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

                                  FORM 10-K/A-2
              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                      For the Year Ended: October 31, 2004

                         Commission File Number: 0-27002

                        INTERNATIONAL DISPLAYWORKS, INC.
             (Exact name of Registrant as specified in its charter)

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

         1613 Santa Clara Drive, Suite 100, Roseville, California 95661
         --------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (916) 797-6800
                                 --------------
              (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

Indicate by a checkmark if disclosure of delinquent  filers pursuant to Item 405
of Regulation  S-K,  (ss.229,405 of this chapter) is not contained  herein,  and
will not 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. [ ]

Indicate by a check mark  whether the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). [X] Yes [ ] No

Aggregate  Market  Value  of the  voting  stock  held by  non-affiliates  of the
registrant  based on the closing sale price as reported by the OTCBB on December
16, 2004 was $240,672,138.90.

The  number  of shares of the  registrant's  common  stock,  $0.001  par  value,
outstanding on December 22, 2004 was 30,759,357.

Documents incorporated by reference: Certain portions of Registrant's definitive
proxy  statement to be filed pursuant to Regulation  14A in connection  with the
annual meeting of stockholders:

     Part III: Items 10, 11, 12, 13 and 14 of this report

<PAGE>

                                EXPLANATORY NOTE

This  amendment  No. 2 on Form 10-K/A to our annual  report on Form 10-K for the
year  ended  October  31,  2004  ("Form  10-K) is being  filed  to  correct  our
previously  issued  consolidated  statement of operations for fiscal years 2004,
2003, and 2002. The corrections are to re-classify  certain discounts for prompt
payment from expenses,  and to net those discounts against revenue recorded,  in
accordance with accounting  principles  generally accepted in the United States.
The amendment also adds clarifying information to Part I, Item 1 Business,  Note
9  with  respect  to the  factors  utilized  in our  Black  Scholes  model,  and
clarifying  language to Part II, Item 9A. The cumulative effect of the amendment
to the consolidated  statement of operations has no impact on our income or loss
from operations,  net income,  or net income (loss) per common share. The report
issued by our auditors remains unchanged.

This amendment No. 2 amends and restates the entire Form 10-K for the year ended
October 30, 2004, and the primary changes are as noted above.

Except as otherwise expressly stated, the information in this amendment No. 2 is
as of January 3, 2005, the date on which the original Form 10-K was filed, and
this amendment No. 2 does not purport to provide an update or discussion of any
developments subsequent to the original filing date.

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



PART I
         ITEM 1.  Business                                                     1
         ITEM 2.  Properties                                                  13
         ITEM 3.  Legal Proceedings                                           13
         ITEM 4.  Submission of Matters to a Vote of Security Holders         13

PART II

         ITEM 5.  Market for Registrant's Common Equity and Related
                  Stockholder Matters and Issuer Purchases of Equity
                  Securities                                                  14
         ITEM 6.  Selected Consolidated Financial Data                        16
         ITEM 7.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                   18

RISK FACTORS
         ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk  40
         ITEM 8.  Financial Statements and Supplementary Data                 F1
         ITEM 9.  Changes in and Disagreements With Accountants and Financial
                  Disclosure                                                  41
         ITEM 9A. Controls and Procedures                                     41
         ITEM 9B. Other Information                                           41

PART III
         ITEM 10. Directors and Executive Officers of the Registrant          41
         ITEM 11. Executive Compensation                                      41
         ITEM 12. Security Ownership of Certain Beneficial Owners and
                  Management                                                  41
         ITEM 13. Certain Relationships and Related Transactions              42
         ITEM 14. Principal Accounting Fees and Services                      42

PART IV
         ITEM 15. Exhibits, Financial Statement Schedules                     42

Signatures                                                                    47

Exhibits Index
         Exhibit 31.1
         Exhibit 31.2
         Exhibit 32

<PAGE>


                                     PART I

ITEM 1.  BUSINESS

     With the exception of historical facts stated herein, the matters discussed
in this report on 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,"  "we," or  "us"),  projected  costs and
expenses  related  to  our  operations,   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  - Risk  Factors."  Readers of this report are  cautioned  not to put
undue reliance on "forward looking" statements,  which, by their nature, are not
reliable indicators of future performance.  We disclaim any intent or obligation
to publicly update these "forward  looking"  statements,  whether as a result of
new information, future events or otherwise.

Overview

     We design and manufacture liquid crystal display,  or LCD, products and are
a supplier to several Fortune 500 companies,  major Japanese and other Asian and
European  corporations and smaller companies  operating in a variety of discrete
markets.  Our  principal  product  focus is on the small form factor LCD market,
which is 7"  displays  or  smaller.  We work as an  outsourced  manufacturer  or
provider of design,  manufacturing and assembly services.  Our customers include
OEMs ODMs and EMSs serving markest such as the  telecommunications,  automotive,
medical devices,  computing,  office equipment,  home appliance,  mobile phones,
hand held games, industrial, and consumer electronics industries. Our components
and modules are used in various electronic  products,  including cellular phones
and other wireless  communication  devices.  We are also targeting areas for new
applications,  including audio,  point-of-sale systems,  irrigation controls and
personal digital  assistants.

     We assist  our OEMs OOMs and EMSs  (collectively  our  "customers")  in the
design and development of their products and furnish full turnkey  manufacturing
services.  Our services  include  design,  component  purchasing,  assembly into
finished  products or electronic  subassemblies and  post-assembly  testing.  We
provide  custom  design  and  manufacturing  services,  for which we design  and
develop  products  that  are  sold by our OEM and EMS  customers  to  their  end
customers  using their brand names.  We support a broad product  portfolio  with
offerings in the three leading small form factor LCD  technologies  - Monochrome
STN, color STN.

     Our corporate headquarters are located in Rocklin,  California.  The design
and  manufacture  of our products is located at our facility in China,  where we
employ approximately 2,000 people. We were originally a private company that was
acquired by Morrow Snowboards,  Inc., a public company incorporated in Oregon in
October 1989 that was engaged in a different line of business.  Through a series
of transactions, we assumed the reporting obligations of Morrow Snowboards, Inc.
and  its  successor,   Granite  Bay   Technologies,   Inc.  Our  operations  are
concentrated primarily in our subsidiaries,  MULCD  Microelectronics  (Shenzhen)
Co., Ltd. and IDW Technology  (Shenzhen)  Co., Ltd., both of which are organized
under  the laws of China.  We refer to  International  Display  Works,  Inc.,  a
Delaware  corporation,  and  these  subsidiaries  collectively  as  "we" or "us"
throughout this report. Our operating structure is described graphically below:


                                        1
<PAGE>
                        International DisplayWorks, Inc.
                             A Delaware corporation

                                      100%

                  International DisplayWorks (Hong Kong) Ltd.
                A company organized under the laws of Hong Kong,
                                      SAR

                 100%                            100%

          MULCD                              IDW Technology (Schezhen)
      Microelectronice                       Comapny Ltd., a comapny
        (Shenzhen)                           orgonized under the laws of
         Company Ltd.,                       the People's Republic of China
     a company organized
   under the laws of the
 People's Republic of China

     Our  website is located at  www.idwlcd.com.  Through our  website,  we make
available  free of charge our annual report on Form 10-K,  our proxy  statement,
our quarterly reports on Form 10-Q, our current reports on Form 8-K,  amendments
to reports filed under the Securities Exchange Act and earnings press releases.

Industry Overview

     Displays

     Display Technology

     Prior  to the  1970s,  most  commonly  used  displays  and  indicators  had
substantial  limitations as to their use,  especially in terms of size, life and
power  consumption.  LCDs  were  developed  in the  1970s in  response  to these
limitations,  especially  the demand for  greater  information  content and less
power  consumption  than  was  possible  using  light  emitting  diode,  or LED,
technology.  LCDs  provide  high-information  content  displays  at  competitive
prices.  LCDs now  appear in  products  throughout  the  communications,  office
automation,  industrial,  medical and consumer electronics industries.  LCDs are
one of the fastest growing of the established display industry segments.

     An LCD modifies  light that passes  through or is  reflected by it,  rather
than  emitting  light  like  an  LED.  An LCD  consists  of a  layer  of  liquid
crystalline  material  suspended  between two glass plates.  The liquid crystals
align themselves in a predictable manner when an electrical charge is applied in
accordance  with the  graphical  design  and  instructions  from the  associated

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<PAGE>

integrated circuit (driverIC).  LCDs display these images or characters in black
and white or in a wide range of color  combinations.  The graphical  image of an
LCD is produced in rows and columns  that can be  selectively  energized to form
letters  or  pictures.   A  principal  advantage  of  LCDs  over  other  display
technologies, such as LEDs, is the ability to include thousands or even millions
of pixels in a single display, which allows for greater information content.

     There  are two  types  of  LCDs:  passive  matrix  and  active  matrix.  We
manufacture  passive  matrix  LCD  displays,  which  are less  complex  and less
expensive to manufacture.  Currently,  passive matrix LCDs  (monochrome or color
STN)are used in  applications  such as mobile  handsets and PDAs,  as well as in
office equipment,  data collection terminals,  point-of-sale equipment,  medical
devices,  transportation instrumentation and industrial instruments and controls
and  consumer  electronics.  Active  matrix  LCD,  otherwise  known as thin film
transistor,  or TFT,  displays are relatively  complex  semi-conductor  devices.
Other display  technologies  such as organic light  emitting  diodes,  or OLEDs,
liquid-crystal-on-silicon,  or LCOS  and  plasma,  along  with  other  promising
display technologies, are also available or in development.

     Display Markets

     Displays are becoming a ubiquitous feature in many consumer, commercial and
industrial products iSuppli  Corporation,  an industry analysis firm,  estimates
that the small and medium form factor market,  which includes  display panels of
10" or smaller,  to be approximately  $19.9 million in 2005. OEMs, ODMs and EMSs
increasingly believe that display interfaces are becoming more important because
they help make  products  more useful and easier to operate.  In  addition,  the
increasing  complexity and functionality of handheld products,  such as wireless
computing  and  communication  devices,  require  OEMs and EMSs to increase  the
visual  performance and information  content of the displays  incorporated  into
their products. At the same time, the market continues to demand that OEMs, ODMs
and EMSs incorporate  displays with reduced power  requirements and lower costs.
Custom  LCDs  address  these   requirements  for  high  performance,   increased
information content, low power and low cost.

     OEMs and EMSs often include in their products  unique  display  modules and
features as a means of differentiating their products from those of competitors.
OEMs and EMSs  then make  decisions  about  whether  to use  standard  or custom
display devices and whether to design and produce these devices  in-house versus
outsourcing design and/or  production.  OEMs and EMSs often recognize that their
greatest strengths are market recognition of their brand names,  market research
and product development  expertise,  as well as effective sales and distribution
channels. OEMs and EMSs 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.  As a  result,  many  OEMs  and EMSs  outsource  to us the  design  and
production of display devices and components to focus their own resources on the
areas  where  they  have the  greatest  expertise  and  leverage  of  resources.
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.  These advantages allow OEM and EMS customers to maximize
profitability  and  reduce  risk  and  time to  market,  while  capitalizing  on
economies of scale. In some cases, the outsourced functions include the original
design of products.

                                       3
<PAGE>

     Industry Structure

     We  purchase  from  raw  material  manufacturers  (e.g.  glass),  component
manufacturers and from Integrated Circuit (chip or driver chip) manufacturers or
their  distributors.  Sometimes the chip has been  designed by a "fabless"  chip
design company which has  contracted a chip foundry to  manufacture  the chip to
their design. Chips are not usually  interchangeable without design changes that
may require re-qualification with the customer and / or the customer's approval.

     We supply to OEMs (Original Equipment  Manufacturers) - these normally have
a  recognized  brand  name,  ODMs  (Original  Design   Manufacturers)   or  EMSs
(Electronic  Manufacturing  Service  providers)  which assembles our display and
module  into the  final  product.  EMSs  are  contracted  by OEMs who  sometimes
nominate us as their chosen display module supplier.

Our Solutions

     We enable these  customers,  who are typically  unable to  efficiently  and
economically  produce their own LCDs, to outsource the design and manufacture of
small form  factor  LCDs to us. By  maintaining  the  technology  and  expertise
necessary for producing  high-quality,  low-cost LCDs we enable our customers to
optimize  the use of  their  own  resources  and  focus on  their  own  areas of
expertise.

