UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                  FORM 10 - KSB


   [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                      FOR THE YEAR ENDED DECEMBER 31, 2000

                              FREESTAR TECHNOLOGIES
                                Formerly known as
                               FREEDOM SURF, INC.

          Nevada                                               68-0221599
          -------                                              -----------
(STATE OR OTHER JURISDICTION OF                              (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                              IDENTIFICATION NO.)


207 W. 138th Street Los Angeles, CA 90006
-----------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)


(310) 352-3300  Fax: (310) 352-3370
-----------------------------------
(ISSUER'S TELEPHONE NUMBER)

SECURITIES REGISTERED UNDER SECTION 12 (b) OF THE ACT:


TITLE OF EACH CLASS            NAME OF EACH EXCHANGE ON WHICH
                               REGISTERED
---------------------------    ------------------------------

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


SECURITIES REGISTERED UNDER SECTION 12 (g) OF THE ACT:

                          Common Stock - .001 Par Value
                         ------------------------------
                                (TITLE OF CLASS)

<PAGE>

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

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

State the issuer's revenues for its most recent fiscal year. $908,525

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the last 60 days.

$1,715,375 as of March 1, 2001

State the number of shares outstanding of each of the issuer's classes of common
equity, as of March 1, 2000:

Common Shares      6,861,500
Preferred Shares       -0-

                           INCORPORATION BY REFERENCE

     If the following documents are incorporated by reference, briefly describe
them and identify the part of the form 10-KSB (e.g., Part I, Part II, etc. )
into which the document is incorporated: (1) any annual report to security
holders; (2) any proxy or information statement; and (3) any prospectus filed
pursuant to rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act").
The listed documents should be clearly described for identification purposes
(e.g., annual report to security holders for fiscal year ended December 24,
1990).

The following documents are incorporated by reference:

None

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

                                        2
<PAGE>

                 INFORMATION REQUIRED IN REGISTRATION STATEMENT

                               TABLE OF CONTENTS


Part I                                                                        5

Item 1.  Description of Business                                              5

Item 2.  Description of Property                                              8

Item 3.  Legal Proceedings                                                    8

Item 4.  Submission of Matters to a Vote of
         Security Holders                                                     8

Part II                                                                       9

Item 5.  Market for Common Equity and
         Related Stockholder Matters                                          9

Item 6.  Management's Discussion and Analysis
         Or Plan of Operation                                                 10

Item 7.  Financial Statements                                                 12

Item 8.  Changes in and disagreements with
         Accountants on Accounting & Financial
         Disclosures                                                          26

Part III                                                                      26

Item 9.  Directors, Executive Officers, Promoters
         And Control Persons; Compliance with
         Section 16(a) of the Act                                             26

Item 10.  Executive Compensation                                              28

Item 11.  Security Ownership of Certain Beneficial
          Owners and Management                                               29

Item 12.  Certain Relationships and Related
          Transactions                                                        30

Item 13.  Exhibits and Reports on Form 8-K                                    31

Signatures                                                                    32

                                        3
<PAGE>

INTRODUCTORY NOTE

This Annual Report on Form 10-KSB may be deemed to contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company intends that
such forward-looking statements be subject to the safe harbors created by such
statutes. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Annual Report contains forward-looking statements regarding
the financial condition, operating results, business prospects or any other
aspect of the Company, please be advised that the Company's actual financial
condition, operating results and business performance may differ materially from
that projected or estimated by the Company in forward-looking statements. The
differences may be caused by a variety of factors, including but not limited to
adverse economic conditions, intense competition, including intensification of
price competition and entry of new competitors and products, adverse federal,
state and local government regulation, inadequate capital, unexpected costs and
operating deficits, increases in general and administrative costs, lower sales
and revenues than forecast, loss of customers, customer returns of products sold
to them by the Company, disadvantageous currency exchange rates, termination of
contracts, loss of suppliers, technological obsolescence of the Company's
products, technical problems with the Company's products, price increases for
supplies and components, inability to raise prices, failure to obtain new
customers, litigation and administrative proceedings involving the Company, the
possible acquisition of new businesses that result in operating losses or that
do not perform as anticipated, resulting in unanticipated losses, the possible
fluctuation and volatility of the Company's operating results, financial
condition and stock price, losses incurred in litigating and settling cases,
dilution in the Company's ownership of its business, adverse publicity and news
coverage, inability to carry out marketing and sales plans, loss or retirement
of key executives, changes in interest rates, inflationary factors, and other
specific risks that may be alluded to in this Annual Report or in other reports
issued by the Company. In addition, the business and operations of the Company
are subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements. In light of the significant uncertainties inherent
in the forward-looking information included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be achieved.

                                        4

<PAGE>

PART I

Item 1.  Description of Business

Freestar Technologies, is a diversified firm consisting of three divisions, all
vertically integrated to serve the growing demand for the machinery, media,
apparel, automotive parts, micro-turbine and telecommunications markets.

The strategic business plan is broadly diversified with a business mix of high
earning hard assets in non-cyclical markets and high margin products and
services in high growth cyclical markets. Positioning itself in these
negatively- correlated markets is designed to smooth out the Company's
performance in all stages of the business cycle.

The Company's first division is its Sports/promotional Apparel Division, known
as Freedom Surf, built around the acquisition of Southern California Logo in
January, 2000. SewCal is a producer of promotional apparel for the film and
sports industry in Southern California. It has trade marked a sports apparel
line, invested heavily in its production capacity, and currently is positioned
and negotiating to take on a major national apparel line under license. Its
current customer list is a Who's-Who in the entertainment (e.g. Disney) and
sports world (e.g. L.A. Lakers). Its growth strategy is to expand the SewCalLogo
customer base on a national level and to grow through related acquisitions.

The Company's second division which was not operational at the end of the year
2000, intends to enter the agricultural equipment sales and rental market
through a series of John Deere equipment dealerships in Texas. This will be
accomplished through a merger between Freestar Technologies and Texas Equipment
Company which executed a binding letter of intent in December, 2000.

The third division will be known as Freestar Techonology Systems and results
from the grant of a license from Turbonique, Inc. and focuses on developing
advanced micro- turbine technology to meet the demand for improved efficiency
and performance in the automotive transportation, power and pump markets. This
division also was not operational at the end of the year 2000.

History of the Company
----------------------

The Company was organized on August 2, 1997 under the laws of the State of
Delaware as Interstate Capital Corporation. The Company at that time had no
operations and was considered a development stage company. On November 17, 1999,
the Company caused a Nevada corporation to be formed under the name of Freedom
Surf, Inc. which then merged with Interstate Capital Corporation for the purpose
of changing the corporate domicile to Nevada.

Previously, on April 5, 1999, Interstate Capital Corporation had completed a
public offering that was exempt from Federal registration under Regulation D,
Rule 504 of the Securities & Exchange Act of 1933, as amended. The Company sold
5,000,000 shares of common stock at a price of $.001 per share raising a total
of $5,000.00.

                                        5

<PAGE>

Effective January 4, 2000, the Company, then known as Freedom Surf, acquired all
of the issued and outstanding shares of stock in Southern California Logo, Inc.
["SewCal"]. The contract was executed on May 12, 2000 but was deemed effective
for purposes of reporting income and expense as of January 4, 2000.

Sewcal was acquired through a structured acquisition under the terms of which
the former owners of Sewcal, Rick & Judy Songer, received a total of 900,000
shares of stock. They, in turn, transferred a total of 13,150 shares to some
long time employees. Judy Songer retained a total of 236,850 shares of common
stock in Freestar and Rick Songer owns a total of 650,000 shares. Additionally,
the Company then known as Freedom Surf was to pay a total of $800,000 in cash to
the Songers. $500,000 of that amount was paid in August, 2000 and the balance is
still owed.

