<page> 1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-K
                ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                 For the Fiscal Period Ended: October 31, 2001

                         Commission File Number: 0-27002

                        INTERNATIONAL DISPLAYWORKS, INC.
                    (Formerly Granite Bay Technologies, Inc.)
             (Exact name of Registrant as specified in its charter)

           Delaware                                   94-3333649
           --------                                   ----------
   (State or Incorporation)              (I.R.S. Employer Identification No.)

 599 Menlo Drive, Suite 200, Rocklin, California           95765
 -----------------------------------------------           -----
    (Address of principal executive offices)             (Zip Code)

                                 (916) 415-0864
               (Registrant's telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act: Common Stock

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 twelve months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days.
                         X   Yes                 ___ No


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-K, and no disclosure will be contained, to the best of the
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment of this
Form 10-K. [ ]

Aggregate Market Value of the voting stock held by non-affiliates of the
registrant based on the closing sale price as reported by Bulletin Board on
January 31, 2002 is $3,378,099.

The number of shares of the registrant's common stock, no par value, outstanding
on January 31, 2002 was 19,321,246.

Documents incorporated by reference:  None.


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     With the exception of historical facts stated herein, the matters discussed
in this  Form 10-K are  "forward  looking"  statements  that  involve  risks and
uncertainties  that  could  cause  actual  results  to  differ  materially  from
projected  results.  Such  "forward  looking"  statements  include,  but are not
necessarily  limited  to  statements  regarding  anticipated  levels  of  future
revenues and earnings from the operations of  International  DisplayWorks,  Inc.
and its subsidiaries,  (the "Company"),  projected costs and expenses related to
the operations of the Company, liquidity, capital resources, and availability of
future equity capital on commercially reasonable terms. Factors that could cause
actual results to differ  materially are discussed  under "Item 7 - Management's
Discussion  and  Analysis of  Financial  Condition  and Results of  Operations -
Liquidity  and Capital  Resources  - Factors  That May Affect  Future  Results."
Readers of this Form 10-K are  cautioned  not to put undue  reliance on "forward
looking"  statements,  which, by their nature, are not reliable indicators of
future  performance.  The Company disclaims any intent or obligation to publicly
update  these  "forward  looking"  statements,   whether  as  a  result  of  new
information, future events or otherwise.

                                     PART I
ITEM 1.  BUSINESS

     Granite Bay  Technologies,  Inc.  ("GBAY"),  merged  into its wholly  owned
subsidiary,  International  DisplayWorks,  Inc. (the "Company," "IDW,",  "we" or
"us") on October 31, 2001.  IDW assumed the reporting  obligations of GBAY. As a
result of the  merger,  the  Company  is now a  Delaware  corporation.  GBAY was
originally  incorporated  under  Oregon  law  as  Morrow  Snowboards,  Inc.,  to
manufacture  and market  snowboard  equipment and apparel.  In 1999, we sold the
snowboard  business to K2 and the apparel  business to Westbeach  and on January
31, 2000, we purchased all of the outstanding shares of Common Stock of IDW from
four private investors and IDW became our wholly owned  subsidiary.  On February
1,  2000,  IDW  acquired  through  its  wholly-owned  subsidiary,  International
DisplayWorks  (HK) Ltd.  ("IDWHK"),  a company  organized under the laws of Hong
Kong, SAR, all of the shares of MULCD  Microelectronics  Company Ltd.  ("MULCD")
and  IDW  Shenzhen  Technology  Development  Company  Ltd.  ("IDWT"),  companies
organized under the laws of the People's Republic of China from Vikay Industrial
Ltd., a Singapore company operating under judicial  management  ("Vikay Group").
(IDW, IDWHK, MULCD, and IDWT are collectively referred to as "IDW," the "Group,"
the "Company," "we" or "us") (MULCD and IDWT are collectively referred to as the
"PRC  Companies").  IDW Singapore was  incorporated  by the Company in the third
quarter  of 2000 and  discontinued  operations  in June of 2001 as a  result  of
general cost cutting and reorganization programs.

     The principal business of the Group is conducted through IDW, IDWHK and the
PRC Companies.  IDW has adopted  October 31st as its fiscal year end and is thus
reporting  for the  ten-month  period  ending  October 31, 2001.  The  following
discussion  is presented on a  consolidated  basis,  and analyzes the  financial
condition  and  results  of  operations  of IDW  and  its  subsidiaries  for the
ten-month fiscal period ended October 31, 2001.

     Our  headquarters  are  located  in  Rocklin,  California.  We  design  and
manufacture a wide range of display  products  including liquid crystal displays
("LCD"),  LCD modules,  turnkey  assemblies,  front panel display  systems,  and
printed  circuit  board  assemblies  for use in the  end  products  of  Original
Equipment  Manufacturers  ("OEM")  and  products  incorporating  LCDs for

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use in telecommunications and other electronics  equipment,  including appliance
controllers, and personal communication devices.

     The  LCDs  and   circuits   we   design   and   manufacture   are  used  in
telecommunications  (cell phones and other wireless  communication  devices), as
well  as in  medical  equipment,  household  appliances,  utility  applications,
automotive  equipment,  retail  and office  equipment  and  consumer  electronic
products. Targeted areas for new applications include office equipment (copiers,
facsimile machines, and printers),  high-resolution graphic display products for
personal digital assistants ("PDA") and small computers and map displays. We are
maintaining an efficient display  manufacturing  operation that will include the
latest product and  production  technologies  and high  production  yields.  The
design and  manufacturing  of our products is conducted in our facilities in the
PRC where we employ approximately 1,300 people.

     The PRC Companies were  purchased from the Vikay Group,  while it was under
Judicial  Management in Singapore.  Judicial  Management is a form of bankruptcy
proceeding  in  Singapore.  The PRC  Companies  had higher  sales prior to their
parent  entering  Judicial  Management.  We are  actively  working  to  re-build
revenues  throughout  the group by focusing on accounts  located  throughout the
world, some of which are relationships lost during the Judicial  Management era,
and some of which  are new  relationships  we have  been  developing  since  the
acquisition.  To remain competitive,  we are expanding production technology and
capabilities,  improving  the  organization  and  deployment of the staff at the
manufacturing   facilities  and  increasing  the  level  of  senior   management
supervision. We are focusing on high-volume production and management support to
increase yields and decrease unit costs,  reducing  inventories  through careful
planning  and  scheduling,  increasing  design staff to support new projects and
product  development and reducing  overall costs. We have  established  internal
systems to improve the level of communications among the factory,  sales offices
and customers to reduce lead times for price quotations, design and production.

     These internal changes lay the foundation for the future development of the
Group and give us strength in designing  prototypes and producing  products on a
timely and  cost-efficient  basis,  including a wide  variety of custom  design,
high-quality  display modules  required in the end products of OEMs and increase
the volume and efficiency throughout our LCD line.

Industry Overview

The Technology

     Since the commercial  production of the first light emitting diodes ("LED")
in the 1960s and twisted  nematic ("TN") liquid  crystal  displays in the 1970s,
the use of LCD and LED  indicators  has  become  widespread  in  industrial  and
consumer  electronics  products with LCD now the predominant  technology.  These
technologies  were  developed to overcome  limitations  in uses,  principally in
terms of size, life and power consumption of standard displays or indicators.

     An LCD modifies  light that passes  through or is  reflected by it,  rather
than emitting light like an LED. An LCD generally  consists of a layer of liquid
crystalline  material  suspended  between two glass plates.  The crystals  align
themselves in a predictable manner, which changes

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when stimulated  electrically.  The  change  in  alignment  produces  a  visual
representation  of  the  information  desired  when  used  in  conjunction  with
polarizers and either an external light source or natural ambient light.

     The flexibility of liquid crystal  technology allows for easy customization
in both size and design.  Displays are manufactured in sheet form and the images
can be changed by generating  artwork to the  customer's  requirements.  Display
size  can  be  controlled  by  programming  the  cutting  tool  to  the  desired
dimensions.  There is no significant  additional  manufacturing cost for a fully
custom display that allows each product to have its own unique  appearance  such
as icons, annunciators and color printing.

The Industry

     OEMs often  design their  products to contain  unique  display  modules and
features as a highly cost-effective means of differentiating their products from
those of  competitors.  OEMs  then make the  decision  whether  to use  standard
devices,  design  and  produce  devices  in-house  or  outsource  design  and/or
production.  In making the decision,  OEMs often  recognize  that their greatest
strengths are consumer  recognition  of their brand names,  market  research and
product  development  expertise and effective  sales and  distribution  channels
rather than in manufacturing.  OEMs also recognize that the time constraints and
limitations  of available  resources  often preclude them from  maintaining  the
specialized in-house expertise and equipment necessary to design and manufacture
custom  devices  and  those  standard  "off-the-shelf"  devices  are not  always
available. As a result, many OEMs outsource the design and production of devices
and  components  in which they lack the requisite  technology  and expertise and
focus their  resources on the areas where they have the greatest  expertise  and
leverage.  Outsourcing  allows  them to gain  access to  specialized  design and
manufacturing  technology and  expertise,  accelerate  the design  process,  and
reduce  their  own  investment  in  equipment,  facilities,  and  the  personnel
necessary  for  specialized  design  and  production.  By  reducing  design  and
manufacturing costs by utilizing the specialized  resources of a supplier,  such
as  ourselves,  and  concentrating  their  resources  on their  strengths in the
production  and   distribution  of  their  core  products,   they  can  maximize
profitability and reduce risk and time to market.  Our  specialization on design
and production provides a partnership  advantageous to both parties and provides
value through focus and economies of scale. This is further enhanced by locating
our manufacturing operations in the PRC.

     Several  major  OEMs  in the  electronics  industry  have  announced  their
decision  to  outsource  production  of  components  and final  assembly  of end
products,  including major cellular phone, PDA manufacturers and many others. We
believe that these  decisions  have been made to allow major OEMs to concentrate
on designing concepts for finished products,  marketing the finished product and
to better control costs by reducing the need for  specialized  equipment,  while
the Company can produce products for multiple companies.  IDW expects to benefit
from these  decisions  because it will  provide  us with more  design  input and
create  more  value-added  opportunities,  resulting  in  increased  module  and
assembly business, and solidified  relationships,  while providing our customers
with quality, reliability and lower overall product and service costs.

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     The  estimated  world  market  for  segmented  and  character  LCDs only is
reported to be $1.3  billion,  of which $225  million is in North  America.  The
module and assembly market is of significantly greater size than the LCD market.

Products and Service

     Our products  consist of LCDs and  subassemblies,  ranging from the low-end
LCDs for  calculators,  watches  and  electronic  games to  STN-LCDs  for use in
applications  that require high multiplex  rates and wide viewing  angles.  Such
devices are used in cellular telephones,  consumer appliances, office equipment,
bar  code  readers,  hand  held  computers,  automotive  equipment  and  medical
electronics.  The display  company,  MULCD,  produces the LCDs. The  electronics
company,  IDWT, designs and manufactures  customized LCD modules adding value to
the basic displays with electronics, keypads, interface circuitry, back lighting
and mounting hardware. This division also produces assemblies without LCDs. IDWT
has   production   and  design   capability  in  module   processes,   including
chip-on-glass  (COG), surface mount technology ("SMT"),  chip-on-board  ("COB"),
chip-on-film ("COF"), tape automated bonding ("TAB"), keypads and back lighting.

     We  currently  emphasize  custom-design  display  modules.  We believe that
custom  devices  will  represent  approximately  90% of our  sales  and the best
opportunity for higher profits and potential growth.  For each custom device, we
work directly  with our customer to develop and produce the original  design and
then manufacture the device in accordance with the customer's specifications. We
identify the specific needs of existing and prospective customer's applications.
We then  assign a  cross-functional  team of our  engineers  to a custom  design
project to develop the product working with the customer's  engineers throughout
the design phase,  prototype development and manufacturing  process. This effort
results in a  complete  system or  product,  which  requires  a specific  visual
display (cellular  telephones,  medical instruments or hand-held data collection
devices).  We, also,  have an inventory of completed  designs that are currently
generating  revenue  and are  expected  to  generate  additional  revenue in the
future.

     We are instituting a careful  marketing and customer  selection  process to
more closely  align our growth and  development  with that of the  customers and
industries,  which offer the greatest  opportunity for growth.  Our research and
development is focused upon  technological  developments  and products that meet
the current and future requirements of those industries and companies.

     With our LCD manufacturing  line at the MULCD  facilities,  we are focusing
our efforts on creating  advanced display  technologies.  These advanced display
technologies will allow us to provide customers with differentiating products or
products that provide higher information  content than either custom or standard
devices.

Manufacturing

     We have a broad range of production  processes to  manufacture a variety of
LCD types and features,  including TN and STN displays, which incorporate a wide
variety of  interface  technologies,  as well as  appearance  and  environmental
options. MULCD, the display subsidiary,

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has  a  state-of-the-art,   fully  automated,  LCD  front-end  sheet  processing
production  line that  started in 1998,  supported  by back-end  processing  and
testing  operators.  MULCD's LCD line was awarded an ISO 9001  certification for
quality.   (ISO  is  a  quality  standard   established  by  the   International
Organization for Standardization.)

     IDWT, the module and assembly  subsidiary is an ISO 9001 certified  display
module and assembly production facility.  Current manufacturing technologies are
COG,  COB, SMT, TAB assembly and heat seal flex  circuitry  assembly to which we
are adding  QVGA.  IDWT has the option to buy displays  from outside  sources in
order to expand its production  capabilities  or to have a second source to meet
customers'  requirements.  IDWT's production  capabilities include SMT lines for
high-speed  electronic component placement and production lines for LCD Modules,
PCB  assemblies.  IDWT also produces  printed circuit board  assemblies  without
LCDs.

     Wage costs for manufacturing  are currently  materially lower in China than
in the mature  markets of the West.  We are thus  positioned  with a competitive
advantage to compete effectively for business in the United States and Europe as
well as Asia.  IDW may be less able to compete for  customers  outside  China or
with companies with closer manufacturing  facilities if this wage advantage were
to  decrease  or other cost  differentials  affecting  IDW's  ability to provide
products at competitive prices were eroded.

     We seek to  increase  our  value  to  customers  by  providing  responsive,
flexible,  total  design  and  manufacturing  services.  To date,  manufacturing
services have been concentrated  towards the manufacture of LCDs and assembly of
custom design display modules. IDW will provide extended  manufacturing services
beyond those base  services if the customer  requests  them.  Extended  services
include design, process development and turnkey manufacturing.

Quality Control

     IDW has an aggressive quality control program and maintains quality systems
and processes that meet or exceed the  requirements set by many leading OEMs and
competitors in our targeted  industries.  IDW's quality control program is based
upon Total Quality Management ("TQM"). IDW routinely performs product testing on
its standard and custom products to ensure product reliability and quality.  IDW
analyzes test results and takes actions to adjust the  manufacturing  process or
enhance product design and quality.  IDW's customers generally evaluate price in
the  quotation  process,  while  delivery  and quality are  evaluated  after the
product is shipped.  Therefore,  many customers  evaluate a company's quality by
reviewing  the  quality  systems   employed.   IDW's  receipt  of  an  ISO  9001
certification  for quality for the MULCD facility and an ISO 9001  certification
for the IDWT  facility give its clients  assurance as to IDW's  quality  control
processes.  IDW is also  certified with QS9000 for  automotive  products,  which
qualifies it to work with North American automakers.

Sales and Marketing

     IDW  has  sales  representative   organizations  and  a  network  of  sales
representatives  covering  North America and the key markets in the Far East and
Europe, including Hong Kong, Singapore,

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Malaysia,  Taiwan and PRC. In support of our sales force,  we employ  design and
sales support engineers for technical backup.

     IDW's  sales in Asia were  approximately  43% of total sales in fiscal year
2001,  primarily  concentrated  in the  Hong  Kong  market.  The  United  States
accounted for 52% of total sales and Europe  accounted for  approximately  5% of
total sales in fiscal year 2001.

Customers

     IDW  operates  under  Non-Disclosure  Agreements  with  many  of its  major
customers  and thus,  cannot  provide  specific  customer  details.  Our largest
customer  accounted for approximately 35% of sales in fiscal year 2001. Sales to
our five  largest  customers  represented  more than 57% of sales in fiscal year
2001.

Research and Development

     IDW is currently  developing wide  temperature LCD displays for automotive,
appliance and outdoor utility meters; high density graphic displays for handheld
computers,  cell phones and personal digital assistants;  cold cathode and white
LED  backlighting  for black and  white,  half tone and color  displays;  and is
developing standard and custom chip-on-glass  displays for personal products and
appliances.

     Additionally,  IDW will conduct research and development that is focused on
improving  technology,  developing  improved  designs,  improving  manufacturing
processes and  improving  the overall  quality of the products and services that
IDW offers. IDW expects to increase its research and development  efforts on new
display technologies and more sophisticated display technologies. IDW expects to
restore research and development funding activities to appropriate levels and is
hiring research personnel to accomplish that goal.

Seasonality and Backlog

     IDW's business experiences a minimal amount of seasonality.  Our production
tends to ramp up in the second calendar quarter,  continuing  through the fourth
quarter,  but  declines  somewhat  in  the  first  quarter  leading  up  to  and
immediately following the Chinese Lunar New Year. Our manufacturing  facility is
closed  during the Chinese  Lunar New Year.  We attempt to produce our customers
requirements prior to the plant shut down. Chinese Lunar New Year occurs in late
January to early  February.  As of October 31, 2001, IDW had a backlog of orders
in excess of $4.1 million  scheduled  for delivery in fiscal 2002.  The changing
economic environment has encouraged customers to place orders on a shorter order
cycle,  thus reducing  overall value of IDW's  backlog.  However,  customers are
ordering  consistently  and on a more frequent  basis.  We believe that IDW will
continue  to receive  orders  from its key  customers,  resulting  in  increased
revenues overall.

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Intellectual Property

     IDW relies upon a combination of trade secrets, confidential procedures and
contractual provisions to protect its intellectual property. IDW's core business
is not dependent on any patent or trademark  protection  and IDW does not expect
to seek patent  protection  for any  technology  in the near future and does not
presently hold any patents for existing technology.

Raw Materials/Suppliers

     The principal raw materials used in producing IDW's products consist of raw
and coated glass,  polarizers,  liquid  crystal,  chemicals,  PCBs,  driver ICs,
molded plastic parts,  electronic  components and packaging  materials.  The PRC
Companies  electric  power  plant  requires  the use of diesel  fuel to generate
electricity.  IDW has  alternative  sources of supply for the  majority of these
materials and believes that additional  sources would be available if any of our
existing  suppliers  were  to go out of  business  or not  be  able  to  furnish
materials.  Several of these materials,  however,  must be obtained from foreign
suppliers,  which subjects IDW to the risk inherent in obtaining  materials from
foreign sources, including currency fluctuations and supply interruptions. IDW's
ability to produce a significant  percentage of its  requirements  for LCD glass
has reduced its dependence on foreign LCD glass suppliers. The PRC Companies are
evaluating  the  opportunity  to switch to the local utility  power grid,  which
would eliminate the need for consuming diesel fuel to generate electricity.

Employees

     As  of  October  31,  2001,  the  Company  and  its  subsidiaries  employed
approximately  1,300 persons.  Of those, most are employed by the PRC Companies,
with 9 employed by IDW in California, and 18 by IDW HK in Hong Kong. Over 90% of
our  employees  in the PRC  Companies  work in  manufacturing.  We consider  our
relationships  with employees to be good and that  compensation  provided to our
employees is similar to comparable  employers in the same geographic markets and
industry.  Our employees do not belong to a union or other collective bargaining
unit.

Environmental

     IDW's operations generate small amounts of hazardous waste as manufacturing
byproducts,  including various gases, epoxies,  inks, solvents and other wastes.
The PRC Companies also operate a diesel-fired electricity plant on its property.
As IDW's  operations  expand,  the amount of such  hazardous  waste produced may
increase.  Over time,  hazardous  waste has received  increased  regulation from
federal, state, local and international governments.  Our operations comply with
all  applicable  environmental  regulations  and all  hazardous  waste  is being
stored, used, and disposed of in accordance with applicable laws.

Competition

     IDW believes that there are many competitors in its industry. Some of these
competitors  are presently  larger  companies  that are believed to have greater
financial,  technical,  marketing,  manufacturing,  research and development and
personnel  resources  than  IDW.  IDW's  success,   including  its  revenue  and
profitability,  depends  substantially  on its ability to compete with the

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other suppliers of display modules. There is no assurance that IDW will continue
to be able to compete  successfully  with such  companies.  There are also other
companies in the electronics industry that have significantly  greater resources
than the Company and these other  companies could decide to enter the LCD market
and become major competitors. However, we believe that IDW can compete favorably
on the basis of customer relationships,  service,  technical innovation,  design
capability,  product performance,  cost, quality and timely delivery.  To remain
competitive and increase market share, IDW needs to develop more  sophisticated,
higher-end LCD displays.