     Our  solutions  enable our  customers  to improve  the  quality,  yield and
performance of their  products and shorten their time to market.  We believe our
solutions provide the following benefits to our customers:

     o    Cost-effective STN and CSTN products;
     o    High quality components and supply chain management expertise
     o    Custom design and manufacturing expertise
     o    High quality worldwide customer service and post-sales support

Our Strategy

     We are focused on expanding our position as a provider of LCD manufacturing
services  to major  OEMs,  ODMs and EMSs.  Our  objective  is to be the  leading
manufacturer  and  designer of small form factor  LCDs and LCD  modules.  We are
dedicating significant resources to develop custom design and manufacture of LCD
displays  and display  modules  for our  customers,  areas in which  margins are
typically  greater than for standard  LCDs and where we can exhibit our greatest
strengths.  We are also improving the range of technologies  that we offer, such
as the recent addition and subsequent  expansion of Chip-on-Glass  technologies.
To achieve  these  objectives,  we intend to  continue  to pursue the  following
strategies:

                                       4
<PAGE>

o    Target and  establish  close  relationships  with strong  customers  in key
     vertical  markets;  we seek to establish close  relationships  with leading
     customers  that have  high-volume  and multiple  product  needs.  We target
     strong leading  companies in vertical markets that we believe would benefit
     from our design and  manufacturing  services  and seek to develop  multiple
     solutions for different  product groups for those customers.  Our sales and
     engineering  staffs  integrate their knowledge and expertise to demonstrate
     the benefits from working with us. We emphasize  global account  management
     to  establish  long-lasting  customer  relationships  that  offer  complete
     product  life-cycle  solutions and to anticipate  customer  needs. To these
     ends,  we have recently  restructured  our sales  organization  for greater
     efficiency and resource  utilization.  We strive to increasingly  diversify
     our customer base across additional  vertical markets and leading customers
     within those vertical markets.

o    Introduce new technologies  that leverage our core  competencies and result
     in near-term  realizable  revenue. We identify and utilize new technologies
     with near-term  application by our Customers.  We have recently  introduced
     new  technologies,  such as TFT and CSTN,  that add value to our customers'
     products and leverage our current  design and  manufacturing  capabilities.
     The  addition  of  these  new  capabilities  allow  us to  target  a larger
     addressable  market and  attract  new  customers.  Our  investments  in new
     technologies  are  therefore  customer-driven.  We leverage  our library of
     design, manufacturing and assembly processes. Our LCD capabilities include:
     twisted  nematic,   or  TN,  high  performance  twisted  nematic,  or  HTN,
     supertwisted  nematic,  or STN, color supertwisted  nematic,  or CSTN, film
     compensated  supertwisted  nematic,  or FSTN,  and  black  mask  color,  in
     conjunction   with  assembly   capabilities   that  include  Surface  Mount
     Technology, or SMT, Chip-on-Board,  Chip-on-Flex and Chip-on-Glass, each of
     which assists in the production of complex components.

o    Maximize  utilization of manufacturing  capacity.  We have been following a
     strategy  of  targeting  customers  who respond to  competitive  pricing by
     placing  large  volume  repeat  orders with us, thus  reducing our overhead
     absorption  rates as we recover fixed  capacity costs over a larger revenue
     base and incur fewer order setup costs.  We are  promoting  shortened  lead
     times and competitive  pricing to win new business  thereby  optimizing our
     manufacturing  capacity utilization.

o    Utilize  low-cost   manufacturing  in  China.  All  of  our   manufacturing
     facilities are located in China.  In addition to our facility in Shenzhen's
     South Campus,  we have recently added  facilities in our  Shenzhen's  North
     Campus. As a result of these recent acquisitions of plant and equipment, we
     have greatly  increased  our  manufacturing  capacity,  thus enabling us to
     accelerate our TFT and CSTN product  offerings.  China provides us with one
     of the lowest cost  engineering  and  production  work forces in the world,
     which in turn,  allows us to pass on  significant  cost  advantages  to our
     customers and provides us the platform to compete with others manufacturing
     in China and other "low-cost" locations.

o    Produce high value-added  electronic components and modules. We produce not
     only LCDs, but also LCD modules that are incorporated  into different types
     of  electronic  products.  As a result  of our  focus  on high  value-added
     subassemblies or modules that are integrated into complex products,  we are
     able to achieve higher gross margins.

                                       5
<PAGE>

o    Produce high quality  products at competitive  prices.  Given the intensely
     price  sensitive  nature of our industry,  our goal is to manufacture  high
     quality products at low cost for our customers. We believe that the quality
     of our manufacturing  services is central to maintaining customer trust and
     loyalty,  and we therefore  strive to ensure that our design and production
     processes  are of  world-class  standards.  We  have  consistently  met the
     stringent quality demands of our OEM customers.  We are certified under ISO
     9001, the International  Organization for Standardization's highest quality
     standards in respect of our existing monochrome line and module operations.
     We are also QS9000  certified,  which is the  established  standard for the
     automotive  industry.  Our  existing  monochrome  manufacturing  facilities
     located in Shenzhen  South Campus are also certified  under ISO 14001,  the
     latest recognized  quality standard,  which provides a structured basis for
     environmental  management  and control.  We are in the process of obtaining
     certification  for our new facility  where we have  installed  the recently
     purchased color line.

o    Develop improved production techniques in collaboration with customers.  We
     focus on  collaborating  with our  customers  early in the design  cycle to
     refine and improve the production methods employed for complex, yet proven,
     production   technologies   rather  than  on  the  initial  development  of
     components or assemblies for which there is no established market. By doing
     this, we help our OEM customers  enhance their product design,  lower costs
     and improve yields. This strategy allows us to strengthen our relationships
     with our OEM customers.  As a result,  our customers  allow us to use their
     proprietary  production  technologies  in our  assembly  operations.  These
     relationships  allow us to focus our  research and  development  efforts on
     process  improvements  strategically  positioning with our Customers in new
     product  introductions.  By helping our OEM and ODM Customers enhance their
     product  designs,  lower costs and improve yield, we are able to strengthen
     our relationships with them.

Our Customers

     We believe these OEM, ODM and EMS customers  continue to adopt  outsourcing
strategies. The main causes for this are:

o Reduction of total production cost. OEMs and EMSs continually need to reduce
  costs to remain competitive. Providers of components and modules manufacture
  products at reduced total costs to OEMs and EMSs because higher volumes of
  manufacturing capacity lead to economies of scale, access to leading-edge
  procurement and inventory management capabilities, proficiency in purchasing
  materials and an emphasis on improvements to the entire supply chain. Contract
  manufacturing also enables OEMs and EMSs to take advantage of producing in
  low-cost geographical regions.

o Access to leading technologies. OEMs and EMSs continually seek access to
  engineering expertise and manufacturing technologies necessary to build their
  increasingly complex products. OEMs are motivated to work with component
  manufacturers to gain access to their expertise in product design, assembly,
  manufacturing and testing technologies.

o Acceleration of time-to-market. OEMs and EMSs face the demands of increasingly
  shorter product life-cycles. OEMs and EMSs can significantly improve product
  development cycles and shorten time-to-market by utilizing the expertise and
  manufacturing infrastructure of outsourced manufacturers, including
  capabilities relating to design and development.

                               6
<PAGE>

o Reduction of capital investment and shifting of fixed costs to variable costs.
  As electronics products have become more technologically advanced, the
  manufacturing process is requiring greater levels of investment in capital
  equipment. Outsourcing allows OEMs and EMSs to lower their investment in
  inventory and manufacturing assets and shift more of their fixed costs to
  variable costs, thereby increasing their return on assets. As a result, OEMs
  can react more quickly to changing market conditions and allocate capital to
  other core activities such as sales and marketing and research and
  development.

     We  derive   approximately   85%  of  our  business   from  17   customers.
Historically,  we have had substantial recurring sales from one customer.  Sales
to that customer for the year ended October 31, 2004, the year ended October 31,
2003 and the year ended October 31, 2002,  accounted for approximately  16%, 29%
and 30%,  respectively,  of total  sales.  Sales to our five  largest  customers
accounted for 62%, 48% and 51% of our net sales during the periods ended October
31, 2004, 2003 and 2002, respectively. Customers that account for 10% or more of
our sales during the period were Ecowater Systems,  Inc., Jabil Circuits,  Inc.,
Flextronics International, Creative Labs, and Honeywell, Inc.

     Sales to our OEM and EMS customers are primarily  based on purchase  orders
we receive from time to time rather than firm,  long-term purchase  commitments.
Although  it is our  general  practice  to  purchase  raw  materials  only  upon
receiving a purchase order, for certain customers we will occasionally  purchase
raw materials based on such customers' rolling forecasts or anticipated  orders.
Uncertain  economic  conditions  and  our  general  lack of  long-term  purchase
commitments  from our customers  make it difficult for us to accurately  predict
revenue  over  the  longer  term.  Even  in  those  cases  where  customers  are
contractually  obligated  to  purchase  products  from us or  repurchase  unused
inventory from us, we may elect not to enforce our contractual rights because of
the  long-term  nature of our  customer  relationships  and for  other  business
reasons,   and  instead  may  negotiate  with  customers  regarding   particular
situations.

Our Products and Services

     Our customers seek product differentiation. Custom-designed display modules
provide  them  with  the  opportunity  to  differentiate  their  products  on  a
cost-effective   basis.  We  apply  our  design,   manufacturing   and  assembly
capabilities to develop custom displays and display  modules,  and together with
our customers, create and implement engineering and product solutions with quick
design  turnaround  and  rapid  prototyping.  We are  involved  early  with  our
customers'   product   development   cycles  and  continue   with  them  through
manufacturing,  testing,  logistics  and  distribution.  We add  value  for  our
customers through our ability to integrate the design and production  processes.
While some OEMs have made a point of  focusing  on EMS and ODM supply  chains to
reduce  costs,  we believe our  capabilities  and lean  operating  structure can
position us to continue to generate attractive operating margins.

     Our products consist of TN, HTN, STN, CSTN and FSTN LCDs and subassemblies,
ranging from basic LCDs for calculators,  watches and electronic  games, to more
complex  products.  These more complex devices are used in cellular  telephones,
electronic  appliances,  office  equipment,  hand  held  computers,   automotive
equipment and medical  electronics and may be used in applications  that require

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<PAGE>

high multiplex rates and wide viewing angles.  We are currently  developing wide
temperature LCD displays for  automotive,  appliance and outdoor utility meters;
high  density  graphic  displays  for handheld  computers,  cellular  phones and
personal digital  assistants;  cold cathode and white LED backlighting for black
and white,  half-tone and color displays;  and custom Chip-on-Glass displays for
consumer  electronics  and  appliances.  We design and  manufacture  value-added
display modules with electronics,  keypads,  interface circuitry,  back lighting
and mounting hardware.

Our Design and Manufacturing Capabilities

     The typical cycle for an LCD product to be designed,  manufactured and sold
to an OEM  customer  varies  substantially,  ranging  from a few days to several
months, including the design, proof and production period. Initially, an OEM and
EMS customer  gathers data from its sales  personnel for products in which there
is market interest,  including  features and anticipated unit costs. The OEM and
EMS customer then contacts us and possibly other prospective manufacturers, with
forecasted total production  quantities and design specifications or renderings.
From that  information,  we then  determine  estimated  component  and materials
costs.  We  then  advise  our OEM and EMS  customer  of the  development  costs,
manufacturing charges (including molds and tooling, if applicable) and unit cost
based on the  forecasted  production  quantities  desired  during  the  expected
production cycle.

     After  we agree  with the OEM and EMS  customer  on the  quotation  for the
development  and unit cost, we begin the LCD product  development.  The costs of
LCD product  development are either paid by the customer prior to development or
built  into the costs of  manufacturing  the  product.  Upon  completion  of the
tooling,  we produce samples of the product for the customer's  quality testing,
and,  once  approved,  commence  mass  production  of the product.  We expect to
recover  the  development   costs  by  the  forging  of  a  long-term   customer
relationship  and through mass  production,  which  allows us to amortize  these
costs over a period of time and over a production quantity.

     We manufacture LCDs using glass,  liquid crystal solution and polarizer.  A
TN type LCD is the most  conventional  and  economical  and is suitable for most
common devices such as calculators  and watches.  TN type LCDs allow for clearer
visibility  and wider viewing  angles than STN type LCDs.  STN LCDs are suitable
for use in devices  such as handheld  games and consumer  electronics.  Our CSTN
displays are suitable for mobile phones and other products with color  displays.
We also utilize the following production techniques:

o Chip on Glass, or COG. COG is a process that connects integrated circuits
  directly to LCD panels without the need for wire bonding. We apply this
  technology to produce advanced LCD modules for high-end electronic products,
  such as cellular phones and PDAs. At October 31, 2004, we had four COG lines.
  These machines provide a total production capacity of up to 550,000 chip bonds
  per month. We recently acquired additional COG capacity of approximately
  1,250,000 chip bonds per month bringing total COG capacity to approximately
  1,800,000 chip bonds per month.

o Chip on Board, or COB. COB is a technology that utilizes wire bonding to
  connect large-scale integrated circuits directly to printed circuit boards. We

                                       8
<PAGE>

  use COB in the assembly of consumer products such as calculators, personal
  organizers and electronic appliances. At October 31, 2004, we had nine COB
  machines. These machines are fully automatic and use ultrasonic mounting
  technology and have a total production capacity of up to 400,000 chips per
  month.

o Tape Automated Bonding with Anisotropic Conductive Film, or TAB with ACF. TAB
  with ACF is an advanced heat sealing technology that connects a liquid crystal
  display component with an integrated circuit in very small LCD modules, such
  as those used in cellular phones and pagers. At October 31, 2004, we had six
  systems of TAB with ACF machines. The machines provide a total production
  capacity of up to 500,000 seals per month.

o Fine Pitch Heat Seal Technology or FPHS. FPHS technology allows us to connect
  LCD displays to printed circuit boards produced by COB that enables very thin
  connections. This method is highly specialized and is used in the production
  of finished products such as PDAs. At October 31, 2004, we had 12 machines
  utilizing FPHS technology. The machines provide a total production capacity of
  up to 500,000 seals per month.

o Surface Mount Technology or SMT. SMT is a process by which electronic
  components are mounted directly on both sides of a printed circuit board,
  increasing board capacity, facilitating product miniaturization and enabling
  advanced automation of production. We use SMT for products such as electronic
  appliances. At October 31, 2004, we had three SMT production lines. Our total
  mounting capacity is 20,000,000 components per month.

Environmental Laws

     Our  manufacturing  processes  result in the  creation of small  amounts of
hazardous and/or toxic wastes,  including various gases, epoxies, inks, solvents
and other organic  wastes.  We are subject to Chinese  governmental  regulations
related to the use, storage and disposal of such hazardous  wastes. We also have
our own standby  electrical power generation plant that operates on diesel fuel.
The amounts of our hazardous waste are expected to increase in the future as our
manufacturing  operations  increase,  and  therefore,  our cost of compliance is
likely to increase.  In addition,  sewage produced by dormitory facilities which
house our labor force is coming  under  greater  environmental  legislation.  We
believe that all hazardous and/or toxic waste is being stored, used and disposed
of in accordance with applicable laws.

Suppliers

     A  substantial  portion  of our  product  costs stem from the  purchase  of
components and raw materials.  Raw materials are principally comprised of glass,
liquid crystal solution and polarizer.  Components include integrated  circuits,
printed  circuit  boards,  resistors,   capacitors,  molded  plastic  parts  and
packaging  materials.  These are purchased  from a variety of suppliers.  We are
dependent  on  certain  key  suppliers  for sole  source  supplies  of  customer
specified items. We generally base component orders on received  purchase orders
in an effort to minimize our inventory risk by ordering  components and products
only to the extent necessary. However, for certain customers and because of lead
times, we may occasionally  purchase  components  and/or a raw material based on
such  customer's  rolling  forecasts  or  anticipated  orders  following  a risk
assessment.