Significant Events During the Year 2000 and Subsequent
Events During January and February, 2001
------------------------------------------------------

On December 10, 1999, Freedom Surf reported that it had purchased equipment (the
"Equipment") to manufacture neoprene wet suits which was stored in Costa Rica.
Freedom Surf valued the Equipment at $5,180,000. Freedom Surf did not obtain a
report from a licensed independent appraiser. However, Raece Richardson, then
President of Freedom Surf, arranged for an appraisal of this Equipment by a
local appraiser of boats who valued the Equipment at $5,180,000.00. Freedom Surf
then issued 969,000 shares of its common stock to the seller of the Equipment,
STS de Costa Rica, S.A. ["STS"], and also issued a promissory note in the amount
of $335,000 to the same company.

On October 19, 2000, Freedom Surf reported that it had sold the Equipment to
Ronbridge Investments Limited, a Hong Kong company ("Ronbridge") for $4,750,000,
accepting a down payment of $750,000 in cash which was received on August 31,
2000 and a promissory note for the balance of $4,000,000. At the time of the
sale, the only shareholder and President of Ronbridge was Raece Richardson's
father. At the time, Raece Richardson was a principal shareholder of Freedom
Surf. At the time the transaction was completed on the sale of the Equipment,
Ronbridge did not have sufficient resources to pay the amount due on the balance
of $4,750,000. Also, neither Freedom Surf nor Ronbridge had the capacity to pay
the promissory note to the original owner of the Equipment who was still owed
$335,000.

Based on advice from outside consultants, the equipment transaction was
structured so that Pacific Standard Financial Group, Inc. ["Pacific"] acquired
the Equipment from STS and resold it to the Freedom Surf.

Pacific is believed to have purchased the Equipment from STS for the same
consideration that the Company agreed to pay Pacific except that the promissory
note issued by Pacific to the STS was in the original principal amount of
$300,000. Pacific transferred the 969,000 shares to STS and also executed a
promissory note to STS for $300,000, as noted.

After this transaction, Freedom Surf never took possession of the Equipment and
it remained in storage under the control of STS. As a part of the agreement,
Freedom Surf was required to pay storage fees but never paid them. Also, Freedom
Surf never paid Pacific the $335,000 which was owed and Pacific, in turn, never
paid STS the $300,000 which was owed to them. On November 16, 2000, Freedom Surf
received a notice ("Notice") from STS declaring a default. The Notice stated
that STS was terminating the agreement. STS returned the 969,000 shares of
common stock and has not given any indication that it would bring suit for the
monies owed to it. They have accepted the Equipment in lieu of payment.

                                        6

<PAGE>

Finally, Freedom Surf informed Ronbridge that it was not in a position to refund
Ronbridge the $750,000 which it received as a down payment on the sale of the
Equipment.

On December 8, 2000, Freedom Surf reported on Form 8-K to the Securities &
Exchange Commission that the above described situation had occurred.

On January 23, 2001, a group of shareholders who had formed a committee known as
the Committee for Corporate Governance, Larinda Nilsen, Chairman, filed a
Preliminary Proxy Statement [PRE 14a] with the Securities & Exchange Commission
stating that they intended to call a special meeting of the shareholders for the
purpose of removing the remaining members of the Board and electing new Board
members.

Prior to the filing of this Preliminary Proxy Statement, certain members of the
Board of Directors had already resigned. On December 1, 2000, John W.
Cruickshank resigned as a member of the Board of Directors of the Company.
Shortly thereafter, Holly Richardson, another member of the Board resigned
leaving two members of the Board, Rick Songer and David McKenzie.

The remaining Board members, Rick Songer & David McKenzie met in a special
meeting of the Board of Directors on February 2, 2001 to consider the matters
raised by the Preliminary Proxy Statement which had been filed by Larinda
Nilsen. Both Rick Songer and David McKenzie tendered their resignation as
members of the Board of Directors, those resignations to become effective on
February 5, 2001 at 12:00 P.M. Pacific Standard Time. Prior to their
resignations becoming effective, pursuant to Article II, Section 2 of the By
Laws of the corporation, the resigning Board elected new members to replace the
present Board until the next annual meeting of the shareholders, those persons
to become Board members effective on February 5, 2001 at 12:00 P.M. Pacific
Standard Time.

Article II, Section 2 of the By Laws of the corporation provides as follows:

     "SECTION 2. When any vacancy occurs among the Directors by death,
resignation, disqualification or other cause, the stockholders, at any regular
or special meeting, or at any adjourned meeting thereof, or the remaining
Directors, by the affirmative vote of a majority thereof, shall elect a
successor to hold office for the unexpired portion of the term of the Director
whose place shall have become vacant and until his successor shall have been
elected and shall qualify."

The new members of the Board of Directors who were elected to serve until the
next Annual Meeting of the Shareholders were: Charles Cortland Hooper, Arthur F.
Wigand and James L. Flippen.

On February 14, 2001, the Secretary of State of the State of Nevada accepted an
Amendment to the Articles of Incorporation of the Registrant changing its name
from Freedom Surf, Inc. to Freestar Technologies.

Additionally, the Board of Directors implemented a reverse stock split of one
(1) share of common stock for each four (4) shares owned. This reverse split
returned shareholders to the same number of shares which they had prior to the
October, 2000 forward split discussed above. The reverse split became effective
on February 22, 2001. The reverse split had been authorized by the Board of
Directors at a special meeting held on February 5, 2001 pursuant to Section
78.207 of the Nevada Revised Statutes which provides in pertinent part as
follows:

"1. Unless otherwise provided in the articles of incorporation, a corporation
organized and existing under the laws of this state that desires to change the
number of shares of the same class and series and correspondingly increasing or
decreasing the number of shares issued and outstanding shares of the same class
and series held by each shareholder of record as of the effective date and time
of the change, may, . . ,do so by a resolution adopted by the board of
directors, without obtaining the approval of the shareholders."

                                        7

<PAGE>

Item 2.  Description of Property

The Company leases a building at 207 W. 138th Street in Los Angeles, CA 90006
which it uses for the manufacture of clothing and other materials. The Company
leases its manufacturing and operating facility under a noncancellable operating
lease agreement from a partnership, which includes the sole shareholder the
Company. The lease expires in October 2003. This lease agreement has a renewal
option for an additional five-year period through 2008. The lease contains
clauses requiring the Company to pay taxes, insurance and other operating
expenses of the property.

Future minimum annual payments required under the noncancellable operating
leases, excluding common area maintenance and property taxes, are as follows:

               YEARS ENDING AUGUST 31,
               -----------------------

                  2000                               $  125,000
                  2001                                  125,000
                  2002                                  125,000
                  2003                                  125,000
                  2004                                   21,000
                                                     -----------
                                                     $  521,000
                                                     ===========

Item 3.  Legal Proceedings

There are no legal proceedings currently pending nor are there any legal
proceedings either by or against Freestar Technologies or Freedom Surf, Inc.
which are known to management.

Item 4.  Submission of Matters to a Vote of Security Holders

The following matters were referred to a vote of shareholders during the year
2000 and during the months of January and February, 2001:

1.  The shareholders consented to an increase in the authorized
number of shares of common stock which the Company may issue from
20,000,000 shares to 80,000,000 shares on October 9, 2000;

2. The shareholders consented to change the name of the corporation from Freedom
Surf, Inc. to Freestar Technologies which amendment to the Articles of
Incorporation were filed with the Secretary of State of the State of Nevada on
February 14, 2001.

