<DOCUMENT>
<TYPE>10KSB
<SEQUENCE>1
<FILENAME>d10ksb.txt
<DESCRIPTION>ANNUAL REPORT
<TEXT>

<PAGE>


                      Securities And Exchange Commission

                             Washington, DC 20549
                   ----------------------------------------

                                  FORM 10-KSB

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                         COMMISSION FILE NO. 2-91651-D

                         Peacock Financial Corporation

           COLORADO                                      87-0410039
(STATE OR OTHER JURISDICTION OF          (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)

                 2531 SAN JACINTO AVENUE SAN JACINTO, CA 92583
             (ADDRESS AND ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES)

                                (909) 652-3885
             (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES  X  NO___ .
                                       ---

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OR REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT 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-K OR ANY AMENDMENT TO THIS
FORM 10-K.

THE NUMBER OF SHARES OF CLASS A COMMON STOCK OUTSTANDING AS OF DECEMBER 31,
2000, WAS 76,931,751.

DOCUMENTS INCORPORATED BY REFERENCE: NONE.
<PAGE>

ITEM 1 - BUSINESS
-----------------

Peacock Financial Corporation, a Colorado corporation (the Company),
incorporated February 1984, is a publicly traded diversified investment holding
company that makes direct investments in and provides management services to
businesses that have an operating history and can perform to the bottom line.
The Company intends to continue expanding through the internal development of
its present operations and other business opportunities, as well as the
acquisition of additional business ventures.

The Company participates in companies in various fields of business by arranging
for and contributing capital and providing management assistance. Potential
ventures are evaluated based on the ability of the business to be viable and
reach a significant milestone with the Company's initial investment as well as
possessing a potential to generate significant revenues through strong
intellectual property rights and experienced management. The Company continually
seeks and evaluates investment opportunities that have the potential of earning
significant returns. The Company has in the past, and may again in the future,
raise capital specifically for the purpose of permitting it to make an
investment that the company believes is attractive.

The Company's current enterprise portfolio includes the following:

  .   Peacock Real Estate Development Corporation (Riverside Park Apartments,
      Canyon Shadows, St. Michel)

  .   Vir-Tek Corporation

  .   iNetPartners, Inc.

  .   San Diego Soccer Development Corporation

  .   Bio-Friendly Corporation

  .   Bizness Soup Talk

The Company plans to invest in ventures with at least a three-year operating
history, is performing with a profit to the bottom line and, in some cases, has
the need for identification and implementation of experienced management.
Identifying and developing each new business opportunity requires the Company to
dedicate significant amounts of financial resources, management attention, and
personnel, with no assurance that these expenditures will be recouped.
Similarly, the selection of companies and the determination of whether a company
offers a viable business plan, an acceptable likelihood of success, and future
profitability involves inherent risk and uncertainty.

                                       2
<PAGE>

At December 2000, the Company has written off several of its investments. The
auditors have written an opinion that unless the Company can turn profitable, it
will be forced to cease operations. The new management of the Company has been
consolidating the portfolio and endeavoring to improve their performance while
adding to it through strategic investment and attempting to move the Company
into profitability.

ITEM TWO - INVESTMENTS
----------------------

Riverside Park Apartments

The Company formed a limited partnership in June 1992 and acquired two apartment
buildings for $3,350,000 to be repaired, developed and managed. During the year
ending 1992, the Company reduced its interest to 1% and has remained a general
partner with a 1% interest, receiving a property management fee.

Canyon Shadows Apartments

The Company acquired a 120-unit apartment complex in April 1995 for $875,000.
The Company received a $975,000 loan that converts to a grant from the City of
Riverside for the purpose of acquisition and rehabilitation and, in 1996, the
Company was awarded $2,200,000 in Federal Tax Credits for the project. In
December 1996, the project was sold to a tax credit partnership in which the
Company retains a $905,000 capital account, as well as a 1% interest as a
general partner for which it receives a management fee and 80% of the project
cash flow.

St. Michel Development

In 1995, the Company formed a limited liability company to acquire a 63-lot
residential subdivision in the San Jacinto Valley. In March 1996, the limited
liability company acquired an additional 110-lot subdivision also in the San
Jacinto Valley. The Company retains a 50% ownership in the limited liability
company. A joint venture to build out these homes was just completed and the
Company is expecting the distribution of its profits shortly.

Vir-Tek

Vir-Tek is a minority disabled veteran engineering and contracting firm, formed
to take advantage of recently passed federal legislation (H.R. 1568) requiring
3% participation on all programs and projects funded by federal dollars. Vir-Tek
provides environmental management, facility and operations management, mapping
and information management, engineering services, project management, and waste
management. The company emphasizes teamwork in combination with innovation to
design balanced solutions to complex environmental, industrial, and engineering
problems. Vir-Tek has served commercial, industrial, and residential
construction developers as well as concerns of city, county, and federal
agencies. The Company has a 49% equity interest in Vir-Tek.

                                       3
<PAGE>

iNetPartners, Inc.

Peacock Financial holds a 51 percent interest in iNetPartners, Inc., which
focuses on the development of Internet e-commerce applications for both the new
and used automotive markets and is currently developing iNetmotors.com, a
regionally based automobile e-commerce Web site to provide Internet automobile
shoppers easy access to dealer inventories with detailed pictures and prices
online within the shoppers' immediate area. More than 80 percent of pre-owned
and new vehicles are purchased within 20 to 35 miles of where the buyer lives or
works, and 90 percent of all buyers want to inspect and test-drive the vehicle
before purchase.

San Diego Soccer Development Corporation

The Company currently owns approximately 1,555,001 shares of San Diego Soccer
Development Corporation (SDSDC). SDSDC owns the San Diego Flash, an A-league
professional soccer team, which is the only publicly traded soccer franchise in
the United States.

Bio-Friendly Corporation

In May, the Company invested $180,000 for 437,500 shares of common stock at 40
cents a share of Bio-Friendly Corporation, a fuel technology company, that has a
combustion catalyst which dramatically reduces the emissions produced by any
system which burns fuel of any kind, while greatly reducing the amount of fuel
consumed.

ITEM 3 - LEGAL PROCEEDINGS
--------------------------

Unresolved legal issues are:

     .  Cox Communications - A collection case for services provided to the
        Orange County Soccer Development Corporation. The claim is for $60,000
        and is in the discovery phase with a possibility of settlement prior to
        the trial.
     .  City of San Jacinto - Involves the delinquency of payments of the
        property and mello roos taxes on 105 parcels of real property owned by
        PR Equities, where Peacock Financial Corporation is the General Partner.
        This case is currently in a work-out period to provide an offer to the
        City.

                                       4
<PAGE>

     .  Bank of Hemet - This case involved a loan to PR Equities, where Peacock
        Financial Corporation is the General Partner. The loan went into default
        and an abstract of judgment had been filed for nearly $1,000,000. This
        case was just settled for $100,000 to paid out over a period of eighteen
        months.
     .  Hawthorne - Peacock Financial Corporation is the plaintiff in this case
        to retrieve two errantly issued stock certificates. One of the two was
        recovered and the other is considered to be lost. A proposal to re-issue
        the missing certificate and then cancel it is now pending.
     .  Steven Slagter - The case involved an action brought against PR
        Equities, where Peacock Financial Corporation is the General Partner. It
        involved the collection of approximately $900,000 on a promissory note.
        There was a summary judgment for nearly $1.35 million. The Company has
        entered into preliminary settlement negotiations at a value of $250,000.
     .  Helen Apostle - This case involved an action for approximately $90,000
        involving a defaulted loan. A settlement has been offered and we are
        currently waiting for a reply.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------

No matter was submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this report.

ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
-------------------------------------------------------------------------------

Common Stock of the Company is traded in the over-the-counter market, and quoted
on the Electronic Bulletin Board. During the fiscal year ending December 31,
2000, the Company's common stock traded between $1.96 and $.02 per share. The
Company has not yet adopted any policy regarding payment of dividends.