                                       9
<PAGE>

     Certain  components may be subject to limited  allocation by certain of our
suppliers.  In our  industry,  supply  shortages  and  delays in  deliveries  of
particular  components  have  resulted  in  curtailed  production,  or delays in
production of assemblies  using scarce  components  or higher  component  costs.
These supply  shortages may  contribute  to an increase in our inventory  levels
and/or a  reduction  in our  margins.  We expect  that  shortages  and delays in
deliveries of some components  will continue to impact our industry,  and we are
striving to develop multiple sources of supply where possible.

Competition

     General competition in the outsourced manufacturing industry is intense and
characterized  by  price  erosion,   rapid   technological   change  and  global
competition from numerous  companies.  This highly  competitive  environment has
resulted in pricing pressures that have reduced margins. The services we provide
are  available  from  many  independent  sources  as well as  from  current  and
potential customers who possess their own in-house manufacturing capabilities or
the resources to design and manufacture similar products themselves.  We believe
that the  principal  competitive  factors in our  targeted  markets  are product
quality,  pricing,  flexibility  and  timeliness  in  responding  to design  and
schedule   changes,   reliability  in  meeting   product   delivery   schedules,
technological sophistication and geographic location.

     We consider our primary  competitors  to be BYD,  Data Image,  Data Vision,
Hantronics,  Ocular, Optrex, Tian Ma, Truly Semiconductors  Limited,  Varitronix
Ltd., Wintek Corporation, and other similar companies.

Quality Control

     We maintain strict quality control programs for our products, including the
use of total  quality  management  systems,  or TQM,  and  advanced  testing and
calibration  equipment.  We audit our suppliers for quality and control, and our
quality control personnel test incoming raw materials and components. During the
production  stage,  our  quality  control  personnel  also test the  quality  of
work-in-progress at several points in the production process. Finally, after the
assembly stage, we conduct testing of finished products. We provide office space
at our principal  manufacturing  facilities for  representatives  of some of our
major customers to permit them to monitor production of their products,  as well
as to provide them access to our manufacturing personnel.

     We are  certified  under  ISO  9001,  the  International  Organization  for
Standardization's   highest  quality   standards  in  respect  of  our  existing
monochrome line and module  operations.  We are also QS9000 certified,  which is
the established standard for the automotive industry. Our existing manufacturing
facility  located in  Shenzhen  is also  certified  under ISO 14001,  the latest
recognized quality standard, which provides a structured basis for environmental
management and control. We are in the process of obtaining certification for our
new facility where we have installed the recently purchased color line. "ISO" is
a Geneva-based  organization dedicated to the development of worldwide standards
for quality management guidelines and quality assurance. ISO 9001, which was the
first quality system standard to gain worldwide recognition,  requires an entity
to  gather,  analyze,   document  and  monitor  its  quality  systems  and  make
improvements where needed. Our certification  under an ISO 9001 quality standard
demonstrates  that our  manufacturing  operations meet the most demanding of the

                                       10

<PAGE>

established  world standards.  We are also certified with QS 9000 for automotive
products, which qualify us to work with North American automakers.  In addition,
we receive numerous customer  qualification audits each year, many of which make
additional  recommendations  and suggestions  based on third-party  experiences,
which we evaluate and often subsequently adopt.

Sales and Marketing

     We focus on  developing  close  relationships  with  our  customers  at the
development   and  design  phases  and  continuing   throughout  all  stages  of
production.  Sales and marketing operations are integrated processes involving a
network of  representatives,  direct  salespersons,  sales  engineers and senior
executives  covering  North  America,  Asia and  Europe.  We  direct  our  sales
resources  and  activities  at several  management  and staff levels  within our
customers and  prospective  customers.  We receive  inquiries  through our sales
representatives,  word of mouth, from public relations  activities,  our website
and through referrals from current  customers.  We evaluate these  opportunities
against our customer  selection criteria and assign either a representative or a
direct salesperson.

Seasonality

         Our business does not experience seasonality.

Backlog

     As of December 1, 2004, we had a backlog of orders of  approximately  $21.0
million,  as compared  with a backlog of $13.3  million as of December 31, 2003.
Our backlog consists of product orders for which confirmed  purchase orders have
been received and that are scheduled for shipment  within 12 months.  Orders are
given  with an  average  of 12 weeks  lead  time  though  there is  considerable
variation.  Most  orders are  subject to  rescheduling  or  cancellation  by the
customer with the following terms:

     a.   for  cancellations 0 to 30-days prior to scheduled  delivery date, the
          purchaser must pay the full purchase price;

     b.   for  cancellations  between  31- and  90-days  prior to the  scheduled
          delivery  date, the purchaser must pay the full purchase price for all
          finished goods and for cost of all work in process,  all raw materials
          in inventory  associated  with that order,  and all  cancellation  and
          restocking charges of our vendors that we may incur;

     c.   for cancellations between 91- and 120-days from the scheduled delivery
          date,  the purchaser  must pay the costs for all work in process,  all
          raw  materials  in  inventory  associated  with the  invoice,  and all
          non-cancellable  part orders or  cancellation  and restocking  charges
          from our vendors that we may incur;

     d.   for cancellations more than 120-days from the scheduled delivery date,
          the purchaser must pay for all unique raw materials in inventory,  and
          all non-cancellable part orders or cancellation and restocking charges
          from our vendors that we may incur.

                                       11
<PAGE>

     Because of the  possibility  of customer  changes in delivery  schedules or
cancellations  and potential  delays in product  shipments,  our backlog as of a
particular date may not be indicative of net sales for any succeeding period.

     The  percentage of backlog  orders that have been  cancelled  during fiscal
year 2004 was not material to any quarter.  As noted,  our terms and  conditions
allow for recovery of all direct materials and  manufacturing  overhead for work
in process due to any cancellation.

Research and Development

     We currently  invest in research and development  for design,  development,
manufacturing  and assembly  technology  when we can identify  near-term  market
applications  that stem directly  from such  investments.  New,  customer-driven
technologies   provide  us  with  the   potential   to  offer  better  and  more
technologically  advanced  services to our OEM and EMS customers while providing
returns  on the  investments.  We plan to  continue  acquiring  advanced  design
equipment and to enhance our technological  expertise through continued training
of our  engineers  and  further  hiring of  qualified  system  engineers.  These
improvements  are intended to enhance the speed,  efficiency  and quality of our
assembly processes.

Intellectual Property

     We  rely  upon  a  combination  of  trade  secrets,   industry   expertise,
confidential  procedures and contractual  provisions to protect our intellectual
property.  Our core business is not dependent on any material patents,  licenses
or trademarks.

Geographic Markets

     The  approximate  percentages  of our net sales to customers by  geographic
area are based upon shipping  destination of product and are set forth below for
the periods indicated:
<TABLE>
<CAPTION>
         <C>                                              <C>                        <C>                 <C>

        Revenues                                                   Fiscal Period Ended October 31
        -------------------------------------------- ------------------- ------------------ ---------------------
                                                                  2004                2003                  2002

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

        United States                                       $   19,472         $    10,693           $    11,144
        China (including Hong Kong)                              8,440               4,916                 6,753
        Asia (excluding Hong Kong and China)                    10,152               4,538                 2,183
        Europe                                                   7,051               1,690                   566
        Other                                                    1,119                 878                   160

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

                                                     $          46,234   $          22,715           $    20,806
                                                     =================   =================           ===========

        "Long-lived Assets"
        --------------------------------------------
                                                                  2004                2003
                                                     ------------------- ------------------

        United States                                $             112   $             109
        China (including Hong Kong)                             16,306               4,687
        Asia (excluding Hong Kong and China)
                                                                     -                   -
        Europe                                                       -                   -
        Other                                                        -                   -

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

                                                     $          16,418   $           4,796
                                                     =================   =================

</TABLE>

Employees

     As of October 31, 2004, we employed approximately 2,000 persons, 11 of whom
are based in the U.S., one in the U.K. and the remainder in China and Hong Kong.
We consider  our  relationships  with  employees to be good and believe that the
compensation provided to our employees is comparable to similar employers in the
same  geographic  market and industry.  We are not a party to any material labor

                                       12
<PAGE>

contracts.  We have experienced no significant  labor stoppages.  This situation
may  not  continue  in the  future  and any  labor  difficulties  could  lead to
increased costs and/or interruptions in our production.  We are subject to labor
laws in each  location and have to expend  certain  resources in order to comply
with local legislation and regulations.  In China in particular,  these laws may
change or the  interpretation  may  change  over time and could  have a material
impact on our profitability.

ITEM 2. PROPERTIES.

     We now have two manufacturing  facilities,  ten minutes from each other and
both are 30 minutes  from the center of the city of Shenzhen  and about one hour
from Hong  Kong.  Our South  campus  manufacturing  facilities  consist of three
buildings totalling  approximately 270,000 square feet situated on four acres of
leased land in an industrial  suburb of Shenzhen,  Southern  China known as Heng
Gang. Our North campus  facility  (housing our newly  installed  color LCD line)
consists of one building totalling  approximately 140,000 square feet. The North
Campus facility has just been leased on a ten-year lease  commencing in November
2004 and expiring in 2014 with an option to renew for an additional ten years at
the same terms and rate. The annual rental expense is $283,100. The South campus
buildings  are  approximately  13  years  old,  and the LCD  production  line is
approximately six years old. Only the state may own land in China. Therefore, we
lease the land under our South Campus facility, and our lease agreement gives us
the right to use the land for 50 years at an annual  rent of $2,200,  subject to
certain  periodic  rent  increases,  and will expire in 2049.  At the end of the
lease term,  all  improvements  we have made will revert to the lessor.  We also
lease dormitory  facilities for our production  employees on adjacent properties
and ancillary  accommodations  in the area for senior staff at a current cost of
$256,800 per year from the Heng Gang Village.

     Our corporate  headquarters  are located in an industrial  park in Rocklin,
California in a space of 4,700 square feet. The lease expires in April 2005, and
the rent is currently  $73,000 per year for the remainder of the lease. We pay a
proportionate  share of operating  expenses for the facilities of  approximately
$12,400 per year. We lease an office in Hong Kong.  The rent and  management fee
is $22,000 per year and the lease expires in February 2005. We also lease office
space on short-term leases for our sales offices in Saline, Michigan and Woking,
Surrey, United Kingdom.

ITEM 3.  LEGAL PROCEEDINGS.

     We are not a party to any legal proceedings and there are no material legal
proceedings  pending with respect to our property,  though from time to time, we
may be involved in routine litigation incidental to our business.

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

     There were no matters  submitted to a vote of our security  holders  during
the fourth quarter ended October 31, 2004.

                                       13
<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.

     Our  common  stock is traded on the OTC  Bulletin  Board  under the  symbol
"IDWK." As of December  16,  2004,  there were  approximately  2,600  registered
holders of our common  stock.  As many of the shares of common stock are held in
street name, there may be additional  beneficial holders of our common stock. As
of December 12, 2004, a total of 3,343,214  shares of our common stock  underlie
outstanding options and warrants.

     The following  table shows the range of high and low bid as reported by the
OTC  Bulletin  Board for the time  periods  indicated.  Over-the-counter  market
quotations reflect  inter-dealer  prices,  without retail mark-up,  mark-down or
commission and may not necessarily represent actual transactions.

                                     Low                 High
Fiscal 2004:                         ---                 ----
------------
Fourth Quarter (to October 31)      $3.09               $5.12

Third Quarter (to July 31)          $3.84               $5.89

Second Quarter (to April 30)        $2.56               $6.26

First Quarter (to January 31)       $0.48               $2.56


Fiscal 2003:
------------
Fourth Quarter (to October 31)      $0.26               $0.51

Third Quarter (to July 31)          $0.24               $0.40

Second Quarter (to April 30)        $0.16               $0.51

First Quarter (to January 31)       $0.14               $0.35


Dividends

     We have paid no dividends on our common stock since our  inception  and may
not do so in the future. For the foreseeable future, we expect any earnings will
be retained to finance the growth of the Company.

                                       14
<PAGE>

Recent Sales of Unregistered Securities

     During the fiscal year ended  October 31, 2004, we have sold and issued the
following securities:

     1. In December 2003, the Company completed a private financing of 3,333,335
shares of common stock at $1.50 per share.  The  Company's net proceeds from the
offering  were  $5,000,002.  Roth Capital  Partners,  LLC acted as the placement
agent for the  financing  and received an eight  percent (8%) fee based on gross
proceeds and a five (5) year warrant to purchase  166,666 shares of common stock
at $1.75 per share.

     2. In May 2004,  the Company  completed a private  financing  of  4,500,000
shares of common stock at $4.50 per share.  The net  proceeds  from the offering
were $20,250,000.  Roth Capital  Partners,  LLC acted as the placement agent for
the financing and received an eight percent (8%) fee based on gross proceeds.

     The sales and issuances of common stock,  debt  instruments and warrants to
purchase  common  stock in private  placements  listed  above were made by us 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 us 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.

                                       15
<PAGE>



Repurchases of Stock

     The  Company  did not  repurchase  any of its stock  during the fiscal year
ended October 31, 2004.

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA.

