310,000

   Reverse merger with
      Sound Designs (Note 2)             15,600,000      15,600                  16,831                                     32,431

   Stock options granted to
      employees                                                                  40,000                                     40,000

   Beneficial conversion
      feature of notes
      (Note 4)                                                                  187,500                                    187,500

   Accretion of dividends       7,125                                                                         (7,125)           --

   Net loss                                                                                               (1,343,322)   (1,343,322)
                             --------   -----------   ---------  ----------  ----------    --------      -----------   -----------
BALANCE AS OF
   DECEMBER 31, 2000         $ 82,125    39,240,000   $  39,240  $  310,000  $8,675,394    $     --      $(9,418,349)  $  (311,590)
                             ========   ===========   =========  ==========  ==========    ========      ===========   ===========
</TABLE>


See notes to financial statements.


                                      F-5

<PAGE>   22

PLUS SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000 AND 1999, AND
PERIOD FROM OCTOBER 5, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 2000
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                                       CUMULATIVE
                                                                                                                          FROM
                                                                                       2000              1999           INCEPTION
                                                                                   ------------      ------------      ------------
<S>                                                                                <C>               <C>               <C>
OPERATING ACTIVITIES:
   Net loss                                                                        $ (1,343,322)     $ (2,067,101)     $ (9,411,224)
   Adjustments to reconcile net loss to net cash used in operating activities:
      Loss on disposal of property and equipment                                                                              5,501
      Depreciation of property and equipment                                             35,076            21,177            60,498
      Amortization of debt discount                                                      17,250                              17,250
      Amortization of product development costs                                           8,311                               8,311
      Amortization of deferred financing costs                                            4,861                               4,861
      Issuance of common and preferred stock for services                                                 761,958         6,659,486
      Issuance of common stock warrants for services                                     71,000                              71,000
      Beneficial conversion feature on convertible notes                                187,500                             187,500
      Compensation from stock options granted to employees                               40,000           760,000           800,000
      Net changes in operating assets and liabilities:
         Prepaid expenses                                                                 1,108            (1,208)             (100)
         Accounts payable and accrued expenses                                           45,346           123,322           211,788
                                                                                   ------------      ------------      ------------

           Net cash used in operating activities                                       (932,870)         (401,852)       (1,385,129)
                                                                                   ------------      ------------      ------------

INVESTING ACTIVITIES:
   Additions to property and equipment                                                  (73,536)           (5,408)          (79,339)
   Capitalized product development costs                                               (102,031)          (97,440)         (199,471)
                                                                                   ------------      ------------      ------------

           Net cash used in investing activities                                       (175,567)         (102,848)         (278,810)
                                                                                   ------------      ------------      ------------

FINANCING ACTIVITIES:
   Proceeds from issuance of preferred stock                                             75,000                              75,000
   Proceeds from issuance of common stock                                               349,986           565,231         1,015,217
   Proceeds from reverse merger                                                          32,431                              32,431
   Collection of due from stockholder                                                                       20,000           20,000
   Additions to convertible notes payable                                               750,000                             750,000
   Deferred financing costs                                                             (75,000)                            (75,000)
   Payments on notes payable                                                                               (5,100)           (8,100)
                                                                                   ------------      ------------      ------------

           Net cash provided by financing activities                                  1,132,417           580,131         1,809,548
                                                                                   ------------      ------------      ------------

NET INCREASE IN CASH                                                                     23,980            75,431           145,609

CASH, BEGINNING OF PERIOD                                                               121,629            46,198
                                                                                   ------------      ------------      ------------
CASH, END OF PERIOD                                                                $    145,609      $    121,629      $    145,609
                                                                                   ============      ============      ============
SUPPLEMENTAL INFORMATION:
   Interest paid                                                                   $        940      $         --      $         --
                                                                                   ============      ============      ============
   Income taxes paid                                                               $         --      $         --      $         --
                                                                                   ============      ============      ============
NONCASH INVESTING AND FINANCING ACTIVITIES:
   Common stock warrants issued related to convertible notes payable (Note 4)      $    239,000      $         --      $         --
                                                                                   ============      ============      ============
   Notes payable issued for purchase of property and
      equipment (Note 4)                                                           $         --      $         --      $     76,417
                                                                                   ============      ============      ============
   Common stock issued for due from stockholder                                    $         --      $         --      $     20,000
                                                                                   ============      ============      ============
</TABLE>

See notes to financial statements.