Quarter Ended                        Low                   High
-------------                        ---                   ----
March 31, 2000                      $0.57                 $1.96
June 30, 2000                        0.31                  0.95
September 30, 2000                   0.17                  0.34
December 31, 2000                    0.02                  0.19

At December 31, 2000, there were over 6,000 holders of record of the Company's
stock.

ITEM 6 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------
See index to financial statements included herein.

                                       5
<PAGE>

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF OPERATIONS
-------------

Fiscal year 2000 was the Company's second year in operation as a Business
Development Corporation under the Investment Act of 1940.

Management believes that the key to a successful Business Development
Corporation is the ability to produce ongoing revenues and profits from
operating subsidiaries which will allow for an orderly due diligence process.

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

Revenues totaled $764,814 for the fiscal year ending December 31, 2000. For the
year ending December 31, 1999, revenues were $704,556. The increase resulted
from fees charged for property management and administration income as well as
income received for website development.

General and administrative expenses for the year ended December 31, 2000 were
$2,827,709, as compared to $918,374 for the year ended December 31, 1999. The
increase was primarily due to the administrative and operating costs,
specifically the payroll expenses, associated with consolidating the financial
statements of the portfolio companies in which the Company had a majority or
greater interest.

Bad debt expenses for year ended December 31, 2000 were $1,536,998, as compared
to $196,791 for the year ended December 31, 1999. The increase resulted from
allowances reserved on doubtful receivables.

Depreciation and amortization expenses was $38,776 for the year ended December
31, 2000 as compared to $33,979 for the year ended December 31, 1999. The
increase was due to the addition of fixed assets in the portfolio companies.

Interest expense was $918,756 for the year ended December 31, 2000 as compared
to $126,932 for the year ended December 31, 1999. The increase was primarily due
to the loss of market value associated with the conversion of convertible
debentures to stock.

Loss on disposition of assets was $1,809,200 for year ended December 31, 2000 as
compared to $37,365 for year ended December 31, 1999. The increase was primarily
due to the write-off of the Vista Ramona property which was lost due to
foreclosure.

                                       6
<PAGE>

Total operating loss was $8,616,328 for the year ending December 31, 2000 as
compared to $692,737 for the year ended December 31, 1999. This increase
reflects the write-off of certain of the Company's investments, particularly the
soccer franchises.

Changes in Financial Condition, Liquidity and Capital Resource
--------------------------------------------------------------

For the twelve months ended December 31, 2000, the Company funded its operations
and capital requirements partially with its own working capital and partially
with proceeds from stock offerings. The Company currently has no lines of credit
available and is operating in a negative cash flow. Future operations will
depend on attracting additional investments into the Company, which are
essential to the Company's future.

ITEM 8 - CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
-----------------------------------------------------------------------
FINANCIAL DISCLOSURE
---------------------

ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTION and CONTROL PERSONS,
----------------------------------------------------------------------
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
-------------------------------------------------

Name                      Age    Position                   Period of Service

Robert A. Braner          62     Interim President and      Since 2000
                                 Chairman of the Board

James S. Upton            53     Executive Vice             Since 1996
                                 President and Director

Lisa Martinez             42     Acct. & Finance Mgr.       Since 1997
                                 and Corporate Secretary

All directors hold office until the next annual shareholders meeting or until
their death, resignation, and retirement or until their successors have been
elected and qualified.

Mr. Robert A. Braner, 62, is serving as Interim President. He brings with him
more than thirty years experience in providing leadership to progressively
minded growth companies and internationally known organizations. Mr. Braner
combines diverse financial, management and creative leadership with solid and
diversified, extensive international experience in the cross-cultural business
process. He was the former President and Chief Operating Officer of Automobili
Lamborghini USA, Inc.

                                       7
<PAGE>

Mr. James S. Upton, 53, held the position of Executive Vice President and
Director of Peacock Financial Corporation as of 12/31/00. Mr. Upton has since
been terminated from the Company.

Ms. Lisa Martinez, 41, is Corporate Secretary and the Accounting & Finance
Manager of Peacock Financial Corporation. She has over 20 years of accounting
experience and has the managerial duties to handle the multitude of public and
privates business entities for Peacock through effective and organizational
administrative skills.

The Securities Exchange Act of 1934 requires all executive officers and
directors to report any changes in ownership of common stock of the Company to
the Securities and Exchange Commission and the Company.

ITEM 10 - EXECUTIVE COMPENSATION
--------------------------------

The following table shows the amount of compensation earned for services in all
capacities to the Company for the last fiscal year for the executive officers at
December 31, 2000.

<TABLE>
<CAPTION>
Names and Position                              Year      Salary       Other     Total
<S>                                             <C>       <C>          <C>      <C>
Steven R. Peacock, President and
 Chief Executive Officer and Director           2000      $168,500     None     $168,500

James S. Upton, Executive Vice-President        2000      $ 95,265     None     $ 95,265

Lisa L. Martinez, Corporate Secretary           2000      $ 54,125     None     $ 54,125
</TABLE>

ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

At the close of business on December 31, 2000, the Company had 76,931,751 shares
outstanding. There were no beneficial owners of more than five percent of any
class of the Company's voting securities.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

None

                                       8
<PAGE>

ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K
------------------------------------------

Audited Financial Statements and Notes thereto are filed as part of this report.
On February 8, 1996, the Company filed Form 8-K containing its merger.

                                       9
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                            PEACOCK FINANCIAL CORPORATION


                                            By: /s/ Robert A. Braner
                                            ------------------------
                                            Robert A. Braner
                                            Interim President

Date: April 17, 2001


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

Signature                        Title                      Date
---------                        -----                      ----

/s/ Robert A. Braner
----------------------
Robert A. Braner                 Interim President         4/17/01



/s/ Lisa L. Martinez
----------------------
Lisa L. Martinez                 Secretary                 4/17/01


                                       10
<PAGE>

                         PEACOCK FINANCIAL CORPORATION
                               AND SUBSIDIARIES

                       CONSOLIDATED FINANCIAL STATEMENTS

                               December 31, 2000
<PAGE>

                                   CONTENTS



<TABLE>
<S>                                                                        <C>
Independent Auditors' Report .............................................  3

Consolidated Balance Sheet................................................  4

Consolidated Statements of Operations ....................................  6

Consolidated Statements of Stockholders' Equity (Deficit) ................  8

Consolidated Statements of Cash Flows .................................... 11

Notes to the Consolidated Financial Statements ........................... 13
</TABLE>
<PAGE>

                         INDEPENDENT AUDITORS' REPORT
                         ----------------------------

Peacock Financial Corporation and Subsidiaries
Board of Directors
San Jacinto, California

We have audited the accompanying consolidated balance sheet of Peacock Financial
Corporation and Subsidiaries as of December 31, 2000 and the related
consolidated statements of operations, stockholders' equity (deficit), and cash
flows for the years ended December 31, 2000 and 1999. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Peacock
Financial Corporation and Subsidiaries as of December 31, 2000 and the
consolidated results of their operations and their cash flows for the years
ended December 31, 2000 and 1999 in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered recurring losses to
date, which raises substantial doubt about its ability to continue as a going
concern. Management's plans with regard to these matters are also described in
Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

HJ & Associates, LLC
Salt Lake City, Utah
April 5, 2001
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                          Consolidated Balance Sheet

                                    ASSETS
                                    ------

                                                              December 31,
                                                                   2000
                                                              ------------

CURRENT ASSETS

   Cash                                                       $      2,513
   Accounts receivable, net (Note 3)                                27,000
   Due from related party, net (Note 10)                            79,765
   Prepaid expenses                                                  2,704
   Notes receivable - related parties, net (Note 8)                 29,987
   Notes receivable, net (Note 7)                                   84,957
                                                              ------------

