SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

            ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

                         COMMISSION FILE NUMBER: 0-26029


                          ASIAN STAR DEVELOPMENT, INC.
                          ----------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)




       NEVADA                                           88-0866395
-----------------------                     ------------------------------------
(STATE OF ORGANIZATION)                     (I.R.S. EMPLOYER IDENTIFICATION NO.)


                          ROOM 930, BLOCK B, EAST WING
                            NEW WORLD OFFICE BUILDING
                         TSIMSHATSUI, KOWLOON, HONG KONG
                    ----------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)


                                 (852) 2721-0936
               --------------------------------------------------
               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE



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  AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X

THERE ARE 17,246,015 SHARES OF COMMON STOCK OUTSTANDING AS OF SEPTEMBER 30, 2001


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.




________________________________________________________________________________



              UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

         FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 2001


________________________________________________________________________________





<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                                   FORM 10-QSB

                                TABLE OF CONTENTS


                                                                            PAGE

PART 1        FINANCIAL INFORMATION


ITEM 1        CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

              Consolidated  Condensed  Balance  Sheet as of
              December  31,  2000 and  unaudited Consolidated
              Condensed Balance Sheet as of September 30, 2001             F - 1

              Unaudited  Consolidated Condensed Statements
              of Operations for the Three and Nine Months
              Ended September 30, 2000 and 2001                            F - 2

              Unaudited  Consolidated Condensed Statements
              of Cash Flows for the Nine Months Ended
              September 30, 2000 and 2001                                  F - 3

              Notes to Consolidated Condensed Financial
              Statements                                             F - 4 to 12


ITEM 2        MANAGEMENT'S DISCUSSION AND ANALYSIS



<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                            (EXPRESSED IN US DOLLARS)

                                                                    DECEMBER 31,     SEPTEMBER 30,
                                                                            2000              2001
                                                           NOTE        (AUDITED)       (UNAUDITED)
<S>                                                          <C>      <C>               <C>

ASSETS

CURRENT ASSETS
        Cash and cash equivalents                                   $    114,832      $     34,236
        Prepayments                                                      273,211           293,030
        Inventories                                                       20,123            14,622
        Other receivables                                    2                 -           272,250
        Other assets                                         3            45,888            41,336
                                                                    ------------      ------------
            Total current assets                                         454,054           655,474

Goodwill                                                     4            80,459            73,935
Investment                                                   3                 -           150,000
Long term receivables                                        2                 -           272,250
Land improvement                                             5         1,876,701         1,876,701
Construction in progress                                     5           545,681           545,681
Property and equipment, net                                  6         2,458,700           313,684
                                                                    ------------      ------------

Total assets                                                           5,415,595         3,887,725
                                                                    ============      ============

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Amount due to a shareholder                          1         1,143,059         1,011,912
        Accounts payable                                                 748,734           136,855
        Other payables                                                   398,784           413,620
        Accrued expenses                                                 261,659           222,570
                                                                    ------------      ------------
            Total current liabilities                                  2,552,236         1,784,957

LONG TERM PAYABLES                                           2                 -            41,925

Total liabilities                                                      2,552,236         1,826,882
                                                                    ============      ============

COMMITMENTS AND CONTINGENCIES                                7

SHAREHOLDERS' EQUITY Common stock, $0.001 par value:
        25,000,000 shares authorized, 17,246,015 and         8            15,746            17,246
        15,746,015 shares issued and outstanding as of
        September 30, 2001 and December 31, 2000
Additional paid-in capital                                   8        19,499,733        19,648,233
Accumulated deficit                                                  (16,652,120)      (17,604,636)
                                                                    ------------      ------------
             Total shareholders' equity                                2,863,359         2,060,843
                                                                    ------------      ------------

Total liabilities and shareholders' equity                          $  5,415,595      $  3,887,725
                                                                    ============      ============


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

</TABLE>


                                       F-1


<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                            (EXPRESSED IN US DOLLARS)


                                                 THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                    SEPTEMBER 30,                          SEPTEMBER 30,

                                               2000               2001                 2000              2001
                                            -----------       -----------           -----------       -----------
                                 NOTE       (UNAUDITED)       (UNAUDITED)           (UNAUDITED)       (UNAUDITED)
<S>                               <C>       <C>               <C>                   <C>               <C>

Revenue, net                      9         $   337,074       $   270,975           $   962,332       $   844,422

Cost of sales                                  (253,757)         (242,105)             (929,445)         (721,785)
                                            -----------       -----------           -----------       -----------

Gross profit                      9              83,317            28,870                32,887           122,637

Selling, general and
     administrative expenses                   (458,155)         (199,112)             (866,071)         (525,977)

Other loss, net                   10         (1,677,196)         (163,315)           (1,257,834)         (549,176)
                                            -----------       -----------           -----------       -----------

Loss before income tax                       (2,052,034)         (333,557)           (2,091,018)         (952,516)

Income tax                        11                  -                 -                     -                 -
                                            -----------       -----------           -----------       -----------

Net loss                                    $(2,052,034)      $  (333,557)          $(2,091,018)      $  (952,516)
                                            ===========       ===========           ===========       ===========

Loss per share  -- basic and
     diluted                                $    (0.131)      $    (0.021)          $    (0.151)      $    (0.060)
                                            ===========       ===========           ===========       ===========

Weighted average number of
     shares outstanding                      15,711,015        15,974,276            13,825,339        15,822,938
                                            ===========       ===========           ===========       ===========


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

</TABLE>


                                       F-2


<PAGE>

<TABLE>
<CAPTION>


                          ASIAN STAR DEVELOPMENT, INC.