                                      F-6

<PAGE>   23

PLUS SOLUTIONS, INC.
(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999, AND
PERIOD FROM OCTOBER 5, 1998 (DATE OF INCEPTION) TO DECEMBER 31, 2000
--------------------------------------------------------------------------------


1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      ORGANIZATION AND BUSINESS - Plus Solutions, Inc. (a development stage
      company) (the "Company") was organized in October 1998 and is to be a
      provider of Internet-based, business-to-business, e-Commerce solutions and
      services that enable buyers and suppliers to automate business
      transactions on the Internet. The Company is headquartered in Addison,
      Texas. The Company is considered to be a development stage company.

      The Company has experienced cumulative operating losses, and its
      operations are subject to certain risks and uncertainties, including risks
      associated with technology and regulatory trends, growth competition by
      entities with greater financial and other resources, and the need for
      additional capital. There can be no assurances that the Company will be
      successful in becoming profitable or generating positive cash flow in the
      future. These matters raise substantial doubt about the Company's ability
      to continue as a going concern. The Company is currently exploring various
      short-term and long-term financing alternatives, but does not know if
      these alternatives will be successful. The financial statements do not
      include any adjustments that might result from the outcome of this
      uncertainty.

      PREPARATION OF 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 disclosure of contingencies at the
      date of the financial statements and the reported amounts of revenues and
      expenses for the period. Actual results could differ from those estimates.

      PROPERTY AND EQUIPMENT are stated at cost less accumulated depreciation.
      Depreciation is provided on a straight-line basis over the estimated
      useful lives of the related assets. The following is a summary of useful
      lives for major categories of property and equipment:

<TABLE>
<CAPTION>
                    ASSET                                          USEFUL LIFE

<S>                                                                  <C>
         Furniture and fixtures                                      7 years
         Computers and office equipment                              3 years
</TABLE>

      VALUATION OF LONG-LIVED ASSETS in accordance with Statement of Financial
      Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
      Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," requires
      the Company to periodically evaluate the carrying value of long-lived
      assets and certain identifiable intangibles for impairment, when events
      and circumstances indicate that the book value of an asset may not be
      recoverable. An impairment loss is recognized whenever the review
      demonstrates that the book value of a long-lived asset is not recoverable.
      Since October 5, 1998 (date of inception) through December 31, 2000, no
      impairment losses have been identified.


                                      F-7
<PAGE>   24

      RESEARCH AND PRODUCT DEVELOPMENT COSTS are expensed as incurred until
      technological feasibility is established. Thereafter, product development
      and significant enhancement costs are capitalized and, upon product
      release, amortized to expense using the straight-line method over three
      years. Total costs capitalized related to research and product development
      were $102,031 and $97,440 in 2000 and 1999, respectively. Amortization of
      $8,311 has been recorded in 2000.

      DEFERRED FINANCING COSTS are stated at cost less accumulated amortization.
      Amortization is provided on a straight-line basis, which approximates the
      interest method, over the life of the related convertible note payable
      (see Note 4). As of December 31, 2000, deferred financing costs of $75,000
      are stated net of accumulated amortization of $4,861.

      REVENUES will be recognized as services are performed based primarily on a
      time-and-materials basis since the Company will provide its services of
      implementing its product into its customers' existing business processes.
      Revenues from maintenance and support contracts serviced by the Company
      will be recognized ratably over the terms of the contract period, which
      will typically be three years.

      STOCK-BASED COMPENSATION arising from stock option grants is accounted for
      by the intrinsic value method under Accounting Principles Board ("APB")
      Opinion No. 25. SFAS No. 123, "Accounting for Stock-Based Compensation,"
      encourages (but does not require) compensation arrangements with employees
      to be measured based on the fair value of the equity instrument awarded.
      As permitted by SFAS No. 123, the Company applies APB No. 25 to its
      stock-based compensation awards to employees and discloses the required
      pro forma effects on operations in Note 5.

      DEFERRED INCOME TAXES are provided under the asset and liability method
      for temporary differences in the recognition of income and expense for tax
      and financial reporting purposes.

      RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS - SFAS No. 133, "Accounting for
      Derivative Instruments and Hedging Activities," is effective for all
      fiscal years beginning after June 15, 2000. SFAS No. 133, as amended,
      establishes accounting and reporting standards for derivative instruments,
      including certain derivative instruments embedded in other contracts, and
      for hedging activities. Under SFAS No. 133, certain contracts that were
      not formerly considered derivatives may now meet the definition of a
      derivative. The Company adopted SFAS No. 133 effective January 1, 2001.
      The adoption of SFAS No. 133 did not have a significant impact on the
      financial position, results of operations or cash flows of the Company.

2.    MERGERS AND ACQUISITIONS

      On March 10, 2000, the Company closed the Agreement and Plan of Merger
      entered into with Sound Designs, Inc. ("Sound Designs"), a Nevada
      corporation. As consideration for the merger, the stockholders of the
      Company (the accounting acquirer) received approximately 1.69 shares of
      Sound Designs (the legal acquirer) common stock for each share of the
      Company's common stock that they owned. As such, the Company's outstanding
      shares of common stock of 13,876,193 as of March 10, 2000, were converted
      into 23,340,000 shares. The stock conversion has been reflected in the
      accompanying financial statements, and all applicable references as to the
      number of common shares and per-share amounts have been restated. As a
      result, the former stockholders of the Company currently own 60% of the
      outstanding shares of common stock of Sound Designs. In addition, the
      reverse merger agreement required all existing directors and officers of
      Sound Designs to resign and name the directors of the Company as the
      directors of the surviving company that will take the name of Plus
      Solutions, Inc. The "reverse merger" resulted in the Company being treated
      as the acquirer for


                                      F-8
<PAGE>   25

      accounting purposes. The transaction was accounted for in a manner similar
      to a pooling of interests, whereby no goodwill resulted from this
      transaction, and the Company's equity interest in Sound Design's net
      assets of $32,431 was recorded at Sound Design's historical cost basis.
      Other than the cash received upon the merger, no other assets or
      agreements were received from Sound Designs.

3.    PROPERTY AND EQUIPMENT

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

<TABLE>
<S>                                                                  <C>
         Furniture and fixtures                                      $  24,259
         Computers and office equipment                                125,996
                                                                     ---------

         Total                                                         150,255

         Less accumulated depreciation                                 (60,498)
                                                                     ---------

         Property and equipment - net                                $  89,757
                                                                     =========
</TABLE>

4.    NOTES PAYABLE

      The Company negotiated two rounds of third-party financing during 2000 in
      the form of convertible notes payable bearing 8% interest. The notes are
      convertible, at a specified conversion price, into common shares of the
      Company's stock. The first round of financing was closed on September 27,
      2000, and the Company received $500,000 upon the issuance of convertible
      notes bearing interest at 8% and maturing on September 27, 2003. The
      Company recorded, as interest expense and included in additional paid-in
      capital, a beneficial conversion feature, at an estimated value of
      $125,000 based on the $0.025 per-share excess of the estimated fair value
      of the stock of $0.125 per share over the conversion price of $0.10.

      The second round of financing was closed on November 29, 2000, and the
      Company received $250,000 upon the issuance of convertible notes bearing
      interest at 8% and maturing on November 29, 2003. The Company also
      recorded, as interest expense and included in additional paid-in capital,
      a beneficial conversion feature, at an estimated value of $62,500 based on
      the $0.0125 per-share excess of the estimated fair value of the stock of
      $0.0625 per share over the conversion price of $0.05.

      For assistance provided by an outside party in obtaining the financing, on
      September 27, 2000, the Company issued to the outside party 2,000,000
      warrants to purchase common stock at an exercise price of $0.1365 per
      share, which are exercisable over a period of five years. These warrants
      have an initial estimated fair value of $191,000, recorded as debt
      discount, on the date of grant using the Black-Scholes option-pricing
      model. As of December 31, 2000, unamortized debt discount of $175,083 is
      deducted from the related debt.

      In obtaining the November 29, 2000, financing, the Company also issued to
      the outside party 1,000,000 warrants to purchase common stock at an
      exercise price of $0.065625 per share, which are exercisable over a period
      of five years. These warrants have an initial estimated fair value of
      $48,000, recorded as debt discount, on the date of grant using the
      Black-Scholes option-pricing model. As of December 31, 2000, unamortized
      debt discount of $46,667 is deducted from the related debt.