                                        8

<PAGE>

Part II

Item 5.  Market for Common Equity and Related Stockholder Matters

         TRADING MARKET AND RELATED MATTERS

Our common stock is traded over-the-counter under the symbol FSTI. The following
table sets forth, for the periods indicated, the high and low bid prices for the
common stock, as reported by the OTC Bulletin Board during 1999 and 2000. Common
stock prices have been adjusted to reflect the one for four reverse split
effective February 22, 2001.

                                               Bid Price
                                         High              Low
                                        -----------------------
             2000
             ----
         First Quarter                  $  -0-          $  -0-
         Second Quarter                 $  -0-          $  -0-
         Third Quarter                  $ 36.00         $ 9.00
         Fourth Quarter                 $ 52.00         $  .60

             2001
             ----
         First Quarter                  $ 6.50          $  .19

On March 1, 2001, there were approximately 191 holders of record of our Common
Stock.

We have not paid any cash dividends with respect to our common stock, and it is
unlikely we will pay any dividends on our common stock in the foreseeable
future.

         DESCRIPTION OF SECURITIES

         Our authorized stock consists of 80,000,000 authorized shares of Common
Stock, par value $.001 per share, 6,861,500 shares of which were outstanding as
of March 1, 2001; and 5,000,000 authorized shares of Preferred Stock par value
 ..001 per share, of which no shares were outstanding.

Common Stock
------------

         Each share of Common Stock is entitled to one vote, either in person or
by proxy, on all matters that may be voted upon by the owners thereof at a
meeting of the shareholders, including the election of directors. The holders of
Common Stock (i) have equal, ratable rights to dividends from funds legally
available therefor, when, as and if declared by the Board of Directors of the
Company; (ii) are entitled to share ratably in all of our assets available for
distribution to holders of Common Stock upon liquidation, dissolution or winding
up of our affairs; (iii) do not have preemptive or redemption provisions
applicable thereto; and (iv) are entitled to one non-cumulative vote per share
on all matters on which shareholders may vote at all meetings of shareholders.

         All shares of Common Stock issued and outstanding were fully paid and
nonassessable, with no personal liability attaching to the ownership thereof.

                                        9

<PAGE>

Preferred Stock
---------------

         The rights of preferred shareholders is determined at the time a class
of preferred stock is issued. Generally, each preferred share is entitled to one
vote, either in person or by proxy, on all matters that may be voted upon by the
owners thereof at a meeting of the shareholders, including the election of
directors. The holders of Preferred Stock (i) have equal, ratable rights to
dividends from funds legally available; (ii) are entitled to share preferably in
all of our assets available for distribution to holders of Preferred Stock upon
liquidation, dissolution or winding up of our affairs; (iii) do not have
preemptive or redemption provisions applicable thereto; and (iv) are entitled to
one non-cumulative vote per share on all matters on which shareholders may vote
at all meetings of shareholders.


Transfer Agent
--------------

The transfer agent is:         First American Stock Transfer, Inc.
                               PO Box 47700
                               Phoenix, AZ 85068-7700
                               Telephone: (602) 485-1346

Item 6.  Management's Discussion and Analysis Or Plan of Operation

The following discussion of our financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
notes thereto.

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

         THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS REGARDING
US, OUR BUSINESS, PROSPECTS AND RESULTS OF OPERATIONS THAT ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES POSED BY MANY FACTORS AND EVENTS THAT COULD
CAUSE OUR ACTUAL BUSINESS, PROSPECTS AND RESULTS OF OPERATIONS TO DIFFER
MATERIALLY FROM THOSE THAT MAY BE ANTICIPATED BY SUCH FORWARD-LOOKING
STATEMENTS. FACTORS THAT MAY AFFECT SUCH FORWARD-LOOKING STATEMENTS INCLUDE,
WITHOUT LIMITATION: THE IMPACT OF COMPETITION ON OUR REVENUES, CHANGES IN LAW OR
REGULATORY REQUIREMENTS THAT ADVERSELY AFFECT OR PRECLUDE CUSTOMERS FROM USING
OUR SERVICES FOR CERTAIN APPLICATIONS; ABILITY TO ACQUIRE ADDITIONAL MEDICAL
DIAGNOSTIC IMAGING CENTERS; AND FAILURE BY US TO KEEP PACE WITH EMERGING
TECHNOLOGIES.

         WHEN USED IN THIS DISCUSSION AS WELL AS IN OTHER ITEMS IN THIS
PROSPECTUS, WORDS SUCH AS "BELIEVES", "ANTICIPATES", "EXPECTS", "INTENDS" AND
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, BUT ARE
NOT THE EXCLUSIVE MEANS OF IDENTIFYING FORWARD-LOOKING STATEMENTS. READERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH
SPEAK ONLY AS OF THE DATE OF THIS REPORT. WE UNDERTAKE NO OBLIGATION TO REVISE
ANY FORWARD-LOOKING STATEMENTS IN ORDER TO REFLECT EVENTS OR CIRCUMSTANCES THAT
MAY SUBSEQUENTLY ARISE. READERS ARE URGED TO CAREFULLY REVIEW AND CONSIDER THE
VARIOUS DISCLOSURES MADE BY US IN THIS REPORT AND OTHER REPORTS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION THAT ATTEMPT TO ADVISE INTERESTED PARTIES OF
THE RISKS AND FACTORS THAT MAY AFFECT THE COMPANY'S BUSINESS.


Results of Operations
---------------------

The results of operations of the Company for the year ended December 31, 2000
compared to the year ended December 31, 1999 are discussed below and the
financial statements concerning operations for these periods are attached in
PART II, Item 7.

                                       10

<PAGE>

Revenues
--------

Presently, Freestar receives income from the manufacturing operation at Sewcal.
For the year ended December 31, 2000 gross income totaled $908,524. The Company
had no income for the year ended December 31, 1999.

Operating Expenses
------------------

Sales, General and Administrative

Selling, general and administrative costs were $828,639 for the year ended
December 31, 2000, as compared to $6,490 for the year ended December 31, 1999.
This increase was primarily attributed to the fact that the Company did not have
operations during the year 1999 and purchased Socal Logo only in January, 2000.

Net Loss
--------

Our net loss for the year ended December 31, 2000 was ($179,948) as compared to
a loss of ($1,490) for the year ended December 31, 1999. The increase in net
loss was primarily attributable to the fact that the Company did not commence
operations until the year 2000. Loss per common share for the year ended
December 31, 2000 was ($0.026) as compared to a ($0.0001) loss per common share
for the year ended December 31, 1999, basic and diluted.

Liquidity and Capital Resources
-------------------------------

         To date, we have funded our capital requirements for our current from
cash flows from our operations and from equity lines of credit which the Company
has available. Our cash position as of December 31, 2000 was $300,999 as
compared to $ -0- as of December 31, 1999. During the year 2000, the Company
increased its accounts payable from $1,490 to $169,800 mainly as a result of the
operations of Socal. Cash flow provided from operating activities decreased to
($21,798). However, the Company received net cash of $750,000 from financing
activities which was partially used in the business but resulted in an end of
year cash balance of $300,999.

         On May 12, 2000 the Company purchased Sewcal for 900,000 shares of
Company common stock valued at $1,950,030 and $800,000 in cash of which only
$500,000 has been paid to date. The combination has been accounted for by the
purchase method. Accordingly, the Company recorded assets acquired at their fair
values. The Company accounted for the acquisition under the purchase method of
accounting and recorded a total of $2,829,932 in goodwill, which is being
amortized over 15 years.