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                            (EXPRESSED IN US DOLLARS)


                                                                              FOR THE NINE MONTHS ENDED
                                                                                     SEPTEMBER 30,
                                                                             2000                  2001
                                                                         ------------           -----------
                                                                          (UNAUDITED)           (UNAUDITED)
<S>                                                                      <C>                     <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                              $(2,091,018)            $(952,516)
Adjustments to reconcile net loss to
   net cash (used in)/provided by operating activities
      Depreciation and amortisation                                          128,043               128,717
         Loss on disposal of subsidiaries                                  1,257,834               572,590
      Changes in operating assets and liabilities:
         Prepayments                                                         (85,643)              (27,322)
         Inventories                                                      (1,270,171)                5,501
         Other assets                                                       (439,834)                4,552
         Accounts payable                                                  1,546,200               (73,441)
         Other payables                                                      162,181               (27,089)
         Accrued expenses                                                      1,233               (39,089)
                                                                         -----------             ---------

NET CASH USED IN OPERATING ACTIVITIES                                       (791,175)             (408,097)

CASH FLOWS FROM INVESTING ACTIVITIES
  Payments for investment                                                   (665,501)                    -
  Payments  for  capitalized  overhead  costs in  connection  with            (9,379)                    -
   construction
  Purchases of construction materials and fixed assets                      (959,266)               (2,002)
  Net proceeds from disposal of subsidiaries                               2,481,586               460,650
                                                                         -----------             ---------

NET CASH PROVIDED BY INVESTING ACTIVITIES                                    847,440               458,648

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from common stock subscription                                      225,000                     -
Repayment by a shareholder                                                   (46,016)             (131,147)
                                                                         -----------             ---------

NET CASH PROVIDED / (USED IN) BY FINANCING ACTIVITIES                        178,984              (131,147)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                         235,249               (80,596)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                               5,628               114,832
                                                                         -----------             ---------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $   240,877             $  34,236
                                                                         ===========             =========

SUPPLEMENTAL DISCLOSURE OF SIGNIFICANT NON CASH INVESTING
   AND FINANCING ACTIVITIES
     Issuance of 2,313,625 common stocks in year 2000 and
     1,500,000 common stocks in year 2001 for acquiring equity
     interests in investments (Note 3)                                   $ 9,288,000             $ 150,000
                                                                         ===========             =========


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

</TABLE>


                                       F-3


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 1      -     BASIS OF PRESENTATION

The accompanying  consolidated  financial statements as of December 31, 2000 and
September  30, 2001 and for the three and nine months ended  September  30, 2000
and 2001, of Asian Star  Development,  Inc. and its subsidiaries (the "Company")
have been prepared in accordance with accounting  principles  generally accepted
in  the  United  States.  All  significant   inter-company  balances  have  been
eliminated  on  consolidation.  The balance  sheet as of  December  31, 2000 was
derived from audited  financial  statements  included in the Company's Form 10-K
for the year ended December 31, 2000 (the "Form 10-K"). The financial statements
at September 30, 2001 and for the three and nine months ended September 30, 2000
and 2001 have not been audited by independent  accountants.  Certain information
and footnote  disclosures normally included in the financial statements prepared
in accordance with generally accepted accounting  principles have been condensed
or omitted pursuant to rules and regulation of the U.S.  Securities and Exchange
Commission.  However,  the Company believes that the disclosures included in the
accompanying  quarterly financial  statements and footnotes are adequate to make
the information  presented not misleading.  These quarterly financial statements
should  be read in  conjunction  with the  financial  statements  and the  notes
thereto included in the Company's Form 10-K.

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires  management to make  estimates  that affect the
reported  amounts  of  assets,  liabilities,   revenues  and  expenses  and  the
disclosure of contingent  assets and  liabilities.  Actual  results could differ
from these estimates.

The consolidated financial statements are reported in US Dollars ("$").

In the opinion of management,  all  adjustments  necessary to present fairly the
financial  position as of September  30, 2001,  results of  operations  and cash
flows for the three and nine months ended September 30, 2000 and 2001, have been
made.  However,  these results are not  necessarily  indicative of the operating
results for any other interim period or for the full year.

The Company and its subsidiaries suffered losses of $952,516 for the nine months
ended  September 30, 2001 and had negative  working  capital as of September 30,
2001.  Historically,  one of the  Company's  directors  and  major  shareholders
provided the Company with  substantial  sources of finance for the operations of
the Company.