                                      F-9
<PAGE>   26

      The Company purchased property and equipment in 1998 from a related
      company for a note payable of $76,417. The note bears interest, on unpaid
      scheduled payment amounts, monthly at 7% and is due on October 1, 2001. At
      December 31, 2000, the balance outstanding on the note payable is $68,317.

5.    STOCKHOLDERS' EQUITY

      SERIES A VOTING PREFERRED STOCK - The Company has authorized the issuance
      of up to 8,000,000 shares of its $.001 par value Series A Voting Preferred
      Stock. Each share of preferred stock shall have such rights, preferences,
      privileges and restrictions, including voting rights, dividend rights and
      liquidation preferences, as shall be determined by the Board of Directors.
      In October 1998, the Company issued 516,379 shares of preferred stock to
      directors and officers of the Company for services performed. Each share
      of preferred stock is convertible into five shares of common stock, and
      each share of preferred stock was valued at $2.50 per share based on the
      $0.50 per-share price of common shares issued for cash. In 1999 and 1998,
      all shares of preferred stock were converted into 2,581,897 shares of
      common stock. As of December 31, 1999, no shares of preferred stock were
      outstanding.

      In August 2000, the Company issued 100,000 shares of preferred stock at
      $0.75 per share for $75,000 in cash. In connection with these shares, the
      Company has recorded, at December 31, 2000, dividends of $7,125 based on
      the preferred stockholders being entitled to receive dividends at the rate
      of $0.07125 per share on December 31 and June 30 of each calendar year.

      COMMON STOCK - The Company has authorized the issuance of up to
      100,000,000 shares of its $.001 par value common stock. The holders of
      common stock are entitled to one vote per share and are entitled to
      dividends when and if declared by the Board of Directors of the Company.

      COMMON STOCK WARRANTS - In addition to the common stock warrants issued,
      as described in Note 4, in September 2000, the Company also issued to a
      third party, for services performed during 2000, 800,000 warrants to
      purchase common stock at an exercise price of $0.20 per share, which are
      exercisable over a period of five years. These warrants, included in
      stockholders' equity, have an estimated fair value of $71,000 on the date
      of grant using the Black-Scholes option-pricing model.

      STOCK OPTION PLAN - On October 25, 1999, the Company adopted the 1999
      Stock Incentive Plan (the "Plan"). The Plan provides for the granting of
      incentive stock options and nonqualified options for up to 6,000,000
      shares of common stock. Options expire no later than 10 years after the
      date of grant.


                                      F-10

<PAGE>   27

      Options granted in 2000 and 1999 are fully vested and exercisable as of
      the date of grant and remain exercisable for a period of 5 or 10 years
      after the date of grant. A summary of the activity for this plan follows:

<TABLE>
<CAPTION>
                                                                                       WEIGHTED AVERAGE
                                                                                           EXERCISE
                                                          NUMBER OF SHARES              PRICE PER SHARE
                                                     -------------------------     -------------------------
                                                        2000           1999           2000           1999
                                                     ----------     ----------     ----------     ----------
<S>                                                  <C>            <C>            <C>            <C>
Options outstanding, beginning of year                1,900,000             --     $     0.10     $       --

Granted                                                 375,000      1,900,000           0.36           0.10
                                                     ----------     ----------

Options outstanding, end of year                      2,275,000      1,900,000           0.14           0.10
                                                     ==========     ==========

Options exercisable, end of year                      2,275,000      1,900,000           0.14           0.10
                                                     ==========     ==========

Reserved for future options at December 31, 2000      3,725,000
                                                     ==========
</TABLE>

      The following table summarizes additional information about stock options
      outstanding and exercisable at December 31, 2000:

<TABLE>
<CAPTION>
                                OPTIONS OUTSTANDING                OPTIONS EXERCISABLE
                      ----------------------------------------    ----------------------
                                      WEIGHTED
                                       AVERAGE       WEIGHTED                  WEIGHTED
      RANGE OF                        REMAINING      AVERAGE                    AVERAGE
      EXERCISE        NUMBER OF      CONTRACTUAL     EXERCISE     NUMBER OF     EXERCISE
       PRICES           SHARES           LIFE         PRICE         SHARES       PRICE
    -------------     ---------      -----------     --------     ---------    ---------
<S>                   <C>             <C>            <C>          <C>            <C>
        $0.10         2,000,000       5.8 years      $ 0.10       2,000,000      $ 0.10
    $0.40 - $0.60       275,000       8.1 years        0.45         275,000        0.45
                      ---------                                   ---------