     We derived the  consolidated  statements  of income and balance  sheet data
presented  below as of and for the years ended October 31, 2004,  2003 and 2002,
the ten months ended October 31, 2001 and the eleven  months ended  December 31,
2000, from our audited consolidated  financial statements.  We began our current
operations  on February 1, 2000.  You should read this  summary of  consolidated
financial  information  with the section entitled  "Management's  Discussion and
Analysis of Financial  Condition and Results of Operation" and our  Consolidated
Financial Statements and Notes thereto appearing elsewhere in this report.
<TABLE>
<CAPTION>
    <C>                                    <C>            <C>            <C>              <C>                   <C>

                                       (in thousands, except per share data)
                                                           October 31,      October 31,      October 31,     December 30, 2000
                                      October 31, 2004    2003 (twelve     2002 (twelve       2001 (ten      (eleven months)
                                      (twelve months)        months)          months)          months)

Net sales                            $        46,234      $     22,715    $      20,806      $    14,658      $     17,804
Cost of goods sold                            36,123            17,600           15,730           11,468            12,593
                                     -------------------------------------------------------------------------------------------
  Gross Profit                                10,111             5,115            5,076            3,190             5,211
                                     -------------------------------------------------------------------------------------------
Operating expenses:
  General and administrative                   5,403             3,487            4,036            4,071             5,124
  Selling, marketing and customer
    service                                    2,096             1,524            1,440            1,231             1,545
  Engineering, advanced design and
product management                               625               593              691              901               570

Litigation settlement(1)                         625                 -                -                -                 -

  Impairment of machinery                          -                 -              270                -                 -
  Impairment of goodwill                           -                 -            5,287                -                 -
                                     ------------------- ---------------- ---------------- ----------------- -------------------
Total operating expenses                       8,749             5,604           11,724            6,203             7,239
                                     ------------------- ---------------- ---------------- ----------------- -------------------
Operating income (loss)                        1,362              (489)          (6,648)          (3,013)           (2,028)
                                     ------------------- ---------------- ---------------- ----------------- -------------------
Other income (expenses):
  Interest                                      (396)             (389)            (464)            (530)             (442)
  Loss on investment                               -                 -                -                -            (1,000)
  Other income                                   108                70              170              972               (29)
                                     ------------------- ---------------- ---------------- ----------------- -------------------
                                                (288)             (319)            (294)             442            (1,471)
                                     ------------------- ---------------- ---------------- ----------------- -------------------
Income (loss) from continuing
operations before income taxes                 1,074              (808)          (6,942)          (2,571)           (3,499)
Provision for income taxes                         -                 -                -                -                 -
                                     ------------------- ---------------- ---------------- ----------------- -------------------
Income (loss) from continuing
operations                                     1,074              (808)          (6,942)          (2,571)           (3,499)
Loss from discontinued operations,
net of income taxes                                -                 -                -                -              (581)
                                     ------------------- ---------------- ---------------- ----------------- -------------------
Net income (loss)                     $        1,074              (808)          (6,942)          (2,571)           (4,080)
                                     =================== ================ ================ ================= ===================

                                       16
<PAGE>

Net income (loss) per share -
continuing operations

     Basic                            $         0.04             (0.04)           (0.36)           (0.14)            0.20
                                     =================== ================ ================ ================= ===================
     Diluted                          $         0.04             (0.04)           (0.36)           (0.14)            0.20
                                     =================== ================ ================ ================= ===================
Net income (loss) per share -
discontinued operations

     Basic                            $            -                 -                -                -                 (0.03)
                                     =================== ================ ================ ================= ===================
     Diluted                          $            -                 -                -                -                 (0.03)
                                     =================== ================ ================ ================= ===================
Net income (loss) per share

     Basic                            $         0.04             (0.04)           (0.36)           (0.14)            (0.23)
                                     =================== ================ ================ ================= ===================
     Diluted                          $         0.04             (0.04)           (0.36)           (0.14)            (0.23)
                                     =================== ================ ================ ================= ===================
Weighted average number of shares
used in computing per share amounts

     Basic                                25,647,763         19,448,718       19,207,246       19,192,611        17,482,583
                                     =================== ================ ================ ================= ===================
     Diluted                              27,511,228         19,448,718       19,207,246       19,192,611        17,482,583
                                     =================== ================ ================ ================= ===================
--------------------------------------------------------
(1) The litigation settlement related to our former operations as a manufacture
of snowboards, and was part of a claim arising from a snowboard injury prior to
1999. The Company has not manufactured snowboards since prior to 1999, and
believes this is an unusual and infrequent item.

                                     ------------------- ---------------- ---------------- ---------------- ------------------
                                                           October 31,      October 31,      October 31,
                                      October 31, 2004        2003             2002             2001        December 30, 2000
                                     ------------------- ---------------- ---------------- ---------------- ------------------
Consolidated Balance Sheet Data
Cash and cash equivalents             $       10,186      $      1,178     $      1,556     $        982       $      885

Net current assets from continuing
operations                                    28,504             9,264            6,618            5,950            6,151

Property, plant and equipment, net            16,418             4,796            5,197            6,389            7,297

Total assets from continuing
operations                                    34,736            14,060           11,815           18,058           19,543

Current liabilities                           15,718             7,959            6,093            5,861            5,631

Long-term debt and capital lease
obligations, net of current portion               70             1,877            1,280              807              201

Stockholders' equity                          29,134             4,224            4,442           11,390           13,735

</TABLE>

                                       17
<PAGE>





                 SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA
                                 (In thousands)
<TABLE>
<CAPTION>
     <C>                                  <C>                <C>                <C>            <C>                 <C>


                                                                                              Diluted           Basic
                                                                                             Earnings         Earnings
                                                                          Net Earnings      (Loss) Per       (Loss) Per
               2004                       Sales          Gross Profit        (Loss)           Share            Share
               ----                       -----          ------------       -------          --------         ---------

First Quarter                        $    9,796         $     2,378       $     621        $     0.03       $     0.02
Second Quarter                           10,624               2,168            (449)            (0.02)           (0.02)
Third Quarter                            11,654               2,434             370              0.01             0.01
Fourth Quarter                           14,160               3,131             532              0.02             0.02
                                    ------------------ ----------------- ---------------- ---------------- ----------------
Total                                $   46,234         $    10,111       $   1,074        $     0.04       $     0.04
                                    ================== ================= ================ ================ ================

               2003
               ----
First Quarter                        $    5,121         $     1,492              24               -                -
Second Quarter                            4,688                 931            (628)            (0.03)           (0.03)
Third Quarter                             5,889               1,305            (314)            (0.02)           (0.02)
Fourth Quarter                            7,017               1,387             110              0.01             0.01
                                    ------------------ ----------------- ---------------- ---------------- ----------------
Total                                $   22,715         $     5,115       $    (808)       $    (0.04)      $    (0.04)
                                    ================== ================= ================ ================ ================

               2002
               ----
First Quarter                        $    4,611         $     1,155       $    (299)       $    (0.02)      $   (0.02)
Second Quarter                            5,584               1,383            (178)            (0.01)           (0.01)
Third Quarter                             5,316               1,321            (347)            (0.02)           (0.02)
Fourth Quarter                            5,295               1,217          (6,118)            (0.32)           (0.32)
                                    ------------------ ----------------- ---------------- ---------------- ----------------
Total                                $   20,806         $     5,076       $  (6,942)       $    (0.36)      $    (0.36)
                                    ================== ================= ================ ================ ================
</TABLE>


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

     Except  for  statements  of  historical   facts,   this  section   contains
forward-looking  statements involving risks and uncertainties.  You can identify
these statements by  forward-looking  words including  "believes,"  "considers,"
"intends,"  "expects," "may," "will," "should," "forecast," or "anticipates," or
the  negative  equivalents  of those  words or  comparable  terminology,  and by
discussions of strategies that involve risks and uncertainties.  Forward-looking
statements  are not  guarantees of our future  performance  or results,  and our
actual  results  could  differ   materially  from  those  anticipated  in  these
forward-looking  statements as a result of certain factors,  including those set
forth under "Risk Factors." This section should be read in conjunction  with our
consolidated financial statements.

     The following discussion is presented on a consolidated basis, and analyzes
our financial  condition  and results of operations  for the years ended October
31, 2004, October 31, 2003, and October 31, 2002.

                                       18
<PAGE>

Overview

     We manufacture LCDs and LCD modules and assemblies for major OEMs and EMSs,
and offer design and engineering services related to those products.  Our target
OEM customers operate in the telecommunications, automotive, medical, computing,
office  equipment,  home  appliance  and consumer  electronics  industries.  Our
components  and  modules  are  used in  various  electronic  products,  in these
industries.  Developments  in our industry  over the past years have resulted in
lower costs for displays. As a result of the decreased costs and thus prices for
LCDs, new display designs and applications are being  incorporated into products
in new market segments.

     We have been focusing on development of new key customers with high volume,
multi-product  needs for displays and display modules and have  strengthened our
core  engineering  competencies  and  manufacturing  processes,  enabling  us to
maintain our contribution  margins,  predominantly  through higher yields in the
manufacturing process. We also began to engage our customers at the design phase
and  emphasized  our  engineering  design  capability  and  product  quality  to
facilitate  product  changes and the  effective  rollout of new products for our
customers.  More recently, with our expanded base of strong customers, our focus
has  begun to shift to  servicing  those  customers  through  continual  product
changes  and  development  of new  products.  We believe  that our  emphasis  on
engineering and process manufacturing will allow us to continue to maintain high
yields that will translate into competitive pricing and maximization of margins.

     This year we have  completed  the  acquisition  of a second LCD line.  This
line, unlike our existing line which produces  monochrome displays only, is able
to produce both  monochrome  and color  displays.  We  purchased  this asset for
$6,000,000,  and paid cash for the  acquisition.  In addition to the cost of the
LCD equipment line, we incurred additional expenses of approximately  $4,000,000
to package and ship the  equipment  to our  factory in China,  and to unpack and
install the  equipment  for  manufacturing  operations  in fiscal 2004,  with an
additional  approximately $2,000,000 to be incurred in early fiscal year 2005 to
complete  the  installation  of the  equipment.  We believe our total  outlay of
approximately $12,000,000 for the installed color LCD manufacturing line to be a
significant discount to market value when compared to the cost of purchasing and
installing  a new  color  LCD  line,  and also to the  depreciated  value of the
acquired  equipment  reflected in the books of the seller.  All costs associated
with the purchase of the equipment,  including  shipment and installation,  have
been placed in a construction in process account. We anticipate depreciation for
the new  manufacturing  line to start in fiscal  2005,  commensurate  with first
production  of  revenue  generating  products.  Installation  was  completed  in
December 2004 and we expect to be producing  samples for prospective  customers'
evaluation  in the  very  near  future.  This  line  and the  additional  module
equipment  acquired  with  it  will  provide  us  with  enhanced  technical  and
productive  capacity  with which to service the needs of our  targeted  customer
base.

     Our  production  is  typically  based  on  purchase  orders  received  from
customers. However, for certain customers we may purchase raw materials based on
non-binding forecasts or in anticipation of orders for products, consistent with
our  involvement  with  the  customer.  We  generally  do not  obtain  long-term
commitments  from our  customers and economic  changes in a customer's  industry
could impact our revenue in any given period.  One of our risks in manufacturing
results from inventory that may become obsolete due to customer  product changes
and discontinuation of old products for next generation products. We manage this

                                       19
<PAGE>

risk through  customer  forecasts  and our  involvement  in product  changes and
engineering.  Our  design  and  engineering  services  also  allow us to  better
understand and meet our customers'  needs and anticipate  industry  changes that
might impact our inventory and purchasing decisions. Although increases in labor
costs and other  charges may impact cost of sales,  our yield rate is one of the
most significant factors affecting our manufacturing operations and results.

     We are ISO-certified  for our module business and existing  monochrome line
and we emphasize our quality and manufacturing  processes,  and we are generally
pre-qualified through quality inspections by our significant  customers.  We are
in the  process  of  obtaining  ISO  certification  for our new color  line.  We
emphasize incoming quality inspection and in-process inspection to improve yield
and reduce warranty claims and product returns.  We believe that our quality and
manufacturing  processes  are  our  core  strengths.  We do not  anticipate  any
significant  change  in  our  practices  and  consider  our  investment  in  our
engineering and quality  departments as a continuing cost of doing business.  We
believe our current  facilities  and  resources  are adequate to sustain  higher
sales volume and growth.

     With the increase in key customers  that we anticipate  will result in high
volume sales, we intend to emphasize our design engineering, process engineering
and quality efforts to drive  increased sales in conjunction  with our sales and
marketing  efforts,  often working with our customers in teams that will include
engineering input and support at early phases.

Critical Accounting Policies and Estimates

     The  discussion and analysis of our financial  condition  presented in this
section are based upon our  financial  statements,  which have been  prepared in
accordance with generally accepted accounting  principles,  or GAAP, in the U.S.
During the  preparation  of our  financial  statements  we are  required to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenue  and  expenses,   and  related   disclosure  of  contingent  assets  and
liabilities.  On an ongoing  basis,  we evaluate our  estimates  and  judgments,
including  those  related  to sales  returns,  pricing  concessions,  bad debts,
inventories,   investments,  fixed  assets,  intangible  assets,  income  taxes,
pensions and other contingencies. We base our estimates on historical experience
and on various other  assumptions  that we believe are reasonable  under current
conditions.  Actual  results may differ  from these  estimates  under  different
assumptions or conditions.

Revenue Recognition

     We recognize revenue from product sales in accordance with Staff Accounting
Bulletin (SAB) No. 104 "Revenue  Recognition in Financial  Statements."  SAB No.
104 requires that revenue be recognized when all of the following conditions are
met:

o Persuasive evidence of an arrangement exists;
o Delivery has occurred or services have been rendered;
o Price to the customer is fixed or determinable; and
o Collectability is reasonably assured.


                                       20
<PAGE>

     Our standard  terms provide that  shipments are FOB from our  manufacturing
facility,  and title and risk of loss shift to the customer upon  shipment,  and
there are no continuing services other than delivery.  Accordingly, we recognize
revenue  from the sale of our  products  when the  products are shipped from our
factory. Sales revenue is recorded net of discounts,  rebates and prompt payment
discounts. Returns and adjustments are booked as soon as they have been assessed
for validity.  The Company does not provide an allowance for returns at shipment
because we make custom product which are customer  specific,  and no returns are
allowed.  The Company  warrants its product for replacement only in the event of
defects,  and  customers  are  required  to notify us within 10 days of  product
receipt if there is a defect.  Historically,  the  Company  has not  experienced
significant defects, and replacements for defects is not material.

Accounts Receivable

     We maintain  an  allowance  for  doubtful  accounts  for  estimated  losses
resulting from the inability or  unwillingness of our customers to make required
payments.  We determine the adequacy of this  allowance by regularly  evaluating
individual   customer   receivables  and  considering  a  customer's   financial
condition, credit history and current economic conditions.