One of the directors and also a major shareholder  intends to provide continuing
financial  support so as to enable the  Company to meet its  liabilities  as and
when they fall due and carry on its business  without a significant  curtailment
of operations for the foreseeable future. The directors believe that the Company
will  continue as a going concern and  consequently  have prepared the financial
statements on a going concern basis.


                                      F-4


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 2      -     OTHER RECEIVABLES AND LONG TERM RECEIVABLES

The  Company  disposed  of its  investment  in Shilong  Water  World  Project to
Dongguan Shilong  Properties Limited on June 15, 2001 at a cash consideration of
$1,089,000 and debts  assignment to the purchaser of $538,438,  totaling in all,
$1,627,438.  Dongguan Shilong Properties  Limited paid partial  consideration of
$544,500 and the balance will be repaid in six equal  installments  from July 1,
2001 to June 30, 2003.  Pursuant to an  agreement  between the Company and Lucky
Wing  Investments  Limited,  the Company has to pay a  consulting  fee  totaling
approximately  $167,700 for the disposal.  The Company  recognized a net loss on
disposal of this investment of $572,590. Details of the disposal are as follows:

Total consideration                              $1,089,000
Debts assumed by purchaser                          538,438
                                                 -----------
Total consideration                               1,627,438
Less: Book value of net assets disposed          (2,032,328)
                                                 -----------
Loss on disposal                                   (404,890)
Consulting fee  *                                  (167,700)
                                                 -----------
Total loss on disposal                           $ (572,590)
                                                 ===========

*     The  consulting fee of $125,775 is payable within one year and the balance
      of $41,925 will be repaid at $13,975 for each of the next three  quarters.
      During the 3 months ended September 30, 2001, $83,850 was paid.

The financial impact of discounting long term receivables and long term payables
is minimal.


NOTE 3      -     OTHER ASSETS AND INVESTMENT

A)    HARMONIC HALL INVESTMENTS HOLDINGS LTD.

On March 28, 2000, the Company and a subsidiary company,  Asian Star (Hong Kong)
Limited entered into various  agreements with Harmonic Hall Investment  Holdings
Ltd,  ("HHI"),   whereby  the  Company  and  the  subsidiary   company  acquired
approximately 52% of the outstanding common stock of HHI for 2,313,625 shares of
the  Company's  Restricted  Common  Stock,  with a par value $.001,  and cash of
$650,160. The consummation date of the transaction was April 15, 2000.

As of June 30,  2000,  the  subsidiary  company paid cash of $650,160 and issued
2,313,625  shares of the  Company's  Restricted  Common Stock at a fair value of
$9,288,000.  The fair value of the Restricted  Common Stock at  approximately $4
per share was  determined  based on the 7 days  weighted  average  trading share
prices  quoted  on the  stock  exchange  prior to the  consummation  date of the
transaction.


                                      F-5


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 3      -     OTHER ASSETS AND INVESTMENT (CONTINUED)

A)    HARMONIC HALL INVESTMENTS HOLDING LTD. (CONTINUED)

In addition to the above, the Company  advanced a sum of approximately  $323,000
to HHI for its working capital in May 2000. The advance has no specific terms of
repayment and is recorded as other assets.

Following the purchase,  management of the Company has not been able to exercise
control over the  operation of HHI or obtain  financial  statements of HHI as of
June  30,  2000.  Accordingly,  the  financial  statements  of HHI have not been
included in the consolidated financial statements.

In August 2000,  the Company  retained legal counsel in Hong Kong to prepare and
file a writ with the Court  against  HHI and a director of HHI for breach of the
agreements.

On September 26, 2000, the Company filed an action in the High Court of the Hong
Kong Special  Administrative  Region  seeking  return of all monies paid and all
shares  issued by the  Company  in the  transaction,  together  with  damages as
follows:

(a)   rescission of a Subscription Agreement entered into on March 28, 2000 and
      return $650,160;

(b)   rescission  of an Agreement in relation to Sales and Purchase of Shares in
      HHI signed on March 28, 2000 and return of the 2,313,625  issued shares or
      a sum of $9,288,000; and

(c)   rescission of an Investment  Agreement  signed on March 28, 2000 providing
      for injection of funds into HHI by the subsidiary company.

HHI and the director of HHI have made counter claims against the Company and its
subsidiary  company  for  breach  of  the  various  agreements.   Based  on  the
information  pleaded in the pleadings  filed and served and advice received from
the  Company's  legal  counsel,  whilst it appears  HHI and the  director of HHI
managed to disclose a defence, in the opinion of counsel the claims against them
have good prospects.

Management  considers that the Company and its subsidiary  company have a strong
case against HHI and the director of HHI. One of the subsidiary companies of HHI
was under a winding up order in April 2001.  Management is uncertain whether HHI
and the  director  of HHI have  the  financial  ability  to  return  the cost of
investment  and  advances  under the various  agreements.  Full  provisions  for
diminution in value of investment of  $9,938,160,  and the advances of $323,000,
in all totaling $10,261,160, have been made.