ITEM 2.  PROPERTY

     The PRC  Companies  own  manufacturing  facilities  which  consist of three
buildings totaling  approximately  270,000 square feet situated on four acres of
leased land in Heng Gang Industrial Estate located 30 minutes from the center of
the city of Shenzhen,  PRC and about one hour from Hong Kong.  The buildings are
approximately  eleven years old, the LCD  production  line  approximately  four
years old, the SMT  production  machinery  approximately  two to four years old.
There is  sufficient  land to  accommodate  future  expansion  and growth of the
business.  There is additional  production floor space for available support and
expansion of IDW's manufacturing  operations.  The PRC Companies' facilities are
on land leased  pursuant to a 50-year  land lease  expiring in 2043 at an annual
land rent of approximately $70,000,  subject to certain periodic rent increases.
We also lease dormitory  facilities for our production  employees on an adjacent
property from the local government.

     The Group's corporate offices consist of 9,300 square feet in an industrial
park in Rocklin, California. The lease is for a term of 62 months and expires in
April 2005. Besides the base rent of $105,000 per year, IDW pays a proportionate
share of operating  expenses of  approximately  $25,000 per year. In February of
2002,  the  warehouse  facility  will be returned to the  landlord  reducing the
square  footage  occupied  to 4,700.  The  annual  base rent will be  reduced to
$69,000 and an additional $12,000 for operating expenses.

ITEM 3.  LEGAL PROCEEDINGS

     The  company  is  currently  involved  in  the  litigation  and  proceeding
described below.

Nicolas  Steenolsen vs. Squaw Valley Ski Corporation,  Granite Bay Technologies,
Inc., Morrow Snowboards, Inc., et al., Superior Court of California, Los Angeles
County,  Case No.  BC243817,  a complaint for personal  injuries that arose from
plaintiff's use of a snowboard allegedly manufactured by Morrow Snowboards, Inc.
The complaint seeks unspecified  general damages and unspecified past and future
medical expenses. The Company is defending the action.  Indications are that the
company will be dismissed from this action, but there has been no ruling to that
affect.  There is no basis for  determining  amount of damages or probability of
recovery at this time.

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

     At the Annual  Meeting of  Shareholders  held on  October  11,  2001 at the
company's corporate headquarters in Rocklin, California the shareholders elected
the following persons as directors of the Company:

Name                     Votes For           Votes Against        Withheld
----                     ---------           -------------        --------
Stephen C. Kircher       14,677,611                0               15,380
William H. Hedden        14,677,611                0               15,380
Anthony G. Genovese      14,577,711                0              115,280
Timothy Nyman            14,677,611                0               15,380
Ronald Cohan             14,677,611                0               15,380

     The   Shareholders   approved  the  Company  to  change  of  its  state  of
incorporation  from California to Delaware effective through a merger of Granite
Bay  Technologies,   Inc.  into  its  wholly  owned  subsidiary,   International
DisplayWorks, Inc., a Delaware corporation.

     Votes For          Votes Against           Abstain           Withheld
     ---------          -------------           -------           --------
     9,999,745             119,412              13,292            4,560,542

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     From December 14, 1995 until  February 18, 2000 the Company's  Common Stock
was trading under the symbol  "MRRW," from  February 18, 2000 until  November 8,
2001 the Company's  Common Stock was trading under the symbol  "GBAY," and since
November  8, 2001 under the symbol  "IDWK." On April 27,  1999,  the Company was
delisted from the NASDAQ National Market.  The Company traded on the NASDAQ Pink
Sheets from that date until it was upgraded to OTC  Bulletin  Board on September
21,  2001.  As of October 31,  2001,  there were  approximately  859  registered
holders of Common  Stock of the  Company.  Because  many of the shares of Common
Stock are held in street names,  there may be additional  beneficial  holders of
the Company's Common Stock.

     The  following  table  shows  the  range of high and low  market  prices as
reported by Pink Sheets or Over-the-Counter Bulletin Board while the Company was
involved in its current operations:

                                     Low                     High
Fiscal 2001:                       -------                 --------
--------------------------
Fourth Quarter(October 31)          $0.28                    $0.45

Third Quarter (September 29)        $0.20                    $0.56

Second Quarter (June 30)            $0.42                    $0.63

First Quarter (March 31)            $0.47                    $0.87

<page> 11
                                     Low                      High
Fiscal 2000                        --------                ---------
--------------------------
Fourth Quarter (December 30)        $0.45                    $1.90

Third Quarter (October 1)           $1.60                    $2.30

Second Quarter (July 2)             $1.50                    $3.31

First Quarter (April 2)             $0.28                    $5.25

Dividends

     The Company has paid no dividends on its Common Stock since its  inception.
For the  foreseeable  future any earnings will be retained to finance the growth
of the Company and  accordingly,  the Company does not anticipate the payment of
cash dividends.

Recent Sales of Unregistered Securities

     For the fiscal year ended October 31, 2001, the Company has sold and issued
the following  securities  which were not  previously  reported in our quarterly
reports:

     1.   We  granted an  aggregate  of  405,000  shares of Common  Stock to our
          employees, officers and directors under our 2000 Equity Incentive Plan
          with exercise prices ranging from $0.36 to $0.75 per share.

     2.   In settlement of a put option entered into in August 2000, the Company
          issued  125,000  shares of Common Stock valued at a price of $0.75 and
          75,000  warrants  to  purchase  shares of  Common  Stock at a price of
          $0.75.

     3.   On October 31, 2001, we changed our corporate domicile from California
          to Delaware pursuant to a merger agreement.  Each outstanding share of
          Common Stock and option and warrant to purchase shares of Common Stock
          of our predecessor  automatically became one share of our Common Stock
          or option or  warrant to  purchase  shares of our  Common  Stock.  The
          corporate  existence  of our  predecessor  ceased.  We  relied  on the
          exemption  of  registration  contained  in  Rule  145(a)  (2)  of  the
          Securities Act of 1933.

     4.   In connection with consulting  services  rendered,  the Company issued
          45,706  shares of Common  Stock valued at a price of $0.36 and 100,000
          warrants to purchase  Common  Stock at a price of $0.36 in payment for
          consulting services.

     5.   In connection with the $3,000,000  asset based line of credit obtained
          from BFI  Finance,  Inc.,  the  Company  issued  100,000  warrants  to
          purchase Common Stock at a price of $0.60.

<page> 12

     6.   During fiscal year 2001,  the Company  closed  various unit  offerings
          consisting  of debt  instruments  and  warrants to purchase  shares of
          Common  Stock of the Company  equal to 20% of the  investment  amount.
          Under  the  debt  instruments,  the  Company  will pay  interest  only
          payments each month at a rate of 12.68% per year with the total amount
          borrowed  due one year  from the date of  issue.  The  Company  issued
          185,000  warrants with exercise prices ranging from $0.36 to $0.75 per
          share for a period of five (5) years.  The Company's proceeds from
          the  offerings  were  $1,100,000.  There  were no broker or  placement
          agents in these transactions.

     The sales  and  issuances  of the  shares of  Common  Stock,  options,  and
warrants to purchase Common Stock in private  placements  listed above were made
by the Company in reliance upon the exemptions from registration  provided under
Section 4 (2) and 4 (6) of the Securities Act of 1933, as amended,  and Rule 506
of  Regulation  D,  promulgated  by the SEC under  federal  securities  laws and
comparable exemptions for sales to "accredited" investors under state securities
laws. The offers and sales were made to accredited  investors as defined in Rule
501(a) under the Securities Act, no general solicitation was made by the Company
or any person acting on our behalf; the securities sold were subject to transfer
restrictions,  and the  certificates  for those shares  contained an appropriate
legend  stating that they had not been  registered  under the Securities Act and
may not be offered or sold absent registration or pursuant to an exemption there
from.

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The following table presents a summary of selected  financial data for each
of the three  years  ended  January 1, 2000,  December  30, 2000 and for the ten
month period ended October 31, 2001.  The financial  data includes the Company's
discontinued snowboard and apparel operations, except where noted.

<page> 13

<TABLE>
<S>                                                       <C>                         <C>                        <C>

                                        INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENT OF OPERATIONS
                                        (in thousands, except share and per share data)

                                                                                       Periods Ended
                                                           -----------------------------------------------------------------------
                                                            Ten Months
                                                           Ended October                December 30,                January 1,
                                                             31,2001                      2000                       2000
                                                           -----------------------------------------------------------------------
                                                                        (in thousands, except share and per share data)


Net sales                                                   $    14,658                $    17,804                 $       -
Cost of goods sold                                               11,468                     12,593
                                                            -----------                -----------                 -----------
    Gross profit                                                  3,190                      5,211                         -
                                                            -----------                -----------                 -----------
Operating expenses:
    Selling, marketing & customer service                         1,231                      1,545
    Engineering, advance design and product
       management                                                   901                        570
    General and administrative                                    4,071                      5,124                         347
                                                            -----------                -----------                 -----------
        Total operating expenses                                  6,203                      7,239                         347
                                                            -----------                -----------                 -----------

Operating loss                                                   (3,013)                    (2,028)                       (347)
                                                            -----------                -----------                 -----------
Other income (expense):
    Unrealized loss on asset                                         -                      (1,000)
    Interest expense                                               (530)                      (442)                        (27)
    Other income (expense)                                          950                        (29)                        -
                                                            -----------                -----------                 -----------
       Total other income (expense)                                 420                     (1,471)                        (27)
                                                            -----------                -----------                 -----------
Loss from continuing operations before income taxes              (2,593)                    (3,499)                       (375)

    Income tax benefit
                                                            -----------                -----------                  -----------
Loss from continuing operations                                  (2,593)                    (3,499)                       (375)
                                                            -----------                -----------                  -----------
    Income on discontinued snowboard operations                      22                         69                         165
    Loss on disposition of snowboard operations                                               (269)                         -
    Income (loss) on discontinued apparel operations                                          (112)                     (3,309)
    Loss on disposition of apparel operations                                                 (269)                       (132)
                                                            -----------                -----------                  -----------
Income (loss) from discontinued snowboard and apparel
operations, net of taxes                                             22                       (581)                     (3,276)
                                                            -----------                -----------                  -----------
Net loss                                                    $    (2,571)               $    (4,080)                 $   (3,650)
                                                            ===========                ===========                  ===========
Net loss per common share:

    Loss from continuing operations - basic                 $    (0.14)                $     (0.20)                 $    (0.06)
    Loss from continuing operations - diluted               $    (0.14)                $     (0.20)                 $    (0.06)

    Loss from discontinued operations - basic               $     0.00                 $     (0.03)                 $    (0.51)
    Loss from discontinued operations - diluted             $     0.00                 $     (0.03)                 $    (0.51)

    Net loss - basic                                        $    (0.14)                $     (0.23)                 $    (0.57)
    Net loss - diluted                                      $    (0.14)                $     (0.23)                 $    (0.57)

Weighted average number of shares used in computing per
share amounts:
    Basic                                                    19,192,611                 17,482,583                   6,377,556
                                                            ===========                ===========                 ===========
    Diluted                                                  19,192,611                 17,482,583                   6,377,556
                                                            ===========                ===========                 ===========
<PAGE>

</TABLE>
<TABLE>
<S>                                                 <C>                            <C>                           <C>
                                                                                      As Of
                                                --------------------------------------------------------------------------------
                                                    October 31,                    December 30,                   January 1,
                                                        2001                          2000                          2000

                                                --------------------------------------------------------------------------------
                                                                 (in thousands, except share and per share data)
Balance Sheet Data

Cash and cash equivalents                               982                            885                         1,930

Net current assets from continuing operations         5,928                          6,151                         2,111

Net current assets from discontinued operations          12                             24                         2,332

Equipment, fixtures, and property, net                6,389                          7,297                         3,061

Total assets from continuing operations              18,047                         19,543                         6,172

Total net assets from discontinued operations            12                             24                         2,404

Current liabilities                                   5,794                          5,631                         3,298

Long-term debt and capital lease obligations,
net of current portion                                  807                            201

Shareholders' equity                                 11,459                         13,735                         4,603



</TABLE>
<page> 14

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

Overview

     Since its  formation in 1989 until 1999,  the Company  focused its business
activities on designing,  manufacturing  and marketing  premium  snowboards  and
related  products  under the "Morrow"  brand name. In 1999, the Company sold its
snowboarding  and  related   businesses   resulting  in  discontinuance  of  all
operations.  On January 31, 2000,  the Company,  through its  subsidiary IDW HK,
acquired 100% of the shares of the PRC Companies.  The PRC Companies are engaged
in the  manufacturing  and assembly of liquid crystal displays and assemblies in
the Peoples Republic of China ("PRC Companies").

     The following discussion is presented on a consolidated basis, and analyzes
the financial  condition  and results of operations of IDW and its  subsidiaries
for the ten-month  fiscal year ended October 31, 2001 and the eleven months from
the  acquisition  of the PRC Companies on January 31, 2000 through  December 30,
2000.

Comparison of the Periods Ended October 31, 2001 and December 30, 2000

     Continuing Operations - The Company's continuing operations consist of IDW,
IDWHK and the PRC  Companies,  which  manufacture  liquid  crystal  displays and
assemblies.  As  previously  mentioned  the Company  discontinued  snowboard and
apparel  operations  in 1999.  In fiscal  year 2001 there was $22,000 in revenue
related to discontinued  operations  primarily from collection of duty drawback,
insurance premium refunds and recovery of bad debts.

     Net  Sales - Net sales  for the ten  months  ended  October  31,  2001 were
$14,658,000 and for the eleven months ended December 30, 2000 were  $17,804,000,
an  annualized  reduction of 10%.  This  decrease can be  attributed  to pricing
pressures and the overall  down-turn of the world economy first noticed in early
2001.

     Cost of Goods Sold - Cost of sales  increased to 78.2% of net sales for the
ten  months  ended  October  31,  2001 from 70.7% for the  eleven  months  ended
December 30, 2000. This increase can be attributed to pricing pressures from our
customers and under-absorption issues resulting from decreased production.

     Operating  Expenses - Operating  expenses  consist of  selling,  marketing,
customer  service,   engineering,   and  general  and  administrative  expenses.
Operating  expenses  decreased  14.3% to  $6,203,000  for the ten  months  ended
October 31, 2001 from  $7,239,000 for the eleven months ended December 30, 2000.
These  expenses  included  a  fourth  quarter  charge  for the  costs  of  staff
reductions and downsizing of  administrative  and sales  operations in Hong Kong
during the period ended October 31, 2001.

     Selling,  Marketing and Customer Service - Selling,  Marketing and Customer
Service  expenses  decreased 20% to $1,231,000  for the ten months ended October
31,  2001 from  $1,545,000  for the  eleven  months  ended  December  30,  2000.
Significant decreases in this category were made in the second quarter of fiscal
2000 by the closure of the Singapore Sales office and other cost reductions. The
effect was minimized by the accrual of expenses related to the downsizing of the
Hong Kong sales office. Significant elements of this expense consist of employee
related  expenses  of  $513,000,  commission  expense  of  $424,000  and rent of
$54,000.

     Engineering Advanced Design and Project Management - Engineering,  advanced
design and project  management  expenses  increased  58% to $901,000 for the ten
months ended October 31, 2001 from $570,000 for the eleven months ended December
30, 2000. The significant  increase was due to reclassification of some expenses
from General and Administrative to this category.  Significant  elements of this
expense  include  employee  related  expenses of  $844,000,  rent of $10,000 and
travel and lodging of $25,000.

<page> 15

     General and Administrative - General and Administrative  expenses decreased
21% to $4,071,000 for the ten months ended October 31, 2001 from  $5,124,000 for
the eleven  months ended  December 30, 2000.  The effects of cost  reductions in
this category are minimized by the accruals for the  downsizing of the Hong Kong
and Rocklin  offices.  Significant  elements of this  expense  include  employee
related expenses of $1,242,000,  professional fees of $786,000,  amortization of
goodwill of $360,000,  rent,  telephone and utilities of $314,000,  insurance of
$201,000,  local  PRC  government  fees of  $184,000  and bad  debt  expense  of
$113,000.

     Interest Expense - Interest  expense  increased 20% to $530,000 for the ten
months ended October 31, 2001 from $442,000 for the eleven months ended December
31, 2000. The overall  increase in interest expense is a direct result of use of
lines of credit for the factoring of accounts receivable established this fiscal
year and the mortgage on the Company's manufacturing facility in the PRC.

     Other Income - Other  income for the ten months ended  October 31, 2001 was
$950,000.  Significant  elements of this  category  include gain on the issue of
Common  Stock to satisfy the put option of  $57,000;  duty  drawback,  insurance
refunds and  recovery of bad debt from  discontinued  operations  of $22,000 and
reversal of over accruals of $744,000.

     Net Loss - The net loss  for the ten  months  ended  October  31,  2001 was
$2,571,000 compared to $4,080,000 for the twelve months ended December 30, 2000.
This 37% decrease  can be  attributed  to the  Company's  loss for  discontinued
operations of $581,000 and the loss of $1,000,000 from the Company's  write-down
of its  investment in Globalgate in fiscal year 2000.  The loss from  continuing
operations  was $2,593,000 for the ten months ended October 31, 2001 compared to
$3,499,000  for the period ended December 30, 2000.  This  difference can be
attributed to the loss of $1,000,000 from write-down of the Company's investment
in Globalgate.

     Discontinued  Operations - Income from discontinued  operations was $22,000
for the ten months ended  October 31,  2001.  This  consisted of duty  drawback,
insurance  refunds and bad debt  recovery  related to the  snowboard and apparel
operations.

Comparison of Years Ended December 30, 2000 (Fiscal 2000) and January 1, 2000
(Fiscal 1999)

     Continuing Operations - The Group's continuing operations consist of IDWUS,
IDWHK and the PRC  Companies,  which  manufacture  liquid  crystal  displays and
assemblies.  As  previously  mentioned  IDW  discontinued  snowboard and apparel
operations in 1999. As a result of the discontinued operations, the consolidated
financial  statements report the transactions of discontinued  operations as net
amounts separate from continuing operations. All continuing operations ceased in
1999  for  the  snowboard  and  apparel   operations   except  for  general  and
administrative expenses incurred to wind down operations and interest expense on
the Company's  bridge loan. The results of continuing  operations in fiscal 2000
as compared to fiscal 1999 follow.

     Revenues - IDW had  consolidated  net sales of $17,804,000 from the sale of
liquid crystal  displays and  assemblies  for electronic  equipment for the year
ended December 30, 2000. Such sales represent sales of IDW and its  subsidiaries
for the eleven-month  period from their  acquisition on January 31, 2000 through
December  30,  2000.  All  sales  of  the  Company  in  fiscal  1999  were  from
discontinued operations, therefore, are not compared to the fiscal 2000 results.
<page> 16

     Gross Profit - Gross profit from  continuing  operations in the fiscal year
ended December 30, 2000 was $5,211,000,  which represents  continuing operations
of IDW and its subsidiaries for the eleven-month  period from their  acquisition
on January 31, 2000 through  December  30, 2000.  All prior year gross profit is
part of the Company's  discontinued  operations and therefore is not compared to
the 2000 results.

     Operating Expenses - Operating  expenses from continuing  operations in the
fiscal year ended December 30, 2000 was $7,239,000,  which represents continuing
operations of IDW and its subsidiaries  for the  eleven-month  period from their
acquisition on January 31, 2000 through  December 30, 2000. All prior year gross
profit is part of the  Company's  discontinued  operations  and therefore is not
compared to the 2000 results.

     Selling,  Marketing and Customer Service - Selling,  marketing and customer
service  expenses for the year ended  December 30, 2000 were  $1,545,000,  which
represents   continuing   operations  of  IDW  and  its  subsidiaries  from  the
acquisition  date of January 31, 2000 through  December 30, 2000.  There were no
selling,  marketing  and  customer  service  expenses in fiscal 1999  related to
continuing  operations.  Significant  elements  of this  expense in fiscal  2000
consist of staff and related expenses of $1,071,000, travel and related expenses
of $65,000 and advertising expense of $73,000.

     Engineering,   Advanced  Design,  and  Project  Management  -  Engineering,
advanced design, and project management expenses for the year ended December 30,
2000  were  $570,000   representing   continuing   operations  of  IDW  and  its
subsidiaries  from the acquisition date of January 30, 2000 through December 30,
2000. There were no engineering,  design, and project management expenses during
fiscal  1999  related  to  continuing  operations.  The  significant  element of
engineering,  design and project management  expenses for continuing  operations
during fiscal 2000 was staff and employee related expenses of $522,000.

