<PAGE>   1


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                       SECURITIES AND EXCHANGE COMMISSION
                                    FORM 20-F

[ ]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
     EXCHANGE ACT OF 1934 OR

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 -- FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2000

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 -- For the transition period from                to
                                                           --------------
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                         Commission file number: 0-96764

                                DIGITAL STAR INC.
             (Exact name of Registrant as specified in its charter)

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

                             BRITISH VIRGIN ISLANDS
                 (Jurisdiction of incorporation or organization)

                           Room 1806, Hutchison House
                            10 Harcourt Road, Central
                                    Hong Kong
                    (Address of principal executive offices)

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

Securities registered or to be registered pursuant to Section 12(b) of the Act

                                      NONE

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
<TABLE>
<CAPTION>

                                                               NAME OF EACH EXCHANGE
TITLE OF EACH CLASS                                     WHICH THE SECURITIES ARE REGISTERED
-------------------                                     -----------------------------------
<S>                                                     <C>
Class A Common Stock, par value $0.0001 per share                       NONE
Class B Common Stock, par value $0.0001 per share
</TABLE>

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

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act

                                      NONE

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the
Registration Statement.

As of September 30, 2000, 2,000,000 Class A shares, par value $0.0001 per share
(collectively, with the Class A and Class B Stock not yet issued and
outstanding, the "Common Stock"), were issued and outstanding.

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

Indicate by check mark which financial statement item the registrant has
elected to follow. Item 17 [ ] Item 18 [X]

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<PAGE>   2

                                     PART I


                      ITEM 1. DESCRIPTION OF THE BUSINESS.

1A.  GENERAL

     Digital Star Inc. (the "Company") was incorporated on September 15, 1999
under the International Business Companies Act of the British Virgin Islands
(the "IBC Act"). The Company is a development stage company and has no
operations to date other than issuing shares and options to its original
shareholders and authorizing those actions in connection with the filing of this
Form 20-F (the "Annual Report"), as described more fully herein.

     The Company has been formed in accordance with the requirements for forming
a blank check company (a "Blank Check Company") as defined in Section 7(b)(3) of
the Securities Act of 1933, as amended (the "Securities Act"). The Company
intends to provide a method for a foreign or domestic private company to become
a reporting company whose securities are qualified for trading in the United
States secondary market, pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act").

     As such, the Company will attempt to locate and negotiate with a business
entity (a "Target Company") for the merger with or consolidation of, the full or
partial acquisition of, or the entering into any other business combination with
a Target Company. No assurances can be given that the Company will be successful
in locating, negotiating or merging with, acquiring, or entering into any other
business combination with any Target Company.


1B.  PERCEIVED BENEFITS

     There are certain perceived benefits to being a company with a class of
publicly-traded securities. These are commonly thought to include the following:

     *    the ability to use registered securities to make acquisitions of
          assets or businesses;

     *    increased visibility in the financial community;

     *    facility of borrowing from financial institutions;

     *    improved trading efficiency;

     *    shareholder liquidity;

     *    greater ease in raising capital;

     *    compensation of key employees through stock options and similar stock
          plans;
<PAGE>   3

     *    enhanced corporate image; and

     *    a presence in the United States capital market.


1C.  POTENTIAL TARGET COMPANIES

     Target Companies that may be interested in any form of business combination
with the Company could include, without limitation, the following:

     *    a company for which the primary purpose of becoming public is the use
          of its securities for the acquisition of assets or businesses;

     *    a company which is unable to find an underwriter of its securities or
          is unable to find an underwriter of securities on terms acceptable to
          it;

     *    a company which wishes to become public with less dilution of its
          common stock than would occur upon an underwriting of additional
          equity;

     *    a company which believes that it will be able to obtain investment
          capital on more favorable terms after it has become public;

     *    a foreign company which desires to make an initial entry into the
          United States capital market;

     *    a special situation company, such as a company seeking a public market
          to satisfy redemption requirements under a qualified Employee Stock
          Option Plan; and

     *    a company seeking one or more of the other perceived benefits of
          becoming a public company.

     The officers, directors and shareholders are currently composed of the same
individuals. See ITEM 5, "DIRECTORS, OFFICERS, PROMOTERS AND CONTROL PERSONS"
AND ITEM 7, "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS". A business
combination with a Target Company will normally, but not necessarily, involve
the transfer to the Target Company of the majority of the issued and outstanding
common stock of the Company, and the partial or complete substitution by the
Target Company of the Company's current officers and directors.

     No assurances can be given with respect to the Company's ability to enter
into a business combination, nor can assurances be made regarding the terms of
any business combination or the nature of the Target Company with which the
Company may enter into a business combination. See ITEM 1D(2), "SPECULATIVE
NATURE OF THE COMPANY'S PROPOSED PLAN OF OPERATION".

     The proposed business activities described herein classify the Company as a
Blank Check Company. The Securities and Exchange Commission (the "Commission")
and many states have enacted statutes, rules and regulations limiting the sale
of securities of Blank Check Companies. The officers and directors do not intend
to undertake any efforts to cause a market to develop in the Company's
securities until such time as the Company has successfully implemented its
business plan described herein.

     The Company is filing this Annual Report with the Commission and is under
the obligation to file within 90 days from the close of the fiscal year end
under the Exchange Act.
<PAGE>   4


1D.  PLAN OF OPERATIONS

     For the remainder of the fiscal year, the Company anticipates no
operations other than the following activities: (i) continued initial
organization of the Company, (ii) preparing and filing this Annual Report and
(iii) preliminary and general oral conversations by its officers and directors
with respect to engaging in a merger with or acquisition of another company,
which may or may not lead to such a merger or acquisition in the remainder of
this fiscal year. The Company does not know of or have an established plan to
enter into any arrangement, agreement or understanding in the remainder of the
fiscal year with respect to engaging in a merger with or acquisition of a
specific Target Company. The Company has no present plans to thoroughly research
the market for Target Companies, and has no plans to materially expand the
number of people it employs for the remainder of the fiscal year.


1E.  RISK FACTORS

     The Company's business is subject to numerous risk factors, including but
not limited to the following:

     (1)  NO OPERATING HISTORY OR REVENUE AND MINIMAL ASSETS.

          The Company has had no operating history (other than operations in
          connection with the formation of the company and the filing of this
          Annual Report), revenues or earnings from operations and has no
          significant assets or financial resources. The Company will, in all
          likelihood, sustain operating expenses without corresponding revenues,
          at least until the consummation of a business combination, if any.
          This may result in the Company incurring a net operating loss that
          will increase continuously until the Company can consummate a business
          combination with a Target Company. There is no assurance that the
          Company can identify such a Target Company and consummate such a
          business combination.

     (2)  SPECULATIVE NATURE OF THE COMPANY'S PROPOSED PLAN OF OPERATIONS.

          The success of the Company's proposed plan of operation will depend to
          a great extent on the operations, financial condition and management
          of the identified Target Company following any business combination.
          While the Company's officers, directors and current shareholders will
          likely prefer business combinations with entities having established
          operating histories, there can be no assurance that the Company will
          be successful in locating Target Companies meeting such criteria. In
          the event the Company completes a business combination, of which there
          can be no assurance, the success of the Company's operations will be
          dependent upon the business operations and financial results of the
          Target Company and numerous other factors beyond the Company's
          control.

     (3)  SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
          COMBINATIONS.

          The Company currently has no way of distinguishing itself from other
          blank check companies seeking merger or acquisition candidates, and
          also anticipates that it will be an insignificant participant in the
          business of seeking mergers with and acquisitions of business
          entities. A large number of established and well-financed operating
          entities, including venture capital firms, are active in mergers with
          and acquisitions of Target Companies. Nearly all such entities have
          significantly greater financial resources, technical expertise and
          managerial capabilities than the Company and, consequently, the
          Company will be at a competitive disadvantage in identifying possible
          business opportunities and successfully negotiating and completing a
<PAGE>   5
          business combination. Moreover, the Company will also compete with
          numerous other small public and private companies, including other
          blank check companies with registered classes of securities, in
          seeking merger or acquisition candidates.

     (4)  NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION -- NO
          STANDARDS FOR BUSINESS COMBINATION.

          The Company has no current arrangement, agreement or understanding
          with respect to engaging in a merger with or acquisition of a specific
          Target Company. There can be no assurance that the Company will be
          successful in identifying and evaluating suitable business
          opportunities, locating a Target Company or concluding a business
          combination. The officers and directors have not identified any
          particular industry or specific business within an industry for
          evaluation by the Company. There is no assurance that the Company will
          be able to negotiate a business combination on terms favorable to the
          Company. In implementing a structure for a particular business
          acquisition with a Target Company, the Company may also become a party
          to a merger, consolidation, reorganization, joint venture or licensing
          agreement with another corporation or entity. The Company has not
          established a specific length of operating history or a specified
          level of earnings, assets, net worth or other criteria which it will
          require a Target Company to have achieved, or without which the
          Company would not consider a business combination with such Target
          Company. Accordingly, the Company may enter into a business
          combination with a Target Company having losses, no significant
          operating history, limited or no potential for immediate earnings,
          limited assets, negative net worth or other negative characteristics.
          The Company may consider, however, other factors, including (but not
          limited to) the Target Company's long-term growth possibilities, as
          well as its strategic position relative to other companies in its
          location and industry, in deciding to enter into a business
          combination.

     (5)  CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY.

          While seeking a business combination, the officers and directors
          anticipate keeping their current employment positions as well as
          seeking to organize other companies of a similar nature. As such,
          demands may be placed on the officers' and directors' time that will
          detract from the time they are able to devote to the Company. The
          officers and directors intend to devote as much time to the activities
          of the Company as required; however, should a conflict arise, there is
          no assurance that the officers and directors of the Company would not
          attend to other matters prior to those of the Company. Initially, the
          officers and directors intend to devote up to ten (10) hours each per
          month to the business of the Company, and they intend to increase that
          amount of time when the analysis of, and negotiations and consummation
          with, a Target Company is conducted. See ITEM 10E, "CONFLICTS OF
          INTEREST". The Company's officers have not entered into a written
          employment agreement with the Company and they are not expected to do
          so in the foreseeable future. The Company has not obtained key man
          life insurance on its officers and directors. Notwithstanding the
          limited experience and limited time commitment of the officers and
          directors, loss of the services of the officers and directors would
          adversely affect development of the Company's business and its
          likelihood of continuing operations.
<PAGE>   6

     (6)  CONFLICTS OF INTEREST -- GENERAL.