                                      F-6


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 3      -     OTHER ASSETS AND INVESTMENT (CONTINUED)

A)    HARMONIC HALL INVESTMENTS HOLDING LTD. (CONTINUED)

                                                    As of             As of
                                             December 31,     September 30,
                                                     2000              2001

Investment, at cost                           $ 9,288,000       $ 9,288,000
Advances to HHI                                   650,160           650,160
                                             ------------       -----------
Total investment                                9,938,160         9,938,160
Less: Provision for diminution in value
      of investment                            (9,938,160)       (9,938,160)
                                             ------------       -----------
                                              $         -       $         -
                                             ============       ===========

                                                   As of             As of
                                             December 31,     September 30,
                                                    2000              2001

Other assets                                  $   368,888       $   364,336
Less: Provision for diminution in value          (323,000)         (323,000)
                                             ------------       -----------
Other assets, net                             $    45,888       $    41,336
                                             ============       ===========

The suit is currently still in progress and no judgement has been issued.

B)    3GEN SYSTEMS INC.

On July 6, 2001, a wholly owned subsidiary of the Company,  Honpar International
Holdings  Limited,  entered into an agreement with 3GEN Systems Inc. of Toronto,
Canada to  acquire  25% of the total  issued  shares of 3GEN  System  Inc.  3GEN
Systems  Inc.  is a software  technology  company  which  develops  and  deploys
technology-driven  solutions for small and medium-sized  business.  Conway Chow,
the managing director and sole owner of 3GEN Systems Inc., is the son of Stephen
Chow, a director of the Company.

On September 17, 2001, the Company issued 1,500,000 of the Company's  Restricted
Common Stock valued at $0.10 per share for a total  consideration of $150,000 to
acquire  the 25% equity  interest  in 3GEN  Systems  Inc.  The fair value of the
Restricted  Common Stock was  determined on the weighted  average  trading share
prices 14 days prior to consummation date quoted on the stock exchange.

The operating results of 3GEN Systems Inc. was not significant during the period
September 17, 2001 to September 30, 2001. Accordingly, its results have not been
accounted for using the equity method.


                                      F-7


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 4      -     GOODWILL

In January 2000,  the Company  acquired 100% of the equity  interest of two Hong
Kong companies owned by an officer of the Company.  The principal  activities of
these companies are the operation of a cafeteria  business.  Goodwill represents
the excess of  consideration  given over the fair value of the net assets of the
acquired  companies at the date of acquisition.  The carrying amount of goodwill
is amortised over a period of 10 years on a straight-line basis.

Consideration    *                                                $ 445,162
Less: Fair value of net assets acquired                            (358,179)
                                                                  ---------

Goodwill                                                             86,983
Less: Amortisation                                                  (13,048)
                                                                  ---------

                                                                  $  73,935
                                                                  =========

     *  The Company  issued  261,860 of the  Company's  Restricted  Common Stock
        valued at $1.7 per share as consideration for the cafeteria business.

NOTE 5      -     LAND USAGE RIGHTS, LAND IMPROVEMENT AND CONSTRUCTION IN
                  PROGRESS

MAPLE CITY (LAND OCCUPANCY TERM: 70 YEARS)

The Maple City project, which is being developed by the Company, comprises three
parcels  of  land  which  are  close  to  each  other.  The  land  usage  rights
certificates  of the  Maple  City  project  stipulate  a lease  term of 70 years
commencing from 1993 and the total area is  approximately  74,000 square meters.
The land  was  contributed  by a local  Chinese  partner  to the  Company  at no
consideration.  It was the  original  intention of the Company to build a hotel,
commercial and entertainment  complex on these parcels of land. Certain concrete
structural work of the project was completed in 1999.

During the nine months ended  September  30, 2001,  no  construction  costs were
incurred for this project as management prefers to hold the project  development
until a recovery of the  property  market in China.  Management  considers  that
there is no impairment in the carrying value of the project.

Land usage rights,  land improvement and  construction in progress  comprise the
following:

                              As of December 31,      As of September 30,
                                            2000                     2001
                              ------------------      -------------------

Land improvement                      $1,876,701               $1,876,701
Construction in progress                 545,681                  545,681
                              ------------------      -------------------

                                      $2,422,382               $2,422,382
                              ==================      ===================


                                      F-8


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 6      -     PROPERTY AND EQUIPMENT, NET

<TABLE>
<CAPTION>

                                             Cost     Accumulated          Net book
                                                      depreciation            Value
<S>                                   <C>              <C>             <C>

As of December 31, 2000               $ 2,782,076      $  323,376      $  2,458,700
Add: Additions                              2,002               -             2,002
                                      -----------      ----------      ------------

                                        2,784,078         323,376         2,460,702

Less: Disposals                        (2,295,147)       (270,322)       (2,024,825)
Add: Depreciation for the period                -         122,193          (122,193)
                                      -----------      ----------      ------------

As of September 30, 2001              $   488,931      $  175,247      $    313,684
                                      ===========      ==========      ============

</TABLE>


NOTE 7      -     COMMITMENTS AND CONTINGENCIES

Based on the joint venture  contract and agreement with a local Chinese partner,
the Company entered into the Maple City Project in China in 1997. Details of the
current status of the project are as follows:

               Total Investment
                    Per Project              Costs           Years Remaining to
                  Per Agreement        Incurred to     Complete the Project Per
Project             or Contract     Sept. 30, 2001        Agreement or Contract
-------------------------------------------------------------------------------
                                       (unaudited)

Maple City       $   38,000,000     $    2,422,382     No fixed period
                   ------------       ------------

FINANCING RESOURCE DEPENDENCY

The operating  activities of the Company were  substantially  financed by one of
the Company's directors through either capital infusion or loans.