     General and  Administrative - General and  administrative  expenses for the
year ended  December  30,  2000 were  $5,124,000,  which  represents  continuing
operations of IDW and its subsidiaries  from the acquisition date of January 31,
2000 through December 30, 2000 and continuing  corporate  administration of IDW.
The significant  elements of the general and administrative  expenses of IDW and
its  subsidiaries  during  fiscal  2000  consist of staff and  employee  related
expenses of  $1,696,000;  rent,  telephone  and  utilities  of  $288,000;  legal
expenses of $158,000;  accounting expenses of $238,000, and local PRC government
expenses of $122,000.  Significant  elements of the  continuing  operations  for
IDW's ongoing  corporate  administration  include  $310,000 for accounting fees,
$249,000 for legal fees, $213,000 for insurance costs, $175,000 for salaries and
benefits,  and $395,000 in  amortization  of goodwill from the IDW  acquisition.
Depreciation of general and administrative facilities amounted to $341,000.

     Interest Expense - Interest  expense  increased by $415,000 to $442,000 for
the year ended  December  30, 2000 from  $27,000  for the year ended  January 1,
2000.  The  interest  expense in fiscal 2000  related  primarily  to interest on
obligations  incurred  to  raise  funds  for  the  acquisition  of IDW  and  its
subsidiaries.  The  interest  expense in fiscal 1999  related to payments on the
$675,000 outstanding bridge loan.

<page> 17

     Other  Expense - Other  expenses of  continuing  operations  in fiscal 2000
amounted to  $1,000,000  unrealized  loss  resulting  from the  write-off  of an
investment  in common  shares of  Globalgate,  an  e-commerce  company  that had
suffered  deteriorated  financial  condition such that the Company  believed its
investment had little or no market value, and $29,000  representing  small items
of other  income and  expense.  There was no other  income or expense in 1999 of
continuing operations.

     Net Loss - Net loss for fiscal  year 2000 was  $4,080,000  compared  to net
loss of $3,650,000 for fiscal 1999. The loss from continuing  operations in 2000
was  $3,499,000  or an  increase  of  $3,125,000  over the loss from  continuing
operations  of $374,000 in 1999.  The loss from  continuing  operations  in 2000
represents  the  results of  operations  of IDW and its  subsidiaries  while the
activities  in 1999 were  primarily  focused on  discontinued  operations of the
snowboard  and  apparel  segments.  The loss from  discontinued  operations  was
$581,000 in fiscal 2000, a decrease  $2,695,000 from the loss from  discontinued
operations  of $3,276,000 in fiscal 1999.  The decrease is  attributable  to the
closure of operations  of the  discontinued  segments.  Cost of winding down the
discontinued  operations  and losses on disposition of their assets in excess of
previous   estimates   resulted  in  the  fiscal  2000  loss  from  discontinued
operations.

     Discontinued  Operations  - The net loss from  discontinued  snowboard  and
apparel  operations in fiscal 2000 was $581,000  consisting of a loss of $43,000
from  discontinued  operations  ($69,000 income for snowboards and $112,000 loss
for  apparel)  and a  loss  of  $538,000  from  disposition  of  assets  of  the
discontinued  operations  ($269,000 from  snowboards and $269,000 from apparel).
The  loss  from  discontinued  operations  represents  the  differences  between
incurred  costs of winding  down the  operations  and losses on  disposal of the
assets of  discontinued  operations  and estimates  made in prior years when the
decision was made to discontinue the two segments activities.

Liquidity and Capital Resources

     IDW requires  capital to pay certain  existing fixed  obligations,  provide
working  capital for the PRC Companies,  and cover  administrative  overhead and
certain costs related to being a public company. As discussed below, IDW intends
to generate working capital to implement its current Business Plan.

     Net cash  used in  operating  activities  from  continuing  operations  was
$2,218,000 for the ten months ended October 31, 2001 resulting  primarily from a
net loss of $2,571,000,  increases in accounts receivable of $361,000,  decrease
in inventories of $747,000, increases in prepaid expenses of $184,000, decreases
in accounts  payable of $910,000,  decreases in accrued  liabilities of $394,000
and partially  offset by non-cash  expenses of depreciation  and amortization of
$1,301,000.  This compares to cash provided by operating  activities  for fiscal
2000 of $1,314,000 resulting from an operating loss of $4,080,000,  increases in
accounts   receivable  of  $1,485,000  and  decreases  in  accounts  payable  of
$1,004,000,   partially   offset  by  non-cash   expenses  of  depreciation  and
amortization of $2,307,000,  and loss from write off of a $1,000,000  investment
and from loss of discontinued operations of $2,975,000.

<page> 18

     Net cash used in investing  activities for the ten months ended October 31,
2001 was $854,000,  which represents  payments to complete the purchase of the
PRC Companies of $821,000 and acquisition of property and equipment of $33,000.
This  compares  with net cash used in  investing  activities  for fiscal 2000 of
$4,493,000,  which represents  payments toward the purchase the PRC Companies of
$4,208,000 and $285,000 used for the acquisition of property and equipment.

     Net cash provided by financing  activities for the ten months ended October
31, 2001 was $3,020,000  consisting primarily of $2,261,000 from the issuance of
long-term  debt  ($1,200,000  of which is secured by a thee year mortgage on the
buildings of our manufacturing  facility in the PRC) and $1,076,000 from line of
credit borrowings.  Net cash provided by financing activities in fiscal 2000 was
$2,134,000,  consisting  of  $6,078,000  from sale of shares of Common  Stock in
private placements and partially offset by $7,141,000 of net repayment of debt.

     The planned  future  expansion of IDW and its  subsidiaries  which  include
$360,000 of  additional  capital  expenditures  is expected to be needed  during
fiscal 2002 to enhance existing production  capabilities,  assure future product
quality and reduce costs.  IDW plans continued use of its credit  facilities and
extension of related party short term debt. Events such as non-renewal of credit
facilities or requirements to repay short-term debt could affect ability to fund
capital expenditures and working capital.

Factors That May Affect Future Results

     A wide  variety of factors will affect  IDW's  operating  results and could
impact net sales and profitability.  Significant  factors in our success will be
our ability to establish  design and  manufacturing  relationships  with key OEM
customers that will generate sufficient orders,  including orders of high margin
products to increase revenues and profitability.

     Our products are incorporated in a wide variety of communications, consumer
and  appliance  products.  A slowdown in demand for such  products  that utilize
IDW's  displays and modules as a result of economic or other  conditions and the
market  served by IDW or other factors could  adversely  affect IDW's  operating
results.  Our products are sold into an industry  characterized  by increasingly
rapid product turnaround, increasingly shorter lead times, product obsolescence,
order  cancellation  and other factors that make it difficult to forecast future
orders,  production and personnel needs and other resource  requirements  with a
high level of certainty.  Our ability to anticipate  such factors and respond to
them in a timely  fashion  will affect  IDW's  ability to utilize  manufacturing
capacity  effectively,  maintain a proper product mix and avoid downtimes due to
product   conversions  and  other  factors.   Such   uncertainty   also  creates
difficulties in maintaining  adequate supplies of raw materials to meet shifting
customer needs and customer orders placed on short notice.

     IDW's 2001 Operating  Results - The actual  performance of IDW for 2001 was
materially less than forecasted.  This performance  resulted from the unexpected
downturn in the world-wide  economy in 2001,  longer than expected time to raise
capital  for  the  entry  into  the COG  market  and an  increasingly  difficult
environment for raising new capital.

<page> 19

     IDW's  Capital  Resources - In addition,  the longer than  expected time to
complete the final payments and reconciliation  with the Judicial Managers,  and
the protracted  accounting and legal issues relating to the complexity of buying
companies  out of  distress  situations,  has  affected  the  timeliness  of IDW
regaining  its  listing on NASDAQ,  which,  along with an  increasing  difficult
environment in North America for raising new capital,  has slowed our ability to
provide for the  financing  requirements  of the  Company.  While the Company is
closer to  producing a positive  cash flow,  if we are  unsuccessful  in raising
capital  when  required,  then the  Company  could  face the risk of loss of its
investment.  Further, any financing involving equity or rights to acquire equity
interests,  would  result in dilution in the  percentage  ownership  of existing
stockholders  when such equity interest were issued and,  depending on the sales
price,  a dilution in book  value.  Further,  to  capitalize  on certain  growth
opportunities  for the PRC  Companies or if  projected  revenues are less and/or
costs higher than projected,  we would have to raise additional financing beyond
that outlined  above.  Without such  expansion,  we are limited;  and this could
affect the value of the Company's Common Stock.

     Dependence  on Key  Personnel - Our success is largely  dependent  upon the
expertise of key members of the Company's management team, including its founder
and Chief Technical  Officer,  Anthony  Genovese,  and Philip Gregory,  its Vice
President  of  Manufacturing.  Loss  of  their  services  could  materially  and
adversely  affect our business,  its future  prospects  and  operating  results,
including its ability to penetrate the United States market. We do not presently
have long-term employment agreements with these key employees.  Our business and
operating results also depend  substantially on the efforts and abilities of our
senior  management  and technical  personnel.  The  competition is for qualified
management  and technical  personnel are intense.  The loss of service of one or
more of its key employees or the inability to add and retain key personnel could
have a material  adverse effect.  We do not presently  maintain  key-person life
insurance.

     A Few Customers and Applications Account for a Significant Portion of IDW's
Sales - In fiscal 2001,  five customers  represented 57% of total sales revenue,
including one customer representing 35% of the Company's revenue. At our present
size, the loss of any one of these customers could have a material affect on the
Company's health.  Customers have not made firm long-term purchase  commitments.
Delay or  reduction  of customer  orders  could  result in  under-absorption  of
manufacturing capacity. These risks are enhanced because of the large percentage
of sales to electronic  industry customers who are subject to severe competitive
pressures,  repaid  technological  change and  obsolescence.  While we expect to
continue to receive orders from existing customers, there is no assurance orders
will be received,  and if received,  not  cancelled,  delayed or reduced,  which
could have material  adverse effect on the Company's  results of operations.  To
reduce this risk,  we expect to  continue  to  emphasize  custom  devices  where
purchase  orders  are  generally  longer  term  with more  limited  cancellation
provisions.

     Need for Additional  Financing - The  opportunities for long-term growth in
the Company's  lines of business are dependent  upon having  sufficient  capital
resources available to realize the rapid growth potential of significant OEM key
accounts,  which we have  identified and targeted.  We expect to need additional
financing to fuel the Company's  growth for both working capital and our capital
expenditure program.

<page> 20

     The  inability  to include new  display  devices in the  Company's  product
offerings  may affect our ability to seek  business  from certain  customers who
want  complete  solutions to all their display  device needs or could  adversely
affect the Company's  operating  results if technology shifts to such higher-end
devices in general.

     Ramifications  of Long  Period of  Judicial  Management  - The longer  than
expected  time to  complete  the final  payments  and  reconciliations  with the
Judicial Managers continued to affect the Company's  performance in fiscal 2001.
During the period of Judicial  Management  (December  6, 1997  through  January,
2000),  many of our customers  found second sources of supply or purchased goods
elsewhere.  The  probability  of recovering  much of that lost business has been
impaired  by the  passage  of time.  Judicial  management  continued  to  impact
supplier relationships in fiscal 2001. In many cases, supplier relationships may
have been  impacted  in both the short and long  term.  The  Company  has had to
establish  new  sources of supply to ensure  adequate  credit  terms and pricing
consistent with industry standards.  The Company also believes that the judicial
management  resulted  in  financial  and  operating  performances  that  are not
reliable in terms of predicting future financial performance.

     IDW Faces Intense  Competition  - We operate in a  competitive  environment
that is  characterized by price erosion,  technological  change and competition.
IDW competes with major Asian and international companies.  Because of a greater
capital base,  most of IDW's  competitors  have greater market  recognition  and
substantially;    greater   financial,   technical,   marketing,   distribution,
manufacturing,  and other resources than IDW.  Further,  many of our competitors
have manufacturing and sales forces that are geographically diversified allowing
them to reduce  transportation,  tariff  costs  and  currency  fluctuations  for
certain   customers  in  markets  where  their  facilities  are  located.   Many
competitors have production lines that allow them to produce more  sophisticated
and complex  devices than IDW and to offer broader  range of display  devices to
customers.  New emerging  companies or companies in related  industries may also
increase their  participation  in display  module  market,  which would increase
competition.

     IDW's ability to compete successfully depends on a number of factors,  both
in and  outside of its  control.  Those  factors  include:  the price,  quality,
performance,  reliability, ease of use and features of our products; the variety
of our product  solutions;  foreign  currency  fluctuation;  trade  barriers and
customs duties which may effect the cost of products;  our ability to design and
manufacture new product solutions,  including incorporating new technology;  the
availability  and price of raw  materials;  our  ability  to fully  utilize  our
manufacturing  facility; new product technology or solutions by our competitors;
the  number  of  success  of  competitors;   and  general  market  and  economic
conditions.  Our competitive  position can also be adversely  affected if one or
more of our customers, including key customers, decide to design and manufacture
their own  display  modules,  use  different  devices or purchase  devices  from
competitors. We cannot assure that we will compete successfully in the future.

     Risk of  Inability  to Produce  High-End  Products - IDW's  success will be
partly dependent upon our ability to effectively offer or manufacture higher-end
products such as large graphic STN, color graphic displays,  micro-displays  and
black mask automotive products.

<page> 21

     These  products  offer both the  opportunity  to  increase  utilization  of
existing  manufacturing  capacity and also the  opportunity  to generate  higher
margins and profits at given  revenue  levels.  The  production of such products
requires  increased  custom design and  manufacturing  and maintenance of strong
customer  relationships.  This will  require  that we  maintain  and upgrade our
research,  engineering  and design  capabilities  to remain in the  forefront of
developments in the industry.

     Changing  Technologies  - IDW  operates  in an  industry  characterized  by
technological  advances,  the  introduction  of new  products and new design and
manufacturing  technologies.  As a  result,  IDW  will  be  required  to  expend
substantial funds and to commit significant resources to continuing research and
development  activities,  engaging  additional  engineering  and other technical
personnel;   purchasing  new  design,   production,   and  test  equipment;  and
continually enhancing design and manufacturing  processes and techniques.  IDW's
future  operating  results will depend  significantly  on our ability to provide
timely design and manufacturing services for new products that compete favorably
with design and manufacturing capabilities of OEMs and third party suppliers.

     IDW could invest significant sums in design and manufacturing  services for
new  product  solutions  that may not  receive or  maintain  customer  or market
acceptance or effectively  address customer needs,  which could adversely affect
the Company's future operating results.  Further,  customers may change or delay
product  introductions  or terminate  existing  products  without notice for any
number of reasons  unrelated to IDW,  including lack of market  acceptance for a
product.

     We may also be required to increase  our design  staff and other  personnel
and  incur  other  expenses  on  capital  equipment  and  other  items  to  meet
anticipated  or  actual  demand of our  customers.  Those  additional  costs may
adversely impact operating margins in the short term.

     Maintenance   of   Satisfactory   Manufacturing   Yields  and   Capacities;
Variability of Customer  Requirements - The  profitability and operating results
of IDW  are  dependent  upon a  variety  of  factors,  including:  product  mix,
utilization  rates  of  its  manufacturing   lines,   downtime  due  to  product
changeover,  impurities  in raw  materials  causing  shutdowns,  maintenance  of
contaminant-free operations and other factors.

     Risks Associated with International Operations - IDW has made a decision to
locate  all of its  manufacturing  operations  in China and to  establish  sales
offices in Asia, Europe and the United States. The geographical distance between
its  manufacturing  facilities in China and in North America  create a number of
logistical  and  communications  challenges.  Because  of  the  location  of the
manufacturing facilities in China, IDW may be affected by economic and political
conditions in that country, as well as economic and political  conditions in the
countries in which it markets and distributes its products,  including,  without
limitation,  problems related to labor unrest, lack of developed infrastructure,
variances  in  payment  cycles,  currency  fluctuations,  overlapping  taxes and
multiple taxation issues,  employment and severance taxes, compliance with local
laws and regulatory  requirements,  greater  difficulty in collections  accounts
receivable,  political  and  economic  instability  and the  burdens of cost and
compliance with a variety of foreign laws.

<page> 22

     Further,  changes  in  policies  by the  United  States  or  other  foreign
governments resulting in, among other things, increased duties, higher taxation,
currency   conversion,   limitations   and   restrictions  on  the  transfer  or
repatriation of funds or limitations on imports or exports, or the expropriation
of private  enterprises  could also have a materially  adverse effect on IDW and
its  results  of  operations.  China  does not have a  comprehensive  or  highly
developed  system of laws,  particularly  with  respect  to  foreign  investment
activities  and  foreign  trade.  Enforcement  of  existing  and future laws and
contracts is uncertain and implementation and interpretation of such laws may be
inconsistent.  Changes in existing laws, the adoption of new laws and preemption
of local regulations by national laws may adversely affect foreign investment in
China.  IDW could also be adversely  affected by other factors,  including:  the
imposition  of austerity  and other  monetary  measure to fight  inflation or to
achieve other  economic  objectives;  inadequate  development  or maintenance of
infrastructure, including adequate power and water supplies; transportation; raw
materials availability;  or the deterioration in the general political, economic
or social environment.

     Risks Associated with Collectibility of Receivables - IDW extends credit to
its  customers  based on  assessment  of a customer's  financial  circumstances,
generally without requiring collateral, in both the United States and in various
countries  in the  Far  East  and  Europe.  These  extended  payment  terms,  if
continued,  may increase our exposure to risk of  uncollected  receivables.  The
inability  to  collect on these  accounts  receivable  could  have a  materially
adverse effect on our results of operations and profitability.

     Risks Associated with Currency Fluctuations and International Trade - Sales
in global markets,  primarily Europe, the United States and other parts of Asia,
are expected to increase significantly in fiscal year 2002 and subsequent years.
Economic and  political  conditions  internationally  may  adversely  affect the
manufacture and sale of IDW's products.  Protectionist  trade legislation in the
United  States  or  foreign  countries,  such as a change  in  export  or import
compliance  laws,  tariff or duty  structures,  or other trade  policies,  could
adversely affect our ability to sell devices in foreign markets, to purchase raw
materials or equipment from foreign suppliers.

     IDW  transacts  business  in a variety of  currencies  including  Hong Kong
dollars,  Singapore  dollars,  US dollars and the Chinese Yuan Renminbi ("RMB").
Increased sales to Europe may result in receivables in other currencies, such as
the Euro.  Further,  IDW accounts  for a portion of its costs,  such as payroll,
land rent and certain other costs in RMB. Foreign currency exchange fluctuations
are not  expected  to  materially  affect our  operations  because  IDW uses RMB
derived  from  sales  to meet  its RMB  obligations  such as  payroll,  material
purchases  and land rent.  Currency  devaluations  and changes in exchange  rate
fluctuations could affect the value of deposits of currencies IDW holds. The RMB
has experienced  significant  devaluation  against most major  currencies in the
past.

     IDW May  Experience  Shortages  of Raw  Material  Supplies - Principal  raw
materials  used in producing  IDW's  products  consist of raw and coated  glass,
polarizers, liquid crystal, chemicals, printed circuit boards, drive ICs, molded
plastic parts,  electronic  components and packaging  materials.  For its energy
supply,  IDW uses diesel fuel. IDW purchases most of these materials in Asia.

<page> 23

We do not have long-term supply contracts with our suppliers.  IDW believes that
it has secondary sources of supplies for most of its products and, if we were to
lose any of our primary or secondary  sources,  we could  develop new sources of
supply.  However,  because  IDW's  sources for many  materials  are from foreign
suppliers,  IDW may be subject to certain risks,  including:  tariffs,  currency
fluctuations and supply interruptions. The impact of price increases will affect
operating  costs  and  product  margins,  the  materiality  of which  cannot  be
presently determined.

     Environmental  Regulations  - Our  manufacturing  processes  result  in the
creation  of small  amounts  of  hazardous  wastes,  including:  various  gases,
epoxies, inks, solvents and other organic wastes. IDW is, therefore,  subject to
PRC  governmental  regulations  related to the use, storage and disposal of such
hazardous  wastes  used in the  manufacturing  processes.  IDW  also has its own
electrical  power  generation plant that operates on diesel fuel. The amounts of
such hazardous waste are expected to increase in the future as our manufacturing
operations increase. The failure to comply with present and future environmental
regulation  can  result in the  imposition  of fines,  suspension  or halting of
production or closure of manufacturing operations.  Environmental compliance may
also require IDW to purchase pollution-control equipment or to incur significant
capital or other  expenses.  Although we believe we are  operating in compliance
with  applicable  environmental  laws,  there  is no  assurance  that  IDW is in
compliance or will remain in compliance as such laws and regulations change.

     Governmental  Regulations - IDW is subject to numerous  foreign,  state and
local governmental regulations. We are subject to laws and regulations governing
our  relationship  with our employees,  including:  wage and hour  requirements,
working and safety conditions, citizenship requirements, work permits and travel
restrictions.  Further,  the PRC  Companies  are  leasing  the land under  their
facilities  under a 50-year  lease,  which expires in the year 2043. We are also
subject to  significant  government  regulation  to property  ownership and use,
import  restrictions,  currency  restrictions  and  other  areas,  all of  which
consistently impact profits and operating results.