         In the immediate future, in order to fund our current working capital
requirements, expand of our existing operations as well as acquire additional
companies for growth, we intend to seek to complete an offering of equity
securities. Our ability to obtain additional sources of financing cannot be
assured. Our growth is dependent on our ability to obtain such additional
funding.

Our Capital Requirements
------------------------

         Our greatest cash requirements during the next two years will be the
need for cash to complete the acquisition of Texas Equipment. The Company
expects to raise this cash from an equity line. Subsequent to the next
twenty-four months, we plan to finance our long-term operations and capital
requirements with the profits and funds generated from the revenues from
operations and equity lines which are already in place.

                                       11

<PAGE>

Item 7.  Financial Statements


                              FREESTAR TECHNOLOGIES
                                formerly known as
                               Freedom Surf, Inc.

                              FINANCIAL STATEMENTS
                                December 31, 2000



                        TABLE OF CONTENTS

                                                           PAGE

INDEPENDENT AUDITORS' REPORT                               13

BALANCE SHEET - ASSETS                                     14

BALANCE SHEET - LIABILITIES AND SHAREHOLDER'S EQUITY       15

STATEMENT OF OPERATIONS                                    16

STATEMENT OF STOCKHOLDERS' EQUITY                          17

STATEMENT OF CASH FLOWS                                    18

NOTES TO FINANCIAL STATEMENTS                              19


                                       12

<PAGE>

Ludlow & Harrison
a CPA corporation
3545 Camino Del Rio South, Suite D
San Diego, CA 92108

INDEPENDENT AUDITOR'S REPORT

Board of Directors                                                March 31, 2000
Freestar Technologies (The Company)
410 Broadway, 2nd Floor
Laguna Beach, CA 92651

We have audited the Balance Sheet of Freestar Technologies formerly known as
Freedom Surf, Inc., (the Company) as of December 31, 2000 and the related
Statements of Operations, Stockholders' Equity and Cash Flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on my audit.

We conducted my audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Senior Care Industries, Inc., as of
December 31, 2000, and the results of its operations and cash flows for the year
then ended, in conformity with generally accepted accounting principles.

/s/ Ludlow & Harrison

                                       13
<PAGE>

                              FREESTAR TECHNOLOGIES
                                formerly known as
                                FREEDOM SURF, INC.

                                  BALANCE SHEET

                                December 31, 2000


                                     ASSETS


CURRENT ASSETS
Cash                                                                 $  300,399
Accounts Receivable                                                     450,512
Notes Receivable                                                         72,000
Inventory                                                               266,586
Employee Advances                                                         1,500
Prepaid Insurance                                                           851
Prepaid State Income Tax                                                    800
Deposits                                                                 10,000
                                                                     -----------
Total Current Assets                                                  1,103,248

PROPERTY AND EQUIPMENT
Manufacturing Machinery                                                 325,507
Machinery Leases                                                         18,403
Furniture & Fixtures                                                     72,787
Office Equipment                                                         62,109
                                                                     -----------
Total Property and Equipment                                            478,806
Less: Accumulated Depreciation                                         (344,168)
                                                                     -----------
Total Property & Equipment after Depreciation                           134,638

OTHER ASSETS
Security Deposits                                                         6,000
Goodwill                                                              2,758,030
                                                                     -----------
Total Other Assets                                                    2,764,030
                                                                     -----------
TOTAL ASSETS                                                         $4,001,916
                                                                     ===========


                 See accompanying notes to financial statements

                                       14
<PAGE>

                             FREESTAR TECHNOLOGIES
                                formerly known as
                                FREEDOM SURF, INC.

                              LIABILITIES & EQUITY


CURRENT LIABILITIES
Accounts Payable                                                 $   169,800
Notes Payable                                                      1,250,000
Payroll Clearing                                                     (65,581)
Court Ordered Garnishment                                              1,603
Loans Payable-Intercompany                                             6,441
Payroll Taxes Payable                                                 11,435
Accrued State Income Tax                                                (800)
Accrued Sales Tax                                                     14,721
Deposits                                                             300,000
                                                                 ------------
Total Current Liabilities                                          1,687,598

OTHER LIABILITIES
Notes Payable- Corporate Officer                                     622,517
                                                                 ------------
Total Other Liabilities                                              622,517
                                                                 ------------
Total Liabilities                                                  2,310,115

EQUITY
Common Stock, $0.001 par value, authorized 80,000,000
shares; issued and outstanding at 12/31/1999,
6,861,500 common shares                                                6,861
Additional Paid in Capital                                         1,948,167
Retained Earnings-Beginning                                          (83,280)
Net Income (Loss)                                                   (179,947)
                                                                 ------------
Total Stockholders' Equity                                         1,691,801
                                                                 ------------
   TOTAL LIABILITIES & OWNER'S EQUITY                            $ 4,001,916
                                                                 ============


                 See accompanying notes to financial statements

                                       15
<PAGE>

                              FREESTAR TECHNOLOGIES
                                formerly known as
                                FREEDOM SURF, INC.

                             STATEMENT OF OPERATIONS

                                                 1999                    2000
                                                 ----                    ----

    REVENUES
Sales                                                                 $ 908,524

Cost of Sales
Beginning Inventory                                                     266,586
Purchases                                                                42,280
Machinery Leases                                                         19,290
Freight In                                                                  398
Supplies                                                                182,885
Liability Insurance                                                       1,027
Workmen's Compensation                                                   13,844
Utilities                                                                   108
Less: Ending Inventory                                                 (266,586)
                                                                      ----------
Total Cost of Sales                                                     259,834
                                                                      ----------
Gross Profit On Sales                                                   648,691

   COSTS AND EXPENSES

Selling, General and Administrative                  6,490              828,639
                                                 ----------           ----------
     Total Costs and Expenses                        6,490              828,639
                                                 ----------           ----------
     Net Ordinary Income or (Loss)               $  (6,490)           $(179,948)
                                                 ==========           ==========

Weighted average number of common
   shares outstanding                            5,107,667            6,861,500

Net Loss Per Share                                  (0.001)             (0.026)


                 See accompanying notes to financial statements

                                       16
<PAGE>
<TABLE>

                                         FREESTAR TECHNOLOGIES
                                          formerly known as
                                          FREEDOM SURF, INC.


                                 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                                  FOR PERIOD
                                     January 1, 1999 to December 31, 2000
<CAPTION>

                                                                                  Deficit
                                                                              accumulated
                           Common                  Additional                      during           Total
                            Stock                     paid-in       Donated   development   Stockholder's
                           Shares        Amount       capital       Capital         stage          Equity
                     ------------  ------------  ------------  ------------  ------------  --------------
<S>                    <C>            <C>        <C>           <C>           <C>           <C>
April 5, 1999          5,000,000      5,000.00              0            0                         5,000
Issued for cash

Net loss                                                                           (6,490)        (6,490)
(inception) to
December 31, 1999
                     ------------  ------------ -------------- ------------  ------------- --------------
Balances as at
December 31, 1999      5,000,000   $     5,000 $            0  $         0   $      6,490) $      (1,490)

Jan. 4, 2000
Issued for Sewcal        900,000           900      1,964,511                                  1,965,411


Issued to Consultants    961,500           961        (10,000)                                    (9,039)

Retained Earnings -
  SoCal                                                                           (83,280)       (83,280)

Net loss
December 31, 2000                                                                (179,947)      (179,801)
                    -------------  ------------ -------------- ------------  ------------- --------------
Balances as at
December 31, 2000      6,681,500   $     6,861  $   1,954,511   $        0   $   (269,717) $   1,691,801

</TABLE>

                                See accompanying notes to financial statements

                                                      17
<PAGE>
<TABLE>

                                        FREESTAR TECHNOLOGIES
                                          formerly known as
                                          FREEDOM SURF, INC.