Management  believes that the  completion of the Company's  projects on a timely
basis will depend  significantly  on additional  funding being  available to the
Company  through debt and/or equity  financing in the near future and a recovery
of the property market in China.  There is no assurance that such financing will
be available, or if so, at terms beneficial to the Company.


                                      F-9


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 8      -     COMMON STOCK, ADDITIONAL PAID-IN CAPITAL

On September 17, 2001, the Company issued 1,500,000 of the Company's  Restricted
Common Stock valued at $0.10 per share,  totaling  $150,000,  to acquire the 25%
total  issued  shares of 3GEN  System  Inc (note  3(b)).  The fair  value of the
Restricted  Common Stock was  determined on the weighted  average  trading share
prices 14 days prior to consummation date quoted on the stock exchange.

The Company did not issue any options during the nine months ended September 30,
2001. All share options  granted to employees and  consultants  previously  have
expired as of September 30, 2001. No options were exercised  during the 9 months
period ended September 30, 2001.

NOTE 9      -     SEGMENTAL INFORMATION

<TABLE>
<CAPTION>

                                             Nine months ended     Nine months ended
                                                 September 30,         September 30,
                                                          2000                  2001
<S>                                               <C>                  <C>

REVENUE
Operating income from Cafeteria business          $    895,948         $     762,514
Contracting income from Water World                     48,629                50,941
Others                                                  17,755                30,967
                                                  ------------         -------------
                                                  $    962,332         $     844,422
                                                  ------------         -------------

GROSS PROFIT / (LOSS) CONTRIBUTION
Cafeteria business                                $    (25,820)        $      44,287
Water World                                             48,629                50,941
Others                                                  10,078                27,409
                                                  ------------         -------------
                                                  $     32,887         $     122,637
                                                  ------------         -------------

                                                As of December        As of Sept 30,
                                                      31, 2000                  2001

TOTAL ASSETS
Cafeteria business                                $    564,297         $     466,137
Water World                                          2,192,807                     -
Maple City                                           2,443,822             2,443,822
Holding company                                          5,929               616,565
Others                                                 208,740               361,201
                                                  ------------         -------------
                                                  $  5,415,595         $   3,887,725
                                                  ------------         -------------
TOTAL LIABILITIES
Cafeteria business                                $    185,205         $     169,030
Water World                                          1,014,968                     -
Holding company                                      1,222,603             1,469,009
Others                                                 129,460               188,843
                                                  ------------         -------------
                                                  $  2,552,236         $   1,826,882
                                                  ------------         -------------

</TABLE>


                                      F-10


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 10     -     OTHER  LOSS

During the period ended September 30, 2001,  other loss comprises mainly of loss
on disposal of the investment in Shilong Water World Project as detailed in Note
2.

During the period ended September 30, 2000,  other loss comprises  mainly of the
loss on  disposal of the  Company's  100%  equity  interest in the Shilong  Town
Project.

NOTE 11     -     INCOME TAX

No corporate  income tax has been provided for the year ended  December 31, 2000
and nine months ended September 30, 2001 as the Company  suffered tax losses for
the year/period and has no taxable profits.

The Company and its  subsidiaries  account for income  taxes using the asset and
liability method, which requires an entity to recognize deferred tax liabilities
and assets. A full valuation  allowance was provided due to the uncertainty that
deferred tax benefits will be realized in future years.

NOTE 12           NET LOSS

<TABLE>
<CAPTION>

                                            Nine Months Ended       Nine Months Ended
                                           September 30, 2001      September 30, 2000
                                           -------------------     -------------------
                                                  (Unaudited)             (Unaudited)
<S>                                                 <C>                     <C>

Loss from continuing operations before              (371,990)               (573,183)
    income taxes
Provision for income taxes                                  -                       -
                                           -------------------     -------------------
Loss from continuing operations                     (371,990)               (573,183)

Discontinued operations (Note 2)
Loss from  discontinued  operations                   (7,936)                (20,707)
(Income taxes - Nil)
Loss on disposals                                   (572,590)             (1,497,128)
                                           -------------------     -------------------
Net Loss                                            (952,516)             (2,091,018)
                                           ===================     ===================