     Other Risks - Other  risks IDW faces  include  the  cyclical  nature of the
electronics  industry,  the  protection of IDW's trade  secrets and  technology,
management of expected  rapid growth in personnel,  capital  equipment,  outside
sales force,  sales and accounts  receivable and other items and  maintenance of
adequate research and development efforts and personnel.

     Besides the general risk factors  noted above,  there are several  specific
risks that should be noted:

     Future  Potential  Depressive  Effect in Stock Prices from Recently  Issued
Securities  - In fiscal  year 2000 and 2001,  the company  issued an  additional
9,973,951  and 170,706  shares of its Common Stock,  respectively.  All of those
shares are restricted  under federal and state  securities  laws and may only be
resold pursuant to exemptions under Rule 144 in the future. Under Rule 144, each
of the holders of those securities, after holding them for one year, may sell in
any given calendar quarter thereafter,  the greater of (i) 1% of the outstanding
Common Stock, (currently approximately 194,000) per quarter, or (ii) the average
weekly trading volume for Common Stock for the prior full calendar weeks.  Under
Rule 144, a  significant  amount of stock could be sold in any calendar  quarter
after  January 31, 2001,  with a potential  depressive  effect on the  Company's
stock prices. During fiscal 2001, there were approximately 934,052 shares of the
Company's Common Stock sold under Rule 144.

<page> 24

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
                 RISK

Inflation Risk

     We do not  expect  inflation  to have a  material  effect on the  company's
operating expenses.

Interest Rate Risk

     We do not believe  that any change in  interest  rates will have a material
impact on the Company during fiscal 2002. Currently,  our long-term debt is at a
fixed interest rate.

Foreign Currency Exchange Risk

     IDW accumulates  foreign  currency from payment of accounts,  which it then
uses to pay its foreign  vendors,  workers,  and  suppliers  or converts to U.S.
dollars,  exposing IDW to minimal risk  fluctuations in currency exchange rates.
The Company  currently  holds foreign  currencies  which are  translated in U.S.
Dollars using the year-end exchange rate, for a total of $310,000. The potential
loss in fair value  resulting from an adverse change in quoted foreign  currency
exchange rates of 10% amounts to $30,000. Actual results may differ. The Company
does not hold other market  sensitive  instruments and therefore does not expect
to be affected by any adverse changes in commodity  prices, or marketable equity
security prices.

<page> 25

ITEM 8:  FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

  For the Years Ended October 31, 2001, December 31, 2000 and January 1, 2000

                               TABLE OF CONTENTS
                               -----------------

                                                                        Page
                                                                        ----
Independent Auditors Report..............................................27

Consolidated Financial Statements

   Consolidated Balance Sheet............................................28

   Consolidated Statement of Operations..................................29

   Consolidated Statement of Shareholders' Equity........................30

   Consolidated Statement of Cash Flows..................................31

   Notes to Consolidated Financial Statements............................32-47

Supplemental Schedule - Supplementary Information Required
        under the Securities and Exchange Act of 1934....................48-49
<PAGE>

                        INDEPENDENT AUDITOR'S REPORT

Board of Directors
International DisplayWorks, Inc.
And Subsidiaries

     We  have   audited  the   accompanying   consolidated   balance   sheet  of
International DisplayWorks,  Inc. and subsidiaries (the "Company") as of October
31,2001 and  December  30,  2000,  and the related  consolidated  statements  of
operations, shareholders' equity and cash flows for the ten months ended October
31, 2001 and for the years ended  December  30, 2000 and January 1, 2000.  These
consolidated financial statements and the schedules referred to on the following
pages are the responsibility of the Company's management.  Our responsibility is
to  express  an  opinion  on  these   consolidated   financial   statements  and
supplemental schedules based on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
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 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
International  DisplayWorks,  Inc. and  subsidiaries  as of October 31, 2001 and
December 30, 2000, and the  consolidated  results of their  operations and their
cash flows for the ten months  ended  October  31,  2001 and for the years ended
December 30, 2000 and January 1, 2000, in conformity with accounting  principles
generally accepted in the United States of America.

     The  accompanying  consolidated  financial  statements  have been  prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the consolidated  financial  statements,  certain matters raise substantial
doubt about the Company's  ability to continue as a going concern.  Management's
plan in  regard  to these  matters  is  described  in Note 1.  The  consolidated
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.

     Our  audits  were  conducted  for the  purpose of forming an opinion on the
basic  consolidated  financial  statements  taken as a whole.  The  Supplemental
Schedule of  Valuation  and  Qualifying  Accounts is  presented  for purposes of
complying with the Securities and Exchange  Commission's rules and is not a part
of the  basic  consolidated  financial  statements.  This  information  has been
subjected  to the  auditing  procedures  applied  in  the  audit  of  the  basic
consolidated  financial  statements and, in our opinion, is fairly stated in all
material  respects in relation to the basic  consolidated  financial  statements
taken as a whole.
                                                              /s/Perry-Smith LLP

Sacramento, California
January 23, 2002


<page> 26

                               INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                                           CONSOLIDATED BALANCE SHEET
                                        (in thousands, except share data)
<TABLE>
<S>                                                                                     <C>                <C>
                          ASSETS                                                        October 31,         December 30,
                         --------                                                          2001                2000
                                                                                        ----------          -----------
Current assets:
    Cash and cash equivalents                                                           $     982           $     885
    Accounts receivable,
        net of allowance for doubtful accounts of $196 and $127                             3,231               2,939
    Inventories                                                                             1,322               2,069
    Prepaid expense                                                                           391                 207
    Other Assets                                                                                -                  51
    Net current assets of discontinued operations                                              12                  24
                                                                                        ----------          -----------
       Total current assets                                                                 5,938               6,175
                                                                                        ----------          -----------
Property and equipment at cost, net                                                         6,389               7,297
                                                                                        ----------          -----------
Other assets:
    Goodwill, net                                                                           5,719               6,079
    Other assets, net                                                                          12                  16
                                                                                        ----------          -----------
       Total other assets                                                                   5,731               6,095
                                                                                        ----------          -----------
       Total assets                                                                      $ 18,058            $ 19,567
                                                                                        ==========          ===========

                                     LIABILITIES AND SHAREHOLDERS' EQUITY
                                     --------------------------------------

Current liabilities:
    Accounts payable                                                                      $ 1,950             $ 2,860
    Accrued liabilities                                                                     1,258               1,451
    Current portion of long term debt                                                       2,653               1,320
                                                                                        ----------           ----------
       Total current liabilities                                                            5,861               5,631

Long-term debt, net of current portion                                                        807                   -
                                                                                        ----------           ----------
       Total liabilities                                                                    6,668               5,631

Put options                                                                                     -                 201
Commitment and contigencies                                                                    -                   -
                                                                                        ----------           -----------
Shareholders' equity:
    Preferred stock, no par, 10,000,000 shares authorized,
       no shares issued or outstanding                                                          -                   -
    Common stock, no par, 40,000,000 shares authorized,
       19,321,213 and 19,150,507 shares issued and outstanding in 2001 and                 41,205              40,997
       2000 respectively
    Accumulated deficit                                                                   (29,903)            (27,332)
    Cumulative translation adjustment                                                          88                  70
                                                                                        ----------           ----------
       Total shareholders' equity                                                          11,390              13,735
                                                                                        ----------           ----------
       Total liabilities and shareholders' equity                                        $ 18,058            $ 19,567
                                                                                        ==========           ==========

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

</TABLE>

<page> 27

<TABLE>
<S>                                                       <C>                         <C>                        <C>

                                        INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENT OF OPERATIONS
                                        (in thousands, except share and per share data)

                                                                                       Periods Ended
                                                           -----------------------------------------------------------------------
                                                            Ten Months
                                                           Ended October                December 30,                January 1,
                                                             31,2001                      2000                       2000
                                                           -----------------------------------------------------------------------
                                                                        (in thousands, except share and per share data)


Net sales                                                   $    14,658                $    17,804                 $       -
Cost of goods sold                                               11,468                     12,593
                                                            -----------                -----------                 -----------
    Gross profit                                                  3,190                      5,211                         -
                                                            -----------                -----------                 -----------
Operating expenses:
    Selling, marketing & customer service                         1,231                      1,545
    Engineering, advance design and product
       management                                                   901                        570
    General and administrative                                    4,071                      5,124                         347
                                                            -----------                -----------                 -----------
        Total operating expenses                                  6,203                      7,239                         347
                                                            -----------                -----------                 -----------

Operating loss                                                   (3,013)                    (2,028)                       (347)
                                                            -----------                -----------                 -----------
Other income (expense):
    Unrealized loss on asset                                         -                      (1,000)
    Interest expense                                               (530)                      (442)                        (27)
    Other income (expense)                                          950                        (29)                        -
                                                            -----------                -----------                 -----------
       Total other income (expense)                                 420                     (1,471)                        (27)
                                                            -----------                -----------                 -----------
Loss from continuing operations before income taxes              (2,593)                    (3,499)                       (374)

    Income tax benefit
                                                            -----------                -----------                  -----------
Loss from continuing operations                                  (2,593)                    (3,499)                       (374)
                                                            -----------                -----------                  -----------
    Income on discontinued snowboard operations                      22                         69                         165
    Loss on disposition of snowboard operations                                               (269)                         -
    Income (loss) on discontinued apparel operations                                          (112)                     (3,309)
    Loss on disposition of apparel operations                                                 (269)                       (132)
                                                            -----------                -----------                  -----------
Income (loss)from discontinued snowboard and apparel
operations, net of taxes                                             22                       (581)                     (3,276)
                                                            -----------                -----------                  -----------
Net loss                                                    $    (2,571)               $    (4,080)                 $   (3,650)
                                                            ===========                ===========                  ===========
Net loss per common share:

    Loss from continuing operations - basic                 $    (0.14)                $     (0.20)                 $    (0.06)
    Loss from continuing operations - diluted               $    (0.14)                $     (0.20)                 $    (0.06)

    Loss from discontinued operations - basic               $     0.00                 $     (0.03)                 $    (0.51)
    Loss from discontinued operations - diluted             $     0.00                 $     (0.03)                 $    (0.51)

    Net loss - basic                                        $    (0.14)                $     (0.23)                 $    (0.57)
    Net loss - diluted                                      $    (0.14)                $     (0.23)                 $    (0.57)

Weighted average number of shares used in computing per
share amounts:
    Basic                                                    19,192,611                 17,482,583                   6,377,556
                                                            ===========                ===========                 ===========
    Diluted                                                  19,192,611                 17,482,583                   6,377,556
                                                            ===========                ===========                 ===========

</TABLE>

<page> 28
<TABLE>
<S>                                       <C>                 <C>             <C>               <C>                  <C>
                                        INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                                          CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                                 (in thousands, except share data)
                                                                                                 Cumulative
                                                   Common Stock                Accumulated       Translation
                                              Shares           Amount           Deficit          Adjustment           Total
                                        -------------------------------------------------------------------------------------------
Balance, December 26, 1998                 6,176,556         $ 27,116         $(19,602)            $ (19)            $ 7,495
    Common stock options exercised         3,000,000              750                                                    750

Comprehensive Income (Loss)
    Net loss                                                                    (3,650)                               (3,650)
    Translation adjustment                                                                             8                   8
                                                                                                                      -------
    Total comprehensive loss                                                                                          (3,642)
                                        --------------------------------------------------------------------------------------------
Balance, January 1, 2000                   9,176,556           27,866          (23,252)              (11)              4,603
                                        --------------------------------------------------------------------------------------------
Comprehensive Income (Loss)
       Net loss                                                                 (4,080)                               (4,080)
       Translation adjustment                                                                         81                  81
                                                                                                                      -------
    Total comprehensive loss                                                                                          (3,999)
    Stock issued for acquisition           2,680,000            7,236                                                  7,236
    Stock issued in private placement      7,251,601            6,078                                                  6,078
    Common stock options exercised            42,350               18                                                     18
    Common stock subject to put option                           (201)                                                  (201)
                                        --------------------------------------------------------------------------------------------
Balance, December 30, 2000                19,150,507            40,997          (27,332)              70              13,735
                                        --------------------------------------------------------------------------------------------
Comprehensive Income (Loss)
       Net loss                                                                  (2,571)                              (2,571)
       Translation adjustment                                                                         18                  18
                                                                                                                      -------
    Total comprehensive loss                                                                                          (2,553)
    Stock issued in private placement        170,706                59                                                    59
    Warrants issued                                                149                                                   149
                                        --------------------------------------------------------------------------------------------

Balance, October 31, 2001                  19,321,213       $    41,205         $(29,903)          $ 88               $ 11,390
                                        ============================================================================================


                  The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<page> 29
<TABLE>
<S>                                                      <C>                            <C>                           <C>
                                                                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                                                                        CONSOLIDATED STATEMENT OF CASH FLOWS
                                                                                  (in thousands)

                                                                                        Periods Ended
                                                        -------------                   -------------                 -----------
                                                          October 31,                    December 30,                  January 1,
                                                            2001                            2000                         2000
                                                         ------------                   ------------                  -----------
Cash flows from operating activities:
     Net loss                                            $    (2,571)                   $    (4,080)                 $    (3,650)
     Adjustments to reconcile net loss to net cash
       used in operating activities:
         Depreciation                                            941                          1,912                          671
         Amortization of goodwill                                360                            395                           87
         Write off of investment - Globalgate                                                 1,000
         Loss on impairment of assets                                                                                      2,659
         Loss on retirement of fixed assets                                                      33                           30
         (Income) Loss on discontinued operations                 12                          2,975                        1,267
         Other Income                                             18                              2                            8
         Provision for doubtful accounts                          69                             66
         Changes in operating assets and liabilities
           (net of business combinations)
           (Increase) decrease in accounts receivable           (361)                        (1,485)                       3,339
           Decrease (increase) in inventories                    747                           (231)                       4,099
           (Increase) decrease in prepaid expenses              (184)                            99                          469
           Decrease (increase)in refundable deposits               -                             54                          (54)
           Decrease (increase) in other assets                    55                            849                         (431)
           (Decrease) increase in accounts payable              (910)                        (1,004)                        (257)
           (Decrease) in accrued liabilities                    (394)                           726                       (1,998)
           Increase (decrease) in accrued loss on disposal                                        3                       (1,498)
                                                              --------                       -------                    ---------
Net cash (used in) provided by operating activities           (2,218)                         1,314                        4,741
                                                              --------                       -------                    ---------

Cash flows from investing activities:
     Purchase of subsidiary, net of cash acquired                                            (4,208)                         -
     Purchase of investment                                                                                               (1,000)
     Proceeds from sale of equipment                                                                                       1,574
     Acquisition of property and equipment                      ( 33)                          (285)                        (209)
                                                              --------                       --------                   ---------
     Net cash provided by (used in)  investing activities       ( 33)                         (4,493)                        365
                                                              --------                       --------                   ---------

Cash flows from financing activities:
     Proceeds from issuance of common stock                       59                           6,078                         750
     Issuance of warrants                                        149
     Net proceeds from notes payable                           1,333                           2,100                         675
     Proceeds from issuance of long-term debt                    807                           1,320
     Principal payments on note payable                                                       (7,141)                     (2,251)
     Payment of loan fees                                                                       (223)
     Line of credit borrowings (payments), net                                                                            (3,698)
                                                              --------                       --------                   ---------
        Net cash provided by (used in) financing activities    2,348                           2,134                      (4,524)
                                                              --------                       --------                   ---------
Increase (decrease) in cash and cash equivalents                  97                          (1,045)                        582

Cash and cash equivalents at beginning of period                 885                           1,930                       1,348
                                                              --------                       --------                   ---------

Cash and cash equivalents at end of period                    $  982                           $ 885                     $ 1,930
                                                              ========                       ========                   =========
</TABLE>

<page> 30

                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

     Description of Business

     International   DisplayWorks,   Inc.  and  subsidiaries   (the  "Company"),
     headquartered  in Rocklin,  California  was  organized  in July of 1999 and
     recently  merged with its parent Granite Bay  Technologies,  Inc. which was
     organized in the State of Oregon as Morrow Snowboards,  Inc., in October of
     1989.  The  company is engaged in the  design,  manufacture  and  worldwide
     distribution of liquid crystal displays  (LCD's),  modules,  and assemblies
     for  major  original  equipment   manufacturers   (OEMs)   applications  in
     telecommunication, automotive, industrial, medical, and consumer products.

     Granite Bay  Technologies,  Inc.  (formerly  Morrow  Snowboards,  Inc.) was
     originally organized to design,  manufacture and market snowboards,  boots,
     bindings,  apparel and  accessories to retail outlets in the United States,
     as well as international  distributors in several foreign countries,  which
     business was conducted  from  organization  through  discontinuance  of the
     snowboard and apparel  operations in November 1999. In March 1999,  Granite
     Bay  Technologies,  Inc.  sold all of its "Morrow"  intellectual  property,
     along  with all  1999-2000  snowboard  inventories  and its  snowboard  and
     binding production  equipment to K2 Acquisitions,  Inc. ("K2"). In November
     1999, a subsidiary of Granite Bay Technologies,  Inc., Westbeach Canada ULC
     sold all of its operations, along with all apparel inventories to Westbeach
     Sports,  Inc., an unrelated  company.  The results of operations  for these
     business  segments have been  reflected as  discontinued  operations in the
     accompanying Consolidated Statements of Operations (Note 16).

     During the period  ended  October 31,  2001,  the  Company  operated in the
     single business segment of electronic equipment and parts.

     Going Concern

     The Company incurred net losses of $2,571,000,  $4,080,000,  and $3,650,000
     in fiscal periods ended October 31, 2001 (Fiscal  2001),  December 30, 2000
     (Fiscal 2000),  and January 1, 2000 (Fiscal 1999).  Losses from  continuing
     operations for these same periods were $2,593,000,  $3,499,000 and $374,000
     respectively.  The results for fiscal  years  ended  December  30, 2000 and
     January 1, 2000 include losses from discontinued operations of $581,000 and
     $3,276,000 respectively.  The Company has experienced liquidity problems as
     a result of recurring losses from operations.

     The Company  completed  several  private  placements of common stock during
     fiscal year 2000 (Note 9). Consistent with management's strategic plans for
     the Company,  the proceeds from the offerings  were used to facilitate  the
     acquisition of the PRC Companies. Management believes that the Company will
     generate   sufficient  revenue  and  liquidity  to  sustain  the  Company's
     operating  needs in fiscal  year 2002.  Further,  in the event of a capital
     shortfall,  management  of the Company  believes that it has the ability to
     raise additional equity capital and debt financing.  However,  there can be
     no  assurances  that  the  Company's  recent   acquisitions   will  operate
     profitably or that  management  will be  successful  in raising  additional
     capital.

<page> 31

     The matters  described above raise a substantial  doubt about the Company's
     ability  to  continue  as  a  going  concern.  The  consolidated  financial
     statements do not include any  adjustments  relating to the  recoverability
     and   classification   of  asset   carrying   amounts  or  the  amount  and
     classification  of  liabilities  that might  result  should the  Company be
     unable to continue as a going concern.

2. INTERNATIONAL DISPLAYWORKS, INC.

     Merger

     On  October  31,  2001,  by  approval  of  the  shareholders,  Granite  Bay
     Technologies,  Inc. merged into its wholly owned  subsidiary  International
     DisplayWorks, Inc. and changed its state of incorporation to Delaware.

     Acquisition

     On January 31, 2000,  Granite Bay  Technologies,  Inc. acquired 100% of the
     outstanding  shares of  International  DisplayWorks,  Inc. (IDW) a Delaware
     corporation  headquartered  in  Rocklin,  California,  through  issuance of
     2,680,000  shares of common stock.  The acquisition was accounted for using
     the purchase  method of  accounting.  On February 1, 2000,  IDW through its
     wholly  owned  subsidiary,  International  DisplayWorks  (Hong  Kong) Ltd.,
     (IDWHK) acquired 100% of the shares of MULCD Microelectronics  Company Ltd.
     (MULCD) and IDW Shenzhen Technology Development Company, Ltd. (IDWT). MULCD
     and IDWT are engaged in the  manufacturing and assembly of LCDs and modules
     in Peoples Republic of China (PRC Companies). The PRC Companies manufacture
     LCDs  and  assemblies  for the  USA,  Europe,  and Far  East  markets.  The
     acquisition,  which was accounted for by the purchase method of accounting,
     required a total payment of approximately $8,481,000. On April 11, 2001 the
     final  payment  of  $821,000  was  made to the  Judicial  Managers  for all
     remaining  amounts  due under the Sales and  Purchase  Agreement  and the
     Supplemental  Deed and Charge,  thereby  finalizing all matters relating to
     the acquisition on February 1, 2000 of MULCD and IDWT.