          The Company's officers and directors participate in other business
          ventures that may compete directly with the Company. The officers and
          directors will be responsible for seeking, evaluating, negotiating and
          consummating a business combination with a Target Company that may
          result in terms providing benefits to the officers and directors.
          Additional conflicts of interest and non-arms length transactions may
          also arise in the future. There are no binding guidelines or
          procedures for resolving potential conflicts of interest. Failure by
          the officers and directors to resolve conflicts of interest in favor
          of the Company could result in liability of the officers and directors
          to the Company. However, any attempt by shareholders to enforce a
          liability of the officers and directors to the Company would most
          likely be prohibitively expensive and time consuming. As the
          shareholders and the officers and directors are currently the same
          persons, these conflicts of interest also apply to the shareholders.

     (7)  OTHER BLANK CHECK COMPANIES.

          The officers and directors are currently involved in creating
          additional Blank Check Companies substantially similar to the Company.
          To date, three other companies substantially similar to the Company
          have been established, and two of those companies have taken such
          prior action as the filing of an Annual Report or a securities filing
          or issuance. A conflict may arise in the event that another Blank
          Check Company with which the officers and directors are affiliated
          files an Annual Report and actively seeks a Target Company. The
          officers and directors anticipate (but are not required to so effect)
          that Target Companies will be located for the Company and other Blank
          Check Companies either (i) in chronological order of the date of
          formation of such Blank Check Companies; or (ii) by lot. However,
          other additional Blank Check Companies that may be formed may differ
          from the Company in certain items such as place of incorporation,
          number of shares and shareholders, working capital, types of
          authorized securities, or other items. It may be that a Target Company
          may be more suitable for or may prefer a certain Blank Check Company
          formed after the Company. In such case, a business combination might
          be negotiated on behalf of the more suitable or preferred Blank Check
          Company regardless of date of formation or choice by lot. See
          ITEM 10C, "DIRECTORS AND OFFICERS OF REGISTRANT -- CURRENT BLANK CHECK
          COMPANIES".

     (8)  REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION.

          Section 13 of the Exchange Act requires companies subject to the
          Exchange Act to provide certain information about significant
          acquisitions, including certified financial statements for an acquired
          company covering one or two complete fiscal years, depending on the
          relative size of any acquisition. The time and additional costs that
          may be incurred by some Target Companies to prepare such financial
          statements may significantly delay or essentially preclude
          consummation of an otherwise desirable acquisition by the Company.
          Acquisition prospects that do not have or are unable to obtain the
          required financial statements may not be appropriate for acquisition
          so long as the reporting requirements of the Exchange Act are
          applicable.

     (9)  LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION AND EXPERTISE.

          The Company has neither conducted nor obtained market research
          indicating that demand exists for the type of transactions
          contemplated by the Company. Even in the event demand exists for a
          merger or acquisition of the type contemplated by the Company,
<PAGE>   7
          there is no assurance the Company will be successful in completing any
          such business combination.

          The officers and directors will be responsible for seeking,
          evaluating, negotiating and consummating a business combination with a
          Target Company. The officers and directors are not, however,
          professional business analysts, and are novices relative to the more
          established and well-financed entities who are active in mergers with
          and acquisitions of Target Companies. Therefore, the Company will
          operate at a competitive disadvantage in identifying and completing
          business combinations with suitable Target Companies.

     (10) LACK OF DIVERSIFICATION.

          The Company's proposed operations, even if successful, will probably,
          but not necessarily, result in the Company engaging in a business
          combination with only one Target Company. The officers and directors
          anticipate that the Company will be able to participate in only one
          potential business venture because the Company has nominal assets and
          limited financial resources. Consequently, the Company's activities
          will be limited to those engaged in by the Target Company with which
          the Company merges or acquires. The Company's inability to diversify
          its activities into a number of areas may subject the Company to
          economic fluctuations within a particular business or industry and
          therefore increase the risks associated with the Company's operations.
          This lack of diversification should be considered a substantial risk
          to the shareholders of the Company because it will not permit the
          Company to offset potential losses from one venture against gains from
          another.

     (11) REGULATION UNDER THE INVESTMENT COMPANY ACT.

          Although the Company will be subject to certain regulation under the
          Exchange Act, (and, if involved in a reorganization, potentially the
          Securities Act), the officers and directors anticipate that the
          Company will not be subject to regulation under the Investment Company
          Act of 1940 (the "Investment Company Act"). In the event the Company
          engages in business combinations which result in the Company holding
          passive investment interests in a number of entities, the Company
          could be subject to regulation under the Investment Company Act. In
          such event, the Company would be required to register as an investment
          company under the Investment Company Act and comply with the
          provisions thereof and could be expected to incur significant
          registration and compliance costs. The Company has obtained no formal
          determination from the Commission as to the status of the Company
          under the Investment Company Act. Any violation of the Investment
          Company Act could subject the Company to material adverse
          consequences.

     (12) PROBABLE CHANGE IN CONTROL AND MANAGEMENT.

          A business combination involving the issuance of the Company's common
          stock will, in all likelihood, result in the shareholders of the
          Target Company obtaining a controlling interest in the Company. Any
          such business combination may require shareholders of the Company to
          sell or transfer all or a portion of the Company's common stock held
          by them. Any merger or acquisition effected by the Company can be
          expected to have a significant dilutive effect on the percentage of
          shares held by the Company's shareholders at such time. The resulting
          change in control of the Company could potentially result in the
          partial or complete
<PAGE>   8
          removal of the present officers and directors of the Company and a
          corresponding reduction in or elimination of their participation in
          the future affairs of the Company.

          The issuance of previously authorized and unissued common stock of the
          Company would also result in a reduction in percentage of shares owned
          by the present shareholders of the Company and would most likely
          result in a change in control or substitution or replacement of some
          or all of the officers and directors of the Company.

          The terms of any business combination may include such terms as any or
          all of Messrs. Chan and Chan remaining a director, officer and/or
          shareholder of the Company or any or all of them becoming consultants
          to the Company with compensation should they resign as directors and
          officers of the Company and as a result of the consummation of a
          business combination. See ITEM 10A, "BACKGROUNDS OF DIRECTORS".

     (13) TAXATION.

          Tax consequences will, in all likelihood, be major considerations in
          any business combination the Company undertakes. Currently, such
          transactions may be structured to result in tax-free treatment to both
          companies, pursuant to various jurisdictions' tax provisions. The
          Company intends to structure any business combination to minimize the
          tax consequences to both the Company and the Target Company. There can
          be no assurance, however, that any such business combination will meet
          the statutory requirements of a tax-free reorganization or that the
          parties will obtain the intended tax-free treatment upon a transfer of
          stock or assets. A non-qualifying reorganization could result in the
          imposition of taxes in any jurisdiction that may have an adverse
          effect on all parties to the transaction. See ITEM 7, "TAXATION".

     (14) EMPLOYEES.

          The Company has no full time employees. The Company's officers and
          directors have agreed to allocate a portion of their time to the
          activities of the Company, without compensation. The officers and
          directors anticipate that the business plan of the Company can be
          implemented by initially devoting no more than ten (10) hours per
          month to the business affairs of the Company and, consequently,
          conflicts of interest may arise with respect to the limited time
          commitment by such officers and directors. See ITEM 1D(5), "RISK
          FACTORS -- CONTINUED MANAGEMENT CONTROL; LIMITED TIME AVAILABILITY".

     (15) ADVISORS OF TARGET COMPANY.

          A potential Target Company may have an agreement with a consultant or
          advisor providing for services of the consultant or advisor to be
          continued after any business combination. Additionally, a Target
          Company may be presented to the Company only on the condition that the
          services of a consultant or advisor be continued after a merger,
          acquisition or other business combination. Such preexisting agreements
          of Target Companies for the continuation of the services of attorneys,
          accountants, advisors or consultants could be a factor in the
          selection of a Target Company.

     (16) RISKS ASSOCIATED WITH THE YEAR 2000 PROBLEM.
<PAGE>   9
          At present, the Company does not own or lease any computer equipment.
          However, the Company, and any potential Target Company, may face
          material adverse problems in maintaining or upgrading its own (if any)
          or interfacing with other computer systems, software, circuitry or any
          other electronic device in the correct handling and processing of any
          date change. Any such failure could have a material adverse effect on
          the Company's financial condition and could also be a factor in the
          selection of a Target Company.

     (17) ENFORCEMENT OF CIVIL LIABILITIES.

          The Company has appointed Mossack Fonseca & Co. (B.V.I.) Ltd.,
          P.O. Box 3136, Road Town, Tortola, British Virgin Islands as its agent
          upon whom service of process may be served in any action brought
          against it under the securities laws of the United States. All of the
          Company's officers and directors reside outside the United States and
          all of the assets of these persons and of the Company are or may be
          located outside of the United States.

          The Company has been advised by Conyers Dill & Pearman, its legal
          counsel in the British Virgin Islands, that Section 7 to the IBC Act
          provides that:

          "Subject to Section 74, no member, director, officer, agent, or
          liquidator of a company incorporated under this Act is liable for any
          debt, obligation, or default of the company, unless specifically
          provided in this Act or in any other law for the time being in force
          in the British Virgin Islands, and except in so far as he may be
          liable for his own conduct and actions."

          Section 74 provides that:

          "If at any time there is no member of a company incorporated under
          this Act, any person doing business in the name of or on behalf of the
          company is personally liable for the payment of all debts of the
          company contracted during the time and the person may be sued therefor
          without joinder in the proceedings of any other person."

          The Company has been advised by Conyers Dill & Perarman that the
          United States and British Virgin Islands do not have a treaty
          providing for reciprocal recognition of and enforcement of judgments
          of United States courts in civil and commercial matters and that a
          final judgment for the payment of money rendered by any federal or
          state courts in the United States based on civil liability, whether or
          not predicated solely upon the United States federal securities laws,
          would, therefore, not be automatically enforceable in the British
          Virgin Islands. The Company has also been advised by Conyers Dill &
          Pearman that a final and conclusive judgment obtained in federal or
          state courts in the United States under which a sum of money is
          payable as compensatory damages (i.e. not being a sum claimed by a
          revenue authority for taxes or other charges of a similar nature by a
          governmental authority, or in respect of a fine or penalty or multiple
          or punitive damages) may be the subject of an action on a debt in the
          Supreme Court in the British Virgin Islands under the common law
          doctrine of obligation. Such an action should be successful on the
          proof that the sum of money is due and payable, without having to
          prove the facts supporting the underlying judgment, as long as:

          (a)  such courts had proper jurisdiction over the parties subject to
               such judgment,
<PAGE>   10
          (b)  such courts did not contravene the rules of natural justice of
               the British Virgin Islands,

          (c)  such judgment was not obtained by fraud,

          (d)  enforcement of the judgment would not be contrary to the public
               policy of the British Virgin Islands,

          (e)  no new admissible evidence relevant to the action is submitted
               prior to the rendering of the judgment by the courts of the
               British Virgin Islands, and

          (f)  due compliance is made with the correct procedures under the laws
               of the British Virgin Islands.