Inventories

     We plan  inventory  procurement  and production  based on orders  received,
forecasted demand and supplier requirements. Inventories are stated at the lower
of cost or market. Cost is determined on the weighted  average-cost basis. Costs
included in the valuation of inventory are labor,  materials  (including freight
and duty) and  manufacturing  overhead.  We write down inventories for estimated
obsolescence based on the difference between the cost of inventories and the net
realizable  value based upon  estimates  about future demand from  customers and
specific  customer  requirements  on  certain  projects.  The  majority  of  our
inventory  is produced  from raw  materials  for specific  customer  designs and
requirements,  that  cannot be used for other  customers.  Therefore,  inventory
levels  may  change  based  on  customer  demand,   as  well  as  variations  in
manufacturing yields. Because some of our products are dependent on availability
of long lead items or are unique to a particular customer,  there is a risk that
we will forecast  incorrectly  and purchase or produce  excess  inventory.  As a
result,  actual demand may differ from  forecasts,  and such  differences if not
managed may have a material  adverse  effect on future results of operations due
to required write-offs of excess or obsolete inventory. To mitigate against such
exposure, we require a letter of authorization from our customer agreeing to pay
for and take  possession of inventory parts in the event of  cancellation.  This
requirement  is  designed  to  protect us in the event a  customer's  project is
canceled. In addition,  our standard terms and conditions provide for payment to
us to cover costs in the event a customer cancels an order.

Depreciation

     Depreciation  has not been recorded on the new color LCD line  purchased in
June 2004 or on improvements to the new  manufacturing  facility as installation
was not completed at the year end.

                                       21
<PAGE>

Income Taxes

     Pursuant to Financial  Accounting  Standards  Board  ("FASB")  Statement of
Financial  Standards  ("SFAS") No. 109,  "Accounting  for Income  Taxes," income
taxes are recorded based on current year amounts payable or refundable,  as well
as the  consequences  of events  that  give  rise to  deferred  tax  assets  and
liabilities.  We base our estimate of current and deferred taxes on the tax laws
and rates that are currently in effect in the appropriate jurisdiction.  Changes
in laws or rates may affect the current amounts payable or refundable as well as
the amount of deferred tax assets or  liabilities.  At October 31, 2004,  we had
approximately  $10,351,000 of net operating loss carry forward available for use
resulting in approximately $4,192,000 of deferred tax assets. We have provided a
valuation  allowance of 100% of the $4,192,000 based primarily on our history of
losses.

Results of Operations

Comparison of the year ended October 31, 2004 to the year ended October 31, 2003

     Revenue - Net sales for the fiscal year ended October 31, 2004  increased
104% to $46,234,000  from  $22,715,000.  As we stated last year, our goal was to
restructure our sales operation to focus on specific multinational  customers in
expanded  geographic  markets.  We have  achieved  this  goal  adding  four such
customers representing 98% of our 104% sales growth.

     Cost of sales - Cost of sales  increased 0.6% to 78.1% of net sales for the
fiscal  year ended  October 31, 2004 from 77.5% of net sales for the fiscal year
ended  October 31, 2003.  The 1.1%  increase was  attributable  to increased raw
material  costs (7%) as a percent of sales due  primarily to one customer  being
sold to on a fixed contract price  representing  (14%) of total revenue;  due to
unfavorable  exchange  rates of the Japanese Yen; and  increased  semi-conductor
costs and changes in PRC legislation which reduced the amount of VAT recoverable
(1%).   These   increases  were  offset  by  absorption  of  overhead  (5%)  and
depreciation (2%) over a larger revenue base.

     General and administrative  expenses - General and administrative  expenses
were  $5,403,000  for the fiscal year ended October 31, 2004, and $3,487,000 for
the fiscal year ended October 31, 2003, an increase of 54.9%. As a percentage of
sales,  general and administrative  expenses were 11.7% and 15.4% for the fiscal
years ended October 31, 2004 and 2003,  respectively.  The increase is primarily
attributed to increases in payroll due to the  recruitment  of the Company's new
CEO,  expansion of the internal audit department and Sarbanes Oxley  compliance;
increase in legal and accounting  fees;  increased credit insurance costs on the
Company's  accounts  receivable;  and  increased  depreciation,  bad  debt,  and
exchange loss  expense.  The Company  expects that its costs for Sarbanes  Oxley
compliance  will  continue  in  fiscal  2005 at the  current  rate.  Significant
elements of this  expense  include  employee  related  expenses  of  $2,792,000,
professional  fees of  $684,000,  rent,  telephone  and  utilities  of $165,000,
insurance  of  $308,000,   local  Chinese  government  fees  of  $194,000,   and
depreciation of $130,000.

     Sales,  marketing,  and customer service - Sales,  marketing,  and customer
service expenses were $2,096,000 for the fiscal year ended October 31, 2004, and
$1,524,000 for the fiscal year ended October 31, 2003, an increase of 37.5%.  As
a percentage of sales, sales,  marketing and customer service expenses were 4.5%
and 6.7% for the fiscal  years ended  October  31, 2004 and 2003,  respectively.

                                       22
<PAGE>

Increased  commission  expense at $921,000  ($498,000 for the year ended October
31,  2003)  accounts for 74% of the  increase in sales,  marketing  and customer
service  expenses in fiscal 2004 due to higher volumes of  commissionable  sales
during the year.  Significant  elements  of this  expense  consist  of  employee
related expenses of $749,000,  commission expense of $921,000, travel expense of
$135,000 and rent of $81,000.

     Engineering, advanced design and project management expenses - Engineering,
advanced  design and project  management  expenses  were $625,000 for the fiscal
year ended  October 31, 2004 and $593,000 for the fiscal year ended  October 31,
2003 an increase of 5.4%. As a percentage of sales, engineering, advanced design
and project  management  expenses  were 1.4% and 2.6% for the fiscal years ended
October 31, 2004 and 2003,  respectively.  The increase is attributable to costs
related to the  addition  of our  equipment  development  department  in the 4th
quarter of fiscal 2003 and continuing through fiscal 2004.  Significant elements
of this expense consist of employee related  expenses of $522,000,  rent expense
of $57,000 and travel expenses of $34,000.

     Litigation  Settlement - expense for the fiscal year ended October 31, 2004
was $625,000 and was a result of settlement of previously disclosed  litigation,
now concluded.  The expense was for the  Settlement of a lawsuit  arising out of
the use of a snowboard and injuries  sustained prior to 1999. We were named as a
defendant in the lawsuit  alleging a defect in the manufacture of the snowboard,
which we manufactured as part of our prior business.

     Interest  expense - Interest  expense  increased to $396,000 for the fiscal
year ended  October 31, 2004,  from $389,000 for the year ended October 31, 2003
an increase of 1.8%. As a percentage of sales interest expense was 0.9% and 1.7%
for the fiscal years ended October 31, 2004 and 2003, respectively. The increase
can be attributed to increased  borrowings on the Company's accounts  receivable
line of credit  offset  by the  repayment  of the  Company's  outstanding  notes
payable at a significantly higher interest rate.

     Other income - Other income for the fiscal year ended  October 31, 2004 was
$108,000 and $70,000 for the fiscal year ended October 31, 2003. The significant
component was $85,000 received from a sublet of leased property.

     Net  income  - The net  income  for the year  ended  October  31,  2004 was
$1,074,000.  The net loss for the year ended October 31, 2003 was $808,000.  The
significant reason for the increase in net income was the 103% increase in sales
while a  considerable  portion of costs are fixed or  increased  at a lower rate
than the increase in sales.

Comparison of the year ended October 31, 2003 to the year ended October 31, 2002

     Revenue - Net sales for the fiscal year ended October 31, 2003  increased
9.2% to $22,715,000 from $20,806,000.  Our new European  customer  accounted for
the majority of the increase.  We have restructured our sales operation to focus
on specific  multinational  customers in expanded  geographic  markets.  Our new
European customer was derived as a direct result of our new focus.

     Cost of sales - Cost of sales  increased 1.9% to 77.5% of net sales for the
fiscal  year ended  October 31, 2003 from 75.6% of net sales for the fiscal year
ended  October 31, 2002.  1.5% of the increase  can be  attributed  to increased
material costs  resulting from a change in product mix related to production for
our new European customer,  1.2% of the increase to direct labor costs caused by
the use of  overtime  to  meet  delivery  schedules  required  in part  due to a
recruitment  ban  imposed by the Chinese  government  during the SARS crisis and
0.8% of the  increase  to  transportation  costs,  offset by a 1.5%  decrease in
depreciation charges.

                                       23
<PAGE>

     General and administrative  expenses - General and administrative  expenses
were  $3,487,000  for the fiscal year ended October 31, 2003, and $4,036,000 for
the fiscal year ended  October 31,  2002,  a decrease of 13.6%.  The decrease is
primarily  attributed  to a  decrease  in  amortization  expense  related to our
goodwill which was written off at the end of fiscal 2002.  Significant  elements
of this expense include employee  related  expenses of $1,753,000,  professional
fees of $360,000,  rent,  telephone  and  utilities  of  $183,000,  insurance of
$222,000,  and local  Chinese  government  fees of  $197,000.  The Company  also
reversed  certain  estimated  accruals  that were from its prior  operations  as
Morrow Snow Boards that the Company deemed would  ultimately  not be paid.  This
reversal of the accrual was $150,000.

     Selling,  marketing, and customer service - Selling, marketing and customer
service  expenses were $1,524,000 for the fiscal year ended October 31, 2003 and
$1,440,000  for the fiscal  year ended  October 31,  2002,  an increase of 5.8%.
These increases can be attributed to the opening of the Ann Arbor,  Michigan and
Woking,   Surrey,   United   Kingdom  sales  offices  in  June  and  July  2003,
respectively.  Significant  elements of this expense consist of employee related
expenses of $659,000,  commission  expense of $498,000  and rent of $71,000.  We
believe  the  increase in sales and  marketing  expense is  consistent  with the
anticipated  revenue growth through new customers;  however, we will continue to
monitor sales and marketing expenses as a percentage of revenue.

     Engineering, advanced design and project management expenses - Engineering,
advanced  design and project  management  expenses  were $593,000 for the fiscal
year ended October 31, 2003,  and $691,000 for the fiscal year ended October 31,
2002, a decrease of 14.2%.  The decrease is  attributable  to lower salary costs
realized by  replacement  of  expatriate  engineering  staff with Chinese  based
staff.  We anticipate  increases in engineering  related costs  associated  with
design and process  engineering  services to our clients, as well as our efforts
to team  engineers  with our sales and marketing  efforts to service our new and
existing client base.

     Impairment of goodwill - In October  2001,  we merged into our  predecessor
and were the surviving  corporation.  In accordance  with the provisions of SFAS
No. 121, we were required to periodically  review the operating  environment and
our performance,  including market capitalization, to determine if there are any
grounds for reviewing the carrying value of goodwill and whether  impairment may
exist.

     In October 2002,  after  reviewing both our year end financial  performance
and  losses  and  current  decline  in market  capitalization,  we  applied  the
provisions  of SFAS No. 121 to goodwill  and  recorded an  impairment  charge of
$5,287,000,  which  eliminated  all of our remaining  goodwill and included this
charge as a component of operating expenses in fiscal 2002.

     Goodwill  was  being  amortized  on a  straight-line  basis  over 15 years.
Amortization  expense  charged to  operations  was $432,000 for the period ended
October 31, 2002.

     Impairment  of  machinery - Pursuant to the  provisions  of SFAS No. 121, a
review of the  carrying  value of  long-lived  assets in the  fourth  quarter of
fiscal  2002  concluded  that we could not be certain to  recommence  the use of
certain  equipment  that was  decommissioned  when it became more  economical to
outsource  rather  than  manufacture  in house,  nor did we foresee  significant

                                       24
<PAGE>

proceeds from the sale of such  equipment.  Therefore,  an impairment  charge of
$270,000 was recorded in fiscal 2002.  Reviews in the fiscal 2003 did not reveal
the need for further  reductions  in the carrying  value of fixed  assets,  thus
there was no fixed  asset  impairment  charge  recorded in the fiscal year ended
October 31, 2003, pursuant to SFAS No. 144, which superseded SFAS No. 121.

     Interest  expense - Interest  expense  decreased to $389,000 for the fiscal
year ended October 31, 2003, from $464,000 for the year ended October 31, 2002 a
decrease  of 16.2%.  Although  there was an increase in debt in fiscal 2003 over
2002, the overall  decrease in interest  expense is primarily due to a reduction
in the  average  outstanding  debt  during the year as new debt was added in the
fourth quarter of 2003.

     Other income - Other income for the fiscal year ended  October 31, 2003 was
$220,000.  The  significant  components  included a  write-back  of  $150,000 of
accrued  expenses  related to previous  operations  and $63,000  received from a
sublet of leased  property.  Other income for the fiscal year ended  October 31,
2002 was $170,000.

     Net  loss - The net  loss  for the  year  was  $808,000.  This  was a 41.7%
decrease  compared to the net loss from the fiscal period ended October 31, 2002
of $1,385,000  before the write off of goodwill of $5,287,000 and the impairment
of machinery of $270,000.  The net loss for the year ended  October 31, 2002 was
$6,942,000,  including  impairment  charges for the write off of all goodwill at
the year end and the charge for the  impairment  of  machinery.  The increase in
sales and the decrease in total operating expenses were significant contributors
to the reduction in the net loss.

Liquidity and Capital Resources

     The  Company  and  its   subsidiaries   generated  income  from  continuing
operations of $1,074,000 during the period ended October 31, 2004 and net losses
from continuing  operations of $808,000 and $6,942,000  during the periods ended
October 31, 2003 and 2002,  respectively.  The Company and its subsidiaries also
have an  accumulated  deficit of  $36,579,000  as of October 31, 2004,  of which
$23,833,000 is from  discontinued  operations and $12,746,000 is from continuing
operations.  The  discontinued  operations  are  the  former  operations  of the
snowboard apparel and manufacturing business which ceased operations in 1999.

     The Company  generated  positive net income of  $1,100,000  for fiscal year
2004. During fiscal year 2004, the Company also experienced  significant  growth
in revenue over the prior year,  as revenues  doubled from an expanded  customer
base and that resulted in a higher  utilization of our  manufacturing  capacity.
The significant growth in revenue and customer base required  additional working
capital  due in large part to  addition  of new  customers  with more  favorable
payment terms that outpaced the Company's  ability to renegotiate  payment terms
with our  suppliers.  This  required  additional  working  capital  to  purchase
additional  inventory in advance to meet the increasing  customer  demand.  As a
result,  total net cash used in fiscal year 2004 grew by $2,800,000  from fiscal
year 2003.