     In addition to the  acquisition of the PRC Companies,  IDWHK entered into a
     Supplemental  Deed and Charge agreement with IDW and IDWHK as the Chargors,
     and Vikay  Industrial  (Hong Kong) Ltd.,  and Vikay  Industrial,  Ltd.,  as
     Chargees. Under the Deed and Charge agreement, IDW pledged the Common Stock
     of IDWHK and the PRC Companies' assets to collateralize the deferral of the
     payment of the balance of the  purchase  price for the PRC  Companies.  All
     charges under this agreement have been released.

     The consolidated  financial statements include accounts and transactions of
     IDW and the  PRC  Companies  from  January  31,  2000,  the  date of  their
     acquisition.

<page> 32

     The  following  unaudited  pro forma  information  presents  the results of
     operations of the Company as if the acquisition had take place on the first
     day of each of the years ended as follows (in  thousands,  except  weighted
     average shares outstanding and earnings per share):
<TABLE>
<S>                                                 <C>                                <C>

                                                                             Years Ended
                                                     ----------------------------------------------------------
                                                         December 30,                       January 1,
                                                              2000                              2000
                                                     ----------------------             -------------------

   Net sales                                         $        19,320                    $        22,292
   Cost of goods                                     $        13,804                    $        19,199
   Operating expenses                                $         7,360                    $         2,431
   Net loss                                          $        (3,916)                   $        (2,778)
   Weighted average shares outstanding                    17,703,341                          9,057,556
   Loss per share                                    $          (.22)                   $          (.31)
                                                     $                                  $
</TABLE>

     These  unaudited  pro forma  results of  operations  have been prepared for
     comparative  purposes  only  and do not  purport  to be  indicative  of the
     results  of  operations   which   actually  would  have  resulted  had  the
     acquisition  occurred  on the date  indicated,  or which may  result in the
     future.

3. SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

     The consolidated  financial statements include the accounts of the Company,
     and its wholly owned subsidiaries:  International  DisplayWorks (Hong Kong)
     Ltd. (and its subsidiaries),  Westbeach Canada ULC (a Nova Scotia unlimited
     liability company). All significant  intercompany accounts and transactions
     have been eliminated in consolidation.

     Fiscal Year

     The Company  changed  its fiscal  year end to October  31st for fiscal year
     2001.  Accordingly the financial  information presented for the fiscal year
     ended October 31, 2001 is a short period (ten months).

     Previously  the  Company  used a 52 or 53 week  fiscal  year  ending on the
     Saturday nearest to December 31st. Accordingly,  the 2000 fiscal year ended
     on December 30, 2000 and the 1999 fiscal year ended on January 1, 2000.

     Cash and Cash Equivalents

     Cash and cash equivalents consist of cash on hand and on deposit and highly
     liquid  investments  purchased with a maturity of three months or less. The
     Company  maintains its cash in bank deposit  accounts which, at times,  may
     exceed federally insured limits.

     Financial Instruments

     A  financial  instrument  is cash or a contract  that  imposes or conveys a
     contractual  obligation,  or right,  to deliver or receive  cash or another
     financial instrument.  The fair value of financial instruments approximated
     their carrying value as of October 31, 2001 and December 30, 2000.

     Inventories

     Inventories  for  continuing  operations are stated at the lower of cost or
     market.  Costs included in the valuation of inventory are labor,  materials
     (including freight and duty) and manufacturing overhead.

<page> 33

     Investments

     Investments  as of October 31, 2001 and December 30, 2000 consist of equity
     securities deemed by management to be  available-for-sale  and are reported
     at fair value with net unrealized gains or losses, if applicable,  reported
     within shareholders' equity.

     Property and Equipment

     Property and  equipment are carried at cost.  Depreciation  of property and
     equipment is provided  using the  straight-line  method over the  estimated
     useful  lives of the  assets,  which are 10 to 35 years for  buildings  and
     improvements and 3 to 12 years for equipment and fixtures.  Amortization of
     leasehold improvements and equipment under capital leases is provided using
     the  straight-line  method over the expected  useful lives of the assets or
     the initial term of the lease (including periods related to renewal options
     which are expected to be exercised),  whichever is shorter. Amortization of
     leasehold improvements is included in depreciation expense.

     Goodwill and Other Long-Lived Assets

     For the fiscal year ended October 31, 2001, goodwill resulting from the IDW
     acquisition was amortized over 15 years using the straight-line  method and
     is recorded net of  accumulated  amortization  of $755,000 and $395,000 for
     the periods ended October 31, 2001 and December 30, 2000, respectively.

     For fiscal years  commencing  November 1, 2001 the Company will account for
     goodwill  and other  intangible  assets  under the guidance of Statement of
     Financial  Accounting  Standards No. 142. Under Statement No. 142, Goodwill
     and other intangible assets are periodically  evaluated using current facts
     and  circumstances  for  indications  that the value of such  assets may be
     impaired.  Goodwill and other long-lived assets are periodically  evaluated
     when facts and circumstances  indicate that the value of such assets may be
     impaired. Valuations are based on non-discounted projected earnings. If the
     valuation  indicates  that  non-discounted  earnings  are  insufficient  to
     recover the recorded assets,  revised projected  earnings are discounted to
     recover the recorded assets,  then the projected earnings are discounted to
     determine the revised  carrying value and the write-down for the difference
     is recorded.

     On October 31, 2001 Granite Bay  Technologies,  Inc. merged into its wholly
     owned  subsidiary,  International  DisplayWorks,  Inc.  Management does not
     believe the impact of  implementing  Statement No. 142 will have a material
     impact on the Company's financial positition or results of operations.

     Warranty Costs

     The Company asks that the customer  report  defects  within fifteen days of
     receipt of product. All products are fully replaceable if defective. As the
     Company manufactures custom products to customer specifications and has not
     experienced  significant  returns,  the Company does not anticipate it will
     incur a material amount of warranty expense.

     Advertising and Promotion Costs

     Advertising  and  promotion  costs are expensed as incurred and included in
     selling, marketing and customer service expenses. Advertising expenses were
     approximately  $17,000 and $73,000  for fiscal  years  October 31, 2001 and
     December 30, 2000, respectively.

     Revenue Recognition

     The  Company  recognizes  revenue  from the sale of its  products  when the
     products are shipped to customers.

<page> 34
     Income Taxes

     The Company  accounts  for income  taxes using the  liability  method.  The
     estimated future tax effects of differences between the basis in assets and
     liabilities  for tax  accounting  purposes  are  accounted  for as deferred
     taxes.  Deferred tax assets are also  recognized  for operating  losses and
     unused tax credits that are available to offset future  taxable  income.  A
     valuation allowance is established to reduce deferred tax assets when it is
     more likely than not that all, or some portion of such  deferred tax assets
     will not be realized.  A valuation  allowance for  substantially all of the
     Company's  deferred tax assets has been  established due to the uncertainty
     of realizing these deferred tax assets.

     Stock Options and Warrants

     The Company has elected to measure and record  compensation  costs relative
     to  employee  stock  option  and  purchase  plans  in  accordance  with the
     provisions of Accounting  Principles  Board Opinion No. 25,  Accounting for
     Stock Issued to Employees,  and make pro forma disclosure of net income and
     earnings  per share as if the fair  value  based  method of  valuing  stock
     options has been applied.


     Product Development Costs

     Expenditures   associated   with  the   development  of  new  products  and
     improvements  to  existing  products  are  expensed  as  incurred.  Product
     development costs were approximately $636,000 and $314,000 for fiscal years
     October 31, 2001 and December 30, 2000, respectively.

     Net Loss Per Share

     The shares used in the  calculation  of net loss per share are  computed as
     follows:
<TABLE>
<S>                                                <C>                     <C>                       <C>

                                                                           Periods Ended
                                                    October 31,             December 30,              January 1,
                                                      2001                     2000                     2000
                                                -------------------   -------------------------    -----------------------
     Shares:
       Weighted average shares out-
          standing for basic earnings              19,192,611              17,482,583                6,377,556
          per share
       Dilutive effect of stock options
          and warrants (1)                             -                        -                        -

                                              --------------------  ------------------------   ----------------------
       Weighted average shares out-
          standing for diluted earnings            19,192,611              17,482,583                6,377,556
          per share
                                                  ============            ============             =============
</TABLE>

     (1)  The effect of  potential  common  securities  issued  pursuant  to the
          exercise of stock  options and warrants of 2,457,709,  1,915,506,  and
          584,448 shares for fiscal years 2001, 2000, and 1999 respectively, are
          excluded  from the diluted  earnings  per share  calculation  as their
          effect would be antidilutive.
<page> 35

     Foreign Currency Translation

     All foreign assets and liabilities  have been translated in the preparation
     of the consolidated  financial  statements at the exchange rates prevailing
     at the respective  balance sheet dates, and all income statement items have
     been  translated  using the  weighted  average  exchange  rates  during the
     respective  periods.  The net gain or loss resulting from  translation upon
     consolidation  of the  financial  statements  is reported as a component of
     comprehensive  income  (loss)  of  each  period  with  accumulated  foreign
     currency  gain or loss  reported as a component of the equity  category for
     comprehensive income (loss).

     The cash flows of the Company's  foreign  subsidiaries are translated using
     the exchange rates  prevailing at the respective  balance sheet dates.  The
     effect of exchange  rate  changes on foreign cash and cash  equivalents  is
     reported  as a  separate  element  of  the  statement  of  cash  flows,  if
     significant.

     Use of 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 revenues  and  expenses
     during  the  reporting  period.  Actual  results  could  differ  from these
     estimates.

     Impact of New Financial Accounting Standards

     In June 2001, the FASB issued SFAS No. 141, Business Combinations. SFAS No.
     141  addresses  the  financial   accounting   and  reporting  for  business
     combinations  and  requires  the use of a  single  method  to  account  for
     business combinations, the purchase method of accounting. In addition, SFAS
     No. 141 requires that intangible  assets be recognized as assets apart from
     goodwill if they meet one of two criteria, the contractual-legal  criterion
     or the  separability  criterion.  SFAS  No.  141  applies  to all  business
     combinations for which the date of acquisition is July 1, 2001 or later.

     In June 2001, the FASB issued SFAS No. 142,  Goodwill and Other  Intangible
     Assets. Pursuant to SFAS No. 142, goodwill and other intangible assets that
     have indefinite useful lives will be evaluated  periodically for impairment
     rather than amortized.  The provisions of this statement apply to financial
     statements for fiscal years beginning  after December 15, 2001,  except for
     goodwill or other intangible  assets acquired after June 30, 2001 for which
     SFAS No. 142 is  immediately  effective.  Management does not  believe  the
     adoption of SFAS No. 141 and SFAS No. 142 will have a significant impact on
     the Company's current financial position or results of operations.

     In  October  2001,  the  FASB  issued  SFAS  No.  144,  Accounting  for the
     Impairment or Disposal of Long-Lived  Assets,  which replaces SFAS No. 121,
     Accounting  for the  Impairment  of  Long-Lived  Assets and for  Long-Lived
     Assets to be Disposed Of. The accounting model for long-lived  assets to be
     disposed  of  by  sale  applies  to  all   long-lived   assets,   including
     discontinued   operations,   and  replaces  the   provision  of  Accounting
     Principles Board Opinion No. 30, Reporting Results of  Operations-Reporting
     the Effects of Disposal  of a Segment of a  Business,  for the  disposal of
     segments of a business.  SFAS No. 144 requires that those long-lived assets
     be  measured  at the lower of  carrying  amount or fair value less costs to
     sell,  whether  reported  in  continuing   operations  or  in  discontinued
     operations.  Therefore,  discontinued operations will no longer be measured
     at net realizable  value or include amounts for operating  losses that have
     not yet  occurred.  The  provisions  of SFAS  No.  144  are  effective  for
     financial  statements  issued for fiscal years beginning after December 15,
     2001, and, generally, are to be applied prospectively.  Management does not
     believe the adoption of this  statement  will have a significant  impact on
     the Company's current financial position or results of operations.

     Reclassifications

     Certain  amounts  in  the  prior  year's  financial  statements  have  been
     reclassified to conform to the presentation used in the current year.

4. INVENTORY

     Inventories consisted of the following (in thousands):

<TABLE>
<S>                                                               <C>                    <C>
                                                                   October 31,            December 30,
                                                                       2001                   2000
                                                                -----------------        -------------------
       Finished goods                                           $           326           $            636
       Work-in-process                                                      126                        299
       Raw Materials                                                      1,455                      1,637
       Less:  reserve for obsolete inventory                               (585)                      (503)
                                                                -----------------        -------------------
       Total inventories, net                                   $         1,322           $          2,069
                                                                =================        ===================
</TABLE>
<PAGE>

5. PROPERTY AND EQUIPMENT

     Property and equipment consisted of the following (in thousands):

<TABLE>
<S>                                                            <C>                         <C>
                                                                  October 31,                 December 30,
                                                                      2001                         2000
                                                               ------------------       ----------------------
       Building and improvements                               $          3,020          $           2,286
       Plant, equipment, furniture and
             fixtures                                                     5,108                      5,809
                                                               ------------------       ----------------------
                                                                          8,128                      8,095

       Less:  accumulated depreciation                                   (1,739)                      (798)
                                                               ------------------       ----------------------
       Property and equipment, net                       $          6,389          $           7,297
                                                               ==================       ======================
</TABLE>

     Depreciation  expense  totaled  $941,000,  $1,912,000  and $671,000 for the
     periods  ended  October 31,  2001,  December  30, 2000 and January 1, 2000,
     respectively.

6. ACCRUED LIABILITIES

         Accrued liabilities consisted of the following (in thousands):


<TABLE>
<S>                                                                <C>                       <C>
                                                                    October 31,               December 30,
                                                                        2001                      2000
                                                        -------------------------------------------------------
         Accrued commissions                                        $     97                  $       62
         Accrued payroll and related liabilities                         583                           -
         Accrued inventory purchases                                       -                         325
         Other accrued liabilities                                       578                       1,064
                                                        -------------------------------------------------------
                                                                    $  1,258                  $    1,451

                                                        =======================================================
</TABLE>

7. NOTES PAYABLE

     Notes payable consisted of the following (in thousands):

<TABLE>
<S>                                                                                     <C>                <C>
                                                                                         October 31,        December 30,
                                                                                            2001                2000
                                                                                     -----------------   ------------------
       Notes payable, interest only payments due in monthly installments of
       $3,993 at 12% interest; principal balance due and payable in full April
       15, 2002, collateralized by all shares of the Company's common stock, and
       the accounts receivable, inventory, equipment and other tangible assets
       of the Company                                                                       $399                $499

       Notes payable, interest only payments due in monthly installments of
       $1,585 at 12.68% interest; principal balance due and payable in full
       October 26, 2001, collateralized by all shares of the Company's common
       stock, and the accounts receivable, inventory, equipment and other
       tangible assets of the Company (See Note 17).                                         150                   -

       Notes payable, interest only payments due in monthly installments of
       $2,642 at 12.68% interest; principal balance due and payable in full
       April 1, 2002, collateralized by all shares of the Company's common
       stock, and the accounts receivable, inventory, equipment and other
       tangible assets of the Company                                                        250                   -

       Notes payable, interest only payments due in monthly installments of
       $2,906 at 12.68% interest; principal balance due and payable in full
       April 15, 2002, collateralized by all shares of the Company's common
       stock, and the accounts receivable, inventory, equipment and other
       tangible assets of the Company                                                        275                   -
</TABLE>
<page> 37
<TABLE>
<S>                                                                                     <C>                <C>
                                                                                         October 31,        December 30,
                                                                                            2001                2000
                                                                                     -----------------   ------------------
       Notes payable, interest only payments due in monthly installments of
       $1,057 at 12.68% interest; principal balance due and payable in full
       October 15, 2002, collateralized by all shares of the Company's common
       stock, and the accounts receivable, inventory, equipment and other
       tangible assets of the Company                                                       100                   -

       Factoring   line,   at  2.25%  over  Hong  Kong  Dollar  prime
       collateralized by accounts receivable. (Approximately 9.25% at October
       31, 2001).                                                                           488                   -

       Credit line at 3% (12% at October 31, 2001)over U.S.  prime (12% at
       October 31,  2001) collateralized by the accounts receivable,  inventory,
       equipment and other tangible assets of the Company with minimum interest
       charge of $12,500 per month.                                                         588                   -

       Mortgage  Loan, at 8.3%  interest,  to be repaid in three annual
       installments,  collateralized  by the three factory buildings in                   1,210                   -
       Shenzhen, PRC

       Note payable,  unsecured  short-term at 6% interest per annum;
       payable  on  demand;  due for  purchase  of the PRC  Companies                         -                 821
       retired; in fiscal 2001.
                                                                                    ------------------   ----------------
                                                                                          3,460               1,320
       Less:  due within one year                                                         2,653               1,320
                                                                                    ------------------   ----------------
       Due after one year                                                             $     807             $     -
                                                                                    ==================   ================

       Notes Payable
       Due in fiscal year October 31, 2002              $  2,653
       Due in fiscal year October 31, 2003                   404
       Due in fiscal year October 31, 2004                   403
                                                        --------
                                                        $  3,460
                                                        ========
</TABLE>

     During  the  fiscal  year  ended  October  31,  2001,  the  Company  issued
     approximately  $1,100,000 of collateralized notes to a key employee,  board
     members  and other  individual  investors.  The  related  parties  received
     warrants to purchase 185,000 shares of the Company's Common Stock at prices
     ranging  from $.36 to $.75 per share.  The  proceeds  were used for general
     working capital, capital expenditures, and to retire maturing debt.

     In the quarter ended December 30, 2000,  the Company  issued  approximately
     $499,000 of  collateralized  notes  payable due  December 15, 2001 to a key
     employee,  board members and other individual investors. The due dates were
     extended  to April 15,  2002.  The  related  parties  received  warrants to
     purchase 99,861 shares of the Company's Common Stock at $.75 per share. The
     proceeds were used for general working capital.

     On March 23, 2001 the Company  entered into an asset based lending  program
     with BFI Business  Finance granting the Company a $3,000,000 line of credit
     secured  by  the  assets  of the  Company  including  accounts  receivable,
     inventory,  and  intangibles.  The  agreement  is for  twelve  months at an
     interest rate of 3% above the "basic rate" at Comerica Bank-California with
     a minimum  monthly  charge of $12,500.  The Company has been  incurring the
     minimum  interest  charge since  inception of the agreement.  Borrowings at
     October 31, 2001 were approximately $588,000.

<page> 38

     In August of 2001,  the  Company,  through  its  wholly  owned  subsidiary,
     International  DisplayWorks  (Hong  Kong)  Ltd.,  entered  into a factoring
     agreement  with  East  Asia  Heller  Limited   collateralized  by  accounts
     receivable  and  inventory of IDWHK.  The  facility  was for  approximately
     $600,000  with an interest  rate of 2.25% above the Hong Kong Dollar  prime
     quoted by the Hong Kong and Shanghai  Banking  Corporation.  The prevailing
     rate was approximately 9.25% at October 31, 2001.

     In June of 2001,  the  Company,  through its wholly owned  subsidiary,  IDW
     Technology  (Shenzhen)  Co.,  Ltd.,  entered  into a mortgage  on the three
     buildings  located at its  manufacturing  facility in  Shenzhen,  PRC.  The
     amount borrowed was approximately $1,200,000 for three years at an interest
     rate of .693% per month. The loan is scheduled to be repaid in three annual
     installments, the first being due in June of 2002.

8. COMMITMENTS AND CONTINGENCIES

     Commitments

     The Company is obligated under a single operating lease for office space at
     $106,000  per year plus the cost of  common  area  maintenance,  commencing
     March 1, 2000 for the first thirty-two  months,  then for $111,000 per year
     through  April 2005.  This lease was amended by  surrendering  4,600 square
     feet back to the  landlord,  as of  February 1, 2002  reducing  the rent to
     $69,000  per year  through  month  thirty  two,  then for  $73,000 per year
     through April 2005.

     Legal Matters

     The Company is subject to legal  proceedings  and claims which arise in the
     ordinary  course of business.  In the opinion of management,  the amount of
     ultimate liability with respect to such actions, will not materially affect
     the financial position or results of the operations of the Company.

9. SHAREHOLDERS' EQUITY

     Changes in Securities

     In September 2001, in settlement of a Put Option entered into September 30,
     2000,  the Company  issued  125,000  shares of the  Company's  Common Stock
     valued at $.34 per share.  The share  price was  determined  by the selling
     price of the  Company's  Common  Stock on the date of issue,  September  4,
     2001.

     In October 2001, the Company  issued 45,706 shares of the Company's  common
     stock under the Granite Bay  Technologies  2000 Equity  Incentive  Plan for
     consulting services.  The shares were valued at $.36, the fair market value
     on the date of the grant.