                                       STATEMENT OF CASH FLOWS
                                           FOR YEAR ENDED


                                                     December 31, 1999     December 31, 2000
                                                     -----------------     -----------------
<S>                                                        <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net Profit (loss)                                         $   (6,490)           $ (179,947)
   Adjustments to reconciled net income
   to net cash provided
 Depreciation Expense                                             -0-                   -0-
 Increase in accounts payable                                   1,490               169,800
 Prepaid Expenses                                                                   (11,651)
                                                           -----------           -----------
      Net cash flow provided by operating activities           (5,000)              (21,798)

CASH FLOWS FROM INVESTING ACTIVITIES
Investing Activities                                              -0-               750,000
                                                           -----------           -----------
      Net cash used by investing activities                       -0-              (470,790)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock                                       5,000                   -0-
                                                           -----------           -----------
      Net cash provided by financing activities                 5,000                   -0-

      Net increase (decrease) in cash                             -0-               300,999
      Balances as at end of period                                -0-               300,999

Supplemental Disclosure of non-cash investing and financing activities:

The Company acquired the following assets and assumed liabilities for common
stock and promissory notes during 2000:

Common stock issued to SOCAL's shareholder                                       $1,950,030
Note payable                                                                        800,000
Liabilities assumed and incurred                                                    467,152
                                                                                 -----------
         Total acquisition cost                                                   3,217,182
Less: Assets acquired                                                               387,250
                                                                                 -----------
Excess of purchase price over net assets acquired                                $2,829,932
                                                                                 ===========
</TABLE>


                 See accompanying notes to financial statements

                                       18
<PAGE>

                             FREESTAR TECHNOLOGIES
                 And Subsidiary, Southern California Logo, Inc.

                          NOTES TO FINANCIAL STATEMENTS

                      FOR THE YEAR ENDED DECEMBER 31, 2000

NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES

General Accounting Policies
---------------------------

1.       Freestar Technologies, formerly known as Freedom Surf, Inc.
         ("the Company") uses the accrual method of accounting, recording
         revenues when a transaction occurs where the Company has a
         reasonable expectation of receiving the revenue.

2.       The Company has not yet adopted any policy regarding payment of
         dividends. No dividends have been paid since inception.

3.       The costs of equipment and real property improvements are depreciated
         over the estimated useful life of the asset utilizing the straight-line
         method of depreciation.

4.       The preparation of these financial statements are in conformity with
         generally accepted accounting principles. Therefore management has made
         estimates and assumptions that affect the reported amounts of assets
         and liabilities as of the date of the financial statements and revenues
         and expenses for the period reported. Actual results may differ from
         these estimates.

5.       The Company's subsidiary, Southern California Logo, Inc. ("SOCAL") has
         changed its year end to December 31 to conform to the Company's fiscal
         year end.

Concentration of Credit Risk
----------------------------

The Company provides a credit in the normal course of business to a select group
of customers and performs ongoing credit evaluation of such customers. The
Company evaluates reserves for potential credit losses based on the Company's
historical experience. The Company determines the reserve based on a percentage
of total accounts receivable. Management determined that a $6,240 and $2,541
reserve was required for accounts receivable at August 31, 1999 and 1998,
respectively.

Inventories
-----------

Inventories are stated at cost determined using the first-in, first-out (FIFO)
method, but not in excess of market. Inventories consist of raw materials,
work-in process and finished goods. Costs include materials and direct labor.

Property and Equipment
----------------------

Property and equipment are stated at the Company's allocated acquisition cost
for the assets acquired and at cost for all new additions. When property and
equipment is sold or retired, the cost and related accumulated depreciation are
eliminated from the respective accounts and any gain or loss is credited or
charged to income. Maintenance and repairs are charged to expense when incurred;
expenditures for renewals or betterments are capitalized.

                                       19
<PAGE>

Property and equipment is primarily depreciated using the straight-line method
over the estimated useful lives of the related assets or, for leasehold
improvements, over the term of the lease, if less. The following are the
estimated useful lives:

         Machinery and equipment                3 - 5 years
         Automobiles                                5 years
         Furniture and fixtures                     5 years
         Computer equipment                         5 years
         Leasehold improvements                    10 years

Long-Lived Assets
-----------------

Management of the Company assesses the recoverability of property and equipment
by determining whether the depreciation and amortization of such assets over
their remaining lives can be recovered through projected undiscounted cash
flows. The amount of impairment, if any, is measured based on fair value and is
charged to operations in the period in which such impairment is determined by
management. To date, management has not identified any impairment of long-lived
assets.

Revenue Recognition
-------------------

Revenues are recognized upon shipment of goods to customers.

Income Taxes
------------

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), "ACCOUNTING FOR INCOME TAXES." Under
SFAS 109, the asset and liability method is used in accounting for income taxes.
Under this method, deferred tax assets and liabilities are determined based on
differences between the financial reporting and the tax basis of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse.

NOTE 2 - ACQUISITION

On January 4, 2000, the Company acquired all of the issued and outstanding
common stock of Southern California Logo, Inc. ["SOCAL"] for 900,000 shares of
the Company stock at $2.1667 per share plus $800,000 in a note payable to Rick
Songer at an interest rate of prime plus one due on or before July 15, 2000.
During the year 2000, a total of $500,000 of the note for $800,000 was paid
leaving a balance due of $300,000 which has not been paid. The Company also
assumed the outstanding liabilities of SOCAL.

SOCAL was incorporated in October, 1985 and is a leading supplier of high
quality, custom embroidered, promotional clothing to the film industry. The
company has provided products for over 500 movies including The Rock,
Armageddon, Top Gun, Terminator 1 and 2, and many other major films. In the
early years, the Company became a top supplier of wardrobe and related products
to the motion picture industry. In more recent years, the Company has expanded
the customer base into promotional products for many major corporations and has
done private labeling for numerous major brands. The company's most recent
venture has provided products for the surf and skateboard industry.

This transaction has been accounted for under the purchase method of accounting
and the results of operations of SOCAL are included in the historical financial
statements from the date of acquisition.

                                       20

<PAGE>

Common stock issued to SOCAL's shareholder                $1,950,030
Note payable                                                 800,000
Liabilities assumed and incurred                             467,152
                                                          -----------
         Total acquisition cost                            3,217,182
Less: Assets acquired                                        387,250
                                                          -----------
Excess of purchase price over net assets acquired         $2,829,932
                                                          ===========
NOTE 3 - INVENTORIES
--------------------

Inventories consisted of the following at December 31, 2000:


         Raw materials                  $ 149,288
            Work-in-process                18,661
         Finished goods                    98,637
                                        ----------
                                        $ 266,586
                                        ==========


Based on a physical inventory taken on August 31, 2000, the Company's total
inventories had 56% raw materials, 7% work-in-process, and 37% finished goods.
The same allocation percentage was used to allocate the total inventories at
December 31, 2000.

NOTE 4 - PROPERTY AND EQUIPMENT/PROPERTY NOT CONSIDERED AS OWNED
----------------------------------------------------------------

At December 31, 2000, property and equipment consists of the following:


         Furniture, fixtures and equipment                   $   105,451
         Embroidery machinery                                    220,570
         Capital lease asset                                      74,693
         Automobile                                               55,732
                                                             ------------
                                                                 456,446
         Less Accumulated Depreciation                          (344,168)
                                                             ------------
        Net Value of Equipment:                                  134,638

It should be noted that the equipment which the Company purportedly purchased
from STS de Costa Rica, S.A. during 1999 for 969,000 shares of common stock and
a promissory note for $335,000 is considered as never having been purchased for
purposes of these financial statements since the property never came into the
possession of the Company and because title to the property was surrendered to
the original owner, the stock was cancelled and the promissory note cancelled as
well. For that reason, the property is considered as not ever having been owned
by the Company and the position taken by present management is that title to the
said property never passed to the Company.