          A British Virgin Islands court may impose civil liability on the
          Company or its directors or officers in a suit brought in the Supreme
          Court of the British Virgin Islands against the Company or such
          persons with respect to a violation of United States federal
          securities laws, provided that the facts surrounding such violation
          constitute or give rise to a cause of action under British Virgin
          Islands law. Only if the above preconditions are satisfied can a
          plaintiff under a United States judgment sue the Company or its
          officers or directors in the British Virgin Islands upon the debt
          created by the United States judgments and would be entitled to
          summary judgment without further review of the merits of the United
          States case. As such, Conyers Dill & Pearman has advised that it may
          be more difficult for potential investors to effect service of process
          within the United States upon the Company's officers or directors, or
          to enforce against the Company or such persons judgments obtained in
          United States courts predicated solely upon the civil liability
          provisions of the United States securities laws.

     (18) DIRECTOR ACTIONS AND SHAREHOLDER RIGHTS UNDER BRITISH VIRGIN ISLANDS
          LAW.

          Pursuant to the Company's Memorandum and Articles of Association and
          pursuant to the laws of the British Virgin Islands, the Company's
          Memorandum and Articles of Association may be amended by the Board of
          Directors without shareholder approval. This includes amendments to
          increase or reduce the authorized capital stock of the Company, to
          authorize the issuance of different classes of stock including
          preferred stock and to issue such stock subject to any designations,
          powers, preferences, rights, qualifications, limitations and
          restrictions. The Board of Directors may also increase the capital of
          the Company without shareholder approval. Further, the Company's
          Memorandum and Articles of Association provide that differences which
          may arise between the Company and any of its shareholders, their
          executors, administrators or assigns relating to the Company's
          Memorandum and Articles of Association shall, unless the parties agree
          to a single arbitrator, be referred to two arbitrators to be chosen by
          each of the differing parties. The ability of the Company to amend its
          Memorandum and Articles of Association without shareholder approval
          could have the effect of delaying, deterring or preventing a change in
          control of the Company without any further action by the shareholders,
          including, without limitation, a tender offer to purchase the Common
          Stock at a premium over then current market prices. In addition,
          issuance of Preferred Stock, without shareholder approval, on such
          terms as the Board of Directors may determine, could adversely affect
          the voting power of the holders of the Common Stock, including the
          loss of voting control to others. No amendment to the Memorandum and
          Articles of
<PAGE>   11
          Association will be effective unless and until it is filed with the
          Companies Registry of the British Virgin Islands.

          Under the laws of most jurisdictions in the United States, majority
          and controlling shareholders generally have certain fiduciary duties
          to the minority shareholders. Shareholder action must be taken in good
          faith and actions by controlling shareholders which are obviously
          unreasonable may be declared null and void. However, Conyers Dill &
          Pearman has advised that British Virgin Islands law protecting the
          interests of minority shareholders may not be as protective in all
          circumstances as the law protecting minority shareholders in United
          States jurisdictions.

          Further, Conyers Dill & Pearman has advised that, while British Virgin
          Islands law does permit a shareholder of a British Virgin Islands
          company to sue its directors derivatively, and to sue the Company and
          its directors for the shareholder's benefit and the benefit of other
          shareholders similarly situated, the circumstances in which any such
          action may be brought, and the procedures and defenses that may be
          available in any such action, may result in the rights of shareholders
          of a British Virgin Islands company being more limited than
          shareholders of a corporation incorporated in the United States.

     (19) LACK OF DIVIDENDS.

          The Company has not paid any cash dividends on its Common Stock. The
          future payment of dividends is within the discretion of the Board of
          Directors. The Board does not intend to declare any dividends in the
          forseeable future, but intends to retain all future earnings, if any,
          for use in the Company's merger and acquisition activities.

     (20) POLITICAL AND ECONOMIC DEVELOPMENTS AFFECTING HONG KONG.

          The Company's principal office is located in Hong Kong. Accordingly,
          the Company may be materially adversely affected by factors affecting
          Hong Kong's political situation and its economy or in its
          international political and economic relations. Pursuant to the
          Sino-British Joint Declaration, the government of the People's
          Republic of China ("PRC") began to exercise sovereignty over Hong
          Kong, effective July 1, 1997, through the Hong Kong Special
          Administrative Region, which was established pursuant to Article 31 of
          the PRC constitution. The PRC has agreed that (i) Hong Kong's current
          social and economic system will remain unchanged for 50 years after
          July 1, 1997, with the Special Administrative Region to be
          administered by local inhabitants under the PRC's "Basic Law," and
          (ii) the laws currently enforced in Hong Kong will remain largely in
          unchanged and foreign investment will be protected by the law. There
          can be no assurance that the Basic Law as adopted in its present form
          will not be changed or interpreted in a materially adverse manner for
          the Company in the future or that any such changes or interpretations
          would not be given retroactive effect. Accordingly, future political
          developments could make it impractical, inefficient or impossible for
          the Company to conduct business in or from Hong Kong.
<PAGE>   12


                       ITEM 2. DESCRIPTION OF PROPERTIES

2A.  GENERAL

     The Company has no properties and currently has no agreements or plans to
acquire any properties. The Company's officers and directors use the offices of
Champ Pacific Capital Limited, Room 1806, Hutchison House, 10 Harcourt Road,
Central, Hong Kong at no cost to the Company. Champ Pacific Capital Limited has
agreed to continue this arrangement at any location it occupies until the
Company completes a transaction with a Target Company. One of the Company's
officers, directors and beneficial owners, Mr. Kevin Sheung Wai Chan, is a
director and fifty percent (50%) beneficial shareholder of Champ Pacific Capital
Limited.


2B.  REAL ESTATE INVESTMENT POLICIES.

     The Company has no real estate properties and at this time has no
agreements to acquire any properties. The Company does not preclude, however,
the possibility of becoming a party to a business combination with a Target
Company or another corporation or entity, or acquiring stock or assets of an
existing business, in which investments in real estate or interests in real
estate are involved.


                           ITEM 3. LEGAL PROCEEDINGS.

     There is no litigation pending or, to the Company's knowledge, threatened
by or against the Company.


                         ITEM 4. CONTROL OF REGISTRANT.

     The following table sets forth, as of September 30, 2000, each person
known by the Company to be the beneficial owner of ten (10) percent or more of
the Company's outstanding Class A common stock, each of whom are directors
individually and directors and officers of the Company as a group. Each person
has sole voting and investment power with respect to the shares shown. Other
than the rights to exercise options on the Class B Common stock in the amounts
as described below, none of the stockholders listed at this time have any rights
to acquire within sixty (60) days any additional common or preferred stock from
warrants, rights, conversion privilege(s) or similar obligations. No Class B
common stock or preferred stock of the Company has been issued at this time;
however, the individuals listed below are the beneficial owners of rights to
acquire, at an exercise price of US $0.0001 per share, and at any time between
September 15, 1999 and September 14, 2009, the Class B common stock in the
amounts below from stock options, each of whom are directors individually and
directors and officers of the Company as a group.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
TITLE OF CLASS      NAME AND ADDRESS OF BENEFICIAL OWNER      NUMBER OF SHARES       PERCENTAGE
                                                                   OWNED              OF CLASS
-----------------------------------------------------------------------------------------------
<S>                 <C>                                        <C>                   <C>
Class A             Mr. Kevin Sheung Kwan Chan                    1,500,000              75%
Common Stock        Room 1806, Hutchison House
                    10 Harcourt Road, Central
                    Hong Kong
-----------------------------------------------------------------------------------------------
Class A             Mr. Silas Sheung Kwan Chan                      500,000              25%
Common Stock        Room 1806, Hutchison House
                    10 Harcourt Road, Central
                    Hong Kong
-----------------------------------------------------------------------------------------------
Class B             Mr. Kevin Sheung Kwan Chan                    7,500,000              75%
Common Stock        Room 1806, Hutchison House
Options             10 Harcourt Road, Central
                    Hong Kong
-----------------------------------------------------------------------------------------------
Class B             Mr. Silas Sheung Kwan Chan                    2,500,000              25%
Common Stock        Room 1806, Hutchison House
Options             10 Harcourt Road, Central
                    Hong Kong
-----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   13
     Beauty Wise Secretaries Limited ("Beauty Wise"), formerly Beauty Wise
Development Limited, a company organized and existing under the laws of Hong
Kong, holds the shares and options of Mr. Kevin Sheung Wai Chan in trust for
Mr. Kevin Sheung Wai Chan's sole benefit pursuant to a Nominee Shareholder
Agreement dated September 15, 1999 between Mr. Kevin Sheung Wai Chan and
Beauty Wise. Mr. Kevin Sheung Wai Chan is the Secretary, one of two Directors
and a 50% shareholder in Beauty Wise.

     Fortune Access Nominees Limited ("Fortune Access"), formerly Fortune Access
Development Limited, a company organized and existing under the laws of Hong
Kong, holds the shares and options of Mr. Silas Sheung Kwan Chan in trust for
Mr. Silas Sheung Kwan Chan's sole benefit pursuant to a Nominee Shareholder
Agreement dated September 15, 1999 between Mr. Silas Sheung Kwan Chan and
Fortune Access. Mr. Kevin Sheung Wai Chan is the Secretary, one of two Directors
and a 50% shareholder in Fortune Access.


                      ITEM 5. NATURE OF THE TRADING MARKET

     The Common Stock of the Company is not yet listed on an exchange or
over-the-counter system. The Company does plan to consider looking at listing
its shares on the OTC Bulletin Board or the Nasdaq Small Cap market in the
future.


   ITEM 6. EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS

     There are no exchange control restrictions on the payment of dividends on
the Common Stock of the Company in Hong Kong, where the Company's principal
executive offices are located, or the British Virgin Islands, where the Company
is incorporated. Currently, the shares in the Company are issued in the currency
of the United States. Other jurisdictions in which the Company may conduct
operations in the future, or where a Target Company is located, may have various
exchange controls.