     Stock Option Plans

     The Company has a stock option plan (the  "Plan") for selected  executives,
     employees,  and directors for which  1,102,500  shares of common stock have
     been reserved for issuance under the Plan. The Plan permits the granting of
     options  for  terms not to exceed  ten  years  from the date of grant.  The
     options  generally vest ratably over a four-year period and are exercisable
     subject to terms  established in the Plan  document.  The exercise price of
     the  options  granted  under the Plan must be equal to or greater  than the
     fair market  value of the shares on the date of grant for  incentive  stock
     options  and  not  less  than 85  percent  of the  fair  market  value  for
     nonqualified  stock options.  The exercise price of the options  granted by
     the Company has been equal to or greater than fair market

<page> 39

     value at the date of grant.  Fair  market  value for  periods  prior to the
     Company's  initial public offering was determined by the Board of Directors
     without an independent valuation.

     In September  2000, the Company  established  the Granite Bay  Technologies
     2000 Equity  Incentive  Plan for certain key employees of the Company.  The
     plan also  permits the grant of stock  options,  restricted  stock  awards,
     stock  appreciation  rights,  stock units and other stock grants to certain
     persons  with  a   relationship   with  the  Company,   including   agents,
     consultants,  advisors,  independent  contractors,  sales  representatives,
     distributors,  principals and retail distribution outlets for the Company's
     products.  The Plan  provides  for up to  882,000  shares of stock that are
     authorized for issue. The price of each share of stock covered by an option
     shall not be less than 100% of the fair value of the Company's Common Stock
     on the date of grant. Each option certificate shall have an exercise period
     of six months to ten years.

     In October 1999, the Board of Directors adopted the Morrow Snowboards, Inc.
     1999 Stock Option Plan for non-employee  directors.  This plan provides for
     the  issuance of up to 300,000  shares for the  Company's  common  stock to
     existing  directors  and in the  case of extra  services  or  duties,  past
     directors.  Unless otherwise provided in the option grant, the options vest
     over the year  following  the date of grant and  expire  after the later of
     five years  after the date of grant or five years  after  termination  as a
     director.

      The summary of the activity within the plans follows:
<TABLE>
<S>                                                               <C>            <C>                 <C>
                                                                     Number          Weighted         Aggregate
                                                                   Of Shares          Average           Price
                                                                                  Exercise Price
                                                                ----------------  ---------------- ----------------
         Options outstanding at
         December 26, 1998                                             398,998              $3.78     $ 1,508,000

         Options granted                                               280,000                .25          70,000
         Options lapsed/canceled                                      (128,550)              4.41        (566,819)
                                                                ----------------  ---------------- ----------------
         Options outstanding at
         January 1, 2000                                               550,448               1.84       1,011,181

         Options exercised                                             (42,350)               .43         (18,401)
         Options granted                                               858,500               1.64       1,409,230
         Options lapsed/canceled                                      (231,250)              3.69        (852,501)
                                                                ----------------  ---------------- ----------------
         Options outstanding at
         December 30, 2000                                           1,135,348               1.34       1,549,510

         Options granted                                               405,000                .58         236,550
         Options lapsed/canceled                                      (302,500)               .95        (290,535)
                                                                ----------------  ---------------- ----------------
         Options outstanding
         October 31, 2001                                            1,237,848              $1.21     $ 1,495,525
                                                                ================  ================ ================
</TABLE>
<page> 40

     The following table summarizes  information about stock options outstanding
     at October 31, 2001:

     The total options  exercisable at October 31, 2001,  December 30, 2000, and
     January 1, 2000 were  806,852,  665,707,  and  538,882,  respectively  at a
     weighted  average  exercise  price  per  share of  $.87,  $.79,  and  $1.87
     respectively.

<TABLE>
<S>     <C>                   <C>            <C>               <C>            <C>                <C>
                               Number of      Weighted          Weighted       Number of          Weighted
         Range of              Shares out-    Average           Average        Shares             Average exercise
         Exercise              standing at    Remaining         Exercise       Exercisable at     Price per
         Prices per            October 31,    Contractual       Price          October 31,        share
         Share                 2001           Life (years)      Per share      2001
         --------------        -------------- ----------------  -------------  ------------------ -----------------
         $ .01 - $ 5.00        1,197,848            3.91           $ 1.04           806,852             $ .87
         $5.01 - $10.00           40,000            3.82             6.20
                               -------------- ----------------  -------------  -----------------  -----------------
         Total/average         1,237,848            3.91           $ 1.21           806,852             $ .87
                               ============== ================  =============  =================  =================
</TABLE>

     In 1995, the  shareholders  approved the Stock Option Plan for Non-Employee
     Directors (the  "Directors  Plan"),  which  reserved  122,500 shares of the
     Company's  Common  Stock for the future  grants to eligible  Directors  (as
     defined in the Directors  Plan).  Options granted pursuant to the Directors
     Plan reduced the number of underlying  shares available under the Plan on a
     one-to-one  basis. The Directors Plan provided for an annual grant of 2,450
     shares of Common Stock to each eligible Director immediately following each
     annual meeting of  shareholders  commencing  with the 1996 annual  meeting.
     Grants were made at the fair market  value of the Common  Stock on the date
     of grant and were fully vested  after six months.  The  Directors  Plan was
     discontinued in October 1999.

     Pro forma Results of Operations

     The Company has computed,  for pro forma disclosure purposes,  the value of
     all  options  granted  during  fiscal  2001,   2000,  and  1999  using  the
     Black-Scholes  option pricing  model,  and the following  weighted  average
     assumptions for grants for the years ended:

<TABLE>
<S>                                                      <C>                    <C>                <C>
                                                          October 31,            December 30,          January 1,
                                                              2001                   2000                2000
                                                     ----------------------- -------------------    --------------
         Risk-free interest rate                              6.0%                   6.0%                5.7%
         Expected dividend value                              0.0%                   0.0%                0.0%
         Expected lives (years)                                 5                      5                    6
         Expected volatility                                 82.8%                  90.0%                53.8%
</TABLE>

     Statement of Financial Accounting Standards No. 123

     Using the  Black-Scholes  methodology,  the total value of options  granted
     during  fiscal 2001,  2000,  and 1999 was $199,635,  $777,374,  and $34,000
     respectively, which would be amortized on a proforma basis over the vesting
     period of the options  (typically  four years).  The weighted  average fair
     value per share of options  granted during fiscal 2001,  2000, and 1999 was
     $.49, $.91, and $.14 respectively.

<page> 41
     Had the  measurement  provisions of SFAS No. 123 been  adopted,  results of
     operations  computed  on a proforma  basis  would have been as follows  (in
     thousands, except for share information):

<TABLE>
<S>                                    <C>                       <C>                       <C>
                                                                   Periods Ended
                                 -------------------------------------------------------------------------------------

                                        October 31, 2001          December 30, 2000            January 1, 2000
                                   ------------------------   --------------------------    ----------------------

                                        As            Pro          As          Pro            As            Pro
                                     Reported        Forma      Reported      Forma        Reported        Forma
         Net loss                    $(2,571)      $(2,636)     $(4,080)     $(4,726)      $(3,650)       $(3,893)
         Net loss per share:
               Basic                  $(.14)        $(.14)       $(.23)       $(.27)        $(.57)         $(.61)
               Diluted                $(.14)        $(.14)       $(.23)       $(.27)        $(.61)         $(.61)
</TABLE>

     The effects of applying the  measurement  provision of SFAS No. 123 in this
     pro forma  disclosure  are not indicative of future  amounts.  SFAS No. 123
     does not apply to awards prior to January 1, 1995,  and  additional  awards
     are anticipated in future years.

     Stock Warrants

     The Company,  from time to time,  has issued stock  warrants as payment for
     fees,  interest and services rendered.  At fiscal periods ended October 31,
     2001,  December 30, 2000, and January 1, 2000, the Company had  outstanding
     warrants to purchase 1,291,861, 780,161, and 34,300 shares of Common Stock,
     respectively.  The warrants are exercisable at a weighted average price per
     share of $.76.  In fiscal  2001,  2000,  and 1999,  no warrants to purchase
     common stock were  exercised.  During  fiscal 2001,  460,000  warrants were
     granted  and not lapsed.  During  fiscal  2000 and 1999,  no warrants  were
     granted or lapsed.

10. RELATED PARTY TRANSACTIONS

     Related party  transactions  not previously  disclosed in other sections of
     this report include the following:

     A member of the Company's Board of Directors was issued 100,000 warrants to
     purchase the Company's  Common Stock at an exercise price of $.36 per share
     (fair market  value at the date of issue) as  compensation  for  consulting
     services to the Company.

<page> 42

11. INCOME TAXES

     The  provisions  for  income  taxes  consist  of taxes  currently  due plus
     deferred  taxes  for the net  change  in items  with  different  bases  for
     financial and income tax reporting purposes. The items with different bases
     are primarily fixed assets;  allowance for doubtful  accounts;  and accrued
     liabilities for employee vacation and inventory reserves.  The deferred tax
     assets and  liabilities  represent  the future  tax  consequences  of those
     differences,  which will  either be  recovered  or settled,  using  enacted
     marginal  income tax rates in effect when the  differences  are expected to
     reverse.  Deferred tax assets are recognized  for operating  losses and tax
     credits that are  available to offset  future  federal  income  taxes.  Net
     deferred  taxes consist of the following tax effects  relating to temporary
     differences and carry-forwards (in thousands):
<TABLE>
<CAPTION>
<S>                                                              <C>                 <C>              <C>

                                                                 October 31,         December 30,       January 1,
                                                                   2001                 2000              2000
                                                                ---------------   ----------------   ---------------
       Deferred tax assets:
        Accrued expenses and reserves                             $     497         $      105          $    494
        Depreciation                                                                                         145
        Net operating loss and tax credit carry-forwards              2,961             10,970             8,827
                                                                ---------------   ----------------   ---------------
        Deferred tax assets before valuation allowance                3,458             11,075             9,466
        Valuation allowance                                          (3,450)           (11,067)           (9,466)
                                                                ----------------- -----------------  ---------------
        Total deferred taxes                                            8                    8               -
     Deferred tax liabilities:
        Depreciation and amortization                                  (8)                  (8)              -

                                                                ----------------- -----------------  ---------------
        Net deferred tax assets                                 $       -            $      -          $     -

                                                                   ==========         ===========       =========

                                                                    October 31,       December 30,
                                                                      2001              2000             Change
                                                                ----------------- ------------------ ---------------
     Federal net operating loss  carry-forward - expiring thru        7,711             28,128            20,417
     2021
     Valuation allowance                                             (3,450)           (11,067)           (7,617)

</TABLE>

     At October 31, 2001 and  December 30,  2000,  the Company had an estimated
     federal  net  operating  loss  carryforward  of  approximately  $7,711  and
     $28,128, respectively, expiring through 2020. Due to the discontinuation of
     its snowboard and apparel  operations (Note 16) and the purchase of IDW and
     the PRC  Companies  (Note 2), the Company does not meet the  continuity  of
     operations  requirement of Internal Revenue Code Section 382.  Accordingly,
     approximately  $22,636,000 in net operating losses will not be available to
     offset future Federal income taxes, if any. For the years ended October 31,
     2001 and December 30, 2000, the Company  decreased its valuation  allowance
     by  $7,617,000  and  increased  its  valuation   allowance  to  $3,450,000,
     respectively.  A  valuation  allowance  has  been  established  due  to the
     uncertainty of realizing deferred tax assets.

     The  components of income tax  (benefit)  expense for both  continuing  and
     discontinued operations are as follows (in thousands):

<TABLE>
<S>                                                     <C>                   <C>                   <C>
                                                                                Periods Ended
                                                   --------------------------------------------------------------------

                                                        October 31,           December 30,          January 1,
                                                             2001                  2000                 2000
                                                     --------------------- --------------------- ------------------
       (Benefit) expense for income taxes:
          Current:
                Federal
                Foreign                              --------------------- --------------------- ------------------

                                Total                --------------------- --------------------- ------------------

          Deferred                                          (3,430)             $ (1,601)             $  (1,337)
          Valuation allowance                                3,430                 1,601                  1,337
                                                     --------------------- --------------------- ------------------
        Total benefit for income taxes                    $                     $      -              $       -
                                                     ===================== ===================== ==================

             Tax (benefit) expense recorded in:
                Continued operations                      $      -              $      -              $       -
</TABLE>


     A reconciliation of the income tax at the federal statutory income tax rate
     to the income tax benefit as reported is as follows:

<TABLE>
<S>                                                     <C>                   <C>                   <C>
                                                                                Periods Ended
                                                   --------------------------------------------------------------------

                                                        October 31,           December 30,          January 1,
                                                             2001                  2000                 2000
                                                     --------------------- --------------------- ------------------
       Benefit computed at statutory rates                  (34.0)%             (34.0)%               (34.0)%
       State taxes, net of federal benefit                  ( 4.4)              ( 4.4)                ( 4.4)
       Chanage in valuation allowance                       (38.4)               38.4                  35.2
       Other                                                                                            3.2
                                                     --------------------- --------------------- ------------------

             Income tax benefit as reported                      -%                    -%                 -%
                                                     ===================== ===================== ==================

</TABLE>


 12. CASH FLOW DISCLOSURES

      Supplemental cash flow disclosures are as follows (in thousands):

<TABLE>
<S>                                                     <C>                   <C>                   <C>
                                                                                Periods Ended
                                                   --------------------------------------------------------------------

                                                         October 31,           December 30,          January 1,
                                                             2001                  2000                 2000
                                                     --------------------- --------------------- ------------------
       Supplemental disclosure:
             Cash paid for interest                         $ 531                 $ 442                $ 100

       Non-cash investing transactions:
             Assets acquired under capital
             lease                                                              $ 4,272
</TABLE>
<page> 43

     In fiscal year 2000,  IDWHK purchased all of the outstanding  securities of
     MULCD and IDWT for cash. In conjunction with the  acquisition,  liabilities
     were assumed as follows (in thousands):
<TABLE>
<S>                                                                        <C>

       Fair market value of assets acquired                                $ 12,017
       Liabilities assumed                                                   (2,213)
       Deposit paid in 1999 by IDWHK                                         (1,000)
       Payment due to complete acquisition (Note 2)                          (4,532)
       Less:  cash acquired                                                     (64)
                                                                     --------------------
       Cash paid to acquire PRC Companies                                    $ 4,208
                                                                     ====================
</TABLE>

13. CONCENTRATIONS

     Credit Risks

     Financial   instruments,   which   potentially   subject   the  Company  to
     concentration  of  credit  risk,  consist  principally  of  temporary  cash
     investments,  short-term  investments  and trade  receivables.  The Company
     places its temporary cash investments and short-term  investments with high
     quality financial institutions.

     Major Customer

     Sales  to one  customer  for the  fiscal  period  ended  October  31,  2001
     accounted for approximately  35% of total sales.  Sales to one customer for
     the fiscal year ended December 30, 2000 accounted for  approximately 28% of
     total sales.

14. EMPLOYEE SAVINGS PLAN

     The Company created an employee  savings plan (the "Plan") on July 1, 1996,
     under the  provisions of Section  401(k) of the Internal  Revenue Code. The
     plan covered substantially all full-time employees.  The Company's matching
     contributions  took two  forms;  a basic  matching  contribution  of 30% of
     employee   contributions,   and  a  discretionary   supplemental   matching
     contribution based upon parameters set by management on an annual basis.

     The Company  terminated the Plan in December 2000.  Participants  are fully
     vested in their 401(k)  contributions and matching  contribution  accounts.
     Company matching contributions in 1999 were $11,000.

15. SEGMENT AND GEOGRAPHIC INFORMATION

     Under  Statement of Financial  Accounting  Standards  No. 131,  Disclosures
     about Segments of Enterprise  and Related  Information  (SFAS 131),  public
     companies  are  required  to  disclose   certain   information   about  the
     enterprise's  reportable  segments.  The  Company  produces  on displays or
     display  modules  for end  products of  original  equipment  manufacturers.

<page> 44
     However,  the Company has two major geographic  territories  where it sells
     and distributes  essentially the same products.  The geographic territories
     are the  United  States  and  Asia.  The  following  represents  continuing
     operations  geographical  data for the fiscal period ended October 31, 2001
     and December 30, 2000 (in thousands):

<TABLE>
<S>                                                                      <C>              <C>                <C>
                                                                       Fiscal Period Ended October 31, 2001
                                                              ---------------------------------------------------------
                                                                           Asia              USA              Total
                                                              ----------------- ---------------- ------------------
       Revenue                                                            $6,562           $8,096            $14,658
       Cash                                                                  434              548                982
       Fixed assets, net of accumulated depreciation                       6,206              183              6,389
       Total assets                                                       10,087            7,972             18,058
                                                              -------------------- ---------------- ------------------

                                                                      Fiscal Period Ended December 30, 2000
                                                              ---------------------------------------------------------
                                                                           Asia              USA              Total

                                                              ----------------- ---------------- ------------------
       Revenue                                                           $10,479           $7,325            $17,804
       Cash                                                                  766              119                885
       Fixed assets, net of accumulated depreciation                       7,104              193              7,297
       Total assets                                                       11,810            7,757             19,567
       -------------------------------------------------------- ----------------- ---------------- ------------------
</TABLE>

16. DISCONTINUED OPERATIONS

     On March 26, 1999,  the Company sold all if its rights,  title and interest
     in and to  the  "Morrow"  and  "Morrow  Snowboards"  names  and  the  other
     trademarks, trade names and service marks to K2 Acquisitions,  Inc (K2). In
     addition, K2 purchased all of the machinery, equipment and tooling used for
     manufacture  of  snowboards  and  bindings;  all  rights to the  machinery,
     equipment  and tooling that is leased by the Company;  all of the Company's
     snowboard  inventory for the 1999/2000  season;  purchase orders reflecting
     sales  orders  received  and  accepted by the Company  prior to the date of
     sale;   trademark  licensing   agreement  and  international   distribution
     agreement  and all of the  Company's  rights,  claims,  credits,  causes of
     action or rights of set-off  against third parties  relating to the assets.
     In  consideration  of  the  sale,  conveyance,  assignments,  transfer  and
     delivery of the assets, the Company received $3.2 million dollars.

     In October  1999,  Westbeach's  Bellevue,  Washington  retail  store lease,
     inventory and trade  fixtures  were sold for  approximately  $196,000.  The
     payment included the assumption of accounts payable related to that store's
     inventory,  assumption  of the retail  store lease  (including a release of
     Westbeach from any further  obligation) and approximately  $48,000 in cash,
     based on subsequent sales, payable in interest-free installments on January
     5, 2000 and December 30, 2000.

     On November  12,  1999,  Westbeach  sold  substantially  all of its assets,
     including  its  remaining  two retail  stores in  Vancouver  and  Whistler,
     British  Columbia,  and its  apparel  line,  together  with  the  Westbeach
     trademarks, to Westbeach Sports, Inc., a British Columbia corporation,  not
     affiliated  with either the Company or Westbeach.  The assets were sold for
     $2,680,000  pursuant to an Asset Purchase  Agreement that contained certain
     representations   and   warranties   by   Westbeach   to  the   buyer   and

<page> 45

     indemnification  of the Buyer by  Westbeach  in certain  events for certain
     liabilities or any inaccuracies in such representations and warranties. The
     sales  price was subject to  adjustment  based on any final  inventory  and
     accounts  receivable  verifications.  A $100,000  holdback to fund  certain
     adjustments has since been refunded to the Company.

     As a result of these transactions,  the following net book values of assets
     purchased and liabilities assumed at October 31, 2001 and December 30, 2000
     have been  shown as net  current  and  non-current  assets of  discontinued
     operations in the Consolidated Balance Sheet (in thousands):

<TABLE>
<S>                                                                       <C>                      <C>
                                                                           October 31,             December 30,
                                                                              2001                     2000
                                                                    -------------------------- -----------------------
     Accounts receivable, net                                                  $12                      $24
     Inventory
     Other assets
                                                                    -------------------------- ----------------------
     Total net assets from discontinued operations                             $12                      $24
                                                                    ========================== =======================
</TABLE>

     Operating  results  of the  snowboard  and  apparel  operations  for fiscal
     periods  2001,  2000,  and 1999 are shown  separately  in the  consolidated
     statement of operations as loss from discontinued operations, net of taxes.
     The net loss on the sale of the apparel  operations  has been  reflected in
     the 1999  consolidated  statement of operations as a loss from discontinued
     apparel  operations,  as has the  accrued  operating  loss  of the  apparel
     segment for the period from year-end to the date of sale. The  discontinued
     snowboard  operating  results  include an  allocation of  consolidated  net
     interest  expense based on net assets.  The allocated net interest  expense
     was  $96,000  in fiscal  period  1999.  Sales from  discontinued  snowboard
     operations  of $86,000 in fiscal period 1999 was excluded from revenues and
     included in loss from discontinued  snowboard and apparel  operations.  The
     net interest  expense  allocated for  discontinued  apparel  operations was
     $27,000 in 1999. Sales from discontinued  apparel  operations of $9,022,000
     in 1999 were excluded from revenues and included in loss from  discontinued
     snowboard and apparel operations.  The consolidated statement of cash flows
     has not been restated to reflect the discontinued operations presentation.