     Total Current Assets                                          226,926
                                                              ------------

FIXED ASSETS, NET (Notes 3 and 5)                                  191,530
                                                              ------------

OTHER ASSETS

   Investments in limited partnerships (Note 4)                  1,131,961
   Other investments (Note 6)                                      394,289
   Other assets                                                      3,500
                                                              ------------

     Total Other Assets                                          1,529,750
                                                              ------------

     TOTAL ASSETS                                             $  1,948,206
                                                              ============

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

                                       4
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                    Consolidated Balance Sheet (Continued)


                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                ----------------------------------------------

<TABLE>
<CAPTION>
                                                                                   December 31,
                                                                                       2000
                                                                                -----------------
<S>                                                                             <C>
CURRENT LIABILITIES

   Accounts payable                                                             $         473,496
   Accrued expenses                                                                       169,303
   Accrued interest                                                                        68,873
   Judgments payable (Note 12)                                                            350,000
   Notes payable - current portion (Note 9)                                               848,343
                                                                                -----------------

     Total Current Liabilities                                                          1,910,015
                                                                                -----------------

LONG-TERM DEBT

   Notes payable - long term (Note 9)                                                     523,175
                                                                                -----------------

NET LIABILITIES IN EXCESS OF THE ASSETS OF DISCONTINUED OPERATIONS (Note 16)              305,055
                                                                                -----------------

     Total Liabilities                                                                  2,738,245
                                                                                -----------------

COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock: 10,000,000 shares authorized at $0.01 par value;
    545,300 shares issued and outstanding                                                   5,453
   Common stock: 250,000,000 shares authorized at $0.001 par value;
    76,931,751 shares issued and outstanding                                               76,932
   Additional paid-in capital                                                          11,390,655
   Subscriptions receivable                                                              (286,056)
   Treasury stock                                                                          (8,180)
   Accumulated deficit                                                                (11,968,843)
                                                                                -----------------

     Total Stockholders' Equity (Deficit)                                                (790,039)
                                                                                -----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                       $       1,948,206
                                                                                =================
</TABLE>

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

                                       5
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Operations


<TABLE>
<CAPTION>
                                                               For the Year Ended
                                                                   December 31,
                                                        --------------------------------
                                                             2000                   1999
                                                        -------------     -------------
<S>                                                     <C>                   <C>
REVENUES

   Investment banking income                            $     525,000     $     605,000
   Property management and administration income               12,525             7,070
   Website development                                        104,900                 -
   Other income                                               122,389            92,486
                                                        -------------     -------------

     Total Revenues                                           764,814           704,556
                                                        -------------     -------------

EXPENSES

   General and administrative                               2,827,709           918,374
   Bad debt expense                                         1,536,998           196,791
   Depreciation and amortization                               38,776            33,979
                                                        -------------     -------------

     Total Expenses                                         4,403,483         1,149,144
                                                        -------------     -------------

LOSS FROM OPERATIONS                                       (3,638,669)         (444,588)
                                                        -------------     -------------

OTHER INCOME (EXPENSE)

   Interest income                                             11,969             8,371
   Interest expense                                          (918,756)         (126,932)
   Unrealized loss on investments                            (621,108)                -
   Realized gain (loss) on investments                        512,150           (92,223)
   Loss on disposition of assets                           (1,809,200)          (37,365)
                                                        -------------     -------------

     Total Other Income (Expense)                          (2,824,945)         (248,149)
                                                        -------------     -------------

LOSS FROM CONTINUING OPERATIONS BEFORE
 INCOME TAXES AND DISCONTINUED OPERATIONS                  (6,463,614)         (692,737)

Income taxes (Note 2)                                               -                 -
                                                        -------------     -------------

LOSS FROM CONTINUING OPERATIONS                            (6,463,614)         (692,737)
                                                        -------------     -------------

LOSS FROM DISCONTINUED OPERATIONS
 NET OF ZERO TAX EFFECT (Note 16)                          (2,152,714)                -
                                                        -------------     -------------

NET LOSS                                                   (8,616,328)         (692,737)
                                                        -------------     -------------

OTHER COMPREHENSIVE (LOSS)

   Loss on treasury stock                                    (274,287)                -
   Dividends                                                  (22,812)         (188,786)
                                                        -------------     -------------

NET COMPREHENSIVE LOSS                                  $  (8,913,427)    $    (881,523)
                                                        =============     =============
</TABLE>

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

                                       6
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
               Consolidated Statements of Operations (Continued)


                                                      For the Year Ended
                                                           December 31,
                                                   ---------------------------
                                                       2000           1999
                                                   ------------   ------------

BASIC LOSS PER SHARE

   Continuing operations                           $      (0.13)  $      (0.02)
   Discontinued operations                                (0.04)        -
                                                   ------------   ------------

   Basic Loss Per Share                            $      (0.17)  $      (0.02)
                                                   ============   ============

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING        50,655,097     30,503,871
                                                   ============   ============



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

                                       7
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
          Consolidated Statements of Stockholders' Equity (Deficit)



<TABLE>
<CAPTION>
                                                                Preferred Stock                         Common Stock
                                                         ------------------------------        --------------------------------
                                                         Subscriptions      Accumulated
                                                             Shares            Amount             Shares             Amount
                                                         -------------      -----------        ------------        ------------
<S>                                                      <C>                <C>                <C>                 <C>
Balance, December 31, 1998                                   672,300        $     6,723          20,750,370         $    20,750

Common stock issued for cash                                       -                  -          14,008,007              14,008

Common stock issued for services                                   -                  -             759,571                 760

Common stock issued on conversion of debentures                    -                  -           1,070,560               1,070

Common stock issued for investments                                -                  -           1,250,000               1,250

Common stock issued in conversion of preferred stock          (2,000)               (20)              2,000                   2

Common stock canceled                                              -                  -             (30,000)                (30)

Cash received on subscriptions receivable                          -                  -                   -                   -

Accrued dividends                                                  -                  -                   -                   -

Dividends paid                                                     -                  -                   -                   -

Net loss for the year ended December 31, 1999                      -                  -                   -                   -
                                                           ---------        -----------        ------------        ------------

Balance, December 31, 1999                                   670,300        $     6,703          37,810,508        $     37,810
                                                           ---------        -----------        ------------        ------------

<CAPTION>
                                                            Additional              Paid-in
                                                              Capital              Receivable             Deficit
                                                         -----------------       --------------       ----------------
<S>                                                      <C>                     <C>                  <C>
Balance, December 31, 1998                               $       3,519,882       $           -        $    (2,385,491)

Common stock issued for cash                                     1,789,098            (443,500)                     -

Common stock issued for services                                   161,040                   -                      -

Common stock issued on conversion of debentures                     58,346                   -                      -

Common stock issued for investments                                123,750                   -                      -

Common stock issued in conversion of preferred stock                    18                   -                      -

Common stock canceled                                               (5,779)                  -                      -

Cash received on subscriptions receivable                                -             116,445                      -

Accrued dividends                                                  (23,172)                  -                      -

Dividends paid                                                    (165,614)                  -                      -

Net loss for the year ended December 31, 1999                            -                   -               (692,737)
                                                         -----------------       -------------        ---------------
Balance, December 31, 1999                               $       5,457,569       $    (327,055)       $    (3,078,228)
                                                         -----------------       -------------        ---------------
</TABLE>


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

                                       8
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
     Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>
                                        Preferred Stock             Common Stock            Additional
                              ----------------------------  ----------------------------
                              Subscriptions   Accumulated                                    Paid-in
                                  Shares        Amount         Shares         Amount         Capital      Receivable     Deficit
                              -------------  -------------  -------------  -------------  -------------  ------------  ------------
<S>                           <C>            <C>            <C>            <C>            <C>            <C>           <C>
Balance,
December 31, 1999                   670,300  $       6,703     37,810,508  $      37,810  $   5,457,569  $   (327,055) $ (3,078,228)