</TABLE>


                                      F-11


<PAGE>


ASIAN STAR DEVELOPMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


NOTE 13     -     RECENT ACCOUNTING PRONOUNCEMENTS

In July  2001,  the  Financial  Accounting  Standards  Board  (FASB)  issued the
Statement  of  Financial  Accounting  Standard  No.  141  (SFAS  141),  BUSINESS
COMBINATION,  Statement  of  Financial  Accounting  Standard No. 142 (SFAS 142),
GOODWILL AND OTHER  INTANGIBLE  ASSETS,  and  Statement of Financial  Accounting
Standard No. 143 (SFAS 143), ACCOUNTING FOR ASSET RETIREMENT  OBLIGATIONS.  SFAS
141 requires all business  combinations  to be accounted  for using the purchase
method of accounting and prohibits the use of the pooling-of-interests (pooling)
method.  Under SFAS 141,  negative goodwill is allocated as a pro rata reduction
of the amounts that  otherwise  would have been  assigned to all of the acquired
assets,  other than certain  assets.  Any excess  remaining after reducing those
assets to zero is recognized as an extraordinary gain. SFAS 141 is effective for
all  business  combinations  initiated  after June 30,  2001 and  applies to all
business  combinations  accounted for by the purchase  method that are completed
after  June 30,  2001  (that is, the date of  acquisition  is July 1,  2001,  or
later).  The company is still  evaluating the impact of this new standard on its
financial statements.

SFAS 142 supersedes APB Opinion No. 17 (APB 17),  INTANGIBLE ASSETS, and carries
forward the  provisions  in APB 17 related to  internally  developed  intangible
assets.  Under SFAS 142,  goodwill is not amortized but is tested for impairment
at least annually at the reporting unit level. Impairment loss equivalent to the
excess of carrying  amount of goodwill over its implied fair value is recognized
only if the fair value of the reporting  unit is less than its carrying  amount.
SFAS 142 also requires a recognized  intangible  asset to be amortized  over its
useful  life and  reviewed  for  impairment  in  accordance  with  Statement  of
Financial Accounting Standard No. 121 (SFAS 121),  ACCOUNTING FOR THE IMPAIRMENT
OF  LONG-LIVED  ASSETS AND FOR  LONG-LIVED  ASSETS TO BE DISPOSED OF. Under SFAS
142,  a  recognized  intangible  asset  with an  indefinite  useful  life is not
amortized  until  its life is  determined  to be no longer  indefinite  and this
intangible asset is tested for impairment annually and on an interim basis if an
event or  circumstance  occurs  between annual tests  indicating  that the asset
might be impaired.  SFAS 142 should be applied in fiscal years  beginning  after
December 15, 2001 to all goodwill and other intangible  assets  recognized in an
entity's statement of financial position at that date,  regardless of when those
assets were initially  recognized.  The  provisions of this Statement  initially
should be applied at the beginning of a fiscal year and retroactive  application
is not  permitted.  The  company  is still  evaluating  the  impact  of this new
standard on its financial statements.

SFAS 143 requires  entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred.  When the liability
is initially recorded,  the entity capitalizes a cost by increasing the carrying
amount of the related  long-lived asset. Over time, the liability is accreted to
its present value each period,  and the capitalized cost is depreciated over the
useful life of the related asset.  Upon  settlement of the liability,  an entity
either settles the  obligation for its recorded  amount or incurs a gain or loss
upon settlement. SFAS 143 is effective for fiscal years beginning after June 15,
2002, with earlier application  encouraged.  The company is still evaluating the
impact of this new standard on its financial statements.


                                      F-12


<PAGE>


                          ASIAN STAR DEVELOPMENT, INC.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS


LIMITED OPERATING HISTORY; ACCUMULATED DEFICIT; NEED FOR ADDITIONAL CAPITAL

There is limited historical  financial  information about the Company upon which
to  base an  evaluation  of the  Company's  performance  or to  make a  decision
regarding an investment in shares of the Company's Common Stock. The Company has
an  accumulated  deficit of  $17,604,636 as of September 30, 2001. The Company's
cash and cash  equivalents  decreased  from  $114,832  at  December  31, 2000 to
$34,236 at September 30, 2001

RECENT DEVELOPMENTS

LAWSUIT

Harmonic Hall Investment Holdings Ltd.("HHI")

On March 28,  2000,  the Company  entered into  agreements  with  Harmonic  Hall
Investment Holdings Ltd. ("HHI"), whereby the Company acquired approximately 52%
of the  outstanding  common stock of HHI for  2,313,625  shares of the Company's
Restricted  Common  Stock  at  par  value  $.001  and  cash  of  $650,160.   The
consummation date of the transaction was on April 15, 2000.

As of June 30,  2000,  the Company  paid cash of $650,160  and issued  2,313,625
shares of the Company's  Common Stock at a fair value of  $9,288,000  which have
been  accounted for as an investment in the accounts at cost.  The fair value of
Restricted Common Stock was determined based on the average trading share prices
quoted on the stock exchange.

In  addition  to the above,  the  Company  had  advanced a sum of  approximately
$323,000  to a  subsidiary  of HHI for its working  capital.  The advance has no
specific terms of repayment and is recorded as other assets.