                                       25
<PAGE>

     During the third quarter we purchased a color LCD manufacturing line from a
Taiwan company for $6,000,000, and spent approximately $4,000,000 in addition to
the  purchase  price for the  packaging  and  shipment of the  equipment  to our
manufacturing  facility in Shenzhen,  and the  installation  of the equipment at
that  facility,  including  building  expansion  of the  facility to install the
manufacturing  line.  The  addition of the  equipment  provided the Company with
additional  capacity to produce both  monochrome  and color  displays,  and will
allow the Company to attract additional customers. The purchase of the equipment
and installation  represent the majority of our capital  expenditures during the
year.  We anticipate  that  additional  capital  expenditures  of  approximately
$2,000,000 will be required to complete additional  installation of parts of the
manufacturing line, which expenses will continue into early fiscal year 2005.

     The  Company  also  required   capital  to  repay  certain  existing  fixed
obligations,  to provide for additional working capital and to invest in capital
equipment to grow in accordance  with its business plan. To this end the Company
completed the following transactions in the fiscal year ended October 31, 2004:

          o    A $5,000,000 private placement, on December 23, 2003, through the
               sale of 3,333,335 shares of the Company's common stock at $1.50 a
               share. Proceeds, net of expenses of $426,000 were $4,574,002. The
               placement  agent  received an 8%  placement  fee, and a five-year
               warrant to purchase 166,666 shares at $1.75 a share.

          o    A  new  $5,000,000  asset-based  credit  line  with  Wells  Fargo
               Business  Credit,  Inc.  The terms of the  credit  line allow the
               Company to borrow up to  $5,000,000  based on  eligible  accounts
               receivable,  secured by the  Company's  accounts  receivable  and
               assets, and guaranteed in part by an officer of the Company.  The
               credit  facility is for two years,  carries an  interest  rate of
               prime plus 1.25%, and contains certain financial covenants,  such
               as minimum  quarterly net worth,  limitations on investments  and
               acquisitions,  and addition of new debt. The new line replaced an
               existing   domestic  only  receivable  line  and  creates  up  to
               $3,000,000  in  additional  working  capital with more  favorable
               terms.  At October  31,  2004,  approximately  $231,000  remained
               available for use under the asset based or eligible receivables.

          o    A  $20,250,000  private  placement  through the sale of 4,500,000
               shares of the Company's common stock at $4.50 a share.  Proceeds,
               net of expenses of $1,770,000,  were  $18,480,000.  The placement
               agent  received an 8% fee, and no placement  agent  warrants were
               issued in connection with this transaction.

     Based on our cash balances,  line of credit,  expected capital expenditures
associated  with the new  manufacturing  line, and forecasted  working  capital,
Management  believes we have adequate cash resources to fund  operations for the
foreseeable  future.  However,  future cash  forecasts are based on  assumptions
regarding the performance of a new manufacturing  line, and further  assumptions
regarding  working capital needs  associated with  increasing  customer  orders.
Actual  requirements may be materially  different than our forecasts.  To ensure
the company has adequate cash we have begun  negotiations  on a non-asset  based
line of credit with a significantly higher limit.

                                       26
<PAGE>

     In addition  the Company  made an early  repayment of notes due on December
31, 2004,  bearing an interest rate of 12%, in the amount of  $1,524,000.  There
was no  prepayment  penalty  for the  early  payment  and the  Company  saved on
interest expense.

     At October 31,  2004,  the  Company had debt  falling due in fiscal 2005 of
$496,000 and a further  amount of $70,000 due in fiscal 2006.  In addition,  the
Company  had  operating  lease  commitments  that  amounted to  $6,602,000.  The
following table sets forth the amounts:

                                                       Payments Due By Period

                                                        <1       1-3      >3
Dollars in Thousands                 Total             Year     Years    Years
--------------------                 -----             ----     -----    -----
Long Term Debt                        403              403
Capital Lease                         163               93        70
Operating Leases                    6,602              645     1,618     4,339

Long term debt is comprised of a mortgage loan that is collateralized by factory
buildings in Shenzhen PRC. The loan balance of $403,000 is due in June of 2005.

The  company  entered  into a  capital  lease to  license  ERP  software.  It is
anticipated that this system will be implemented during fiscal year 2005.

Operating leases are comprised of the following:

          i.   In March 2000, and as amended,  the Company entered into a 5-year
               lease for office space in Rocklin,  California. The payment terms
               are $73,000 per year.

          ii.  In February  2003 the  Company  entered  into a 2-year  lease for
               office  space in Hong Kong.  The  payment  terms are  $15,000 per
               year.

          iii. The  Company has entered  into a lease  agreement  for a workers'
               dormitory in Shenzhen,  PRC. The lease on the workers'  dormitory
               expires on May 1, 2020 and costs $233,700 per year.

          iv.  The  Company  has  entered  into  various  lease  agreements  for
               individual employee quarters in Shenzhen, PRC. The lease terms of
               these quarters  range from six to sixty months.  The yearly lease
               payments  range from  $1,800 to  $23,100.  During the fiscal year
               ended  October  31,  2004,  the Company  entered  into six of the
               aforementioned leases with terms of between six and twelve months
               and yearly lease payments of between $1,500 and $13,000.

          v.   In November 2002 the Company  entered into a one-year lease at an
               annual cost of $40,600 for housing  accommodation  for an officer
               of the  Company.  In August  2004 the lease term was  extended to
               expire in July 2005.

                                       27
<PAGE>

          vi.  In July 2004 the Company  entered into a ten-year lease agreement
               for additional factory and dormitory space in Shenzhen,  PRC. The
               lease expires on August 31, 2014 and costs $283,000 per year. The
               lease has an option to renew for an  additional  ten years at the
               same terms and lease  rate.  The  expense  recorded in the fiscal
               year ended October 31, 2004 was $47,000.

                                  RISK FACTORS

     Investment in our common stock involves risk. You should carefully consider
the risks we describe below before  deciding to invest.  The market price of our
common stock could  decline due to any of these  risks,  in which case you could
lose all or part of your  investment.  In assessing these risks, you should also
refer  to  the  other  information  included  in  this  report,   including  our
consolidated  financial  statements and the  accompanying  notes. You should pay
particular  attention to the fact that we are a holding company with substantial
operations in China and are subject to legal and regulatory environments that in
many respects differ from that of the U.S. Our business,  financial condition or
results of operations  could be affected  materially and adversely by any of the
risks  discussed  below and any others not foreseen.  This  discussion  contains
forward-looking statements.

                          Risks Related to Our Business

We have just purchased a Color LCD line.

     In June 2004, we contracted for the purchase of a used color LCD line on an
"as is, where is" basis. The line has now been installed in new factory premises
on property in close  proximity to our existing campus on which we have executed
a rental  agreement  for a period of ten years  with an option to extend  for an
additional ten years at the current rent. We have only just begun test operation
of the line and do not yet have reliable  information on the yield or throughput
capacity  achievable  in  mass  production,  although  we  do  have  statistical
information  available from the seller. We have not as yet produced samples that
have been accepted by customers;  however,  we have received  prototyping orders
from  existing  customers.  We have also  determined  that this line can produce
monochrome  displays and have identified  monochrome  projects to be run on this
line. If our color yields are not as expected, the resulting lower margins would
adversely  affect  operating  results in future  periods.  Adverse trends in the
electronics industry may adversely affect our operating results.

     Our business depends on the electronics  industry which is subject to rapid
technological  change,  short  product  life  cycles  and margin  pressures.  In
addition,  the electronics industry has been cyclical and subject to significant
downturns characterized by diminished product demand,  production over-capacity,
and accelerated erosion of average selling prices. Economic conditions affecting
the electronics  industry in general or our major customers may adversely affect
our  operating  results.  If our  customers'  products  fail to gain  widespread
commercial  acceptance,  become  obsolete,  or  otherwise  suffer from low sales
volume, our business and operating results would be negatively impacted.

                                       28
<PAGE>

A few customers and applications account for a significant portion of our sales.

     In fiscal 2004,  five  customers  contributed  62% of total sales  revenue,
including one customer which contributed 16% of our revenue.  This compares with
fiscal 2003 when five customers  contributed  48% of our total sales revenue and
one customer contributed 29% of our revenue. Under present conditions,  the loss
of any one of these customers  could have a material effect on our  performance,
liquidity and  prospects.  To reduce this risk, we continue to emphasize  custom
devices for which customer  relationships  are generally  longer term with lower
probability of cancellation.

We do not have long-term purchase commitments from our customers and may have to
rely on customer forecasts.

     Custom  manufacturers  for OEMs and EMSs must  provide  increasingly  rapid
product turnaround and respond to increasingly  shorter lead times. A variety of
conditions,  both specific to individual  customers and generally  affecting the
demand  for their  products,  may cause  customers  to  cancel,  reduce or delay
orders.  Cancellations,  reductions or delays by a significant  customer or by a
group of customers would result in reduced  revenue,  and could result in excess
and obsolete  inventory and/or unabsorbed  manufacturing  capacity,  which would
adversely affect our business. On occasion, customers require rapid increases in
production,  which can strain our resources and reduce our margins.  Although we
have increased our manufacturing  capacity, we may lack sufficient capacity at a
given time to meet our customers' demands if they exceed anticipated  levels. We
strive for rapid  response to customer  demand,  which can lead to reduced labor
efficiency, purchasing efficiency and increased material costs.

     Our  customers  generally  do not  provide us with firm,  long-term  volume
purchase  commitments.  In addition,  the worldwide  product  demand have led to
radically shortened lead times on purchase orders as rapid product cycles became
the norm.  Although we sometimes  enter into  manufacturing  contracts  with our
customers,  these contracts clarify order lead times,  inventory risk allocation
and similar  matters  rather than  provide  firm,  long-term  commitments.  As a
result,  customers can generally cancel purchase  commitments or reduce or delay
orders  at any time.  The large  percentage  of our  sales to  customers  in the
electronics industry;  which is subject to severe competitive  pressures,  rapid
technological  change and product  obsolescence,  increases  our  inventory  and
overhead risks.

     In  addition,  we  make  significant  and  material  decisions,   including
determining  the levels of  business  that we will seek and  accept,  production
schedules, component procurement commitments,  facility requirements,  personnel
needs,  and other  resource  requirements,  based on our  estimates  of customer
requirements.  The  short-term  nature  of our  customers'  commitments  and the
possibility of rapid changes in demand for their products  reduce our ability to
estimate accurately the future requirements of those customers.  Because many of
our costs and operating  expenses are fixed, a reduction in customer  demand can
harm our gross margins and operating results. In order to transact business,  we
assess the integrity and creditworthiness of our customer and may; based on this
assessment, agree to amortize design, development and set up costs over time and
enter into purchase commitments with suppliers.  Such assessments are not always
accurate  and expose us to  potential  costs,  including  the write off of costs
incurred and inventory obsolescence.  We may also occasionally place orders with
suppliers  based  on a  customer's  forecast  or in  anticipation  of an  order.

                                       29
<PAGE>

Additionally,  from  time to  time,  we may  purchase  quantities  greater  than
customer  orders to secure more  favorable  pricing,  delivery or credit  terms.
These purchases can expose us to losses from cancellation  penalties,  inventory
carrying costs or inventory obsolescence.

Failure  to  optimize  our  manufacturing  potential  and cost  structure  could
materially and adversely affect our business and operating results.

     We strive to fully utilize the manufacturing capacity of our facilities but
may not do so on a  consistent  basis,  particularly  as we have  committed to a
ten-year lease of new facilities and completed the purchase of a second LCD line
primarily for the production of color displays.  Our factory utilization will be
dependent  on our success in acquiring  new business for the expanded  capacity,
predicting  volatility,  timing  volume sales to our  customers,  balancing  our
productive resources with product mix, and planning  manufacturing  services for
new  or  other  products  that  we  intend  to  produce.   Demand  for  contract
manufacturing of these products may not be as high as we expect, and we may fail
to  realize  the  expected  benefit  from our  investment  in our  manufacturing
facilities.  Our  profitability  and operating results are also dependent upon a
variety of other  factors,  including:  utilization  rates of our  manufacturing
lines,  downtime due to product changeover,  impurities in raw materials causing
shutdowns, maintenance of contaminant-free operations and availability of power,
water and labor resources.

     Moreover,  our cost structure is subject to fluctuations  from inflationary
pressures in China and other geographic regions where we conduct business. China
is currently  experiencing  dramatic growth in its economy. This growth may lead
to  continued  pressure  on wages and  salaries  that may  exceed  increases  in
productivity.  In  addition,  these  may  not  be  compensated  for  and  may be
exacerbated by currency movements.  We are also exposed to movement in commodity
prices,  particularly  the  cost  of  electrical  power  for  our  manufacturing
facilities.

We face intense  competition,  and many of our  competitors  have  substantially
greater resources than we do.

     We operate in a  competitive  environment  that is  characterized  by price
deflation and  technological  change.  We compete with major  international  and
domestic companies.  Our major competitors include BYD, Data Image, Data Vision,
Hantronics, Ocular, Optrex, Tian Ma, Truly Semiconductors,  Limited, Varitronix,
Ltd.,  Wintek  Corporation,  and other similar  companies  primarily  located in
Japan,  Taiwan,  Korea,  Hong Kong and China.  Our  competitors may have greater
market recognition and substantially  greater financial,  technical,  marketing,
distribution,  purchasing, manufacturing,  personnel and other resources than we
do.  Furthermore,  some of our competitors have  manufacturing  and sales forces
that are  geographically  diversified,  allowing  them to reduce  transportation
expenses,  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 we
do and to offer a broader  range of display  devices  to our  target  customers.
Other  emerging  companies or companies in related  industries may also increase
their  participation  in the  display and display  module  markets,  which would
intensify competition in our markets.

                                       30
<PAGE>

We depend on the market acceptance of the products of our customers.

     Currently,  we do not sell  products to end users.  Instead,  we design and
manufacture  various  display product  solutions that our customers  incorporate
into their products.  As a result,  our success depends almost entirely upon the
widespread  market  acceptance  of  our  customers'  products.  Any  significant
slowdown in the demand for their products would  adversely  affect our business.
Therefore,  we must identify  industries that have significant  growth potential
and  establish  strong,  long-term  relationships  with  OEMs  and EMSs in those
industries.  Our failure to identify potential growth opportunities or establish
these relationships would adversely affect our business.

We extend credit to our customers and may not be able to collect all receivables
due to us.