    $0.10 - $0.60     2,275,000       6.0 years        0.14       2,275,000        0.14
                      =========                                   =========
</TABLE>

      The Company applies the provisions of APB No. 25 and related
      Interpretations in accounting for the Plan. Compensation of $40,000 and
      $760,000 was recorded for 100,000 and 1,900,000 options granted in 2000
      and 1999, respectively, based on the $0.40 per-share excess of the
      estimated fair value of the stock of $0.50 per share over the exercise
      price, and is recorded in salaries and benefits expense as the options are
      fully vested. SFAS No. 123 prescribes a method to record compensation cost
      at the fair value of the options granted. Had compensation cost been
      determined with the method prescribed by SFAS No. 123, the Company's pro
      forma net loss would have been approximately $1,425,000 and $2,099,000 in
      2000 and 1999, respectively.

      In the pro forma calculations, the weighted average fair value of options
      granted during 2000 and 1999 was estimated at $0.25 and $0.43 per share,
      respectively. The fair value of each option grant is estimated on the date
      of grant using the Black-Scholes option-pricing model with the following
      weighted average assumptions used for grants in 2000 and 1999: risk-free
      interest rates of 6.17% and 5.98%, respectively; no expected dividend
      yield; expected lives of five years; and expected volatility of 100% in
      2000 and no expected volatility in 1999 (because the Company's stock was
      not publicly traded in 1999).


                                      F-11

<PAGE>   28

6.    COMMITMENTS

      The Company leases certain office space. Total rental expense was $28,821
      and $21,318 for the years ended December 31, 2000 and 1999, respectively.

7.    INCOME TAXES

      At December 31, 2000, the Company had a net operating loss carryforward
      totaling approximately $9.4 million, the tax benefit of which is offset by
      a valuation allowance until realization is more likely than not.

                                     ******


                                      F-12
<PAGE>   29


                                   SIGNATURES

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

Date: March 30, 2001                     PLUS SOLUTIONS, INC.


                                         By:  /s/ MAX GOLDEN
                                              ---------------------------------
                                              Max Golden
                                              President and Chief Executive
                                              Officer

Date: March 30, 2001                     /s/ MAX GOLDEN
                                         --------------------------------------
                                         Max Golden
                                         President and Chief Executive Officer,
                                         Director (Principal Executive Officer)


Date: March 30, 2001                     /s/ MARTHA SCROGGINS
                                         --------------------------------------
                                         Martha Scroggins
                                         Secretary and Treasurer
                                         (Principal Accounting Officer)

Date: March 30, 2001                     /s/ DAVID BALLARD
                                         --------------------------------------
                                         David Ballard
                                         Director

Date: March 30, 2001                     /s/ STEPHEN GRAY
                                         --------------------------------------
                                         Stephen Gray
                                         Director

                                      S-1



<PAGE>   30



                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
        EXHIBIT   DESCRIPTION
        -------   -----------

<S>              <C>
         2.1      Agreement and Plan of Merger dated as of February 21, 2000 by
                  and among Sound Designs, Inc., SD Acquisition, Inc., and Plus
                  Solutions, Inc. This exhibit is incorporated by reference from
                  Exhibit 2.1 to our Current Report on Form 8-K filed March 27,
                  2000.

         3.1      Certificate of Incorporation. This exhibit is incorporated by
                  reference from Exhibit 3.1 to our Registration Statement on
                  Form 10 filed December 1, 1999.

         3.2      Certificate of Amendment to Certificate of Incorporation dated
                  May 31, 2000.

         3.3      Bylaws. This exhibit is incorporated by reference from Exhibit
                  3.2 to our Registration Statement on Form 10 filed December 1,
                  1999.

         4.1      Subscription Agreement dated September 27, 2000 among Plus
                  Solutions, Inc. and the subscribers executing the same. This
                  exhibit is incorporated by reference from Exhibit 4.1 to our
                  Current Report on Form 8-K filed October 12, 2000.
</TABLE>



                                      S-2