     Although the Company has not entered into any discussions with any
potential Target Company, the Company may seek to merge with or acquire a Target
Company in a number of jurisdictions, including the People's Republic of China
("PRC"), whose currency, the Renminbi, is not freely convertible into foreign
currency. The PRC government imposes control over its foreign currency reserves
in part through direct regulation of the conversion of Renminbi into foreign
currency and through restrictions on foreign trade. Prior to January 1, 1994,
the PRC had a dual exchange rate system, which consisted of the rate fixed
time-to-time by the PRC State Administration of Exchange Control (the "SAEC")
and the rates prevailing in the various swap centers around the country (the
"Swap Rates"). In most cases, foreign enterprises satisfied their need for
foreign currency through such means as exporting products for foreign currency,
selling "import substitute" products in the PRC for payment in foreign currency,
or accessing a swap center. Among the more widely used Swap Rates was the rate
at the swap center in Shanghai. Effective January 1, 1994, a new unitary,
managed floating-rate system was introduced in the PRC to replace the previous
dual-track foreign exchange system, which was abolished pursuant to the Notice
of the People's Bank of China Concerning Further Reform of the Foreign Currency
Control System (the "PBOC Notice"). The conversion of Renminbi into U.S. dollars
must now be based on the rate set by the People's Bank of China, which is set
based on the previous day's PRC interbank foreign exchange market rate and with
reference to current exchange rates on the world financial markets. In
furtherance of these currency reforms, the China Foreign Exchange Trading Center
(the "CFETC") was formally established in Shanghai and began operating in April
1994. The establishment of the CFETC was originally intended to coincide with
the phasing out of the swap centers. However, the swap centers have been
retained as an interim measure and it is envisaged that the local swap centers
will be phased out gradually.

     Currently, foreign investment enterprises ("FIEs") in the PRC (including
Sino-foreign equity and co-operative joint ventures) are required to apply to
<PAGE>   14
the local bureau of the SAEC for "foreign exchange registration certificates
foreign investment enterprises." Upon the presentation of appropriate
documentation, FIEs may enter into foreign exchange transactions at swap
centers, or in the future, in the event the unitary exchange rate system is
implemented as anticipated, through the unified market when all swap centers are
consolidated under the CFETC. On January 29, 1996, the State Council promulgated
the Regulations of the People's Republic of China Regarding Foreign Exchange
Control (the "Regulations") which came into effect on April 1, 1996. Pursuant to
the Regulations, conversion of Renminbi into foreign exchange for current
account items is permissible. Conversion of Renminbi into foreign exchange for
capital items, such as direct investment, loans or security is still under the
sole jurisdiction and requires approval of the SAEC.

     As a result of the adoption of the unitary exchange rate system on
January 1, 1994, the official bank exchange rate for Renminbi to U.S. dollars
experienced an immediate devaluation of approximately 50% to US$1.00
 .2 = Rmb 8.7000. Any future volatility or devaluation of the Renminbi could have
a material adverse effect on the Company's business, results of operations and
financial condition.

     Management believes that the Company, if it merges with or acquires a
Chinese Target Company, would be able to obtain all required approvals for the
conversion and remittance abroad of foreign currency necessary for the
operations of any Chinese Target Company's business. However, such approvals do
not guarantee the availability of foreign currency, and no assurance can be
given that the Company would be able to convert sufficient amounts of foreign
currency in the PRC's foreign exchange markets in the future at acceptable
rates, or at all, for the repayment of debt, payments of interest, purchases of
equipment or payment of dividends, if any, and payments for services and other
contracts.


CERTAIN FOREIGN ISSUER CONSIDERATIONS

     The Company is an International Business Company incorporated under the
provisions of the IBC Act. The transfer of shares between persons regarded as
residents outside of the British Virgin Islands is not subject to any exchange
controls. Likewise, issues and transfers of shares involving any person regarded
as resident in the British Virgin Islands are not subject to exchange control
approval. There are no limitations on the rights of non-British Virgin Islands
owners of the Common Stock to hold or vote their shares. Because the Company has
been formed pursuant to the IBC Act, there are no restrictions on its ability to
transfer funds into and out of the British Virgin Islands or to pay dividends to
U.S. residents who are holders of the Common Stock.

     In accordance with the Company's Memorandum and Articles of Association,
share certificates are only issued as shares registered on the books of the
Company. In the case of a representative acting in a special capacity (for
example, as an executor or trustee), the Company is not bound to investigate or
incur any responsibility in respect of the proper administration of any such
estate or trust. The Company takes no notice of any trust applicable to any of
its shares whether or not it had notice of such trust.

     As a company subject to the IBC Act, the Company may not: (i) transact
business with persons resident in the British Virgin Islands except as set out
in Section 5(2) of the IBC Act; (ii) own an interest in real property situated
in the British Virgin Islands, other than a lease of property for use as am
office from which to communicate with shareholders or where books and records of
the Company are prepared and maintained; (iii) maintain a banking or trust
business, unless it is licensed under the British Virgin Islands Banks and
Trusts Companies Act of 1990; (iv) transact business as an insurance or a
reinsurance company, insurance agency or insurance broker, unless it is licensed
under an enactment authorizing it to transact that business; (v)

<PAGE>   15
maintain the business of company management unless it is licensed under the
British Virgin Islands Company Management Act, 1990; or (vi) maintain the
business of providing a registered office or act as the registered agent for
companies incorporated in the British Virgin Islands.

     There are no restrictions on the degree of foreign ownership of the
Company. The Company is subject neither to taxes on its income or dividends nor
to any foreign exchange controls in the British Virgin Islands. In addition, the
Company is not subject to capital gains tax in the British Virgin Islands, and
profits can be accumulated by the Company, as deemed by management to be
required, without limitation.


                                ITEM 7. TAXATION

     The following discussion summarizes tax consequences material to a holder
of Common Stock of the Company under present British Virgin Islands, United
States, Hong Kong and the People's Republic of China tax laws. The discussion
does not deal with all possible tax consequences relating to the Company's
operations or ownership of the Common Stock and does not purport to deal with
the tax consequences applicable to particular investors, some of which
(including banks, securities dealers, insurance companies and tax-exempt
entities, as well as financial institutions, broker-dealers, tax-exempt
organizations or persons or particular classes of U.S. holders of at least 10%
of the voting power of the value of the Company's stock) may be subject to
special rules. In particular, the discussion does not address the tax
consequences under state, local and other national tax laws. The following
discussion is based upon laws and relevant interpretations thereof in effect as
of the date of this Annual Report, all of which are subject to change
retroactively and prospectively.

     ANY PROSPECTIVE INVESTOR IN THE COMPANY SHOULD CONSULT WITH HIS OR HER
OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OR HER TO
PURCHASE, OWN AND DISPOSE OF THE SECURITIES, INCLUDING THE EFFECTS OF APPLICABLE
BRITISH VIRGIN ISLANDS, HONG KONG, PRC AND/OR UNITED STATES FEDERAL, STATE,
LOCAL OR OTHER TAX LAWS, AS WELL AS POSSIBLE CHANGES IN THE TAX LAWS.


BRITISH VIRGIN ISLANDS TAXATION

     Under the IBC Act as currently in effect, a holder of Common Stock of
the Company who is not a resident of the British Virgin Islands is exempt from
British Virgin Islands income tax on dividends paid with respect to the Common
Stock of the Company. A holder of Common Stock of the Company is not liable for
British Virgin Islands income tax on gains realized on the sale or disposal of
such shares. The British Virgin Islands does not impose a withholding tax on
dividends paid by the Company to its shareholders due to its incorporation under
the IBC Act.

     There are no capital gains, gift and inheritance, or income taxes levied by
the British Virgin Islands on companies incorporated under the IBC Act. In
addition, the Common Stock of the Company is not subject to transfer taxes,
stamp duties or similar charges.

     There is no income tax treaty or convention currently in effect between the
United States and the British Virgin Islands. As an exempted company, the
Company is required to pay the British Virgin Islands government an annual
license fee based on the Company's stated authorized capital.


UNITED STATES FEDERAL INCOME TAXATION.

     The following is a summary of material United States federal income tax
consequences arising from the purchase, ownership and disposition of the Common
Stock to holders who are United States citizens, individuals resident
<PAGE>   16

in the United States for purposes of United States federal income tax, or
domestic corporations who purchase Common Stock in any future offering and hold
such Common Stock as capital assets (a "U.S. holder"). A U.S. holder must
allocate the purchase price for the Common Stock on the date of issuance as the
U.S. holder's tax basis in his Common Stock for federal tax purposes.

     Cash dividends paid out of the Company's current and accumulated earnings
and profits to a holder of Common Share who is a U.S. holder will be taxed as
ordinary income for United States federal income tax purposes. Cash
distributions in excess of the current and accumulated earnings and profits of
the Company will first be treated, for United States federal income tax
purposes, as a nontaxable return on capital to the extent of the United States
Investor's basis in the Common Share and then as gain from the sale or exchange
of a capital asset.

     In general, a U.S. holder, other than a shareholder owning 10% or more
of the voting power of the Company, will be entitled to claim a foreign tax
credit only for taxes, if any, imposed on dividends paid to such U.S. holder
(such as withholding taxes) and not for taxes, if any, imposed on the Company or
on any entity in which the Company has made an investment. The amount of the
foreign tax credit that may be claimed is limited to that proportion of the tax
against which the credit is taken that the holder's taxable income from
non-United States sources bears to the holder's entire taxable income for that
taxable year. The foreign tax credit limitation is applied separately to
different categories of income. Generally, for purposes of applying such foreign
tax credit limitations, dividends are included in the passive income category.

     The amount of the gross distributions actually or constructively received
by a U.S. Common Stock holder will be included as ordinary income to the extent
such distribution is paid from current or accumulated earnings and profits of
the Company, as determined under United States federal income tax principles.
Such distributions will not be eligible for the dividends that receive
deductions allowed to United States corporations. Distributions in excess of the
Company's current and accumulated earnings and profits are treated as a
non-taxable return of basis to the extent thereof, and then as a gain from the
sale of Common Stock.

     A U.S. holder will recognize capital gain or loss upon the sale or other
disposition of the Common Stock in an amount equal to the difference between the
amount realized and the U.S. holder's tax basis in the Common Stock. Such gain
or loss will be long-term capital gain or loss if the Common Stock has been held
for more than one year at the time of the sale or other disposition. Long-term
capital gain of a non-corporate U.S. holder is generally subject to tax at more
favorable rates than ordinary income or short-term capital gain.