Common stock issued
for cash                               -              -        22,330,821         22,331      4,595,865      (158,001)         -

Common stock issued
for services                           -              -         1,282,000          1,282        247,118          -             -

Common stock issued on
conversion of debentures               -              -        14,577,215         14,578        604,713          -             -

Common stock issued
for investments                        -              -           800,000            800        169,200          -             -

Common stock issued in
lieu of interest                       -              -             6,207              6          6,202          -             -

Common stock issued in
conversion of preferred stock      (125,000)        (1,250)       125,000            125          1,125          -             -

Accrued dividends                      -              -              -               -          (22,812)         -             -

Stock offering costs                   -              -              -               -         (202,325)         -             -

Cash received on
subscriptions receivable              -               -              -               -             -          199,000          -

Additional interest recorded
on convertible debentures             -               -              -               -          534,000          -             -
                              -------------  -------------  -------------  -------------  -------------  ------------  ------------
Balance Forward                     545,300  $        5,45     76,931,751  $      76,932  $  11,390,655  $   (286,056) $ (3,078,228)
                              -------------  -------------  -------------  -------------  -------------  ------------  ------------
</TABLE>

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

                                       9
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
     Consolidated Statements of Stockholders' Equity (Deficit) (Continued)

<TABLE>
<CAPTION>
                                        Preferred Stock             Common Stock            Additional
                              ----------------------------  ----------------------------
                              Subscriptions   Accumulated                                    Paid-in
                                  Shares        Amount         Shares         Amount         Capital      Receivable     Deficit
                              -------------  -------------  -------------  -------------  -------------  ------------  ------------
<S>                           <C>            <C>            <C>            <C>            <C>            <C>           <C>
Balance Forward                     545,300  $       5,453     76,931,751  $      76,932  $  11,390,655  $   (286,056) $ (3,078,228)

Unrealized loss on
treasury stock                         -              -              -              -              -             -          (69,222)

Realized loss on treasury
 stock                                 -              -              -              -              -             -         (205,065)

Net loss for the
year ended
December 31, 2000                      -              -              -              -              -             -       (8,616,328)
                              -------------  -------------  -------------  -------------  -------------  ------------  ------------
Balance,
December 31, 2000                   545,300  $       5,453     76,931,751  $      76,932  $  11,390,655  $   (286,056) $(11,968,843)
                              =============  =============  =============  =============  =============  ============  ============
</TABLE>

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

                                       10
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                                For the Year Ended
                                                                                  December 31,
                                                                         -----------------------------
                                                                             2000             1999
                                                                         -------------     -----------
<S>                                                                      <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Continued operations:
   Net loss                                                              $  (6,463,614)    $  (692,737)
   Adjustments to reconcile net loss to net cash
    (used) by operating activities:
     Depreciation and amortization                                              38,776          33,979
     Bad debts                                                               1,536,998         196,791
     Loss on disposition of assets                                           1,809,200          37,365
     Loss on investments                                                       108,958          92,223
     Additional interest on convertible debentures                             534,000               -
     Stock issued for services                                                 248,400         161,800
Discontinued operations:
   Net loss                                                                 (2,152,714)              -
   Depreciation and amortization                                                 6,683               -
   Bad debts                                                                     9,987               -
   Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                                 19,828          99,147
     (Increase) decrease in accounts
      receivable - related parties                                            (185,476)        (61,091)
     (Increase) decrease in other assets                                           (62)        (18,950)
     Increase (decrease) in accounts payable                                   314,224         (68,471)
     Increase (decrease) in bank overdraft                                           -          (4,509)
     Increase (decrease) in other liabilities                                  671,006         (57,995)
     Increase (decrease) in discontinued operations reserve                    288,385               -
                                                                         -------------     -----------

       Net Cash (Used) by Operating Activities                              (3,215,421)       (282,448)
                                                                         -------------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES

   Purchase of licensing rights                                               (150,000)              -
   Purchase of investments                                                    (181,543)       (662,348)
   Notes receivable - advances                                              (1,189,611)       (324,007)
   Notes receivable - received                                                  30,343          92,500
   Purchase of property and equipment                                         (193,149)         (7,084)
                                                                         -------------     -----------
       Net Cash (Used) by Investing Activities                              (1,683,960)       (900,939)
                                                                         -------------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES

  Due to shareholders                                                                -         (31,660)
  Repayment of notes payable                                                  (306,590)        (62,634)
  Proceeds from long-term borrowings                                           843,500               -
  Repurchase of stock                                                         (282,467)         (5,809)
  Stock offering costs                                                        (202,325)              -
  Receipt of subscription receivable                                           199,000               -
  Stock issued for cash                                                      4,460,195       1,474,071
                                                                         -------------     -----------
     Net Cash Provided by Financing Activities                           $   4,711,313     $ 1,373,968
                                                                         -------------     -----------
</TABLE>


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

                                       11
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
               Consolidated Statements of Cash Flows (Continued)

<TABLE>
<CAPTION>
                                                                 For the Year Ended
                                                                    December 31,
                                                          -------------------------------
                                                               2000              1999
                                                          --------------     ------------
<S>                                                       <C>                <C>
NET INCREASE (DECREASE) IN CASH                           $     (188,068)    $    190,581

CASH AND CASH EQUIVALENTS AT
 BEGINNING OF YEAR                                               190,581                -
                                                          --------------     ------------

CASH AND CASH EQUIVALENTS
 AT END OF YEAR                                           $        2,513     $    190,581
                                                          ==============     ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION

    Interest paid                                         $      357,123     $    269,728
    Income taxes paid                                     $            -     $          -

SUPPLEMENTAL DISCLOSURE OF
 NON-CASH ACTIVITIES

   Common stock issued for services                       $      248,400     $    161,800
   Common stock issued on conversion of debentures
     and interest                                         $      625,499     $     59,416
   Common stock issued for investments                    $      170,000     $    125,000
   Dividends paid through investment stock                $            -     $    165,614
   Purchase of fixed assets through issuance of notes
     payable                                              $       31,195     $          -
</TABLE>

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

                                       12
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 1 -  COMPANY BACKGROUND

          The consolidated financial statements include those of Peacock
          Financial Corporation (Colorado) (Peacock), its wholly-owned
          subsidiaries, Peacock Real Estate Development Corporation (California)
          (PREDC), Peacock International Corporation (Bahamas) (PIC), DotCom
          Ventures, LLC (DotCom), and Peacock Sports, Inc. (PSI). The
          consolidated financial statements also include its majority owned
          subsidiaries, Bay Area Soccer Development Corporation (Bay Area)
          (80%), Orange County Soccer Development Corporation (Orange) (85%),
          Riverside County Soccer Development Corporation (Riverside) (53%), and
          iNetPartners, Inc. (iNet) (51%). Collectively, they are referred to
          herein as "the Company".

          Peacock was incorporated under the laws of the State of Colorado on
          February 16, 1984 under the name of Oravest International, Inc. It
          later changed its name to Camdon Holdings, Inc. and then to American
          Temperature Control, Inc., Connectivity and Technology, Inc., and
          finally to Peacock Financial Corporation on February 27, 1996. Peacock
          was incorporated for the purpose of creating a vehicle to obtain
          capital to seek out, investigate and acquire interests in products and
          businesses which may have a potential for profit.

          PREDC, a wholly-owned subsidiary, was originally formed on July 29,
          1993. On October 22, 1999, the name was changed from Peacock Financial
          Corporation (California) to Peacock Real Estate Development
          Corporation. Its operations consist of the acquisition and enhancement
          of income-producing properties and the development of multi-use
          property including home building. Certain properties are owned by
          limited partnerships managed by the Company.

          PIC, a wholly-owned subsidiary, was formed on December 8, 1997. It has
          had no operations to date, but was formed to invest and trade in
          securities on an international basis.