                                       21

<PAGE>

NOTE 5 - BANK LINE-OF-CREDIT
----------------------------

The Company has a $500,000 line of credit available with a financial
institution. The line bears interest at the bank's index rate (national prime as
determined by Bank of America of California) plus 1.5% and expires in 2002. It
is collateralized by inventories, equipment, accounts receivable and general
intangibles. This line is separately guaranteed by the Company's shareholder,
Rick Songer.

The line of credit agreement requires maintenance of working capital and debt to
net worth ratios. In addition, the agreement contains restrictions regarding
adequate insurance, loans and advances. The Company was in compliance with all
restrictions as of December 31, 2000.

As of December 31, 2000, the outstanding balance on this credit line was
$500,000.


NOTE 6 - NOTE PAYABLE - SHAREHOLDER
-----------------------------------

Shareholder note payable consists of unsecured note, bearing interest at 10% per
annum, with principal and interest due after 2002. The balance on this note as
of December 31, 2000 was $622,517.

NOTE 7 - CAPITAL LEASE OBLIGATION
---------------------------------

The Company is the lessee of certain equipment (included in property and
equipment) under a capital lease which expires during 2001, with effective
interest rate of 13.32%. Future minimum lease obligation for the asset under
capital lease are as follows:


       Year Ending
         December 31,                                                  2000
       -------------                                             ---------------
         2000                                                            28,326
         2001                                                            28,714
                                                                 ---------------
   Total minimum lease obligations                                       57,040

      Less: interest imputed                                             (7,193)
                                                                 ---------------

      Present value of future minimum lease obligations                  49,847

    Less: current portion                                               (23,061)
                                                                 ---------------

      Noncurrent portion                                         $       26,786
                                                                 ===============

Leased property under capital lease obligations at December 31, 2000 totaled
$18,402.

                                       22

<PAGE>

NOTE 8 - INCOME TAXES
---------------------

The following are the components of the provision for income taxes for the year
ended December 31, 2000:


             Current:
                Federal                          $   -0-
                State                                800
                                                 --------
                Total                                800


             Deferred:
                  Federal                        $   -0-
                  State                              800
                                                 --------

             Provision for income taxes          $   800

The following is a reconciliation of income tax as the federal statutory rate to
the provision for income taxes.

The effective tax rate for the year ended December 31, 2000 differs from the
statutory rate primarily as a result of non-deductible goodwill amortization and
other miscellaneous items.

Deferred tax assets and liabilities as of December 31, 2000 consist primarily of
various reserves and accruals, net operating loss and alternative minimum tax
credit carryforwards and depreciation differences.

NOTE 9 - COMMITMENTS

Lease
-----

The Company leases its manufacturing and operating facility under noncancellable
operating lease agreement, which expires in October, 2003. This lease agreement
has a renewal option for an additional five-year period through 2008. The lease
contains clauses requiring the Company to pay taxes, insurance and other
operating expenses of the property. The monthly lease payment is $10,418.

Future minimum annual payments required under the noncancellable operating
leases, excluding common area maintenance and property taxes, are as follows:


          YEAR ENDING DECEMBER 31
         ------------------------

               2000                                     $       125,016
               2001                                             125,016
               2002                                             125,016
               2003                                             125,016
               2004                                              20,836
                                                        ----------------

                                                        $       520,900
                                                        ================
                                       23

<PAGE>

Total rent expense was approximately $127,000 for the year ended December 31,
2000.

NOTE 10 - COMMON STOCK TRANSACTIONS

On April 5, 1999, the Company completed a public offering that was exempt from
federal registration pursuant to Regulation D, Rule 504 of the Securities Act of
1933 as amended. The Company sold 5,000,000 shares of common stock at a price of
$.001 per share for a total amount of $5,000.

On or about December 10, 1999 the Company purchased equipment (the "Equipment")
to manufacture neoprene wet suits valued at $5,180,000 by issuing 969,000 shares
of the Company's stock and issuing a promissory note in the original principal
amount of $335,000. The Company did not obtain a report from a licensed
independent appraiser as to the valuation of the Equipment. The Company later
defaulted on the purchase of the equipment and all right, title and interest in
and to that equipment returned to the seller and the 969,000 shares which were
issued in connection with the purchase of that equipment were cancelled.

On May 2, 2000, the Company issued 900,000 shares at $2.1667 per share to
acquire SOCAL (see Note 2).

On May 4, 2000, the Company issued 100,000 shares of stock to John Cruickshank
of Defined Holding Corporation for work done in lieu of monetary compensation
which was registered by the filing of an S-8 Registration Statement on October
20, 2000.

On August 4, 2000, the Company issued 349,000 restricted shares of the Company's
Common stock in lieu of cash payments to World Alliance Consulting,
Incorporated.

On August 4, 2000, the Company issued 500,000 restricted shares of the Company's
Common stock in lieu of cash payments to International Capital Group LLC.

On November 6, 2000, the Company issued 12,500 restricted shares of the
Company's Common stock in lieu of cash payments to the Geneva Group.

NOTE 11 - STOCK OPTIONS

On March 15, 2000, the Company granted 4,560,000 stock options at an exercise
price of $0.01 to its key employees and service providers considered essential
to the continuation of the business.

All of those stock options and any exercise of those stock options which
occurred during the year 2000, were cancelled by action of the Board of
Directors on February 5, 2001.

NOTE 12 - EARNINGS (LOSS) PER SHARE

Earnings (loss) per share is computed based on the weighted average number of
shares of common stock outstanding during the period. Basic loss per share for
year ended December 31, 2000 is ($.026)

NOTE 13 - SEGMENT REPORTING

SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that a publicly traded company must disclose information
about its operating segments when it presents a complete set of financial
statements. Since the parent did not have substantial operations in 2000, and
all income is derived from SOCAL, the Subsidiary, detailed information of the
reportable segment is not presented.

                                       24

<PAGE>

NOTE 14 - GOING CONCERN

The accompanying financial statements are presented on the basis that the
Company is a going concern. Going concern contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business over a
reasonable length of time. As shown in the accompanying financial statements,
the Company incurred a net loss of $179,947 for the year ended December 31, 2000
and an accumulated deficit of $83,280.

Management is currently involved in active negotiations to obtain additional
financing and is actively increasing marketing efforts to increase revenues. The
Company's continued existence depends on its ability to meet its financing
requirements and the success of its future operations. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

                                       25
<PAGE>

Item 8.  Changes in and disagreements with Accountants on Accounting & Financial
         Disclosures

Freestar reported the following changes in accountants during the calendar year
2000 and subsequently during January and February, 2001:

During March, 2000, Freedom Surf engaged John Spurgeon, CPA as its principal
accountant replacing James Slayton who had resigned. The Independent Auditors'
Report for the year ended 1999, contained the following:

"The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company has had limited operations and has not generated
significant revenues from planned principal operations. This raises substantial
doubt about its ability to continue as a going concern. Management's plan in
regard to these matters is also described in Note 3. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty."

Note 3 to the Financial Statements, as referenced above, reads as follows:

"The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not generated significant revenues from its
planned principal operations. Without realization of additional capital, it
would be unlikely for the Company to continue as a going concern."