     However, if the Company is deemed to be a passive foreign investment
company ("PFIC"), upon the receipt of certain distributions from the Company or
a disposition of the Common Stock, each U.S. holder will be liable for United
States federal income tax computed generally at the highest applicable rate as
if such distribution or gain had been recognized ratably over the period the
U.S. holder held such Common Stock, plus interest on the tax allocable to prior
years including within such holding period. Such tax and interest will be
payable by the U.S. holder for the year in which the distribution or gain is
actually realized, regardless of whether losses, credits or other tax benefits
would have been available to the U.S. holder to offset such income if it had
actually been realized in such prior tax years. Under certain circumstances, if
the Company were a PFIC, distributions and dispositions of shares in a direct or
indirect foreign corporate subsidiary of the Company may be attributed in whole
or in part to a U.S. holder, and such U.S. holder may be taxed under the PFI
rules with respect to such distributions or dispositions.
<PAGE>   17
     The Company will be treated as a PFIC if in the current tax year or any
prior tax year, either (i) seventy-five (75) percent or more of the gross income
of the Company is passive income, or (ii) on average, at least fifty (50)
percent of the assets of the Company (by value or, if the Company elects, by
their adjusted basis for computing earnings and profits) produce or are held for
the production of passive income ("passive assets"). Under special
"look-through" rules, the Company is considered to own its pro rata share of the
gross income and assets of any corporation which the Company owns (or is
considered to own) twenty-five (25) percent or more of the stock (by value).
Passive income for purposes of the PFIC rules generally includes dividends,
interest and other types of investment income.

     The Company anticipates that under the look-through rules most of its
income will not constitute passive income and that most of its investments
therein will not constitute passive assets. Accordingly, the Company does not
anticipate that it will be treated as a PFIC based on the nature of its
business; however, there can be no assurance that they will not be treated as
such.

     Alternatively, a U.S. holder could elect to treat the Common Stock as an
investment in a qualified electing fund ("QEF"). In such a case, the PFIC rules
described above would not apply; instead, the U.S. holder would be required to
include currently in his income his pro-rata share of the Company's ordinary
earnings (as ordinary income) and his pro-rata share of the Company's net
capital gains (as long-term capital gain), whether or not distributions with
respect to such earnings or gains are actually made to the U.S. holder. If the
U.S. holder makes the QEF election for the first year in which the Company is a
PFIC, the investor will be required to include its share of such income only for
tax years in which the Company meets either the income test or the asset test
and not in other tax years. Once made, the QEF election will be effective for
the tax year and all subsequent tax years, and may be revoked only with the
consent of the United States Internal Revenue Service.

     The Company intends to notify U.S. holders in the event that it concludes
it will be treated as a PFIC for any tax year to enable the U.S. holders the
ability to consider whether to make the QEF election, although the Company has
no obligation to do so nor should U.S. holders rely on the Company doing so.
Prospective investors should consult with their own tax advisors regarding the
possible treatment of the Company as a PFIC, its effect, and the eligibility,
manner and advisability of making a QEF election in such case.

     A U.S. holder will be subject to "backup withholding" at the rate of
thirty-one (31) percent with respect to dividends paid on the Common Stock and
any proceeds of the sale, exchange or redemption of the Common Stock which are
paid through a paying agent, broker or other intermediary in the United States
or a United States broker or certain United States-related brokers to such
holder outside the United States unless the U.S. holder (i) qualifies as an
exempt payee (including, without limitation, a corporation), and when required,
demonstrates this fact or (ii) provides a correct taxpayer identification number
(or certifies that he has applied for a taxpayer identification number),
certifies that such holder is not subject to backup withholding and otherwise
complies with the backup withholding rules. Backup withholding is not an
additional tax; rather the stockholder is entitled to a credit against his
United States federal income tax for the amount of any backup withholding. In
addition, a United States investor who fails to furnish his taxpayer
identification number may be subject to a penalty.

     A U.S. holder who owns or acquires five (5) percent or more in value of the
Company's stock may be required to file certain additional reports with respect
to the Company with the United States Internal Revenue Service and may be
subject to a penalty for failing to do so.
<PAGE>   18


HONG KONG TAXATION.

     Under the laws of Hong Kong, as currently in effect, a holder of Common
Stock is not subject to Hong Kong tax on dividends paid with respect to such
shares and no holder of Common Stock is liable for Hong Kong tax on gains
realized on sale or other disposition of such Common Stock except that those
persons who are classified for Hong Kong purposes as dealers in securities in
Hong Kong may be subject to Hong Kong tax in respect of any gain resulting from
the disposition of Common Stock. Hong Kong does not impose a withholding tax on
dividends paid by the Company. In addition, the Company will not be subject to
Hong Kong taxes as a result of its receipt of dividends from any of its
subsidiaries.


PRC TAXATION.

     Currently, there is no material connection with the Company and the PRC for
tax claims to be made by PRC tax authorities. However, the Company is looking to
merge with or acquire a Target Company in the future, which may (but not
necessarily) be an operating entity in the PRC. The Company anticipates that
there would be no material consequences to holders of the Common Stock solely as
a result of the purchase, ownership and disposition of the Common Stock after
any potential merger or acquisition with a Chinese Target Company. There is an
income tax treaty in effect between the United States and the PRC.


                        ITEM 8. SELECTED FINANCIAL DATA


SUMMARY FINANCIAL AND OPERATING DATA

     The selected information set forth below should be read in conjunction
with, and is qualified in its entirety by reference to, the consolidated
financial statements of the Company included in this Annual Report as prepared
by Arthur Andersen & Co., independent public accountants. The Company prepares
its financial statements in accordance with United States generally accepted
accounting principles ("U.S. GAAP").


                                  BALANCE SHEET
                            AS OF SEPTEMBER 30, 2000
                  (Amounts expressed in United States dollars)

<TABLE>
<CAPTION>
<S>                                                                                      <C>
---------------------------------------------------------------------------------------------------------
ASSET
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Cash                                                                                               20,000
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Liabilities:
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Accrued liabilities                                                                                 2,500
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Amount due to a related company                                                                    25,813
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Total liabilities                                                                                  28,313
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Stockholders' equity:
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Common Stock -- Class A, $0.0001 par value; 400,000,000 shares authorized; 2,000,000
 shares issued and outstanding                                                                        200
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Common Stock -- Class B, $0.0001 par value; 100,000,000 shares authorized; Nil
 issued and outstanding                                                                                --
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Additional paid-in capital                                                                         19,800
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Accumulated deficit                                                                               (28,313)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Total stockholders' equity                                                                         (8,313)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity                                                         20,000
---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   19


                             STATEMENT OF OPERATIONS
         FOR THE PERIOD FROM SEPTEMBER 15, 1999 (DATE OF INCORPORATION)
                              TO SEPTEMBER 30, 2000
     (Amounts expressed in United States dollars except for per share data)

<TABLE>
<CAPTION>
<S>                                                                                      <C>
---------------------------------------------------------------------------------------------------------
Selling, general and administrative expenses                                                      (28,313)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Provision for income taxes                                                                             --
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Net loss                                                                                          (28,313)
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
</TABLE>


    ITEM 9. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

     With the exception of any historical matters herein, this Annual Report may
contain "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (except as may be limited by Section 27A(b)(2)(D) of the
Securities Act and Section 21E(b)(2)(D) of the Exchange Act). The Company's
actual results could differ materially from the results, if any, discussed in
such forward-looking statements. Any such forward-looking statements should be
read only in conjunction with this entire Annual Report and the exhibits hereto.


9A.  GENERAL BUSINESS PLAN

     The Company's purpose is to seek, investigate and, if such investigation
warrants, attempt to enter into some form of business combination with a Target
Company seeking the perceived advantages of having a class of securities
registered under the Exchange Act. The Company will not restrict its search to
any specific business, industry or geographical location and the Company may
participate in a business venture of virtually any kind or nature. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its shares publicly traded, or may seek other
perceived advantages which the Company may offer. The Company is also not
restricted from implementing a structure for a particular business acquisition
with a Target Company in which the Company also becomes a party to a merger,
consolidation, reorganization, joint venture, or licensing agreement with a
third party corporation or entity. The Company has not identified any Target
Companies and has not entered into any negotiations regarding such business
combination to date. None of the Company's officers or directors have engaged in
any negotiations with any representative of any company regarding the
possibility of any business combination between the Company and such other
company to date.

     The officers and directors anticipate possibly seeking out a Target Company
through solicitation. Such solicitation may include newspaper or magazine
advertisements, mailings and other distributions to law firms, accounting firms,
investment bankers, financial advisors and similar persons,
<PAGE>   20
the use of one or more World Wide Web sites and similar methods. No estimate can
be made as to the number of persons who may be contacted or solicited. The
officers and directors may engage in such solicitation directly or may employ
one or more other entities to conduct or assist in such solicitation. The
officers and directors will pay referral fees to consultants and others who
refer Target Companies for mergers into reporting companies in which the
officers and directors have an interest. Payments are made if a business
combination occurs, and may consist of cash or a portion of the stock in the
Company retained by the officers and directors.

     The Company anticipates that the selection of a business opportunity in
which to participate will be complex and a high-risk endeavor. The officers and
directors believe (but have not conducted or obtained any research to confirm)
that there are business entities seeking the perceived benefits of a publicly
registered corporation. Such perceived benefits may include the items listed in
Part 1, Item 1B of this Annual Report. Business opportunities may be available
in many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities difficult and complex.

     The Memorandum and Articles of Association of the Company provides that the
Company may indemnify officers and/or directors of the Company for all losses
and liabilities which he or she may sustain or incur in or about the execution
of the duties of his or her office or otherwise in relation thereto, and no
director or officer shall be liable for any loss, damage or misfortune which may
happen to, or be incurred by the Company in the execution of the duties of his
or her office, or in relation thereto.

     The Company has, and will continue to have, no capital with which to
provide the owners of business entities with any cash or other assets. The
Company believes it will be able to offer owners of Target Companies the
opportunity to enter into a business combination with a reporting company
without incurring the cost and time that would be required should a Target
Company decide to become a reporting company on its own. In analyzing
prospective business opportunities, the officers and directors will consider
such matters as: (i) available technical, financial and managerial resources;
(ii) working capital and other financial requirements; (iii) history of
operations, if any; (iv) prospects for the future; (v) nature of present and
expected competition; (vi) quality and experience of management services which
may be available and the depth of that management; (vii) potential for further
research, development or exploration; (viii) specific risk factors not now
foreseeable but which then may be anticipated to impact the proposed activities
of the Company; (ix) potential for growth or expansion; (x) the potential for
profit; (xi) perceived public recognition or acceptance of products, services or
trades; (xii) name identification; and (xiii) other relevant factors. This
discussion of the proposed criteria is not meant to be a restrictive or an
inclusive list of the Company's virtually unlimited discretion to search for and
enter into potential business opportunities. The officers and directors have not
conducted or obtained market research and are not aware of any empirical data to
support the perceived benefits of a merger or acquisition transaction for the
owners of any Target Company. See ITEM 1D(9), "RISK FACTORS -- LACK OF MARKET
RESEARCH OR MARKETING ORGANIZATION AND EXPERTISE".