Following the purchase,  management of the Company has not been able to exercise
control over the  operation of HHI or obtain  financial  statements of HHI as of
June 30, 2000. In August 2000, the Company retained a legal counsel in Hong Kong
to prepare and file a writ in Court against HHI for breach of the agreements. On
September  26, 2000,  the Company  filed an action in the High Court of the Hong
Kong Special  Administrative  Region seeking  rescission of the agreements.  The
action seeks return of all monies paid,  and all shares issued by the Company in
the transaction, together with damages.

Management  considers  that it is unable to determine the outcome of the lawsuit
and is unable to estimate the loss, if any. However,  a full provision  totaling
$10,261,160  has been made for any  diminution  in value of the  investment  and
advances  to HHI.  There  were no changes  in the  assessment  of outcome of the
litigation by management during the nine months ended September 30, 2001.


<PAGE>


THREE MONTHS ENDED  SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED  SEPTEMBER
30, 2000

REVENUE AND OPERATING EXPENSES

Revenue from the operations of Ocean Wealth  Restaurant,  Asian Star  Technology
Development  Limited  and  Shilong  Water World  decreased  by $66,099,  a 19.6%
decrease from $337,074 for the three months ended September 30, 2000 to $270,975
for the three months ended  September  30, 2001.  The decrease was mainly due to
decrease  in  cafeteria  revenue  by $26,205 or 9.2%,  Water  World  contracting
service revenue by $33,988 or 93% and souvenir  merchandising business by $5,906
or 33.2%.

Selling,  general and administrative  expenses  comprised mainly salary,  rental
expenses,  depreciation  expenses,  commission  and  promotional  expenses.  The
decrease in these  operating  expenses  from $458,155 for the three months ended
September 30, 2000 to $199,112 for the three months ended September 30, 2001 was
mainly due to cost  reductions,  productivity  improvements and no promotion fee
was incurred for China Space souvenir products.

The  Company  disposed  of its  investment  in Shilong  Water  World  Project to
Dongguan Shilong Properties Limited on June 15, 2001 at a total consideration of
$1,627,438.  A net loss on disposal of $572,590 was  recognized.  Details of the
disposal are as follows:

Sales consideration                                  $ 1,627,438
Less : Book value of net assets disposed              (2,032,328)
                                                     -----------
Loss on disposal before consulting fee                  (404,890)
Consulting fee                                          (167,700)
                                                     -----------
Loss on disposal                                     $  (572,590)
                                                     ===========


NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000

REVENUE AND OPERATING EXPENSES

Revenue from the operations of Ocean Wealth  Restaurant,  Asian Star  Technology
Development  Limited and Shilong  Water World  decreased  by  $117,910,  a 12.2%
decrease from $962,332 for the nine months ended  September 30, 2000 to $844,422
for the nine months ended  September 30, 2001.  The decrease was mainly due to a
decline in sales  volume,  strong  competition  and weak  economic  condition of
customers.  A drop in  cafeteria  business  revenue by  $133,434  was off set by
increase in Water World  contracting  service  revenue of $2,312 and increase in
souvenir merchandising business by $13,212.


<PAGE>


Selling,  general and administrative  expenses  comprised mainly salary,  rental
expenses,  depreciation  expenses,  commission  and  promotional  expenses.  The
decrease in operating expenses from $866,071 for the nine months ended September
30, 2000 to $525,977 for the nine months ended September 30, 2001 was mainly due
to reduced promotional  efforts for the souvenir  merchandising  business,  cost
reductions and productivity improvements.

Other loss  primarily  resulted from a loss on disposal of investment in Shilong
Water World Project to Dongguan Shilong  Properties  Limited of $572,590 for the
nine months ended September 30, 2001. During the nine months ended September 30,
2000, there was a gain on disposal of the 80% equity interest in Dongguan Dragon
Villa Limited and Dongguan Dragon Entertainment Centre Limited of $417,138 and a
loss on  disposal of the 100% equity  interest in Shilong  Town Hall  project of
$1,727,573.


LIQUIDITY AND CAPITAL RESOURCES

The Company  generated cash flows of $34,236 for the nine months ended September
30,  2001.  The  Company's  major  sources of revenue for the nine months  ended
September 30, 2001 were $762,514 from the operations of the cafeteria  business,
$50,941  contracting  revenue  from  the  Water  Park  and  $30,967  from  other
operations.  The Company's  internally generated cash has not been sufficient to
support the Company's on-going  business.  The Company's ongoing operations have
been substantially dependent on financing from a shareholder.

As of September 30, 2001, the Company's total assets and total  liabilities were
$3,887,725 and $1,826,882 respectively.