          DotCom was organized on July 23, 1999. Peacock acquired its initial
          50% ownership with an initial investment of $112,203. On January 5,
          2000, the Company acquired the remaining 50% ownership by granting
          options to acquire a total of 500,000 restricted common shares of the
          Company at $0.10 per share. DotCom was organized for the purposes of
          conducting an internet production company and to consult start-up and
          emerging growth companies with their internet strategies.

          PSI was incorporated in January 2000 to hold and manage investments in
          professional sports. PSI holds ownership interests in three "A" league
          professional soccer teams, including the Orange County Waves, the Bay
          Area Seals and the San Diego Flash.

          In January 2000, the Company acquired an 85% ownership interest for
          $50,000 cash in Orange County Soccer Development Corporation (Orange).
          The investment was recorded as a purchase. Orange owns the "A" league
          soccer franchise for Orange County, California, known as the Orange
          County Waves.

          In February 2000, the Company acquired an 85% ownership interest for
          $100,000 cash in Bay Area Soccer Development Corporation (Bay Area).
          The investment was recorded as a purchase. Bay Area owns the "A"
          league soccer franchise of San Francisco, California known as the Bay
          Area Seals.

                                       13
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 1 -  COMPANY BACKGROUND (Continued)

          In February 2000, the Company acquired a 53% ownership interest in
          Riverside County Soccer Development Corporation (Riverside) for
          $6,000. The investment was recorded as a purchase. Riverside owns a D-
          3 league soccer franchise known as the Riverside Elite.

          The investments and operations of the soccer subsidiaries were
          discontinued as of December 31, 2000 (see Note 15).

          Peacock holds a 51% interest in iNet as of December 31, 2000. iNet was
          organized under the laws of the State of California on December 15,
          1999. iNet focuses on the development of Internet e-commerce
          applications for both the new and used automotive markets and is
          currently developing iNetmotors.com, a regionally based automobile e-
          commerce website to provide Internet automobile shoppers easy access
          to dealer inventories.

          On February 27, 1996, the Company completed an Agreement and Plan of
          Reorganization whereby Peacock issued 7,767,702 shares of its common
          stock and 672,300 shares of its preferred stock in exchange for all of
          the outstanding common stock of PREDC. Pursuant to the reorganization,
          the name of the Company was changed to Peacock Financial Corporation.

          The reorganization was accounted for as a recapitalization of PREDC
          because the shareholders of PREDC control the Company after the
          acquisition. Therefore, PREDC is treated as the acquiring entity.
          Accordingly, there was no adjustment to the carrying value of the
          assets or liabilities of Peacock . Peacock is the acquiring entity for
          legal purposes and PREDC is the surviving entity for accounting
          purposes.

          On September 15, 1998, the Company filed with the Securities and
          Exchange Commission to become a Business Development Corporation as
          defined under the Investment Act of 1940. Simultaneously, the Company
          registered an offering circular with the SEC for 13,000,000 shares of
          common stock under Regulation E of the Investment Act to raise capital
          and to make investments in real estate and in eligible portfolio
          companies. The Company participates in the formation of, and invests
          in, emerging or early-stage companies in various fields of business by
          arranging for and contributing capital and providing management
          assistance.

NOTE 2 -  GOING CONCERN

          As reported in the consolidated financial statements, the Company has
          an accumulated deficit of approximately $11,968,000 at December 31,
          2000 and has incurred a loss of $8,616,328 for the year ended December
          31, 2000. In addition, the Company is party to certain lawsuits at
          December 31, 2000 that could have a material impact on the Company's
          operations. The Company also has certain debts that are in default at
          December 31, 2000. The Company's stockholders' deficit at December 31,
          2000 was $790,039 and its current liabilities exceeded its current
          assets by $1,683,089.

                                       14
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 2 -  GOING CONCERN (Continued)

          These factors create uncertainty about the Company's ability to
          continue as a going concern. The ability of the Company to continue as
          a going concern is dependent on the Company obtaining adequate capital
          to fund operating losses until it becomes profitable. If the Company
          is unable to obtain adequate capital it could be forced to cease
          operations. The Company decided to discontinue all of the soccer
          operations of its subsidiaries as of December 31, 2000.

          In order to continue as a going concern, develop and generate revenues
          and achieve a profitable level of operations, the Company will need,
          among other things, additional capital resources. Management's plans
          to obtain such resources for the Company include (1) raising
          additional capital through sales of common stock, (2) converting
          promissory notes into common stock and (3) enter into acquisition
          agreement with profitable entities with substantial operations. In
          addition, management is continually seeking to improve the operations
          and grow the business through a variety of venues. However, management
          cannot provide any assurances that the Company will be successful in
          accomplishing any of its plans.

          The ability of the Company to continue as a going concern is dependent
          upon its ability to successfully accomplish the plans described in the
          preceding paragraph and eventually secure other sources of financing
          and attain profitable operations. The accompanying consolidated
          financial statements do not include any adjustments that might be
          necessary if the Company is unable to continue as a going concern.

NOTE 3 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          A summary of the significant accounting policies consistently applied
          in the preparation of the accompanying consolidated financial
          statements follows:

          a.   Accounting Method

          The Company's consolidated financial statements are prepared using the
          accrual method of accounting. The Company has elected a December 31
          year end.

          b.   Cash and Cash Equivalents

          Cash equivalents include short-term, highly liquid investments with
          maturities of three months or less at the time of acquisition.

          c.   Partnership Investments

          The Company's general and limited partnership interests are accounted
          for using the equity method, which reflects historical cost adjusted
          for the proportionate share of partnership earnings or losses. The
          Company has not recorded its share of losses in excess of its
          investment in each partnership.

                                       15
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 3 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          d.  Fixed Assets

          Fixed assets are recorded at cost. Major additions and improvement are
          capitalized. The cost and related accumulated depreciation of
          equipment retired or sold are removed from the accounts and any
          differences between the undepreciated amount and the proceeds from the
          sale are recorded as gain or loss on sale of assets. Depreciation is
          computed using the straight-line method over the estimated useful life
          of the assets as follows:

                    Description                     Estimated Useful Life
                    -----------                     ---------------------

                    Furniture and fixtures          5 to 7 years
                    Computers and software          5 years
                    Automobiles                     5 years

          e.   Basic and Diluted Loss Per Share

                                            2000            1999
                                            -----           ----

          Loss (numerator)              $(8,616,328)    $   (692,737)

          Shares (denominator)           50,655,097       30,503,871

          Per share amount              $     (0.17)    $      (0.02)

          The computations of basic loss per share of common stock are based on
          the weighted average number of common shares outstanding during the
          period of the consolidated financial statements. Common stock
          equivalents, consisting of convertible debt and preferred shares, have
          not been included in the calculation as their effect is antidilutive
          for the periods presented.

          f.   Change in Accounting Principles

          The Company has adopted the provisions of FASB Statement No. 138
          "Accounting for Certain Derivative Instruments and Hedging Activities,
          (an amendment of FASB Statement No. 133.)" Because the Company had
          adopted the provisions of FASB Statement No. 133, prior to June 15,
          2000, this statement is effective for all fiscal quarters beginning
          after June 15, 2000. The adoption of this principle had no material
          effect on the Company's consolidated financial statements.

          The Company has adopted the provisions of FASB Statement No. 140
          "Accounting for Transfers and Servicing of Financial Assets and
          Extinguishments of Liabilities (a replacement of FASB Statement No.
          125.)" This statement provides accounting and reporting standard for
          transfers and servicing of financial assets and extinguishments of
          liabilities. Those standards are based on consistent application of a
          financial- components approach that focuses on control. Under that
          approach, the transfer of financial assets, the Company recognized the
          financial and servicing assets it controls and the liabilities it has
          incurred, derecognizes financial assets when control has been
          surrendered, and derecognizes liabilities when extinguished. This
          statement provides consistent standards for distinguishing transfers
          of financial assets that are sales from transfers that are secured
          borrowings. This statement is effective for transfers and

                                       16
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 3 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          f.   Change in Accounting Principles (Continued)

          servicing of financial assets and extinguishments of liabilities
          occurring after March 31, 2001. This statement is effective for
          recognition and reclassification of collateral and for disclosures
          relating to securitization transactions and collateral for fiscal
          years ending after December 15, 2000. The adoption of this principle
          had no material effect on the Company's consolidated financial
          statements.