     The Exchange Act requires that any merger or acquisition candidate comply
with certain reporting requirements, which include providing audited financial
statements in any reporting filings made under the Exchange Act. The officers
and directors of the Company will in all likelihood be inexperienced in matters
relating to the business of a Target Company. The officers and directors will
rely upon their own efforts in accomplishing the pre-business combination
purposes of the Company. Outside consultants or advisors may be utilized by the
Company to assist in the search for qualified Target Companies. If the Company
does retain such an outside consultant or advisor, any cash fee earned by such
person will need to be assumed by the Target
<PAGE>   21
Company, as the Company has limited cash assets with which to pay such
obligation.

     Following a business combination the Company may benefit from the services
of others in regard to accounting, legal services, underwritings and corporate
public relations. If requested by a Target Company, the officers and directors
of the Company may recommend one or more underwriters, financial advisors,
accountants, law firms, public relations firms or other consultants to provide
such services.


9B.  ACQUISITION OF OPPORTUNITIES

     It is anticipated that any securities issued in any such reorganization
would be issued in reliance upon exemption from registration under the
Securities Act, any other applicable federal securities laws and state
securities laws. In some circumstances, however, as a negotiated element of its
transaction, the Company may agree to register all or a part of such securities
under the applicable federal or state securities laws immediately after the
transaction is consummated or at specified times thereafter. If such
registration occurs, of which there can be no assurance, it will be undertaken
by the surviving entity after the Company has entered into an agreement for a
business combination or has consummated a business combination and the Company
is no longer considered a Blank Check Company. Until such time as this occurs,
the Company will not register any securities. The issuance of additional
securities and their potential sale into any trading market which may develop in
the Company's securities may depress the market value of the Company's
securities in the future if such a market develops, of which there is no
assurance.

     While the terms of a business transaction to which the Company may be a
party cannot be predicted, it is expected that the parties to the business
transaction will desire to avoid the creation of a taxable event and thereby
structure the acquisition as a "tax-free" reorganization under Sections 351 or
368 of the Internal Revenue Code of 1986, as amended (the "Code").

     With respect to any negotiations with a Target Company, the officers and
directors expect to analyze, among other factors, the percentage of the Company
Target Company shareholders would acquire in exchange for their shareholdings in
the Target Company. Depending upon, among other things, the Target Company's
assets and liabilities, the Company's shareholders would in all likelihood hold
a substantially lesser percentage ownership interest in the Company following
any such transaction. The percentage of ownership may be subject to significant
reduction in the event that the Company acquires a Target Company with
substantial assets.

     The Company will participate in a business opportunity only after the
negotiation and execution of appropriate agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require certain
representations and warranties of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which
must be satisfied by the parties prior to and after such closing, will outline
the manner of bearing costs, including costs associated with the Company's
attorneys and accountants, and will include miscellaneous other terms.

     Due to the Company's filed Registration Statement dated August 31, 2000,
the Company is subject to the rules and regulations of the Exchange Act and
other laws, rules and regulations as applicable to foreign companies and as may
be necessary for listing its securities in the future on Nasdaq Small Cap or OTC
Bulletin Board.

     The officers and directors have agreed that they will advance to the
Company any additional funds which the Company needs for operating capital and
for costs in connection with searching for or completing a business
<PAGE>   22
combination with a target company. The officers and directors are under no
obligation to advance funds to the Company, and they may discontinue such
funding at any time. Such advances will be made without expectation of repayment
unless the owners of the business which the Company acquires or merges with
agree to repay all or a portion of such advances. There is no minimum or maximum
amount the officers and directors will advance to the Company. The Company will
not borrow any funds to make any payments to the Company's promoters, officers,
directors or their affiliates or associates.


9C. COMPETITION

    The Company will remain an insignificant participant among the firms that
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined extremely limited financial resources and limited
management availability, the Company will continue to be at a significant
competitive disadvantage compared to the Company's competitors. See ITEM 1D(3),
"RISK FACTORS -- SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND
COMBINATIONS".


                 ITEM 10. DIRECTORS AND OFFICERS OF REGISTRANT.

10A. BACKGROUNDS OF DIRECTORS

     The Company has the following officers and directors:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
NAME                                               AGE              POSITIONS AND OFFICES HELD
---------------------------------------------------------------------------------------------------------
<S>                                                <C>    <C>
Kevin Sheung Wai Chan                              38     Director
---------------------------------------------------------------------------------------------------------
Silas Sheung Kwan Chan                             36     Director and Secretary
---------------------------------------------------------------------------------------------------------
</TABLE>

     There are no agreements or understandings for the officers or directors
to resign at the request of another person and the above-named officer and
director is not acting on behalf of nor will act at the direction of any other
person.

     Set forth below are summary descriptions containing the name of the
directors and officers of the Company, all positions and offices with the
Company held, the period during which such officer or director has served as
such, and the business and educational experience of each during at least the
last five (5) years:

     KEVIN SHEUNG WAI CHAN.  Mr. Chan is a director of the Company. From 1985 to
1989, he was with the audit division of Arthur Andersen in Hong Kong. From 1989
to 1994, he was an investment banker with Deutsche Morgan Grenfell in Hong Kong.
From 1994 to the present, Mr. Chan has been a Principal of Champ Pacific Capital
Limited, a financial consulting and advisory firm located in Hong Kong. Mr. Chan
has been a Certified Public Accountant in Hong Kong since 1989, as well as a
fellow member of the Hong Kong Society of Accountants and the Association of
Chartered Certified Accountants. Mr. Chan received his B.So.Sc. in Management
Studies from the University of Hong Kong in 1985.

     SILAS SHEUNG KWAN CHAN.  Mr. Chan is a director and secretary of the
Company. From 1985 to 1990, Mr. Chan was an Accountant with KPMG Peat Marwick
and Ernst & Young, both located in Hong Kong. From 1990 to 1992, Mr. Chan was
with the Hong Kong Stock Exchange as a Listing Executive. From 1993 to 1997,
Mr. Chan was with Fuji International Finance Limited, an international
investment bank, as Assistant Director. From 1997 to the present, Mr. Chan has
been an executive officer with Champ Pacific Capital Limited, a financial
consulting and advisory firm located in Hong Kong. Mr. Chan is a fellow member
of the Hong Kong Society of Accountants and the Association of
<PAGE>   23
Chartered Certified Accountants since 1989, and has been a Chartered Financial
Analyst since 1997. Mr. Chan received a B.Sc. in Accounting from the University
of Hong Kong in 1985 and an M.B.A. from the University of Birmingham in 1993.


10B. PREVIOUS BLANK CHECK COMPANIES

     Since formation of the Company, Messrs. Chan and Chan have formed two
additional British Virgin Islands companies - Portal Net Limited and Net-Matrix
Limited -- with the intent of them becoming additional Blank Check Companies.
See ITEM 10D, "RECENT TRANSACTIONS BY BLANK CHECK COMPANIES". Prior to
initiating formation of these companies, Messrs. Chan and Chan and the Company
have owned together one other British Virgin Islands Blank Check Company, First
Nets Global Inc., but Messrs. Chan and Chan have not yet registered such company
under the Exchange Act.


10C. CURRENT BLANK CHECK COMPANIES

     In addition to First Nets Global Inc., with which they have organized and
established in the British Virgin Islands but have not registered any shares of
such company under the Exchange Act, Messrs. Chan and Chan have being involved
with additional Blank Check Companies with common stock registered under the
Securities Act or the Exchange Act. At present, Messrs. Chan and Chan have
registered under the Exchange Act and filed an Annual Report for two additional
blank check companies Portal Net Limited and Net-Matrix Limited, simultaneously
with the Annual Report for the Company on January 11, 2001.


10D. RECENT TRANSACTIONS BY BLANK CHECK COMPANIES

     Although Messrs. Chan and Chan have formed the three additional companies
listed in Item 10B and 10C above with the intent of such companies becoming
additional Blank Check Companies, no Annual Reports have been filed previous to
this Annual Report for these three companies. At present, Messrs. Chan and Chan
do not have plans to file a registration statement for First Nets Global Inc. in
the immediate future.


10E. CONFLICTS OF INTEREST

     The Company's officers and directors have registered Portal Net Limited and
Net-Matrix Limited, and expect to register First Nets Global Inc. and other
companies of a similar nature and with a similar purpose as the Company.
Consequently, there are potential inherent conflicts of interest in acting as an
officer and director of the Company. Insofar as the officers and directors are
engaged in other business activities, the officers and directors anticipate that
they will devote only a minor amount of time to the Company's affairs.

     A conflict may arise in the event that another Blank Check Company with
which the officers and directors are affiliated is registered and actively seeks
a Target Company. The officers and directors anticipate (but are not required to
so effect) that Target Companies will be located for the Company and other Blank
Check Companies either (i) in chronological order of the date of formation of
such Blank Check Companies; or (ii) by lot. However, other additional Blank
Check Companies that may be formed may differ from the Company in certain items
such as place of incorporation, number of shares and shareholders, working
capital, types of authorized securities, or other items. It may be that a Target
Company may be more suitable for or may prefer a certain Blank Check Company
formed after the Company. In such case, a business combination might be
negotiated on behalf of the more suitable or preferred Blank Check Company
regardless of date of formation or choice by lot. See ITEM 1D(7), "RISK
FACTORS -- OTHER BLANK CHECK COMPANIES".
<PAGE>   24
     Mr. Silas Sheung Kwan Chan is an executive officer of Champ Pacific Capital
Limited, and a Director and Secretary of Portal Net Limited, Net-Matrix Limited
and First Nets Global Inc. and expects to organize other companies of a similar
nature and with a similar purpose as the Company. As such, demands may be placed
on the time of Mr. Silas Sheung Kwan Chan that will detract from the amount of
time he is able to devote to the Company. Mr. Silas Sheung Kwan Chan intends to
devote as much time to the activities of the Company as required. However,
should a conflict arise regarding the time demands of Mr. Silas Sheung Kwan
Chan, there is no assurance that Mr. Silas Sheung Kwan Chan would not attend to
other matters prior to those of the Company. Mr. Silas Sheung Kwan Chan projects
that initially up to ten hours per month of his time may be spent locating a
Target Company which amount of time would increase when the analysis of, and
negotiations and consummation with, a Target Company are conducted.