17. SUBSEQUENT EVENTS

     On November 15, 2001 and January 7, 2002 $50,000 and $100,000  respectively
     was paid in full  satisfaction  of a note payable due October 26, 2001 (See
     Note 7).
<page> 46

                             SUPPLEMENTAL SCHEDULE

                       SUPPLEMENTARY INFORMAITON REQUIRED

                        UNDER THE SECUTITIES AND EXCHANGE

                                   ACT OF 1934

                   AS OF OCTOBER 31, 2001, DECEMBER 30, 2000,

                               AND JANUARY 1, 2000

                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES



                              SUPPLEMENTAL SCHEDULE

                        VALUATION AND QUALIFYING ACCOUNTS

                          As of and for the years ended
                           October 31, 2001, December
                          30, 2000, and January 1, 2000


<PAGE> 47



     The  following   schedule  has  been  restated  to  confirm  to  continuing
     operations presentation (see Item 7. Managements Discussion and Analysis of
     Financial Condition and Results) (in thousands):
<TABLE>
<S>                                          <C>                 <C>                <C>                <C>

                                              Balance at          Charged to                            Balance
                                              Beginning           costs,                                At End
                                              Of Period           expenses or                           Of Period
     Description                                                  restated           Deductions*
     ------------------------------------  ----------------     --------------  ----------------   ---------------
     January 1, 2000

     Allowances deducted from asset accounts:
        Allowance for doubtful
        accounts                                $1,066             $220             $(280)             $1,006
        Obsolete inventory
        allowance                               $2,792          $(2,750)                                  $42

     December 30, 2000

     Allowances deducted from asset accounts:
        Allowance for doubtful
        accounts                                $1,006          $(1,006)             $127                $127
        Obsolete inventory
         allowance                                 $42             $(42)             $482                $482

     October 31, 2001

     Allowances deducted from asset accounts:
        Allowance for doubtful
        accounts                                  $127              $69                                  $196
        Obsolete inventory
         allowance                                $482             $104                                  $586

      * Balances written off, net of recoveries
</TABLE>


<PAGE> 48

                                       PART III
<TABLE>
<S>                                <C>          <C>           <C>

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

            NAME                   AGE           SINCE                 POSITION WITH THE COMPANY
------------------------       ----------      ----------    ---------------------------------------------
Stephen C. Kircher                 48             1999       Chairman and Chief Executive Officer

William H. Hedden                  49             1999       Director


Anthony G. Genovese                59             2000       Vice-Chairman, Chief Technology Officer and
                                                             Assistant Secretary

Timothy Nyman                      51             2000       Director

Ronald A. Cohan                    61             2000       Director

Ian Bebbington                     46             2001       Chief Financial Officer and Secretary

Key Employees
-----------------
Philip Gregory                     64             1999       Vice President, Manufacturing

Richard T. Seery                   55             2001       Vice President of Sales and Marketing

</TABLE>

(a) Corporate Directors

     The following is the business background for the Directors of the Company:

          Stephen C.  Kircher,  age 48, has served as  Chairman  of the Board of
     Directors  of the  Company  since  February  2000 and as a  director  since
     October 1999. Mr. Kircher was appointed as the Chief  Executive  Officer of
     the Company in July 2001.  Since 1993,  he served as Chairman  and majority
     owner  of  Capitol  Bay  Group,  Inc.,  and  as  Chairman  of  Capitol  Bay
     Securities,  Inc.  (securities  and  investment  banking)  and  Capitol Bay
     Management,  Inc. (Investment Company).  Both Capitol Bay Securities,  Inc.
     and Capitol Bay Management,  Inc. are wholly owned  subsidiaries of Capitol
     Bay Group,  Inc. Mr.  Kircher  closed Capital Bay Securities in February of
     2001.  Mr. Kircher was also a founding  Director of Burlingame  Bancorp and
     served on its Board from 1984 to 1991.  Prior to 1993,  Mr.  Kircher formed
     and managed  Spinner  Corporation,  which  engaged in leveraged  buyouts of
     troubled companies.  Mr. Kircher has extensive experience as a principal in
     equity private placements, sale and leaseback financing, and multiple forms
     of debt  financing  and initial  public  offerings.  Mr.  Kircher began his
     career with Dean Witter in 1975 before  joining  Bateman,  Eichler,  Hill &
     Richards,  a regional  investment-banking  firm in 1978.  Mr. Kircher has a
     Bachelor of Arts degree from the University of California, San Diego.

<page> 49

          William H.  Hedden,  age 47, has served as a Director  of the  Company
     since 1999. Mr. Hedden has served as President and Chief Executive  Officer
     of Consolidated  Adjusting,  Inc. (construction  insurance adjusting) since
     1992.  From 1985 to 1992,  Mr.  Hedden  served as a Director of  Burlingame
     Bancorp and its subsidiary, Burlingame Bank & Trust Co. In 1984, Mr. Hedden
     served  as  Chairman  of  the  Board  of  Bayhill  Service  Corporation,  a
     mortgage-banking  subsidiary of Delta Federal  Savings & Loan. From 1983 to
     1987,  Mr. Hedden served as Chairman of the Board and majority  stockholder
     of Delta  Federal  Savings & Loan.  Mr.  Hedden  received  his Juris Doctor
     degree  from  Hastings  College  of the Law,  San  Francisco  in 1979 and a
     Bachelor of Arts degree from Stanford University, Palo Alto in 1975. He has
     been a director of the Company since October 1999.

          Anthony G.  Genovese,  59, has been a Director  of the  Company  since
     September 2000, Chief Technology Officer since 2000 and Assistant Secretary
     since July  2001.  He founded  IDW in June 1999 to  purchase  the shares of
     MULCD and Vikay Industrial (Shenzhen) Limited ("IDWT").  IDW operated MULCD
     and IDWT under a  management  contract  with Vikay  Industrial  (Singapore)
     Limited ("Vikay"),  MULCD's and IDWT's parent company, from August 1, 1999.
     From 1997 to 1999, Mr.  Genovese was President,  joint member of the Office
     of the Chief  Executive  and  Director  of Vikay.  Vikay  entered  Judicial
     Management, a form of bankruptcy proceeding in Singapore, in December 1997.
     The Judicial Managers of Vikay selected Mr. Genovese to oversee  continuing
     operations. In 1986, Mr. Genovese founded VGI, Inc, a joint venture company
     with Vikay to market  Vikay  LCD's and to help  Vikay  enter the LCD module
     business  in the United  States.  He  introduced  custom  products to major
     companies  such  as  ADEMCO,  GE,  Honeywell,  Schlumberger,  AT&T,  Milton
     Bradley,  Lifescan and  White-Rogers.  In 1992,  VGI became a subsidiary of
     Vikay and was  renamed  Vikay  America,  Inc.  Mr.  Genovese  continued  as
     President and CEO of Vikay America from 1992 to 1997.  Prior to Vikay,  Mr.
     Genovese was a technologist and Marketing  Executive for PCI Displays (1977
     to1986),  and  founded  the LCD  operations  at Beckman  Instruments  (1972
     to1976) and Rockwell  International (1966 to 1969). Mr. Genovese received a
     Bachelor of Science in Physics from Manhattan  College in 1964, a Master of
     Science  in  Physics  &  Mathematics  from  NYU  &  Courant   Institute  of
     Mathematical  Sciences in 1966 and  attended  USC for 18  graduate  credits
     towards a Master Degree in Systems Management in 1975 and 1976.

          Timothy B. Nyman,  50, has served as a Director  of the Company  since
     October 2000. Mr. Nyman is the Vice  President of Global  Services at GTECH
     Corporation,  the world's  largest  supplier of online lottery  systems and
     services.  In 1979, Mr. Nyman went to work with the predecessor  company of
     GTECH Corporation,  which was the gaming division of Datatrol,  Inc. In his
     twenty-one  years  with  GTECH  and its  predecessors,  Mr.  Nyman has held
     various positions in operations and marketing. He has directed a full range
     of corporate  marketing  activities  and  participated  in the planning and
     installation   of   new   online   lottery   systems    domestically    and
     internationally.  Mr.  Nyman  received  a  Bachelor  of  Science  degree in
     Marketing, Accounting and Finance from Michigan State University in 1973.

          Ronald A. Cohan,  60, has served as a Director  of the  Company  since
     October  2000.  Since 1995,  Mr. Cohan has served as a  consultant  to High
     Integrity  Systems,  Inc., a subsidiary of Equifax Inc.  Prior to that, Mr.
     Cohan joined the San  Francisco law firm of Pettit & Martin as an Associate
     in 1968 and was  admitted  as a Partner in 1972.  He opened the Los Angeles
     office of Pettit & Martin in  October  of 1972 and was  partner  in charge

 <page> 50

     until March of 1983. Mr. Cohan left Pettit & Martin in February of 1992 and
     became  principal  of his  own law  firm.  Mr.  Cohan  has  specialized  in
     government  procurement matters for various  institutional  clients such as
     Honeywell, 3M, Mitsui, Centex and Equifax. Mr. Cohan received a Bachelor of
     Arts degree from Occidental  College in 1963 and a Juris Doctor degree from
     the University of California, Berkeley (Boalt Hall) Law School in 1966.

(b) Corporate Officers

          The following  table sets fourth certain  information  with respect to
     executive officers of the Company.  There is no family relationship between
     any of the officers and directors.

          Ian  Bebbington,  age 46, is a chartered  accountant  and has been the
     Company's Chief Financial Officer since July 2001. Mr.  Bebbington  founded
     Findatsys Worldwide Ltd., an internet start-up company where he worked from
     1995 to 2001. He was the Chief Financial  Officer from 1991 to 1995 and the
     Chief  Executive  Officer from 1994 to 1995 of Contimach Ltd., a subsidiary
     of Fenner PLC, a U.K. public company.  Mr.  Bebbington earned a Bachelor of
     Science   degree  in  Economics  and  Commerce   from  the   University  of
     Southampton.  He is a member  of the  Institute  of  Chartered  Account  of
     England and Wales.

(c) Key Employees

          Philip Gregory, age 64, Vice President,  Manufacturing,  joined IDW in
     November 1999. Mr. Gregory has over 30 years' experience in the electronics
     industry  in areas of product and process  development,  equipment  design,
     equipment  maintenance,  installation and automation,  in both high and low
     volume,  manufacturing environments.  From 1996 to 1999, Mr. Gregory served
     as a manufacturing  consultant to Three-Five Systems,  Micro Display Corp.,
     Accudyne  and Villa  Precision  International.  From  1994 to 1995,  he was
     Product Development Manager for Villa Precision International,  responsible
     for product  development,  customer process improvements and sales support.
     Mr. Gregory's experience also includes CEO of Dove Communications,  General
     Manager of the telecom  division  of Elec & Elteck,  VP of  Operations  for
     Printed   Circuit    International,    Operations   Manager   of   National
     Semiconductor,  and various positions with Texas  Instruments.  Mr. Gregory
     attended North Texas State University, majoring in business.

          Richard T.  Seery,  age 55, has been the Vice  President  of Sales and
     Marketing  of IDW since May 2001.  He was the  Senior  Sales  Engineer  for
     Unaxis Optics from 2000 to April 2001 and was the Director of International
     Sales of Villa  Precision  Inc.  from 1995 to 2000.  Mr.  Seery  earned his
     Bachelor of Science in Business  Administration and Electrical  Engineering
     from Marquette University.

(d) Compliance with Section 16 of the Securities Exchange Act of 1934

          Based  solely  upon a  review  of Forms  3, 4 and 5  delivered  to the
     Company   as   filed   with  the   Securities   and   Exchange   Commission
     ("Commission"),  directors  and officers of the Company and persons who own
     more than 10% of the  Company's  common  stock  timely  filed all  required

<page> 51

     reports  pursuant to Section 16(a) of the Securities  Exchange Act of 1934,
     except Ian Bebbington,  who was six days late filing his Form 3 and Anthony
     Genovese who was late on one Form 4 reporting two transactions and one Form
     4 reporting one transaction.

ITEM. 11. EXECUTIVE COMPENSATION.

     Compensation Summary

          The following table summarizes all  compensation  earned by or paid to
     the Companies former President,  Chief Financial  Officer,  Chief Executive
     Officer and other executive  officers,  whose total  compensation  exceeded
     $100,000 for  services  rendered in all  capacities  for fiscal years 2001,
     2000, and 1999.

                           Summary Compensation Table
                          ----------------------------
<TABLE>
<S>        <C>                              <C>        <C>         <C>          <C>                <C>

                                                     Annual Salary                     Long-Term Compensation
                                                                                   Securities
                Name and                                                           Underlying          Other
           Principal Position                Year         $          Bonus        Options (#)       Compensation
           ------------------                ----         -          -----        -----------       ------------

Stephen C. Kircher,                          2001      $ 61,417       ---            100,000             ---
Chief Executive Officer

P. Blair Mullin(1)                           2001      $124,247      ----            150,000            ----
Former President, Chief Financial            2000      $124,224       --              80,000             --
Officer, and Secretary of GBAY and Chief     1999      $121,774       --              70,000          $  117(2)
Operating Officer of IDW

Anthony Genovese,                            2001      $145,833      ----             30,000          $7,500(3)
Chief Technology Officer                     2000      $200,833       --             260,000          $9,000(3)
                                             1999        --           --               --                ---

Philip Gregory,                              2001      $141,583      ----             30,000             ----
Vice President of Manufacturing              2000      $114,583       --              60,000          $5,000(4)
                                             1999        --           --               --                 --


Alan Lefko,                                  2001      $112,280      ----             ----          $  5,000(3)
Former Chief Financial Officer of IDW        2000      $109,375       --              50,000         $13,250(5)
                                                          --          --               --                 --

Ian Bebbington,                              2001       $33,848      ----             50,000         $17,436(7)
Chief Financial Officer
</TABLE>
--------------------------
Footnotes:

(1)  Mr. Mullin was President of the Company from May 18, 1998 to August 2001.
     He was also serving as Chief Financial Officer and Secretary/Treasurer of
     the Company and served as Chairman of the Board from April 1, 1999 to
     February 2000.
(2)  Represents medical insurance reimbursement
(3)  Represents vehicle allowance.
(4)  Represents moving allowance.
(5)  Represents $8,000 moving allowance and $5,250 vehicle allowance.
(6)  Represents vehicle allowance.
(7)  Housing allowance
<page> 52

Option Grants in 2001

     The following table provides  information relating to stock options granted
during the year ended October 31, 2001.

                                                      Individual Grants
<TABLE>
<S>                    <C>                        <C>                  <C>          <C>               <C>              <C>
                                                                                                      Potential Realizable Value
                                                                                                        at Assumed Annual Rates
                                                                                                           of Stock Price
                        Number of Securities      Percent of Total                                          Appreciation
                        Underlying Warrants      Options Granted to     Exercise                          For Option Terms
                               and                   Employees            Price      Expiration       ------------------------
                        Options Granted (#)        In Fiscal Year       Per Share       Date               5%          10%
                        -------------------        --------------       ---------    ----------          -----        -----
        Name
                                                                                       Date
Stephen Kircher               100,000                   18.7              $0.36       10/06/06          $9,900        $21,900
P. Blair Mullin               150,000                   28.0              $0.50       10/11/06         $20,700        $45,750
Anthony Genovese               30,000                   5.6               $0.36       08/29/06          $2,970         $6,570
Phil Gregory                   30,000                   5.6               $0.36       10/11/06          $2,970         $6,570
Alan Lefko                      ----                    ----              ----          ----
Ian Bebbington                 50,000                   9.3               $0.56       07/11/06          $7,750        $17,100
</TABLE>

     The exercise price of each option was equal to the fair market value of our
Common Stock on the date of the grant. Percentages shown under "Percent of Total
Options  Granted to Employees in the Last Fiscal Year" are based on an aggregate
of 535,000  options  granted to our employees  under the 1998 Stock Option Plan,
2000  Equity  Incentive  Plan and  outside  of this plan  during  the year ended
October 31, 2001.

     Potential realizable value is based on the assumption that our Common Stock
appreciates  at the annual rate  shown,  compounded  annually,  from the date of
grant until the expiration of the five-year  term.  These numbers are calculated
based on Securities and Exchange Commission  requirements and do not reflect our
projection or estimate of future stock price growth. Potential realizable values
are computed by:

     o    Multiplying  the number of shares of Common  Stock  subject to a given
          option by the exercise price;

     o    Assuming that the aggregate stock value derived from that  calculation
          compounds  at the  annual  5% or 10% rate  shown in the  table for the
          entire five-year term of the option; and

     o    Subtracting from that result the aggregate option exercise price.

                         Ten-Year Options/SAR Repricings

There was no repricing of options for the fiscal year ended October 31, 2001.
<page> 53

Fiscal Year End Option Values

     The following table sets forth for each of the executive  officers named in
the  Summary  Compensation  Table  the  number  and  value  of  exercisable  and
unexercisable options for the year ended October 31, 2001.

<TABLE>
<S>                     <C>             <C>               <C>             <C>               <C>              <C>
                                                               Number of Securities
                           Shares                          Underlying Unsecured Options          Value of Unexercised
                         Acquired           Value                 and Warrants                  In-The-Money Options
                            on                                 at October 31, 2001                at October 31, 2001
        Name            Exercise (#)     Realized ($)     Exercisable     Unexercisable     Exercisable      Unexercisable
        ----            ------------     ------------     -----------     -------------     -----------      -------------
Stephen Kircher                                             595,861             0

P. Blair Mullin                                             150,000             0

Anthony Genovese
                                                            105,000          185,000
Phil Gregory                                                 40,000           50,000
Alan Lefko                                                   25,000           25,000
Ian Bebbington                                               12,500           37,500
</TABLE>


Compensation of Directors

     Board members are  currently not  compensated  for  participation  in Board
meetings. This policy may change in the future. All Directors are reimbursed for
expenses incurred in attending Board and committee meetings.  Additionally,  the
Board may grant stock  options to its members for service as  directors.  During
the fiscal year ended October 31, 2001,  non-employee directors were not granted
options.

<page> 54

Performance Measurement Comparison

COMPARISON OF CUMULATIVE TOTAL RETURN ON INVESTMENT

(Graph Ommitted)






























     There  can be no  assurance  that  the  Company's  stock  performance  will
continue into the future with the same or similar  trends  depicted in the graph
above.  The  market  price of the  Company's  common  stock in recent  years has
fluctuated  significantly  and it is likely  that the  price of the  stock  will
fluctuate in the future.  The Company does not endorse any predictions of future
stock performance. Furthermore, the stock performance chart is not considered by
the Company to be (i) soliciting material, (ii) deemed filed with the Securities
and  Exchange  Commission,  and (iii) to be  incorporated  by  reference  in any
filings by the  Company  under the  Securities  Act of 1933,  or the  Securities
Exchange Act of 1934.

Compensation Committee Report on Executive Compensation

     The executive  compensation  policies and programs developed by the Company
are designed to retain and motivate  executive officers and to ensure that their
interests  are aligned with the  interests of the  Company's  stockholders.  The
Company's  policy is to offer  competitive  compensation  opportunities  for its
employees based on a combination of factors, including Company growth, corporate
performance and the individual's personal contribution to the business.

     The Company's  compensation  programs are  implemented by the  Compensation
Committee of the Board of Directors  ("Board").  Such  programs  consist of base
salary, annual incentives and long-term  incentives.  Executive officers who are
also directors do not participate in decisions affecting their own compensation.

<page> 55

Base Salary

     The Compensation  Committee considered its own assessment of the individual
performances of each executive officer and its own subjective  assessment of the
Company's overall financial performance.  There is no fixed relationship between
base salary and corporate performance or between base salary and the competitive
range of salaries that may be offered by competitive companies. The Compensation
Committee  members   considered  their  business  judgment  in  light  of  their
experience to be an important factor in establishing executive compensation.

Annual Incentives

     On an annual  basis,  the  Compensation  Committee  considers  the grant of
annual  incentive  bonuses to each  executive  officer.  Incentive  bonuses  are
discretionary and are determined  subjectively,  with the Compensation Committee
taking  into  consideration  the  individual's  performance,   contribution  and
accomplishments  during  the  past  fiscal  year  and  the  Company's  financial
performance. Neither the decision to award a bonus, nor the specific size of the
incentive bonus, is based on any specific measure of corporate  performance.  In
fiscal 2000, no incentive bonuses were awarded to any executive officer.