          The Company has adopted the provisions of FIN 44 "Accounting for
          Certain Transactions Involving Stock Compensation (an interpretation
          of APB Opinion No. 25.)" This interpretation is effective July 1,
          2000. FIN 44 clarifies the application of Opinion No. 25 for only
          certain issues. It does not address any issues related to the
          application of the fair value method in Statement No. 123. Among other
          issues, FIN 44 clarifies the definition of employee for purposes of
          applying Opinion 25, the criteria for determining whether a plan
          qualifies as a noncompensatory plan, the accounting consequence of
          various modifications to the terms of a previously fixed stock option
          or award, and accounting for an exchange of stock compensation awards
          in a business combination. The adoption of this principle had no
          material effect on the Company's consolidated financial statements.

          g.   Principles of Consolidation

          The consolidated financial statements include those of Peacock
          Financial Corporation (Colorado), its wholly-owned subsidiaries,
          Peacock Real Estate Development Corporation (California) (PREDC),
          Peacock International Corporation (Bahamas) (PIC), DotCom Ventures,
          LLC (DotCom) and Peacock Sports, Inc. (PSI). They also include the
          majority owned subsidiaries, Bay Area Soccer Development Corporation
          (Bay Area) (80%), Orange County Soccer Development Corporation
          (Orange) (85%), Riverside County Soccer Development Corporation
          (Riverside) (53%), and iNet Partners, Inc. (iNet) (51%). All
          significant intercompany accounts and transactions have been
          eliminated.

          h.   Estimates

          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date of the financial statements and the reported amounts of revenues
          and expenses during the reporting period. Actual results could differ
          from those estimates.

          i.   Concentrations of Risk

          Credit losses, if any, have been provided for in the consolidated
          financial statements and are based on management's expectations. The
          Company's accounts receivable are subject to potential concentrations
          of credit risk. The Company does not believe that it is subject to any
          unusual, or significant risks in the normal course of its business.

                                       17
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 3 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          j.   Provision for Taxes

          At December 31, 2000, the Company had an accumulated deficit of
          $11,968,843 which includes net operating loss carryforwards that may
          be offset against future taxable income through 2020. No tax benefit
          has been reported in the consolidated financial statements as the
          Company believes there is a 50% or greater chance the net operating
          loss carryforwards will expire unused. Accordingly, the potential tax
          benefits of the net operating loss carryforwards are offset by a
          valuation allowance of the same amount.

          The income tax benefit differs from the amount computed at federal
          statutory rates of approximately 38% as follows:

                                                                  For the Years
                                                                  Ended
                                                                  December 31,
                                                   --------------------------
                                                        2000          1999
                                                        ----          ----

          Income tax benefit at statutory rate     $   3,274,205  $   263,240
          Change in valuation allowance               (3,274,205)    (263,240)
                                                   -------------  -----------
                                                   $           -  $         -
                                                   =============  ===========

          Deferred tax assets (liabilities) are comprised of the following:

                                                                For the Years
                                                                Ended
                                                                December 31,
                                                      ---------------------
                                                        2000         1999
                                                        ----         ----

          Income tax benefit at statutory rate    $  4,548,160  $   1,273,955
          Change in valuation allowance             (4,548,160)    (1,273,955)
                                                  ------------  -------------

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

          Due to the change in ownership provisions of the Tax Reform Act of
          1986, net operating loss carryforwards for Federal income tax
          reporting purposes are subject to annual limitations. Should a change
          in ownership occur, net operating loss carryforwards may be limited as
          to use in the future.

          k.   Advertising

          The Company follows the policy of charging the costs of advertising to
          expense as incurred.

          l.   Revenue Recognition

          The Company receives shares in certain companies for providing capital
          and investment services. The Company records investment banking income
          based on the fair value of the shares received.

          m.   Accounts and Notes Receivable

          Accounts and notes receivable are shown net of an allowance for
          doubtful accounts of $1,760,100 as of December 31, 2000

                                       18
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 4 - INVESTMENTS IN LIMITED PARTNERSHIPS

         During 1987, the Company formed a limited partnership agreement where
         the Company is the general partner. The partnership was formed to
         acquire and develop approximately 500 acres in San Jacinto, California.
         The partnership currently owns certain residential lots, commercially
         zoned property, and property zoned for high density senior apartments
         within the community of Rancho San Jacinto. The general partner was not
         required to make an initial capital contribution, thus the initial
         investment was recorded at $-0-. The Company holds a 15% interest in
         the limited partnership at December 31, 2000 and records the investment
         under the equity method of accounting. The Company has not recorded its
         share of losses in excess of its investment.

         On June 29, 1992, the Company formed a limited partnership agreement to
         acquire two apartment buildings to be repaired, developed, and managed
         which are referred to as the Riverside Park Apartments. The partnership
         acquired the property for $3,350,000 on July 10, 1992 for $670,000 in
         cash and a promissory note of $2,680,000. In July 1992, the partnership
         entered into an agreement whereby the City of Riverside loaned the
         partnership $650,000 at 10.5 percent interest. The loan will be
         forgiven by August 1, 2007. The debt and accrued interest are forgiven
         at one-fifteenth of the original balance per year. The agreement
         requires the partnership to meet certain restrictive covenants. The
         Company remains the general partner with a 1% interest and receives a
         property management fee.

         In December 1995, the Company formed a limited liability company to
         acquire a 63-lot residential subdivision in the San Jacinto Valley. In
         March 1996, the limited liability company acquired an additional 110-
         lot subdivision also in the San Jacinto Valley. The Company retains a
         50% ownership in the limited liability company and also receives an
         overhead fee for the construction and marketing of the homes. The
         investment is recorded under the equity method.

         During 1995, the Company received a $975,000 loan that converted to a
         grant from the City of Riverside to acquire and rehabilitate a 120-unit
         apartment complex (see Note 12). During April 1996, the Company was
         awarded $2,400,000 in Federal tax credits. During December 1996, the
         Company sold the completed project to a tax credit partnership named
         Canyon Shadows, L.P. retaining a 1% interest as general partner and
         receiving a $905,000 capital account in the partnership. During 1999, a
         $70,000 note held by the Company was transferred to Canyon Shadows,
         L.P., which was recorded as a capital distribution to the Company (see
         Note 12). Additional costs of $411,639 were incurred by the Company on
         behalf of the partnership resulting in a total investment in Canyon
         Shadows, L.P. of $1,131,961 at December 31, 2000.

         The Company currently owns 49% of Vir-Tek Company (Vir-Tek), a minority
         disabled veteran engineering and contracting firm, formed to take
         advantage of recently passed federal legislation (H.R. 1568) requiring
         3% participation on all programs and projects funded by federal
         dollars. Vir-Tek provides environmental management, facility and
         operations management, mapping and information management, engineering
         services, project management, and waste management. The company
         emphasizes teamwork in industrial, and engineering problems. Vir-Tek
         has served commercial, industrial, and residential construction
         developers as well as concerns of city, county, and federal agencies.
         The investment is recorded under the equity method. The Company has
         also recorded a receivable from Vir-Tek totaling $139,029 for funds
         advanced to Vir-Tek for operating expenses.

                                       19
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 5 - FIXED ASSETS

         Fixed assets consist of the following at December 31, 2000:

             Furniture and fixtures                                   $  38,039
             Computers and software                                     194,212
             Automobiles                                                 56,195
                                                                      ---------
                                                                        288,446

            Accumulated depreciation                                    (96,916)
                                                                      ---------

            Net fixed assets                                          $ 191,530
                                                                      =========

         Depreciation expense for the years ended December 31, 2000 and 1999 was
         $38,776 and $3,979, respectively.