The Company's  investment  portfolio comprised the following as of September 30,
2001:

PROJECT / SUBSIDIARY                       BUSINESS NATURE

Maple City                                 Property Development
Ocean Wealth Restaurant                    Cafeteria Business
Asian Star Technology Development Ltd      Souvenir  Merchandising and
                                           International agent for the Chinese
                                           Academy of Space  Technology
Honpar International Holdings Ltd.         Investment in software technology
3GEN Systems Inc.                          Software development business


<PAGE>


FINANCIAL POSITION AS OF SEPTEMBER 30, 2001 AS COMPARED TO SEPTEMBER 30, 2000

<TABLE>
<CAPTION>

                                                                                 SEPTEMBER 30,           SEPTEMBER 30,
                                                                                          2000                    2001
                                                                                   (UNAUDITED)             (UNAUDITED)
<S>                                                                    <C>           <C>                        <C>

ASSETS                                                              NOTES

CURRENT ASSETS
        Cash and cash equivalents                                                  $   240,877           $      34,236
        Prepayments                                                                    218,702                 293,030
        Inventories                                                    1             1,274,076                  14,622
        Other assets                                                                   483,524                  41,336
        Other receivables                                              2                     -                 272,250
                                                                                 -------------           -------------

            Total current assets                                                     2,217,179                 655,474

Goodwill                                                                                82,635                  73,935
Investment                                                             3             9,953,501              10,088,160
Less : Provision for diminution in value of investment                                       -              (9,938,160)
Long term receivables                                                  2                     -                 272,250
Land usage rights, land improvement and construction in-progress       4             2,598,625               2,422,382
Property and equipment, net                                            5             2,629,474                 313,684
                                                                                 -------------           -------------

Total assets                                                                        17,481,414               3,887,725
                                                                                 =============           =============


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
        Amount due to a shareholder                                                    668,188               1,011,912
        Accounts payable                                                             2,089,021                 136,855
        Other payables and accrued expenses                                            503,454                 636,190
                                                                                 -------------           -------------

            Total current liabilities                                                3,260,663               1,784,957

LONG TERM PAYABLES                                                                           -                  41,925
                                                                                 -------------           -------------

Total liabilities                                                                    3,260,663               1,826,882
                                                                                 =============           =============

SHAREHOLDERS' EQUITY
Paid-in capital                                                        6            18,481,429              19,665,479
Accumulated deficit                                                                 (4,260,678)            (17,604,636)
                                                                                 -------------           -------------

             Total shareholders' equity                                             14,220,751               2,060,843
                                                                                 -------------           -------------


Total liabilities and shareholders' equity                                        $ 17,481,414            $  3,887,725
                                                                                 =============           =============

</TABLE>


<PAGE>


NOTE 1         INVENTORIES

Inventories  as of September  30, 2000 and  September  30, 2001  decreased  from
$1,274,076 to $14,622.  The decrease was mainly due to a decrease in inventories
for China Space souvenir products carried by one of the company's  subsidiaries,
Asian Star Technology Development Limited.

NOTE 2         OTHER RECEIVABLES AND LONG TERM RECEIVABLES

Other  receivables  and long term  receivables as of September 30, 2001 comprise
receivables for sales of Shilong Water World Project of $544,500.

NOTE 3         INVESTMENT

As  detailed  in the MD&A  recent  developments  (a) (i),  a full  provision  of
$9,938,160 has been made for the Company's  investment in HHI. No such provision
was made during the nine months ended September 30, 2000.

NOTE 4         LAND USAGE RIGHTS, LAND IMPROVEMENT AND CONSTRUCTION IN PROGRESS

Following the disposal of Shilong Town Projects and Shilong Town Hall, the total
costs for land usage  rights,  land  improvement  and  construction  in progress
decreased from $2,598,625 as of September 30, 2000 to $2,422,382 as of September
30, 2001. The costs carried  forward were related to the  development  costs for
Maple City Project.

NOTE 5         PROPERTY AND EQUIPMENT

The decrease in property and equipment was mainly due to the disposal of Shilong
Water World Project of $2,024,825.

NOTE 6         PAID IN CAPITAL

As of September 30, 2000,  there were 15,711,015  shares issued for a total paid
in capital of $18,481,429.  The increase in paid in capital to 17,246,015 shares
of $19,665,479 as of September 30, 2001 comprised the following:

- Stock issued for consultancy services               $  127,050
- Notional compensation for stock options                787,000
- CEO notional compensation                              120,000
- Acquisition of  an investment                          150,000
                                                      -----------
                                                      $1,184,050
                                                      ===========


<PAGE>


FINANCIAL POSITION AS OF SEPTEMBER 30, 2001 AS COMPARED TO DECEMBER 31, 2000

The Company  recorded a loss of $952,516  during the nine  months  period  ended
September 30, 2001.

TOTAL ASSETS

The  decrease  in total  assets was mainly due to  disposal of assets of Shilong
Water World Project.

TOTAL LIABILITIES

The decrease in total liabilities was mainly due to debts assignment of $538,438
to the  purchaser  which was part of the  consideration  for disposal of Shilong
Water World Project.


<PAGE>


                                   SIGNATURES


     In accordance with the requirements of the Exchange Act of 1934, the
registrant  has duly  caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                               ASIAN STAR DEVELOPMENT INC.



Date:  November 12, 2001                  By: /s/ STEPHEN CHOW
                                        --------------------------------
                                        Name:     Stephen Chow
                                        Title:    President