Stock Incentive Compensation

     The Board  believes  that stock  ownership  by  executive  officers and key
employees  provides  valuable  incentives  for those  persons  to benefit as the
Company's Common Stock price increases,  and that stock  option-based  incentive
compensation arrangements help align the interests of executives,  employees and
stockholders.  To  facilitate  these  objectives,  the Board has  granted  stock
options to executives and key employees  through the Company's  Employee  Equity
Incentive Plan (formerly,  the 1990 Amended and Restated Stock Option Plan) (the
"Plan"), approved by the stockholders in 1991. The Plan was amended by the Board
in 1995 to increase the number of shares  available under the Plan to 1,102,500,
which amendment was approved by the Company's  stockholders.  The Plan was again
amended  by the  Board in 1997 to  change  the  name of the  Plan,  add  certain
additional  types of equity  grants,  provide  for  acceleration  of  vesting on
certain changes in control or sale of substantially all the Company's assets and
a number of immaterial  changes to update,  modernize and  reorganize  the Plan,
which amendment was also approved by the Company's  stockholders.  This Plan has
now expired.

     Effective  October 12, 1999,  the Board  adopted the 1999 Stock Option Plan
for Non-Employee  Directors (the "Directors'  Plan").  The Plan provides for the
issuance of up to 300,000  shares of the  Company's  Common Stock (as  presently
constituted) to existing  directors and, in the case of extra service or duties,
to prior  directors.  Options may be awarded in such amounts,  at such times, at
such exercise prices and on such other terms as the Board determines, subject to
any limitations in the Plan. Unless otherwise designated, options vest uniformly
over the year  following  the date of grant.  The  options,  subject  to earlier
termination  under the Plan or option grant,  expire after the later of (i) five
years  after  the  date of grant  or (ii)  five  years  after  termination  as a
director. In 2001, the Board did not grant any options to directors.

<page> 56

     Effective September 28, 2000, the Board and the stockholders of the Company
approved the 2000 Employee Equity  Incentive Plan ("Equity  Incentive  Plan"). A
total of 882,800  shares of Common Stock were  reserved  for issuance  under the
Equity  Incentive  Plan. The purpose of the Equity  Incentive Plan is to attract
and retain the services of key employees,  directors,  officers and  consultants
and to help  such  individuals  realize  a direct  proprietary  interest  in the
Company.  A total of 882,800  shares of Common Stock were  reserved for issuance
under the Equity  Incentive  Plan. In 2001, the Board issued options to purchase
405,000 shares at exercise prices ranging from $0.36 to $0.75.

     In determining the number of options granted to executive  officers and key
employees,  the Board  considered  the person's  opportunity to affect the share
price of the Company's Common Stock, the level of the person's performance based
on past  performance,  future  contribution  to the Company and the  anticipated
incentive effect of the number of options granted.

     The Board  believes  that the policies and plans  described  above  provide
competitive   levels  of  compensation   and  effectively  link  executives  and
stockholder interests.  Moreover, the Board believes such policies and plans are
consistent with the long-term investment objectives  appropriate to the business
in which the Company is engaged.

                             Respectfully Submitted,
                             Compensation Committee of
                             International DisplayWorks, Inc.

                             Stephen C. Kircher
                             William H. Hedden
                             Ronald Cohan
                             Timothy Nyman

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

Principal Stockholders

     The following table sets forth certain  information as of January 15, 2002,
with  respect  to the  beneficial  ownership  of our  common  stock for (i) each
director,  (ii) all of our  directors  and  officers as a group,  and (iii) each
person  known  to us to own  beneficially  five  percent  (5%)  or  more  of the
outstanding shares of our Common Stock.

     Unless  otherwise  indicated,  the address for each listed  stockholder is:
International   DisplayWorks,   Inc.,  599  Menlo  Drive,  Suite  200,  Rocklin,
California 95765. To our knowledge, except as indicated in the footnotes to this
table or pursuant to applicable  community  property  laws, the persons named in
the table have sole voting and  investment  power with  respect to the shares of
common stock indicated.

<page> 57
<TABLE>
<S>     <C>                                                      <C>                 <C>
                                                                  Number of
         Name of Beneficial Owner                                  Shares(1)           Percent(2)
        -------------------------                                 ----------           ----------
         Stephen C. Kircher                                       2,630,861(3)           13.5%
         William H. Hedden                                           65,000(4)             *
         Anthony Genovese                                         1,559,353(5)            8.0%
         Ronald Cohan                                               154,000(6)             *
         Timothy Nyman                                              336,664(7)            1.7%
         All directors and executive officers as a group          4,774,260(8)           24.5%
         (six persons)
</TABLE>

-------------------
Footnotes:

*        Does not exceed 1% of the class.

(1)  "Beneficial  Ownership"  is defined  pursuant to Rule 13d-3 of the Exchange
     Act,  and  generally  means any person who  directly or  indirectly  has or
     shares  voting or  investment  power with  respect to a security.  A person
     shall be deemed to be the beneficial owner of a security if that person has
     the right to acquire  beneficial  ownership of the security within 60 days,
     including,  but not limited to, any right to acquire the  security  through
     the  exercise  of any  option or warrant or  through  the  conversion  of a
     security.  Any  securities not  outstanding  that are subject to options or
     warrants shall be deemed to be outstanding for the purpose of computing the
     percentage of outstanding securities of the class owned by that person, but
     shall not be deemed to be  outstanding  for the  purpose of  computing  the
     percentage of the class owned by any other person.

(2)  Based on 19,129,491  shares of the Company's  Common Stock  outstanding  at
     January 15, 2002, plus that number of shares subject to options exercisable
     within 60 days of January 15, 2002,  owned by each  individual  or group of
     individuals.

(3)
     Includes  2,000,000 shares,  options to purchase 85,000 shares and warrants
     to purchase  435,861 shares in Mr. Kircher's name and 35,000 shares held by
     Capital Bay Securities,  Inc. ("CBS") and warrants to purchase 75,000.  CBS
     is a wholly owned  subsidiary of Capital Bay Group ("CBG") and Mr.  Kircher
     is a majority  shareholder  in CBG.

(4)  Includes 65,000 shares subject to options  exercisable within 60 days after
     January 15, 2002.

(5)  Includes  670,000  shares held in joint tenancy with Mr.  Genovese's  wife,
     Mrs.  Sharon  Genovese,  694,353  shares held by an  individual  retirement
     account for Anthony  Genovese  and  135,000  shares  subject to options and
     60,000 shares subject to warrants  exercisable within 60 days after January
     15, 2002.

<page> 58

(6)  Includes  134,000 shares and options to purchase 20,000 shares  exercisable
     within 60 days after January 15, 2002.

(7)  Includes  316,664 shares and options to purchase 20,000 shares  exercisable
     within 60 days after June 30, 2001.

(8)  Includes 3,940,899 shares,  options to purchase 325,000 shares and warrants
     to purchase  495,861  shares  exercisable  within 60 days after January 15,
     2002  owned  by  the  Directors  and  options  to  purchase  12,500  shares
     exercisable within 60 days after January 15, 2002 owned by Mr. Bebbington.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On February 23, 2001, Mr. and Mrs.  Cohan,  one of the Company's  Directors
and his wife, loaned the Company $200,000 pursuant to a secured promissory note.
Under the secured  promissory  note, the total amount borrowed  together with an
interest  payment at a rate of 12.68  percent per year was due on April 2, 2001.
As security for the loan, the Company  pledged the shares of Common Stock of IDW
and Mr. and Mrs. Kircher,  the Company's  Chairman and his wife,  guaranteed the
loan. On April 4, 2001, the Company repaid the secured promissory note in full.

     In Fiscal 2001, the Company paid Capitol Bay Securities,  Inc.  ("CBS"),  a
company  owned  by the  Company's  Chairman,  Mr.  Kircher,  28,000  in cash and
warrants to purchase  100,000  shares of the  Company's  Common  stock at $0.36,
expiring October 10, 2006 as final settlement for its role as Private  Placement
Agent.  The Company also granted 45,706 shares of the Company's  Common Stock to
two former employees of CBS.

     During the fiscal  year 2001,  the Company  closed  various  unit  offering
consisting of debt  instruments  and warrants to purchase shares of Common Stock
of the Company equal 20% of the investment  amount.  Under the debt instruments,
the  Company  will pay  interest  only  payments  each  month at a rate of 12.68
percent per year with the total  amount  borrowed  due one year from the date of
issue. The Company's net proceeds from the offering were $875,000.

     On August 30, 2001, Mr.  Genovese,  the Company's  Vice-Chairman  and Chief
Technology  Officer,  invested  $150,000  and was  granted  warrants to purchase
30,000 shares of common stock at $.36 per share.

     On October 15, 2001,  the parents of the Company's  Chairman,  Mr.  Kircher
agreed to assume the loan to the Company of $100,000  from a former  Director of
the Company and to extend the  repayment  date until  October 15, 2001.  For the
extension,  the  Company  granted  Mr.  Kircher's  parents a warrant to purchase
20,000 shares of common stock at $0.36 per share expiring November 1, 2006.

<page> 59
                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K

(a) The following documents are filed as part of this report:

     1. Financial Statements (see Item 8.)

     o    Report of Independent Public Accountants (Perry-Smith LLP) o Report of
          Independent Public Accountants (Arthur Andersen LLP)

     o    Consolidated Balance Sheets - October 31, 2001 and December 30, 2000

     o    Consolidated  Statements of Operations - Years Ended October 31, 2001,
          December 30, 2000 and January 1, 2000

     o    Consolidated  Statements of Stockholders' Equity - Years Ended October
          31, 2001, December 30, 2000 and January 1, 2000

     o    Consolidated  Statements of Cash Flows - Years Ended October 31, 2001,
          December 30, 2000 and January 1, 2000

     o    Notes to Consolidated Financial Statements


     2. Financial Statement Schedules

     o    Schedule II - Valuation and Qualifying Accounts (accounts not required
          or not material have been omitted)

     3. Exhibits

          See Exhibit Index.

          (b) Reports on Form 8-K

     The following reports on Form 8-K were filed during the last quarter of the
period covered by this report:
<TABLE>
<S>             <C>                                                    <C>

                 Date of Event Reported                                 Item Reported
                 ----------------------                                 -------------

                   September 19, 2002                        Change in Fiscal Year End to October 31

</TABLE>


<PAGE> 60
                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Rocklin, State of California, on ________ ___, 2002.

                                            INTERNATIONAL DISPLAYWORKS, INC.,
                                            A Delaware corporation


Dated:   ______________       By:     _________________________________________
                                      Stephen C. Kircher,
                                      Chairman and Chief Executive Officer
                                      (Principal Executive Officer)

     Pursuant  to  the   requirements  of  the  Securities  Act  of  1933,  this
registration  statement  has  been  signed  by  the  following  persons  in  the
capacities and on the date indicated.



Dated:   ______________      By:     _________________________________________
                                     Stephen C. Kircher,
                                     Chairman and Chief Executive Officer
                                     (Principal Executive Officer)



Dated:   ______________      By:     _________________________________________
                                     Anthony Genovese,
                                     Vice-Chairman and Chief Technology Officer



Dated:   ______________      By:     _________________________________________
                                     William H. Hedden, Director



Dated:   ______________      By:     _________________________________________
                                     Ronald Cohan, Director



Dated:   ______________      By:     _________________________________________
                                     Tim Nyman, Director


Dated:   ______________      By:     _________________________________________
                                     Ian Bebbington,
                                     Chief Financial Officer
                                     (Principal Financial Officer)


<PAGE> 61




                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                           --------------------------

                                    EXHIBITS

                                 Filed with the

                                ANNUAL REPORT ON

                                    FORM 10-K

                   FOR THE FISCAL YEAR ENDED OCTOBER 31, 2001

                                      UNDER

                       THE SECURITIES EXCHANGE ACT OF 1934
                            ------------------------

                        INTERNATIONAL DISPLAYWORKS, INC.



<PAGE> 62


                                  EXHIBIT INDEX


Exhibit No.                         Description
-----------                         -----------

2.1  Agreement and Plan of Merger merging Morrow  Snowboards,  Inc. into Granite
     Bay Technologies, Inc. (1)

2.2  Agreement and Plan of Merger merging  Granite Bay  Technologies,  Inc. into
     International DisplayWorks, Inc.(2)

3.1 Certificate of Incorporation (2)

3.2  Bylaws

4    Registration Rights Agreement dated April 20, 1994 among the Registrant and
     the investors named therein (3)

4.2  Securities  Purchase Agreement dated October 31, 1997 among the Registrant,
     Morrow, LLC, Morrow Snowboards ULC, Westbeach Snowboard Canada Ltd. and the
     security holders of Westbeach Snowboard Canada Ltd. listed therein (6)

10.1 Lease and Option Agreement among PR Investors  Limited  Liability  Company,
     the Registrant,  Ray E. Morrow,  Jr. and Sharon Morrow dated July 25, 1994,
     as amended by Amendment to Lease and Option  Agreement dated August 1, 1995
     (3)

10.2 Forms of Warrant (3)


10.3 Employment  Agreement  between Ray E. Morrow,  Jr. and the Registrant dated
     April 20, 1994, as amended (3-4)

10.4 Noncompete  Agreement  between Ray E.  Morrow,  Jr. and  Nicollett  Limited
     Partners Partnership dated April 20, 1994 (3)

10.5 Assignment  Agreement  by  and  among  the  Registrant,  Nicollett  Limited
     Partners,  James V. Zaccaro, Gregory M. Eide, Dennis R. Shelton and Erik J.
     Krieger dated December 19, 1995 (5)

10.6 Morrow  Snowboards,  Inc.  Employee  Equity  Incentive  Plan as amended and
     restated February 13, 1997 (4)

10.7 Form of Nonqualified Stock Option Agreement (3-4)

10.8 Form of Incentive Stock Option Agreement (3-4)

10.9 Manufacturing Agreement between the Registrant and Plasticos Duramas, S.A.,
     dated July 20, 1995 (3)

10.10 Form of Sales Representative Agreement (3)

<page> 63

10.11 Letter Agreements  between the Registrant and Pacific Crest Securities
      Inc.dated  February 22, 1994,  January 27, 1995,  August 4, 1995 and
      October 4,1995 (3)

10.12 Form of  Indemnification  Agreement  (3-4)

10.13 Stock Option Plan for Non-Employee Directors (3-4)

10.14 Purchase and Sales Agreement dated February 29, 1996 (5)

10.15 Securities  Purchase Agreement dated October 31, 1997 among the
      Registrant,Morrow, LLC, Morrow Snowboards ULC, Westbeach Snowboard Canada
      Ltd. and the Security holders of Westbeach Snowboard Canada Ltd. listed
      therein (6)

10.16 Loan and Security  Agreement  dated as of May 7, 1998 among the
      Registrant and Westbeach  Snowboard  U.S.A.,  Inc., as Borrower,  and
      Foothill Capital Corporation as Lender (as assigned to Capitol Bay
      Management, Inc.) (9)

10.17 Guarantee  and  Postponement  of Claim by Morrow  Westbeach  Canada  ULC
      in favor of Foothill Capital  Corporation dated as of May 7, 1998
      (as assigned to Capitol Bay Management, Inc.) (19)

10.18 Intellectual  Property  and  Security  Agreement  dated as of May 7,
      1998, between  Morrow  Snowboards,  Inc. and  Foothill  Capital
      Corporation  (as assigned to Capitol Bay Management, Inc.)(19)

10.19 General  Security  Agreement  dated  as of  May  7,  1998,  between
      Morrow Westbeach  Canada ULC and  Foothill  Capital  Corporation  (as
      assigned to Capitol Bay Management, Inc.)(19)

10.20 Security  Agreement-Stock  Pledge dated as of May 7, 1998,  between
      Morrow Snowboards,  Inc. and Foothill Capital  Corporation (as assigned
      to Capitol Management, Inc.)(19)

10.21 Assignment and Acknowledgment  Agreement dated May 7, 1999, between
      Capitol Bay Management,  Inc. and Foothill Capital Corporation,  the
      Registrant and Westbeach Snowboard U.S.A. Inc.(19)

10.22 Apparel  Design  and  Manufacturing  Agreement  dated  December  31,
      1996, between the Registrant and Marmot Mountain Ltd. (7)

10.23 "Terms of  Instrument - Part 2", dated April 1, 1994,  as amended by
      "Terms of Instrument - Part 2",  Modification  Agreement,  dated October
      17, 1997, between  Westbeach  Snowboard Canada Ltd. (now Morrow Westbeach
      Canada ULC)and Western IMMO Holdings Inc. (8)

10.24 International  Distribution  Agreement dated as of January 1, 1998,
      between the Registrant and K.K. Morrow Japan (8)

10.25 Acquisition  Agreement  dated as of  March  26,  1999,  by and  between
      K2 Acquisitions, Inc. and the Registrant (10)

10.26 Memorandum of  Understanding  between Capitol Bay Management,  Inc. and
      the Company (11)

<page> 64

10.27 Payment Agreement  effective June 17, 1999 among Morrow  Snowboards,
      Inc., certain Petitioning  Creditors named therein and Robert K. Morrow,
      Inc., a Disbursing Agent for the Petitioning Creditors (12)

10.28 Promissory Note dated August 25, 1999, given by Morrow Snowboards,  Inc.
      to Dennis and Carol Pekkola (12)

10.29 Trust Deed dated  August 25,  1999,  given by Morrow  Snowboards,  Inc.
      to Robert Smejkel, as Trustee,  with Dennis and Carol Pekkola as
      beneficiaries (13)

10.30 Subordination  Agreement  dated August 25, 1999,  among Morrow
      Snowboards, Inc.,  Robert K.  Morrow,  as Escrow  Agent for  certain
      creditors  of the Company and the Pekkolas (13)

10.31 Morrow   Snowboards,   Inc.   1999  Stock  Option  Plan  for
      Non-Employee Directors(14)

10.32 Asset Purchase  Agreement  dated as of November 12, 1999,  among
      Westbeach Canada ULC and Westbeach Sports Inc.(15)

10.33 General  Assignment  dated as of November 12, 1999,  among Westbeach
      Canada ULC and Westbeach Sports Inc.(15)

10.34 Assignment  of Lease and Consent  among  Westbeach  Canada  ULC,
      Westbeach Sports Inc. and Western Immo  Holdings,  Inc. dated as of
      November 12, 1999 (15)

10.35 Assignment  of Lease and Consent  among  Westbeach  Canada  ULC,
      Westbeach Sports Inc. and Welf Arne Von Dehn dated as of November 12,
      1999 (15)

10.36 Bill of Sale between  Westbeach  Canada ULC and Westbeach Sports Inc.
      dated as of November 12, 1999 (15)

10.37 Letter from Arthur Andersen, LLP dated January 24, 2000 (16)

10.38 Placement  Agent   Agreement   dated  January  13,  2000,   between
      Morrow Snowboards, Inc. and Capitol Bay Securities, Inc (17)

10.39 Securities  Purchase  Agreement  effective  as of January 31,  2000,
      among Morrow Snowboards, Inc. and the Sellers (18)

10.40 Sale and Purchase  Agreement  February 1, 2000 among Vikay Industrial
      (Hong Kong) Ltd. and International DisplayWorks, Inc. (19)

10.41 Supplemental Deed and Charge dated February 1, 2000, between
      International DisplayWorks  (Hong Kong) Ltd. and  International
      DisplayWorks,  Inc.,  as Chargors,  and Vikay  Industrial  Ltd.
      (in Judicial  Management)  and Vikay Industrial (Hong Kong) Ltd. as
      Chargees (18)

21   Subsidiaries of the Registrant

27   Financial Data Schedule

<page> 65

(1)  Incorporated  herein by reference from the Company's Current Report on Form
     8-K dated November 6, 2000 (File No. 0-753683).

(2)  Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated October 31, 2001 (File No. 0-27002).

(3)  Incorporated herein by reference from the Company's  Registration Statement
     on Form S-1 (File No. 33-97800).

(4)  Management contract or compensatory plan or arrangement.

(5)  Incorporated  herein by reference  from the Company's 1995 Annual Report on
     Form 10-K (File No. 0-27002).

(6)  Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated October 31, 1997 (File No. 0-27002).

(7)  Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated November 11,1997 (File No. 0-27002).

(8)  Incorporated  by reference  from the  Company's  1997 Annual Report on Form
     10-K (File No. 0-27002).

(9)  Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated May 8, 1998 (File No. 0-27002).

(10) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated March 26, 1999 (File No. 0-27002).

(11) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated April 27, 1999 (File No. 0-27002).

(12) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated June 28, 1999 (File No. 0-27002).

(13) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated August 25, 1999 (File No. 0-27002).

(14) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated September 30, 1999 (File No. 0-27002).

(15) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated November 12, 1999 (File No. 0-27002).

(16) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated January 14, 2000 (File No. 0-27002).

(17) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated January 31, 2000 (File No. 0-27002).

(18) Incorporated  by reference  from the Company's  Current  Report on Form 8-K
     dated January 31, 2000 (File No. 0-27002).

(19) Incorporated by reference from the Company's Annual Report on Form 10-K for
     the year ended January 1, 2000 (File No.0-27002).

<page> 66

                                  Exhibit 3.2