NOTE 6 - OTHER INVESTMENTS

         During the year ended December 31, 1998, the Company became a Business
         Development Corporation whereby the Company can raise capital under a
         simplified and cost effective informational filing with the Securities
         and Exchange Commission for the purpose of investing in small
         businesses and government securities. The Company intends to provide
         capital for these companies and to later take these companies public
         through a spin-off process.

         On October 19, 1998, the Company issued 1,000,000 shares of its
         outstanding common stock valued at $100,000 to acquire an approximate
         33% interest in IPO/Emerging Growth Company, LLC. (IPO). The investment
         has been recorded under the equity method. The Company's share of the
         1999 and 2000 loss recorded under the equity method was $16,513
         bringing the equity investment at December 31, 2000 to $83,487.

         On October 23, 1998, the Company issued 820,000 shares of its
         outstanding common stock valued at $100,000 to acquire an approximate
         5% interest in San Diego Soccer Development Corp. (SDSDC), owner of the
         San Diego FLASH pro soccer team. On March 11, 1999, the Company issued
         an additional 500,000 shares of its outstanding common stock valued at
         $50,000 to acquire 200,000 additional shares of SDSDC. In addition, the
         Company received an additional 400,000 shares of SDSDC during 1999,
         valued at $200,000, as an investment fee for providing capital to
         SDSDC. As part of the investment agreement, the Company distributed a
         total of 294,999 shares of its SDSDC stock to the Company's
         shareholders as a dividend valued at $165,614.

         During 2000, the Company acquired an additional 1,050,000 restricted
         shares of SDSDC for an additional cost of $531,519. 1,000,000 of those
         shares were received as an investment fee recorded at $500,000 or $0.50
         per share. A decline in the value of the shares was recorded at
         December 31, 2000 of $607,055 bringing the total value of the 1,555,001
         shares at December 31, 2000 to $108,850.

                                       20
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 6 - OTHER INVESTMENTS (Continued)

         On January 3, 2000, SDSDC became a publicly traded company. The shares
         are thinly traded, however, until SDSDC is able to finalize a proposed
         merger agreement. The Company's shares in SDSDC have been recorded at
         their fair value at December 31, 2000 rather than cost because of the
         significant decline in value. Once the shares become free-trading
         shares on the open market, they will be recorded as "trading
         securities" pursuant to SFAS 115. The shares represent an approximate
         15% ownership in SDSDC at December 31, 2000. Management of the Company
         does not exercise any influence or control over management of SDSDC.

         On February 2, 1999, the Company issued 750,000 shares of its
         outstanding common stock valued at $75,000 to acquire approximately 20%
         (2,000,000 shares) of the outstanding shares of Solutions Media, Inc.
         (Solutions). On June 15, 1999, the Company entered into a separate
         agreement whereby the 750,000 shares of the Company were returned for
         cancellation in exchange for the return of the 2,000,000 shares of
         Solutions. As part of the agreement, the Company received 800,000
         shares of Solutions as an investment fee valued at $400,000. The
         investment was originally recorded under the cost method as the Company
         did not exercise any influence or control over management of Solutions.
         The 800,000 shares of Solutions represented an approximate ownership of
         2% at December 31, 1999. Solutions filed for bankruptcy during 2000
         under Chapter 7. Therefore, the investment in Solutions at December 31,
         2000 was written down to $-0-, as there is no apparent current value of
         the shares owned.

         During 1999, the Company purchased 1,020,000 shares of Las Vegas Soccer
         Development Corporation (LVSDC) for $20,000 cash, which represents an
         approximate ownership of 25% at December 31, 2000. The investment has
         been recorded under the equity method.

         During 2000, the Company invested a total of $180,000 in Bio-Friendly
         Corporation (Bio-Friendly) for 437,500 shares of Bio-Friendly stock.
         The investment is recorded under the cost method as the Company does
         not exercise any influence or control over management of Bio-Friendly.
         Bio-Friendly has put together licensing agreements to manufacture,
         distribute and market their bulk fuel additive on a world-wide basis.
         The Company was originally to invest a total of $250,000 in Bio-
         Friendly for a total of 625,000 shares. The Company was also to receive
         3.33% of Bio-Friendly's share of the cash flow pursuant to a joint
         venture. As the Company has not invested the full amount originally
         agreed on, the investment is recorded at cost with no revenues from the
         cash-flow.

                                       21
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 6 - OTHER INVESTMENTS (Continued)

         As previously mentioned, once the shares that the Company owns in each
         of the companies become free-trading shares on the open market, the
         investments will be recorded as "trading securities" pursuant to SFAS
         115, and recorded at the fair market value of the shares owned.

         Following is a summary of the investments held as of December 31, 2000:

                    IPO/Emerging Growth Co.              $      83,487
                    San Diego Soccer Development               108,850
                    Bio-Friendly Corporation                   180,000
                    Las Vegas Soccer Development                20,000
                    Other                                        1,952
                                                         -------------

                    Total                                $     394,289
                                                         =============

NOTE 7 - NOTES RECEIVABLE

         Notes receivable consist of the following at December 31, 2000:

         Note receivable at 10%, secured by stock, principal and
           interest due June 12, 2001.                              $    72,457

         Note receivable at 10%, unsecured, principal and interest
           due July 1, 2000, currently in default.                       25,000
                                                                    -----------

                  Total Notes Receivable                                 97,457
                  Less: Allowance for Bad Debts                         (12,500)
                                                                    -----------

                  Notes Receivable, net                             $    84,957
                                                                    ===========

NOTE 8 - NOTES RECEIVABLE - RELATED PARTIES

         Notes receivable - related parties consist of the following at
December 31, 2000:

         Note receivable at 8%, due from San Diego Soccer
          Development Corporation, unsecured, principal and
          interest due on demand                                    $   100,000

         Credit line receivable at 10%, due from San Diego
          Soccer Development Corporation, secured by shares
          of SDSDC representing 53% of the outstanding shares,
          originally due December 31, 2000, currently in default.       694,612

         Note receivable at 7%, due from PR Equities, Ltd.
          (equity investment), unsecured, principal and interest
          due December 31, 2001.                                        565,223
                                                                    -----------

              Balance Forward                                       $ 1,359,835
                                                                    -----------

                                       22
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 8 - NOTES RECEIVABLE - RELATED PARTIES (Continued)

         Balance Forward                                           $  1,359,835

         Note receivable from former employee, secured by 100,000
          shares of the Company's stock, due October 1, 2000,
          currently in default                                           22,232

          Other                                                          17,880
                                                                   ------------

              Total Notes Receivable - Related Parties                1,399,947
              Less: Current Portion                                  (1,369,960)
                                                                   ------------

              Long-Term Notes Receivable - Related Parties         $     29,987
                                                                   ============

NOTE 9 - NOTES PAYABLE

         Notes payable consist of the following at December 31, 2000:

         Note payable at 5%, secured by an assignment of
           partnership cash, interest payable quarterly, principal
           due January 1, 2007, convertible to common stock.         $  500,000

         Note payable at variable rate (18.0% at December 31, 2000)
           collateralized by deed of trust on real property. Lump sum
           payment was due May 21, 1999, currently in default.           86,854

         Note payable at 10%, secured by deed of trust, due
           March 31, 1996, currently in default.                         65,000

         Note payable at 20.28%, secured by vehicles, payable
           in monthly installments of $832, matures February 2005.       27,914

         Debentures at 10%, unsecured, convertible into common
           shares at rates of $0.02 to $0.10 per share at the option
           of the holder, due December 31, 2000.                        681,750

         Others                                                          10,000
                                                                     ----------

             Total Notes Payable                                      1,371,518
             Less: Current Portion                                     (848,343)
                                                                     ----------

             Long-Term Notes Payable                                 $  523,175
                                                                     ==========

                                       23
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 9 -  NOTES PAYABLE (Continued)

          The aggregate principal maturities of notes payable are as follows:

           Years Ending December 31,                          Amount
           -------------------------                        -----------

                  2001                                       $  848,343
                  2002                                            5,795
                  2003                                            7,250
                  2004                                            8,680
                  2005                                            1,450
                  2006 and thereafter                           500,000
                                                            -----------
                  Total                                     $ 1,371,518
                                                            ===========

NOTE 10 - RELATED PARTY TRANSACTIONS

          The Company is a partner in several limited partnerships (Note 4). The
          Company occasionally pays for operating expenses of the partnerships
          and is reimbursed as funds become available to the partnerships. These
          advances are non-interest bearing and are reimbursed on a regular
          basis.