     Mr. Kevin Sheung Wai Chan is a Director of Champ Pacific Capital Limited,
Portal Net Limited, Net-Matrix Limited and First Nets Global Inc. and expects to
organize other companies of a similar nature and with a similar purpose as the
Company. As such, demands may be placed on the time of Mr. Kevin Sheung Wai Chan
that may detract from the amount of time he is able to devote to the Company.
Mr. Kevin Sheung Wai Chan intends to devote as much time to the activities of
the Company as required. However, should a conflict arise regarding the time
demands of Mr. Kevin Sheung Wai Chan, there is no assurance that Mr. Kevin
Sheung Wai Chan would not attend to other matters prior to those of the Company.
Mr. Kevin Sheung Wai Chan projects that initially up to ten hours per month of
his time may be spent locating a Target Company which amount of time would
increase when the analysis of, and negotiations and consummation with, a Target
Company are conducted.

     At the time of a business combination, the officers and directors
expect that some or all of the shares of common stock owned by the shareholders
and directors will be purchased by the Target Company. The amount of common
stock sold or continued to be owned by the directors cannot be determined at
this time.

     The Company may agree to pay finder's fees, as appropriate and allowed,
to unaffiliated persons who may bring a Target Company to the Company where that
reference results in a business combination. The amount of any finder's fee will
be subject to negotiation, and cannot be estimated at this time. No finder's fee
of any kind will be paid to the officers and directors or promoters of the
Company or to their associates or affiliates. No loans of any type have, or will
be, made to the officers, directors or promoters of the Company or to any of
their associates or affiliates.

     The Company's officers and directors have not had any negotiations with and
there are no present arrangements or understandings with any representatives of
the owners of any business or company regarding the possibility of a business
combination with the Company.

     Any changes in these provisions require the approval of the Board of
Directors. The officers, directors and current shareholders do not intend to
propose any such action and do not anticipate that any such action will occur.


10F. INVESTMENT COMPANY ACT OF 1940

     See ITEM 1D (11), "RISK FACTORS -- REGULATION UNDER THE INVESTMENT
COMPANY ACT". Any violation of the Investment Company Act would subject the
Company to material adverse consequences.
<PAGE>   25


                ITEM 11. COMPENSATION OF DIRECTORS AND OFFICERS.

     The Company's officers and directors do not receive any compensation for
services rendered to the Company, have not received such compensation in the
past, and are not accruing any compensation pursuant to any agreement with the
Company.

     The officers and directors of the Company will not receive any finder's
fee, either directly or indirectly, as a result of their efforts to implement
the Company's business plan outlined herein. However, the officers and directors
of the Company anticipate receiving benefits as beneficial shareholders of the
Company. See ITEM 4, "CONTROL OF REGISTRANT," and ITEM 13, "INTEREST OF
MANAGEMENT IN CERTAIN TRANSACTIONS".

     No retirement, pension, profit sharing, stock option or insurance programs
or other similar programs have been adopted by the Company for the benefit of
its directors, officers or other employees.


    ITEM 12. OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT OR SUBSIDIARIES.

     Mr. Kevin Sheung Wai Chan is the beneficial holder of the right to exercise
stock options for 7,500,000 Class B shares at an exercise price of US $0.0001
per share expiring September 14, 2009. It is anticipated that all such shares
would, if Mr. Kevin Sheung Wai Chan were to exercise such right, be held in
trust by a nominal shareholder, Beauty Wise Secretaries Limited, formerly Beauty
Wise Development Limited, a company organized and existing under the laws of
Hong Kong. Mr. Kevin Sheung Wai Chan is the Secretary, one of two Directors and
a 50% shareholder in Beauty Wise Secretaries Limited. Beauty Wise Secretaries
Limited would hold the above-mentioned shares of Mr. Kevin Sheung Wai Chan for
Mr. Kevin Sheung Wai Chan's sole benefit pursuant to a Nominee Shareholder
Agreement dated September 15, 1999 between Mr. Kevin Sheung Wai Chan and Beauty
Wise Secretaries Limited.

     Mr. Silas Sheung Kwan Chan is the beneficial holder of the right to
exercise stock options for 2,500,000 Class B shares at an exercise price of US
$0.0001 per share expiring September 14, 2009. It is anticipated that all such
shares would, if Mr. Silas Sheung Kwan Chan were to exercise such right, be held
in trust by a nominal shareholder, Fortune Access Nominees Limited, formerly
Fortune Access Development Limited, a company organized and existing under the
laws of Hong Kong. Mr. Kevin Sheung Wai Chan is the Secretary, one of two
Directors and a 50% shareholder in Fortune Access Nominees Limited. Fortune
Access Nominees Limited would hold the above-mentioned shares of Mr. Silas
Sheung Kwan Chan for Silas Sheung Kwan Chan's sole benefit pursuant to a Nominee
Shareholder Agreement dated September 15, 1999 between Mr. Silas Sheung Kwan
Chan and Fortune Access Nominees Limited.


            ITEM 13. INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS.

     The Company has issued a total of 2,000,000 shares of common stock to the
following persons for a total of US $20,000.00 in cash:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
NAME                                   RELATIONSHIP TO ISSUER         NUMBER OF TOTAL SHARES          CONSIDERATION
-------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                            <C>                             <C>
Kevin Sheung Wai Chan                  Director                                 1,500,000                    15,000
-------------------------------------------------------------------------------------------------------------------------
Silas Sheung Kwan Chan                 Director and Secretary                     500,000                     5,000
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The Company has also provided Kevin Sheung Wai Chan and Silas Sheung Kwan
Chan, through nominee shareholders Beauty Wise Secretaries Limited and Fortune
Access Nominees Limited, respectively, with the right to exercise stock options
for Class B shares as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
NAME                                   RELATIONSHIP TO ISSUER         NUMBER OF TOTAL SHARES          CONSIDERATION
-------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                            <C>                             <C>
Kevin Sheung Wai Chan                  Director                                 7,500,000                     750
-------------------------------------------------------------------------------------------------------------------------
Silas Sheung Kwan Chan                 Director and Secretary                   2,500,000                     250
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>   26


                                     PART II


              ITEM 14. DESCRIPTION OF SECURITIES TO BE REGISTERED.


14A. GENERAL

     The authorized capital stock of the Company consists of 400,000,000 shares
of Class A stock, par value $0.0001 per share, and 100,000,000 shares of Class B
stock, par value $0.0001 per share. To date, no Class B common stock or
preferred stock has been issued by the Company; however, Messrs. Chan and Chan
have been given the right to exercise, from September 15, 1999 until September
14, 2009, the Class B stock in the amounts set forth in Item 12 above from stock
options. To date, Messrs. Chan and Chan have not exercised their rights to
purchase stock options. The following statements relating to the capital stock
are summaries and, as summaries, may not contain all information of importance
to investors and potential investors. Reference is made to the more detailed
provisions of, and such statements are qualified in their entirety by reference
to, the Certificate of Incorporation and the Memorandum and Articles of
Association, copies of which were previously filed.


14B. COMMON STOCK

     Holders of shares of Class A common stock are entitled to one vote for each
share on all matters to be voted on by the stockholders. Holders of Class A
common stock do not have cumulative voting rights. Holders of Class A common
stock are entitled to share ratably in dividends, if any, as may be declared
from time to time by the Board of Directors in its discretion from funds legally
available therefor. In the event of a liquidation, dissolution or winding up of
the Company, the holders of Class A common stock are entitled to share pro rata
all assets remaining after payment in full of all liabilities.

     Holders of Class A and Class B common stock have no preemptive rights
to purchase the Company's common stock. Without prejudice to any special rights
previously conferred on the holders of any existing shares or class of shares,
any Class A or Class B share in the Company may be issued with such preferred,
deferred or other special rights, or such restrictions, whether in regard to
dividend, voting, return of capital or otherwise, as the Directors may from time
to time determine. Under British Virgin Islands law, nonresidents of the British
Virgin Islands may freely hold, vote and transfer shares of Class A or Class B
common stock in the same manner as British Virgin Islands residents.

     Subject to the provisions of the IBC Act, Class A and Class B common
stock may be issued on the terms that they are redeemable, or, at the option of
the Company, liable to be redeemed on such terms and in such manner as the
directors before or at the time of the issue of Class A and/or Class B common
shares may determine. The Board of Directors may redeem any such Class A or
Class B common share at a premium. The Company's organizational documents
contain no provisions regarding sinking funds or liability to further calls or
assessment by the Company.

     Pursuant to the Articles of Association of the Company, holders of Class B
common shares are entitled to five votes for each share on all matters to be
voted on by the stockholders. Each Class B common share can be converted into
one Class A common share at the option of the holders of such shares. Conversion
shall be effected by written notice of such election by the holder to the
Secretary of the Company. Other than voting rights and conversion rights
mentioned above, the organizational documents of the Company do not provide
Class B common shareholders with any different rights than or any preference
over Class A common shareholders in terms of dividend rights, liquidation rights
(in the case of any liquidation, dissolution or winding-up
<PAGE>   27
of the Company), pre-emptive rights, redemption provision, sinking fund
provisions, and liability to further calls or to assessment by the Company.


14C. PREFERRED STOCK

     The Company has not issued any preferred stock to date nor is any preferred
stock of the Company being registered pursuant to this Annual Report.


14D. DIVIDENDS

     Dividends, if any, will be contingent upon the Company's revenues and
earnings, if any, and capital requirements and financial conditions. The payment
of dividends, if any, will be within the discretion of the Company's Board of
Directors. The Company presently intends to retain all earnings, if any, for use
in its business operations and accordingly, the Board of Directors does not
currently anticipate declaring any dividends prior to a business combination.
See ITEM 1(D)(19) "LACK OF DIVIDENDS" and ITEM 6 "EXCHANGE CONTROLS AND OTHER
LIMITATIONS AFFECTING SECURITY HOLDERS".


                                    PART III


                    ITEM 15. DEFAULTS UPON SENIOR SECURITIES

     None.


       ITEM 16. CHANGES IN SECURITIES, CHANGES IN SECURITY FOR REGISTERED
                         SECURITIES AND USE OF PROCEEDS

     None.


                                     PART IV


             ITEM 17. FINANCIAL STATEMENTS (Intentionally Omitted)


                         ITEM 18. FINANCIAL STATEMENTS

     Please see the consolidated financial statements of the Company included in
this Annual Report as prepared by Arthur Andersen & Co., independent public
accountants.

<PAGE>   28


                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant certifies that it meets all of the requirements for filing on
Form 20-F and has duly caused this Annual Report to be signed on its behalf by
the undersigned, thereunto duly authorized.


                                       DIGITAL STAR INC.