Then, John Spurgeon, CPA, rendered his Independent Auditors' Report on the
acquisition of Sewcal which was reported in an amended 8-K/A Report filed with
the Securities & Exchange Commission on October 26, 2000. That report contained
no contained no adverse opinion or a disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope, or accounting principles.

On February 19, 2001, John Spurgeon, CPA notified the Registrant in writing that
he had resigned as the Registrant's principal independent accountant.

The Registrant is unaware of any disagreements with the former accountant, John
Spurgeon, CPA, whether or not resolved, on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure,
which, if not resolved to the former accountant's satisfaction, would have
caused him to make reference to the subject matter of the disagreement(s) in
connection with his report;

Part III

Item 9.  Directors, Executive Officers, Promoters And Control Persons;
         Compliance with Section 16(a) of the Act

         MANAGEMENT

         Our Directors and Executive Officers, on December 31, 2000, and their
ages, positions held with the Company, length of time in such positions, and
term of office are set forth below:

Name and Age          Current Position       Director Since     Officer Since
------------          ----------------       --------------     -------------
Rick Songer 50        President, Director    Aug.10, 2000       Aug. 10, 2000

David McKenzie 42     Secretary, Director    Nov.17, 1999       Nov. 17, 1999

                                       26
<PAGE>

Both of these officers and directors resigned their positions effective on
February 5, 2001 and were replaced by the current officers and directors of the
Company on that date:

Name and Age          Current Position       Director Since     Officer Since
------------          ----------------       --------------     -------------
Charles               President, Director    Feb. 5, 2001       Feb. 5, 2001
Cortland Hooper, 52

Arthur F.             Vice President,
Wigand, 57            Director               Feb. 5, 2001       Feb.5, 2001


James L.              Chief Financial
Flippen, 54           Officer, Director      Feb. 5, 2001       Feb. 5, 2001


The following is a biography of each of the current officers and directors:

Charles Cortland Hooper, President, Director

Mr. Hooper is presently President of Rent USA, Inc., a public company, and is
also a member of the Board of Directors of that company since August of 2000.
>From 1986 until August of 2000, he was the Chief Executive Officer of Mojave
Natural Resources in Temecula, California, a company which produces decorative
rock and construction aggregate and industrial minerals. From 1978 until 1990,
he was also the owner of Old Town Financial in La Jolla, California that
developed of shopping centers, office buildings, condominiums, apartments,
health clubs, single family homes and ranch estates. He began his career in 1968
with Litton Industries. He was an officer in the U.S. Navy during the Viet Nam
war. Mr. Hooper is a graduate of the University of California at Los Angeles
with High Honors, has a Master of Science Degree from the U.S. Naval Post
Graduate School and has done doctorate work in finance and human behavior. He
has also taken a number of continuing education courses in finance, real estate
and insurance.

Arthur F. Wigand, Vice President, Director

Mr. Wigand is presently Vice President of Rent USA, Inc., a position which he
has held since August, 2000. Prior to coming with Rent USA, Mr. Wigand had been
retired since 1998. From 1996 through 1998, he became President of Cubic
Communications, a company that had had as its sole customer the United States
government. Mr. Wigand assisted the transition from government as the sole
customer to commercial applications for the company's products From 1986 to
1989, Mr. Wigand was Vice President of Operations at Compudyne Air Traffic
Control in San Diego, California. In 1995, Mr. Wigand became Vice President of
Direction Finder Products for product development, customer service, scheduling
and profit and loss for the product group establishing a joint venture with
Hughes STX to develop and manufacture search and rescue direction finding
equipment.

James L. Flippen, Chief Financial Officer, Director

Mr. Flippen is Chief Financial Officer of Rent USA since August, 2000. Prior to
coming with Rent USA and since 1997, Mr. Flippen, acted as a consultant
specializing in new business development, feasibility studies of acquisitions
for quarry development, asphalt plants and batch plants, working on such
specific developmental projects as the new San Francisco ball park, the San
Francisco BART Airport extension and U.S. Steel hazardous waste clean up. Prior
to 1997 and going back for the last several years to 1986, he operated Flippen
Engineering, Inc. specializing in sand and gravel mining and recovery and
handling the engineering aspects of a number of large development projects
including high end residential, commercial and a Robert Trent Jones golf course.

                                       27
<PAGE>

Item 10.  Executive Compensation

         The following table sets forth the Summary Compensation Table for our
Chief Executive Officer and the next most highly compensated executive officer
other than the Chief Executive Officer who were serving as executive officers at
the end of the last completed fiscal year. No other compensation not covered in
the following table was paid or distributed by the Company to such persons
during the period covered.
<TABLE>
<CAPTION>

    Name                    Annual                      Awards          Payouts
& Position                  Comp.
--------------------------------------------------------------------------------------
              Year      Salary    Bonus   Other         Restricted           LTIP    Other
                                          Compensation  Stock      Options

<S>          <C>         <C>       <C>       <C>          <C>      <C>       <C>      <C>
Present Officers and Directors:

Cort Hooper  1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
President,   1999        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Director     2000        -0-       -0-       -0-          -0-          -0-    -0-      -0-

Art Wigand   1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Vice Pres.,  1999        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Director     2000        -0-       -0-       -0-          -0-          -0-    -0-      -0-

Art Wigand   1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Chief Fin.,  1999        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Off., Dir.   2000        -0-       -0-       -0-          -0-          -0-    -0-      -0-

Former Officers and Directors:

Rick Songer  1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
President,   1999        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Director     2000      60,000      -0-       -0-          -0-      200,000 ** -0-      -0-

David
McKenzie     1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Vice Pres.,  1999        -0-       -0-       -0-          -0-      500,000 *  -0-      -0-
Director     2000        -0-       -0-       -0-          -0-      200,000 ** -0-      -0-

Raece
Richardson   1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
President,   1999        -0-       -0-       -0-          -0-    4,000,000 *  -0-      -0-
Director     2000        -0-       -0-       -0-          -0-          -0-    -0-      -0-

Holly
Richardson   1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Director     1999        -0-       -0-       -0-          -0-          -0-    -0-      -0-
             2000        -0-       -0-     40,000         -0-      200,000 ** -0-      -0-

John
Cruickshank  1998        -0-       -0-       -0-          -0-          -0-    -0-      -0-
Director     1999        -0-       -0-       -0-          -0-          -0-    -0-      -0-
             2000      10,000      -0-       -0-          -0-      200,000 ** -0-      -0-
                                                                   100,000 ***

</TABLE>

* Raece Richardson received a total of 4,000,000 warrants and David McKenzie
received a total of 500,000 warrants which were convertible into common stock in
the corporation at any time upon the payment of $.01 per share. These warrants
were cancelled by the Board of Directors of Freestar on February 5, 2001. Raece
Richardson had converted 2,000,000 warrants in October, 2000 but never paid the
option price. The Board of Directors cancelled all shares which had been issued
pursuant to the exercise of these warrants for failure to properly exercise the
warrants. David McKenzie never attempted to exercise his warrants which have now
been cancelled.

                                       28

<PAGE>

** The Board of Directors in August, 2000 authorized the issuance of 200,000
warrants to each of the then members of the Board of Directors. These warrants
could be exercised over a period of two years on certain specified option dates.
All of these warrants were cancelled by the Board of Directors of Freestar on
February 5, 2001 prior to any of them ever being exercised.

*** John Cruickshank received a total of 100,000 shares of common stock for
consulting services which he received in lieu of cash during 1999 and 2000 prior
to becoming a member of the Board of Directors.

Compensation Committee Interlocks and Insider Participation
-----------------------------------------------------------

The Company presently has no compensation committee.