          The Company is owed certain amounts from a former officer of the
          Company and certain other related entities in the amount of $223,172.
          The amounts are non-interest bearing and due on demand. An allowance
          for bad debts of $143,407 has been recorded by the Company at December
          31, 2000 due to collection uncertainty bringing the net amount to
          $79,765.

NOTE 11 - PROFIT SHARING PLAN

          In 1989, the Company adopted a profit sharing plan covering all
          eligible employees. Contributions are made at the discretion of the
          Board of Directors. There were no contributions to the plan for the
          years ended December 31, 2000 and 1999.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

          a. General Partner Obligations
             ---------------------------

          The Company serves as general partner in several real estate
          development partnerships. The Company may be held liable for certain
          liabilities of these partnerships in its capacity as general partner.
          At December 31, 2000, the partnerships had certain liabilities with
          recourse against the Company although management does not feel that
          the potential liabilities will have a material impact on the Company.

                                       24
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999

NOTE 12 - COMMITMENTS AND CONTINGENCIES (Continued)

          b.   Rents and Leases
               ----------------

          During 1996, the Company acquired an historic 15-room hotel in
          downtown San Jacinto and converted it into an executive suites office
          building. Financing, which consisted of a seller carry-back loan of
          $125,000 for the acquisition and a City of San Jacinto Redevelopment
          loan of $193,088 for the rehabilitation was foreclosed on during 1999,
          resulting in a gain on the disposition of the corresponding assets and
          liabilities associated with the hotel of $4,635 for the year ended
          December 31, 1999.

          c.   Wrap Around Mortgage
               --------------------

          The Company has sold a property subject to a mortgage. The mortgage
          has not been fully assumed by the buyer. If the buyer defaults on the
          mortgage, the Company may be liable for the balance owing.

          d.   Housing Grant
               -------------

          In April 1995, the Company acquired a 120 unit apartment complex using
          a $975,000 loan that converts to a grant from the City of Riverside,
          California. The loan is non- recourse and is secured by a second trust
          deed on the property. If the Company meets certain requirements
          pertaining to the complex, which have been stipulated by the city, the
          loan will be forgiven in its entirety. Management has complied with
          all of the requirements and believes that the repayment of $905,000
          (the grant portion) of the $975,000 is highly remote. Accordingly,
          $905,000 of the amount has been recorded as income to the Company for
          the year ended December 31, 1997.

          The remaining $70,000 plus accrued interest of $9,625 on the loan was
          transferred to Canyon Shadows, L.P. (see Note 4) during 1999, reducing
          the loss on investment in Canyon Shadows by $79,625 for the year ended
          December 31, 1999.

          If the Company fails to meet the requirements, however, the entire
          unpaid principal balance, together with accrued interest, will become
          due at the discretion of the City of Riverside and foreclosure
          proceedings may be initiated on the property.

          e.   Litigation
               ----------

          The Company is party to litigation and claims arising in the normal
          course of business. Management is currently working on settlement
          negotiations and has recorded a potential liability of $350,000
          related to these lawsuit settlements. The outcome of these lawsuits
          and claims cannot be determined as of the date of our audit report.

NOTE 13 - PREFERRED STOCK

          The Company's preferred stock has the right to quarterly dividends to
          be paid at the annual rate of 6%. The quarterly dividend is to be paid
          to all shareholders of record, as of the last day of each quarter
          until such time as the Company causes such shares to be converted to
          common shares and "registered" (free trading) with the S.E.C. and the
          appropriate State regulatory agency.

          Each preferred share is convertible into one share of the common stock
          of the Company, such conversion to occur automatically and registered
          concurrently with any public offering of the common shares of the
          Company.

                                       25
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 14 - STOCK SUBSCRIPTIONS RECEIVABLE

          During 1999, the Company issued a total of 2,733,000 shares of its
          outstanding common stock for $443,500 under stock subscription notes
          receivable. These notes were non-interest bearing. During 1999,
          $116,445 of the amount was received. During 2000, the Company issued
          additional shares of common stock under promissory notes totaling
          $158,001 for 1,200,000 shares. These notes are also non-interest
          bearing. During 2000, an additional $199,000 was received by the
          Company pursuant to these subscription notes receivable. The total
          amount of stock subscriptions receivable at December 31, 2000 was
          $286,056.

NOTE 15 - SEGMENT INFORMATION

          The Company's reportable segments are strategic business units that
          offer different products and services. They are managed separately
          because each business requires different technology and marketing
          strategies.

          The Company had three separate reportable segments during the year
          ended December 31, 2000, investment banking, website development and
          soccer franchises. As discussed in Note 16, the soccer subsidiaries
          were discontinued as of December 31, 2000. The remaining two segments
          will be the Company's focus in the future. The accounting policies
          applied to determine the segment information are the same as those
          described in the summary of significant accounting policies.

          Financial information with respect to the reportable segments are as
          follows:


                                     Investment
                                    Banking and       Website
                                   Administration   Development      Total
                                   --------------   -----------   ------------

          Revenues                  $     611,214   $   153,600   $    764,814

          Expenses                     (3,581,346)     (822,137)    (4,403,483)

          Other income (expenses)      (2,823,479)       (1,466)    (2,824,945)
                                    -------------   -----------   ------------

          Net loss per segment      $  (5,793,611)  $  (670,003)  $ (6,463,614)
                                    =============   ===========   ============


NOTE 16 - DISCONTINUED OPERATIONS

          Effective December 31, 2000, the Company discontinued the operations
          of the soccer subsidiaries, Bay Area, Orange and Riverside. The
          following is a summary of the loss from discontinued operations
          resulting from the dissolution of these subsidiaries for the year
          ended December 31, 2000. The Company has established a reserve for
          discontinued operations of $305,055 which consists of net liabilities
          in excess of recoverable assets at December 31, 2000. No tax benefit
          has been attributed to the discontinued operations.

                                       26
<PAGE>

                PEACOCK FINANCIAL CORPORATION AND SUBSIDIARIES
                Notes to the Consolidated Financial Statements
                          December 31, 2000 and 1999


NOTE 16 - DISCONTINUED OPERATIONS (Continued)

                                                                    For the
                                                                   Year Ended
                                                                  December 31,
                                                                      2000
                                                                 -------------

          REVENUES                                               $     178,540
                                                                 -------------

          OPERATING EXPENSES

            General and administrative                               2,315,634
            Bad debt expense                                             9,987
            Depreciation and amortization                                6,683
                                                                 -------------

              Total Operating Expenses                               2,332,304
                                                                 -------------

          LOSS FROM OPERATIONS                                      (2,153,764)
                                                                 -------------

          OTHER INCOME (EXPENSE)

            Interest income                                              1,834
            Interest expense                                              (784)
                                                                 -------------

              Total Other Income (Expense)                               1,050
                                                                 -------------

          LOSS FROM DISCONTINUED OPERATIONS                      $  (2,152,714)
                                                                 =============

                                       27
</TEXT>
</DOCUMENT>