     We extend credit to our customers  based on assessments of their  financial
circumstances,  generally without requiring  collateral.  Our overseas customers
may be subject to economic  cycles and  conditions  different  from those of our
U.S. customers.  We may also be unable to obtain satisfactory credit information
or adequately secure our credit risk for some of these overseas  customers.  The
extension  of credit  presents an exposure to risk of  uncollected  receivables.
Additionally, the collectable amounts may not realize the amounts anticipated in
U.S.  dollar terms when  denominated  in a foreign  currency.  While the Company
maintains  credit  insurance  on  all  of its  accounts  receivable,  collection
difficulties  could result in the  insurance not being renewed which may have an
affect on our  liquidity as we borrow  under an asset based  credit line,  under
which uncollected  receivables are a major asset and our collection record a key
indicator of  performance  to our lender.  In the fiscal year ended  October 31,
2004,  the Company  recorded  expenses of $82,000  related to the  extension  of
credit.

We may need to produce higher-end products to remain competitive.

     Our future success may be partly  dependent upon our ability to effectively
offer higher-end  products that we do not currently supply,  including thin film
transistor,  ("TFT"),  and organic liquid  emissive  displays,  ("OLED"),  as we
believe the high volume  markets are moving in these  directions.  If we fail to
offer more complex higher-end products that are desired by the marketplace,  our
competitive position could decline.

The growth of our business depends on our ability to finance new products and
services.

     We operate in a rapidly  changing  industry.  Technological  advances,  the
introduction of new products and new design and  manufacturing  techniques could
adversely  affect  our  business  unless  we are able to  adapt to the  changing
conditions.  To remain competitive,  we must continue to incur significant costs
in product  development,  equipment,  facilities and invest in working  capital.
These  costs may  increase,  resulting  in  greater  fixed  costs and  operating
expenses.  As a result, we could be required to expend substantial funds for and
commit significant resources to the following:

     o    research and development  activities on existing and potential product
          solutions;

     o    additional engineering and other technical personnel;


                                       31
<PAGE>

     o    advanced design, production and test equipment;

     o    manufacturing services that meet changing customer needs;

     o    technological changes in manufacturing processes; and

     o    manufacturing capacity.

     Our future  operating  results will depend to a  significant  extent on our
ability  to  continue  to  provide  new   product   solutions   and   electronic
manufacturing  services  that compare  favorably on the basis of time to market,
cost and performance with the design and manufacturing  capabilities of OEMs and
competitive  third-party  suppliers  and  technologies.  Our failure to increase
sufficiently  our net sales to offset  these  increased  costs  would  adversely
affect our operating results.

We are subject to lengthy development periods and product acceptance cycles.

     We sell our products and services to OEMs and EMSs who on sell to OEMs, who
then incorporate  them into the products they sell. They make the  determination
during their product  development  programs  whether to incorporate our products
and services or pursue other alternatives.  This requires us to make significant
investments  of time and  resources  well before our customers  introduce  their
products  and  before  we can  be  sure  that  our  efforts  will  generate  any
significant  sales or that we will even recover our initial  investment  of time
and resources.

     During a customer's entire product  development  process,  we face the risk
that our products will fail to meet technical,  performance or cost requirements
or that they could be replaced by  competing  products.  Even if we complete our
design or production  processes in a manner  satisfactory  to our customer,  the
customer may delay or terminate its product development  efforts. The occurrence
of any of these events could adversely affect our operating results. The lengthy
development  period  also  means that it is  difficult  to  immediately  replace
unexpected losses of existing or expected business.

We are subject to lengthy sales cycles.

     Our focus on developing a customer base that requires  custom  displays and
devices means that it may take longer to develop strong  customer  relationships
or partnerships.  Moreover,  factors specific to certain industries also have an
impact on our sales cycles.  In  particular,  those  customers who operate in or
supply to the medical and automotive  industries  require longer sales cycles as
qualification processes are longer and more rigorous,  often requiring extensive
field audits.  These lengthy and challenging sales cycles may mean that it could
take longer before our sales and marketing efforts result in revenue, if at all.

                                       32
<PAGE>

Products we manufacture may contain design or manufacturing defects, which could
result in reduced demand for our services and customer claims.

     We manufacture products to our customers' requirements, which can be highly
complex and may at times contain design or manufacturing errors or failures. Any
defects  in  the  products  we   manufacture,   whether   caused  by  a  design,
manufacturing  or  component  failure or error,  may result in returns,  claims,
delayed shipments to customers or reduced or cancelled customer orders. If these
defects occur,  we will incur  additional  costs and if in large quantity or too
frequent,  we may sustain loss of  business,  loss of  reputation  and may incur
liability.

We could become involved in intellectual property disputes.

     We do  not  have  any  patents,  licenses  or  trademarks  material  to our
business.  Instead,  we  rely  on  trade  secrets,  industry  expertise  and our
customers'  sharing  of  intellectual  property  with  us.  We do not  knowingly
infringe  patents,  copyrights or other  intellectual  property  rights owned by
other  parties;  however,  in the  event  of an  infringement  claim,  we may be
required  to spend a  significant  amount of money to defend a claim,  develop a
non-infringing  alternative or to obtain  licenses.  We may not be successful in
developing such an alternative or obtaining  licenses on reasonable terms, if at
all. Any litigation,  even without merit,  could result in substantial costs and
diversion  of our  resources  and could  materially  and  adversely  affect  our
business and operating results.

Our customers may decide to design and/or manufacture the products that they
currently purchase from us.

     Our competitive position could also be adversely affected if one or more of
our customers decide to design and/or manufacture their own displays and display
modules.  We may  not be  able  to  compete  successfully  with  these  in-house
developments by our customers.

We may develop new products that may not gain market acceptance.

     We operate in an industry characterized by frequent and rapid technological
advances,  the  introduction  of new products  and new design and  manufacturing
technologies.  As a result,  we may be  required  to expend  funds and to commit
resources to research and development activities,  possibly requiring additional
engineering and other technical  personnel;  purchasing new design,  production,
and test equipment; and continually enhancing design and manufacturing processes
and techniques.  We may invest in equipment employing new production  techniques
for existing products and new equipment in support of new technologies that fail
to generate adequate returns on the investment due to insufficient productivity,
functionality  or market  acceptance of the products for which the equipment may
be used. We could therefore incur  significant sums in design and  manufacturing
services for new product  solutions  that do not result in  sufficient  revenue,
which  would  adversely  affect  our  future  operating  results.   Furthermore,
customers  may  change or delay  product  introductions  or  terminate  existing
products  without  notice for any number of reasons  unrelated to us,  including
lack of market  acceptance  for a product.  Our 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.

                                       33
<PAGE>

Our component and materials suppliers may fail to meet our needs.

     We do  not  have  long-term  supply  contracts  with  the  majority  of our
suppliers  or for  specific  components.  This  generally  serves to reduce  our
commitment risk but does expose us to supply risk and to price increases that we
may not be able to pass on to our customers.  In our industry,  at times,  there
are  shortages  of some of the  materials  and  components  that we use. In some
cases,  supply  shortages  and delays in delivery  have  resulted  in  curtailed
production or delays in production, which contribute to an increase in inventory
levels and loss of profit.  We expect that shortages and delays in deliveries of
some  components  will  continue to occur from time to time. If we are unable to
obtain sufficient components on a timely basis, we may experience  manufacturing
delays, which could harm our relationships with current or prospective customers
and reduce our sales.  We also depend on a small number of suppliers for certain
supplies that we use in our  business.  If we are unable to continue to purchase
components  from  these  limited  source   suppliers  or  identify   alternative
suppliers,  our business and operating results would be materially and adversely
affected.  We may also not be able to obtain as competitive  pricing for some of
our supplies as our competitors.  Moreover,  some suppliers,  for example, those
who sell  integrated  circuits,  could  be  preferential  in their  sales to our
competitors, who may have greater buying power or leverage in negotiations.

We are exposed to the limit on the availability and price of electricity.

     The primary energy supply to our  operations is electricity  from the local
power company.  There is not an extensive and resilient connection to a national
or regional power grid.  Thus, we may be exposed to power outages and shut downs
which our standby  generators  would only partially  mitigate.  Fluctuations  in
world oil  prices  and  supply  could also work to affect our supply and cost of
electricity.

We are exposed to the limit on the availability of water.

     We depend on a continuous supply of water in our  manufacturing  processes.
To  date  when we have  experienced  shortages,  we  have  been  able to  obtain
supplementary supplies from alternative local sources. We cannot be certain that
such an  arrangement  will  always  be  available  and that no  interruption  to
production will result.

Future outbreaks of severe acute respiratory syndrome or other communicable
diseases may have a negative impact on our business and operating results.

     In 2003, several economies in Asia, including Hong Kong and southern China,
where our operations are located,  were affected by the outbreak of severe acute
respiratory  syndrome, or SARS. If there is a recurrence of an outbreak of SARS,
or  similar  infectious  or  contagious  diseases  such as avian  flu,  it could
adversely affect our business and operating results.  For example, a future SARS
outbreak could result in  quarantines or closures to some of our factories,  and
our operations could be seriously disrupted as the majority of our work force is
housed in two dormitories.  In addition, an outbreak could negatively affect the
willingness of our customers and suppliers to visit our facilities.

                                       34
<PAGE>

Our results could be harmed if compliance with new environmental regulations
becomes too burdensome.

     Our  manufacturing  processes  result in the  creation of small  amounts of
hazardous and/or toxic wastes,  including various gases, epoxies, inks, solvents
and other organic  wastes.  We are subject to Chinese  governmental  regulations
related to the use, storage and disposal of such hazardous  wastes. We also have
our own standby  electrical power generation plant that operates on diesel fuel.
The amounts of our hazardous waste are expected to increase in the future as our
manufacturing  operations  increase,  and  therefore,  our cost of compliance is
likely to increase.  In addition,  sewage produced by dormitory facilities which
house  our  labor  force is  coming  under  greater  environmental  legislation.
Although we believe we are operating in compliance with applicable environmental
laws,  there is no assurance that we will be in compliance  consistently as such
laws and regulations or their interpretation and implementation  change. Failure
to comply with environmental regulation could result in the imposition of fines,
suspension or halting of production or closure of manufacturing operations.

From time-to-time, we may seek additional equity or debt financing and may not
be able to secure this financing at acceptable terms.

     From  time-to-time,  we may seek  additional  equity or debt  financing  to
provide for the capital  expenditures  required to maintain or expand our design
and production  facilities and equipment and/or working  capital,  as well as to
repay loans if our cash flow from operations is insufficient.  We cannot predict
with  certainty the timing or amount of any such capital  requirements.  If such
financing is not available on satisfactory terms, we may be unable to expand our
business  or to develop  new  business at the rate  desired,  and our  operating
results may suffer.

We must effectively manage our growth.

     Failure  to manage  our  growth  effectively  could  adversely  affect  our
operations. We have increased the number of our manufacturing locations from one
to two and are increasing the number of our  manufacturing  and design  programs
and plan to expand  further  the number and  diversity  of our  programs  in the
future  and  may  further  increase  the  number  of  locations  from  which  we
manufacture and sell. Our ability to manage our planned growth  effectively will
require us to:

    o    enhance our operational, financial and management systems;

    o    expand our facilities and equipment; and

    o    successfully hire, train and motivate additional employees, including
         the technical personnel necessary to operate our production facilities.

     An expansion and  diversification  of our product range,  manufacturing and
sales  locations and customer base would result in increases in our overhead and
selling  expenses.  We may also be  required  to  increase  staffing  and  other
expenses as well as our  expenditures on plant,  equipment and property in order
to meet the anticipated demand of our customers.  Customers,  however, generally

                                       35
<PAGE>

do not  commit  to firm  production  schedules  for  more  than a short  time in
advance.  Any increase in  expenditures in anticipation of future orders that do
not materialize  would adversely  affect our  profitability.  Customers also may
require  rapid  increases  in  design  and  production  services  that  place an
excessive short-term burden on our resources.

Potential strategic alliances may not achieve their objectives.

     We are  currently  exploring  strategic  alliances  designed  to enhance or
complement  our  technology  or to  work in  conjunction  with  our  technology,
increase our manufacturing capacity, provide additional know-how,  components or
supplies and develop,  introduce and distribute  products and services utilizing
our  technology  and  know-how.  Any  strategic  alliances  entered into may not
achieve their strategic  objectives,  and parties to our strategic alliances may
not perform as contemplated.

We may not be able to retain, recruit and train adequate management and
production personnel.

     Our  continued  operations  are  dependent  upon our  ability to  identify,
recruit and retain  adequate  management and production  personnel in China.  We
require  trained  graduates of varying levels and experience and a flexible work
force of  semi-skilled  operators.  Many of our current  employees come from the
more remote regions of China as they are attracted by the wage  differential and
prospects  afforded by Shenzhen and our  operations.  With the growth  currently
being experienced in China and competing opportunities for our personnel,  there
can be no guarantee that a favorable  employment  climate will continue and that
wage rates in Shenzhen or China as a whole will  continue to be  internationally
competitive.

We are at risk of double taxation due to transfer pricing.

     None of the asset based finance or factoring lines we have established will
accept receivables from our Chinese subsidiaries as collateral for advances;  we
therefore  invoice our non-Chinese  customers through our companies in Hong Kong
and the U.S. As a result,  we have  intercompany  invoicing  whereby our Chinese
subsidiaries  invoice  the Hong  Kong and U.S.  entities  who then  invoice  our
customers  for  sales  rendered.  As  required  by the tax  authorities  in each
jurisdiction,  we seek to apply arm's length  pricing to this process.  Should a
tax authority in any  jurisdiction  consider the pricing not to be arm's length,
it may deem the prices  charged to be different  from those we have applied.  If
this decision were to be applied  unilaterally,  it could lead to an increase in
our  overall tax  expenses.  In  addition,  we may have to expend  resources  in
defending our positions, irrespective of the outcome determined.

We are installing a new ERP system and are required to comply with the
provisions of the Sarbanes Oxley Act of 2002.