                                       By: /s/ Kevin Sheung Wai Chan
                                           ----------------------------
                                       Name:  Mr. Kevin Sheung Wai Chan
                                       Title: Director


                                       By: /s/ Silas Sheung Kwan Chan
                                           ----------------------------
                                       Name:  Mr. Silas Sheung Kwan Chan
                                       Title: Director and Secretary


Date: January 11, 2001
<PAGE>   29


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of
Digital Star Inc.

We have audited the accompanying balance sheet of Digital Star Inc. as of
September 30, 2000 and 1999 and the related statement of operations, cash flows,
and changes in shareholders' equity for the year ended September 30, 2000 and
for the period from September 15, 1999 (date of incorporation) to September 30,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards
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 audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above presents fairly, in
all material respects, the financial position of Digital Star Inc. as of
September 30, 2000 and 1999, and the results of its operations and its cash
flows for the year ended September 30, 2000 and for the period from September
15, 1999 (date of incorporation) to September 30, 1999, in conformity with
generally accepted accounting principles in the United States of America.


ARTHUR ANDERSEN & CO
Certified Public Accountants
Hong Kong


Hong Kong,
January 2, 2001.
<PAGE>   30


                                DIGITAL STAR INC.
                          (A DEVELOPMENT STAGE COMPANY)


                                  BALANCE SHEET
                        AS OF SEPTEMBER 30, 2000 AND 1999
                  (Amounts expressed in United States dollars)

<TABLE>
<CAPTION>

                                                                       2000      1999
                                                                     --------   -------
<S>                                                                  <C>        <C>
ASSET

Cash                                                                 $ 20,000   $20,000
                                                                     ========   =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Accrued liabilities                                                  $  2,500   $ 5,000

Amount due to a related company                                        25,813        --
                                                                     --------   -------
Total liabilities                                                      28,313     5,000
                                                                     --------   -------
Stockholders' equity:

Common Stock -- Class A, $0.0001 par value; 400,000,000 shares
 authorized; 2,000,000 shares issued and outstanding                      200       200

Common Stock -- Class B, $0.0001 par value; 100,000,000 shares
 authorized; Nil issued and outstanding                                    --        --

Additional paid-in capital                                             19,800    19,800

Accumulated deficit                                                   (28,313)   (5,000)
                                                                     --------   -------
Total stockholders' equity                                             (8,313)   15,000
                                                                     --------   -------
Total liabilities and stockholders' equity                           $ 20,000   $20,000
                                                                     ========   =======
</TABLE>

   The accompanying notes are an integral part of these financial statements.
<PAGE>   31


                                DIGITAL STAR INC.
                          (A DEVELOPMENT STAGE COMPANY)


                             STATEMENT OF OPERATIONS
                    FOR THE YEAR ENDED SEPTEMBER 30, 2000 AND
         FOR THE PERIOD FROM SEPTEMBER 15, 1999 (DATE OF INCORPORATION)
                              TO SEPTEMBER 30, 1999
     (Amounts expressed in United States dollars except for per share data)


<TABLE>
<CAPTION>

                                                     PERIOD FROM                                      PERIOD FROM
                                                 SEPTEMBER 15, 1999                               SEPTEMBER 15, 1999
                                                      (DATE OF                                         (DATE OF
                                                 INCORPORATION) TO           YEAR ENDED           INCORPORATION) TO
                                                 SEPTEMBER 30, 1999      SEPTEMBER 30, 2000       SEPTEMBER 30, 2000
                                                 ------------------      ------------------       --------------------
<S>                                              <C>                     <C>                      <C>
Selling, general and administrative
 expenses                                              $(5,000)              $(23,313)                  $(28,313)
Provision for income taxes                                  --                     --                         --
                                                 ------------------      ------------------       --------------------
Net loss                                               $(5,000)              $(23,313)                  $(28,313)
                                                 ==================      ==================       ====================
</TABLE>

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

<PAGE>   32


                                DIGITAL STAR INC.
                          (A DEVELOPMENT STAGE COMPANY)


                             STATEMENT OF CASH FLOWS
                    FOR THE YEAR ENDED SEPTEMBER 30, 2000 AND
         FOR THE PERIOD FROM SEPTEMBER 15, 1999 (DATE OF INCORPORATION)
                              TO SEPTEMBER 30, 1999
                  (Amounts expressed in United States dollars)

<TABLE>
<CAPTION>

                                                            PERIOD FROM                                          PERIOD FROM
                                                         SEPTEMBER 15, 1999                                  SEPTEMBER 15, 1999
                                                       (DATE OF INCORPORATION)          YEAR ENDED         (DATE OF INCORPORATION)
                                                        TO SEPTEMBER 30, 1999       SEPTEMBER 30, 2000      TO SEPTEMBER 30, 2000
                                                       -----------------------      ------------------     -----------------------
<S>                                                    <C>                          <C>                    <C>
Cash flows from operating activities:

Net loss                                                      $(5,000)                  $(23,313)                 $(28,313)

(Decrease) Increase in accrued liabilities                      5,000                     (2,500)                    2,500

Increase in amount due to a related company                        --                     25,813                    25,813
                                                       -----------------------      ------------------     -----------------------
Net cash flows from operating activities                           --                         --                        --

Cash flows from financing activities:

Net proceeds from issuance of common stock --
 Class A                                                       20,000                         --                    20,000
                                                       -----------------------      ------------------     -----------------------
Net increase in cash                                           20,000                         --                    20,000

Cash, beginning of year/period                                     --                     20,000                        --
                                                       -----------------------      ------------------     -----------------------
Cash, end of year/period                                      $20,000                   $ 20,000                  $ 20,000
                                                       =======================      ==================     =======================

</TABLE>

   The accompanying notes are an integral part of these financial statements.
<PAGE>   33


                                DIGITAL STAR INC.
                          (A DEVELOPMENT STAGE COMPANY)


                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                      FOR THE YEAR ENDED SEPTEMBER 30, 2000
       AND FOR THE PERIOD FROM SEPTEMBER 15, 1999 (DATE OF INCORPORATION)
                              TO SEPTEMBER 30, 1999
                  (Amounts expressed in United States dollars)

<TABLE>
<CAPTION>

                           Common stock -- Class A           Common stock -- Class B
                        ----------------------------       --------------------------
                                                           Number of                       Additional
                        Number of shares      Amount         shares         Amount       paid-in capital    Accumulated deficit
                        ----------------      ------       ---------        ------       ---------------    -------------------

<S>                     <C>                   <C>          <C>             <C>           <C>                <C>
Balance as of
 September 15, 1999                --          $ --            --             $--           $     --             $     --

Issuance of common
 stock                      2,000,000           200            --              --             19,800                   --

Net loss for the
 period                            --            --            --              --                 --               (5,000)
                        ----------------      ------       ---------        ------       ---------------   --------------------
Balance as of
 October 1, 1999            2,000,000           200            --              --             19,800               (5,000)

Net loss for the year              --            --            --              --                 --              (23,313)
                        ----------------      ------       ---------        ------       ---------------   --------------------
Balance as of
 September 30, 2000         2,000,000          $200            --             $--            $19,800             $(28,313)
                        ================      ======       =========        ======       ===============   ====================
</TABLE>

   The accompanying notes are an integral part of these financial statements.
<PAGE>   34


                                DIGITAL STAR INC.
                          (A DEVELOPMENT STAGE COMPANY)


                        NOTES TO THE FINANCIAL STATEMENTS
                  (Amounts expressed in United States dollars)


1.   ORGANIZATION AND BUSINESS OPERATIONS

     Digital Star Inc. (a development stage company) (the "Company") was
incorporated in the British Virgin Islands on September 15, 1999 to serve as a
vehicle to effect a merger, exchange of capital stock, asset acquisition, or
other business combination with a domestic or foreign private business. As of
September 30, 2000 the Company had not yet commenced any formal business
operations, and all activity to date relates to the Company's formation and
proposed fund raising.

     The Company's ability to commence operations is contingent upon its ability
to identify a prospective target business and raise the capital it will require
through the issuance of equity securities, debt securities, bank borrowings, or
a combination thereof.

     The accompanying financial statements were prepared on a going-concern
basis as the shareholders have undertaken to provide continuing financial
support for the future operations of the Company.


2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a.   Income taxes

     The Company accounts for income tax under the provisions of Statement of
     Financial Accounting Standards No. 109, which requires recognition of
     deferred tax assets and liabilities for the expected future tax
     consequences of events that have been included in the financial statements
     or tax returns. Deferred income taxes are provided using the liability
     method. Under the liability method, deferred income taxes are recognized
     for all significant temporary differences between the tax and financial
     statement bases of assets and liabilities.

b.   Use of estimates

     The preparation of the financial statements in conformity with generally
     accepted accounting principles 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 contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenues and expenses during the reporting period. Accordingly,
     actual results could differ from those estimates.

c.   Fair value of financial instruments

     All financial instruments of the Company are carried at cost, which
     approximate their fair values.
<PAGE>   35


3.   COMMON STOCK AND STOCK OPTIONS

a.   Common stock

     The Company is authorized to issue 400,000,000 shares of common stock --
     Class A with a par value of $0.0001 each and 100,000,000 shares of common
     stock -- Class B with a par value of $0.0001 each. On September 15, 1999,
     2,000,000 shares of common stock -- Class A were issued. No Class B common
     stock were issued.

     The shareholders of common stock -- Class A have one vote per share while
     the shareholders of common stock -- Class B have five votes per share on
     any matter submitted to the shareholders. The shareholders of common stock
     -- Class A shall rank equally with the shareholders of common stock --
     Class B in all other aspects.

b.   Stock options

     On September 15, 1999, the Company granted stock options to existing
     shareholders to subscribe for 10,000,000 shares of common stock Class B.
     The share options are exercisable at par value of $0.0001 each during the
     period from September 15, 1999 to September 14, 2009. No stock option was
     exercised subsequent to their issuance.

c.   Proceeds

     On September 15, 1999, the Company received proceeds of $20,000 in exchange
     for the 2,000,000 shares of Class A common stock and the options to
     subscribe for 10,000,000 shares of Class B common stock at $0.0001 per
     share.

<PAGE>   36


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT NUMBER             DESCRIPTION OF DOCUMENT
--------------             -----------------------
<S>                        <C>
    1.1*                   Memorandum of Association
    1.2*                   Articles of Association
    2.1*                   Relevant Board Resolutions
    2.2*                   Nominee Shareholder Agreements
    3.1*                   Letter of Agreement to Use Offices of Champ Pacific Capital Limited
   10.1*                   Consent of Champ Pacific Capital Limited
   10.2                    Consent of Accountants
</TABLE>
------------
* Previously Filed