Audit Committee and Insider Participation
-----------------------------------------

The Company presently has no audit committee.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

         The following sets forth the number of shares of our Common Stock
beneficially owned by (i) each person who, as of December 31, 2000, known by us
to own beneficially more than five percent (5%) of our Common Stock; (ii) our
individual directors and (iii) our officers and directors as a group. As of
December 31, 2000, there were a total of 6,861,625 shares of Common Stock issued
and outstanding and no shares of preferred stock outstanding.

NAME AND ADDRESS                     AMOUNT AND NATURE OF             PERCENT OF
OF BENEFICIAL OWNER                  BENEFICIAL OWNERSHIP (1)(2)      CLASS
-------------------                  ---------------------------      ----------
(i)   Rick Songer                       650,000
      Judy Songer                       236,850 Husband & Wife        12.9%
      207 W. 138th Street
      Los Angeles, CA 90006

(ii)  Individual Directors              None

      Former Director                   100,000                        1.45%
      John Cruickshank
      410 Broadway, Suite 204
      Laguna Beach, CA 92651

(iii) Officers and Directors
      as a group                        None


(1)      All ownership is beneficial and of record, unless indicated otherwise
         and includes shares issuable upon exercise of outstanding options,
         warrants or other common stock equivalents which are exercisable within
         60 days.

(2)      Beneficial owners listed above have sole voting and investment power
         with respect to the shares shown, unless otherwise indicated.

(3)      There were no transactions, or series of transactions, during fiscal
         1999 or 2000, nor are there any currently proposed transactions, or
         series of transactions, to which we are a party, in which the amount
         exceeds $60,000, and in which to our knowledge any director, executive
         officer, nominee, five percent or greater shareholder, or any member of
         the immediate family of any of the foregoing persons, has or will have
         any direct or indirect material interest.

                                       29

<PAGE>

Item 12.  Certain Relationships and Related Transactions

In the last three years, we have made transactions with our common stock for
cash, services, and acquisitions which were not registered under the Securities
Act of 1933.

We have issued stock for services rendered for investor relations and other
consulting services which were performed by Geneva Group, Inc. 12,500 shares of
common stock were issued on November 11, 2000 in lieu of cash payments or in
addition to cash payments in certain circumstances.

Additionally, we have issued stock for services for services rendered for
investor relations and other consulting services which were performed by World
Alliance Consulting, Inc. 349,000 shares of common stock were issued on
September 1, 2000 in lieu of cash payments.

Finally, on August 4, 2000, we issued stock for consulting services rendered by
International Capital Group, LLC which resulted in the issuance of 500,000
shares of common stock in lieu of cash payments.

Additionally, we have issued stock to acquire assets as follows:

On May 12, 2000, the Company completed the purchase of Southern California Logo,
Inc. in exchange for 900,000 shares of common stock which was issued to the
prior shareholders of that company, Rick & Judy Songer who gave a portion of the
shares to their long time employees.

In all of the transactions shown above, the issuance, delivery and sale of our
common stock was made pursuant to the asset exchange exemption within the
meaning of Section 4(2) of the Act; and we have issued stop transfer orders
concerning the transfer of certificates representing all the common stock issued
and outstanding as reported above.

We have issued our common stock for services to our employees and others as
follows:

<TABLE>
<CAPTION>

Name              Date of Issuance       Number of Shares      Value of Shares at Issuance
--------------    ----------------       ----------------      ---------------------------
<S>               <C>                    <C>                   <C>
John Cruickshank  May 4, 2000           100,000                $10,000

International     Aug. 4, 2000          500,000                $50,000
Capital Group

World Alliance    Aug. 4, 2000          349,000                $34,900
Consulting

Geneva Group      Nov. 11, 2000          12,500                $12,500

</TABLE>

The Board of Directors cancelled warrants, options and common stock issued to
former officers and directors as follows:

Raece Richardson received a total of 4,000,000 warrants and David McKenzie
received a total of 500,000 warrants which were convertible into common stock in
the corporation at any time upon the payment of $.01 per share. These warrants
were cancelled by the Board of Directors of Freestar on February 5, 2001. Raece
Richardson had converted 2,000,000 warrants in October, 2000 but never paid the
option price. The Board of Directors cancelled all shares which had been issued
pursuant to the exercise of these warrants for failure to properly exercise the
warrants or to pay the option price. David McKenzie never attempted to exercise
his warrants which have now been cancelled.

                                       30

<PAGE>

The Board of Directors in August, 2000 authorized the issuance of 200,000
warrants to each of the then members of the Board of Directors, Rick Songer,
David McKenzie, Holly Richardson and John Cruickshank. These warrants could be
exercised over a period of two years on certain specified option dates. All of
these warrants were cancelled by the Board of Directors of Freestar on February
5, 2001 prior to any of them ever being exercised.

Additionally, it was discovered by the Board of Directors in February, 2001 that
Raece Richardson had caused stock to be issued without the approval of the Board
of Directors and without authority to various friends and acquaintances. All of
these shares were cancelled by the Board on February 5, 2001. The total number
of 3,152,750 common shares were cancelled as a result of this inquiry including
the reversal of the shares held by Raece Richardson which had resulted from
exercised warrants.

Item 13.  Exhibits and Reports on Form 8-K

The following Reports were filed by Freestar formerly known as Freedom Surf on
Form 8-K during the last six months of the calendar year 2000 and during the
first quarter of 2001 which are incorporated by reference:

        a. An 8-K Report reporting a change in officers and directors which was
filed on August 11, 2000 which reported that Raece Richardson had resigned as
President and that Rick Songer had been named as President and director and that
John Cruickshank and Holly Richardson had also been named as Directors;

        b. An 8-K/A Report filed on September 29, 2000 amending the 8-K Report
filed on the purchase by the Company of Southern California Logo, Inc. which had
been previously filed on May 15, 2000. The 8-K/A Report filed on September 29,
2000 contained what purported to be audited Financial Statements by John
Spurgeon, CPA which were inadvertently filed without the auditor's signed
opinion letter. As a result, the public was asked to disregard that filing in an
amended 8-K/A Report filed on October 26, 2000.

       c. An 8-K/A Report filed on November 1, 2000 containing the audited
financial statements of Southern California Logo, Inc. and reporting
the sale of Southern California Logo, Inc. to Freedom Surf, Inc.

       d. An 8-K Report filed on December 1, 2000 reporting that Freedom Surf
had defaulted on the payment for equipment which it originally purchased in
November, 1999 from STS de Costa Rica, S.A. which Freedom Surf had valued at
$5,180,000.

       e. An 8-K Report filed on February 6, 2001 reporting that the last
remaining officers and directors, Rick Songer and David McKenzie had resigned
effective February 5, 2001 and that three new directors had been elected to
replace them, Charles Cortland Hooper, Arthur F. Wigand and James L. Flippen.

       f. An 8-K Report filed on February 20, 2001 reporting that the Company
had changed its name from Freedom Surf, Inc. to Freestar Technologies and that
the Board of Directors had authorized a one (1) for four (4) reverse split of
the common stock in the Company to take place on February 22, 2001.

                                       31
<PAGE>

   SIGNATURES


         Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form 10K-SB and has duly caused this Annual Report to
be signed on its behalf by the undersigned, there unto duly authorized, in the
City of Los Angeles, State of California, on this 15th day of March, 2001.

          FREESTAR TECHNOLOGIES

          By: /s/ Charles Cortland Hooper          By: /s/ Arthur F. Wigand
          -------------------------------          ---------------------------
          Chief Executive Officer                  Chief Financial Officer
          & Director                               & Director


          By: /s/ James L. Flippen
          ---------------------------
          Vice President
          Director

                                       32