     We are working  diligently  toward  evaluating and documenting our internal
control  systems in order to allow  management to report on, and our independent
auditors  to attest  to, our  internal  control  over  financial  reporting,  as
required by Section 404 of the Sarbanes-Oxley  Act of 2002. In addition,  we are
in the process of converting our accounting and record-keeping software to a new

                                       36
<PAGE>

software system.  We cannot assure the  implementation of the new system will be
completed on a timely basis. In addition, we may experience  difficulties in the
transition to the new software that could affect our internal  control  systems,
processes and  procedures.  Should we have to defer part of the  implementation,
reliance on our current system for the purpose of complying with  Sarbanes-Oxley
Section 404 will require significant effort in a compressed  timeframe,  as well
as result in our incurring costs to comply with Sarbanes-Oxley  Section 404 that
will duplicate  compliance costs that will be associated with the implementation
of our new system.  There can be no assurances  that the evaluation  required by
Sarbanes-Oxley  Section 404 will not result in the identification of significant
control  deficiencies  or that  our  auditors  will be  able  to  attest  to the
effectiveness of our internal control over financial reporting.

We are at risk for potential product liability claims not covered by insurance
from our discontinued snowboard business.

     We were acquired by Morrow  Snowboards,  Inc., which  previously  designed,
manufactured  and  distributed  snowboards and apparel.  Those  operations  were
discontinued in 1999, but the snowboards previously manufactured and distributed
may still be in use.  To the extent  there is an accident  involving  the use of
those old snowboards,  we could be named in a civil action  alleging  liability.
Although  we  do  not  think   there  are  defects  in  the  boards   previously
manufactured,  it is not  uncommon  for  an  injured  snowboarder  to  name  the
manufacturer when the injuries are serious. We are currently not insured against
any such claims and although we do not believe such actions are likely given the
length of time that has lapsed since we last manufactured snowboards,  there are
no assurances that such actions will not result in the future.  To the extent an
action is brought and  successfully  prosecuted  to a judgment,  the claim could
have a material affect on our financial performance.

                    Risks Related to International Operations

We are dependent on our Chinese manufacturing operations.

     Our  current  manufacturing  operations  are  located  in China,  our sales
offices  are in the U.S.,  Europe,  Hong  Kong,  Singapore  and  China,  and our
administrative  offices are in the U.S. The geographical distances between these
facilities  create a number of  logistical  and  communications  challenges.  In
addition,  because of the location of the manufacturing  facilities in China, we
could be  affected  by  economic  and  political  instability  there,  including
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 collecting accounts receivable,
and the burdens of cost and compliance with a variety of foreign laws. Moreover,
inadequate  development  or maintenance of  infrastructure  in China,  including
adequate power and water supplies, transportation, raw materials availability or
the deterioration in the general political, economic or social environment could
make it  difficult,  more  expensive  and  possibly  prohibitive  to continue to
operate our manufacturing facilities in China.

The Chinese government could change its policies toward, or even nationalize,
private enterprise, which could harm our operations.

                                       37
<PAGE>

         Over the past several years, the Chinese government has pursued
economic reform policies, including the encouragement of private economic
activities and decentralization of economic regulation. The Chinese government
may not continue to pursue these policies or may significantly alter them to our
detriment from time to time without notice. Changes in policies by the Chinese
government resulting in changes in laws, regulations, their interpretation, or
the imposition of confiscatory taxation, restrictions on currency conversion or
imports and sources of supply could materially and adversely affect our business
and operating results. The nationalization or other expropriation of private
enterprises by the Chinese government could result in the total loss of our
investment in China.

The Chinese legal system has inherent uncertainties that could materially and
adversely impact our ability to enforce the agreements governing our operations.

         We lease the land on which our factories in China are located. The
performance of the agreements and the operations of our factories are dependent
on our relationship with the local government. Our operations and prospects
would be materially and adversely affected by the failure of the local
government to honor our agreements or an adverse change in the laws governing
them. In the event of a dispute, enforcement of these agreements could be
difficult in China. China tends to issue legislation which is subsequently
followed by implementing regulations, interpretations and guidelines that can
render immediate compliance difficult. Similarly, on occasion, conflicts are
introduced between national legislation and implementation by the provinces that
take time to reconcile. These factors can present difficulties in our
compliance. Unlike the U.S., China has a civil law system based on written
statutes in which judicial decisions have limited precedential value. The
Chinese government has enacted laws and regulations to deal with economic
matters such as corporate organization and governance, foreign investment,
commerce, taxation and trade. However, its experience in implementing,
interpreting and enforcing these laws and regulations is limited, and our
ability to enforce commercial claims or to resolve commercial disputes in China
is therefore unpredictable. These matters may be subject to the exercise of
considerable discretion by agencies of the Chinese government, and forces and
factors unrelated to the legal merits of a particular matter or dispute may
influence their determination.

Because our operations are international, we are subject to significant
worldwide political, economic, legal and other uncertainties.

     We are  incorporated  in the U.S.  and have  subsidiaries  in The  People's
Republic  of China,  Hong  Kong,  and the  British  Virgin  Islands.  Because we
manufacture all of our products in The People's Republic of China, substantially
all of the net book value of our total fixed  assets and a major  portion of our
inventory is located there. However, we sell our products to customers worldwide
with  concentrations  in Hong Kong,  North  America,  Europe,  Japan,  China and
Southeast  Asia and may thus have  receivables  in and goods in transit to those
locations.  Protectionist  trade  legislation in the U.S. or foreign  countries,
such as a change in export or import legislation,  tariff or duty structures, or
other trade  policies,  could  adversely  affect our ability to sell products in
these  markets,  or even to purchase raw  materials  or  equipment  from foreign
suppliers.  Moreover,  we are subject to a variety of U.S. laws and regulations,
changes to which may affect our ability to transact  business with  customers or
in certain product categories.

                                       38
<PAGE>

     We are also  subject to  numerous  national,  state and local  governmental
regulations, including environmental, labor, waste management, health and safety
matters  and  product  specifications.  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. These include local labor laws and regulations,
which may  require  substantial  resources  for  compliance.  We are  subject to
significant  government  regulation with regard to property ownership and use in
connection with our leased facilities in China,  import  restrictions,  currency
restrictions and restrictions on the volume of domestic sales and other areas of
regulation, all of which impact our profits and operating results.

We face risks associated with international trade and currency exchange.

     We  transact  business  in a  variety  of  currencies  including  Hong Kong
dollars,  Japanese Yen,  Singapore  dollars,  U.S.  dollars and the Chinese Yuan
Renminbi,  or RMB.  Increased sales to Europe may result in receivables by us in
other currencies,  such as the Euro. Although we transact business predominantly
in U.S.  and Hong Kong  dollars,  we collect a portion of our  revenue and incur
approximately  30% of our  operating  expenses,  such  as  payroll,  land  rent,
electrical  power and other costs  associated  with  running our  facilities  in
China, in RMB. Adverse  movements between the selling currency and the RMB would
have a material  impact on our  profitability.  Changes in exchange  rates would
affect the value of deposits of  currencies  we hold.  The RMB has been  broadly
stable against U.S. dollar in the past three years, but is not fully convertible
and fully traded. It is not currently  possible to hedge against movement in the
RMB exchange rate through  conventional means; we are thus not hedged and remain
exposed to movement in the exchange  rate.  The  exchange  rate of the Hong Kong
dollar has been  pegged to the U.S.  dollar and has not in the past  presented a
currency  exchange risk,  though this could change in the future. We also do not
currently  hedge against  exposure to other  currencies.  We cannot predict with
certainty future exchange rates and thus their impact on our operating results.

     We also  had  long  term  debt,  denominated  in RMB,  repayable  in  equal
installments  over three years,  of RMB 10 million (U.S. $1.2 million at current
exchange rates).  As of October 31, 2004, one installment of RMB 3.3 million was
outstanding  and is due for  repayment in June 2005. An increase in the value of
the RMB against  the U.S.  dollar  would  result in a  translation  loss in U.S.
dollar  terms that would be realized as U.S.  dollars  from sales  revenues  are
utilized to meet the repayment obligation.

Changes  to  Chinese  tax  laws  and  heightened  efforts  by  the  Chinese  tax
authorities to increase revenues could subject us to greater taxes.

     Under applicable Chinese law, we have been afforded a number of profits tax
concessions  by, and tax refunds from,  Chinese tax authorities on a substantial
portion of our operations in China.  However,  the Chinese tax system is subject
to substantial uncertainties with respect to interpretation and enforcement. The
Chinese  government has attempted to augment its revenues through heightened tax
collection efforts.  Continued efforts by the Chinese government to increase tax
revenues  could  result  in  revisions  to or  changes  to  tax  laws  or  their
interpretation,  which  could  increase  our future tax  liabilities  or deny us
expected concessions or refunds.

                                       39
<PAGE>

                           Risks Related to Our Shares

The  concentration  of share ownership by our officers and directors allows them
to  control  or  substantially   influence  the  outcome  of  matters  requiring
shareholder approval.

     As of October 31, 2004, our officers and directors as a group  beneficially
owned  approximately  16.3% of our common shares. As a result,  acting together,
they may be able to control or  substantially  influence  the outcome of matters
requiring approval by our shareholders,  including the election of directors and
approval of significant corporate transactions.

We do not pay cash dividends.

     We have never paid any cash  dividends  on our common stock and may not pay
cash  dividends  in the  future.  Instead,  we intend to apply  earnings  to the
expansion  and  development  of  our  business.  Thus,  the  liquidity  of  your
investment is dependent upon your ability to sell stock at an acceptable  price.
The price can go down as well as up and may limit your  ability  to realize  any
value from your investment, including the initial purchase price.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currency Fluctuations

     We sell a majority of our products in U.S. dollars and pay for our material
components in U.S. dollars, Hong Kong dollars,  Chinese RMB and Japanese yen. We
pay  labor  costs  and  overhead  expenses  in U.S.  dollars,  RMB and Hong Kong
dollars.

     The exchange rate of the Hong Kong dollar to the U.S. dollar has been fixed
by the Hong Kong  government  since  October  1983 at  approximately  HK$7.80 to
US$1.00 through the currency  issuing banks in Hong Kong and accordingly has not
in the past presented a currency  exchange risk. This could change in the future
as there has been  discussion in some circles  concerning  the advantages of the
floating rate.

     Effective January 1, 1994, China adopted a floating currency system whereby
the  official  exchange  rate  equaled  the  market  rate.  Since the market and
official RMB rates were  unified,  the value of the RMB against the U.S.  dollar
has been  stable.  There is  currently  pressure  being  exerted by the U.S. and
others  for the RMB to be  permitted  to float  more  freely  but it is  unclear
whether this would lead to an upward  movement in the exchange  rate between the
RMB and the U.S. dollar. It is not currently  possible to hedge against movement
in the RMB exchange rate through  conventional means. We are thus not hedged and
remain exposed to movement in the exchange rate. We incur  approximately  30% of
our expenses in RMB and have negligible RMB revenue; an increase in the value of
the RMB would thus have an adverse  affect on our operating  margins and minimal
effect on our monetary assets denominated in RMB as cash holdings broadly equate
to the remaining  installment  of RMB 3.3 million (US$ 403,000 at current rates)
due on a three mortgage repayable in June 2005.

                                       40
<PAGE>

     We also  incur  liabilities  in  Japanese  Yen  from  the  purchase  of raw
materials.  We do not currently hedge against this exposure and are thus exposed
to exchange rate movement at present.

Interest Rate Risk

     Our  principal  exposure  to  interest  rate  changes is on the asset based
lending line which is based on prime rates in the U.S.

Inflation Risk

     Although inflation has remained low in recent years in the markets in which
we currently sell and expect to do so for the  foreseeable  future,  the general
inflation  rate in China is higher with wage  inflation  expected to run between
five  and  ten  percent  annually.  Such  inflation  represents  a  risk  to our
profitability  if sustained  and not  compensated  for by a movement in exchange
rates or productivity improvements.

                                       41
<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                TABLE OF CONTENTS

                                                                            Page

Report of Independent Registered Public Accounting Firm                      F-2

Consolidated Financial Statements

   Consolidated Balance Sheets as of October 31, 2004 and 2003               F-3

   Consolidated Statements of Operations for the year
      ended October 31, 2004, the year ended October 31, 2003
      and the year ended October 31, 2002                                    F-4

   Consolidated Statements of Stockholders' Equity for the year
      ended October 31, 2004, the year ended October 31, 2003
      and the year ended October 31, 2002                                    F-5

   Consolidated Statements of Cash Flows for the year
      ended October 31, 2004, the year ended October 31, 2003
      and the year ended October 31, 2002                                    F-6

   Notes to Consolidated Financial Statements                                F-7

Supplementary Information                                                   F-32



                                      F-1
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors and Shareholders of
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, 2004 and
2003 and the related consolidated statements of operations, stockholders' equity
and cash  flows,  for each of the three  years in the period  ended  October 31,
2004. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of International  DisplayWorks,
Inc.  and  subsidiaries  as of October  31, 2004 and 2003 and the results of its
operations  and its cash flows for each of the three  years in the period  ended
October 31, 2004, in conformity with accounting principles generally accepted in
the United States of America.

In connection with our audit of the consolidated  financial  statements referred
to above, we have audited Schedule II - Valuation and Qualifying  Accounts,  for
each of the three years in the period  ended  October 31,  2004.  In our opinion
this  schedule  presents  fairly,  in all  material  respects,  the  information
required to be set forth therein.


/S/ GRANT THORNTON

Hong Kong
December 8, 2004



                                      F-2

<PAGE>
<TABLE>
<CAPTION>
            <C>                                                                         <C>                      <C>

                                    INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                                               CONSOLIDATED BALANCE SHEETS
                                            (In Thousands, Except Share Data)

                                                                                 --------------------    ------------------
                                         ASSETS                                      October 31,            October 31,
                                         ------                                          2004                   2003
                                                                                 --------------------    ------------------
Current assets:
      Cash and cash equivalents
         Cash in banks                                                            $           8,187       $        1,178
         Cash in commercial paper                                                             1,999                    -
                                                                                 --------------------    ------------------
         Total cash and cash equivalents                                                     10,186                1,178
      Accounts receivable,
          net of allowance for doubtful accounts of $101 and $40                             11,378                4,260
      Inventories                                                                             5,780                2,465
      Prepaid expense and other current assets                                                1,160                1,361
                                                                                 --------------------    ------------------
         Total current assets                                                                28,504                9,264
                                                                                 --------------------    ------------------

Property and equipment at cost, net                                                          16,418                4,796
                                                                                 --------------------    ------------------
         Total assets                                                             $          44,922        $      14,060
                                                                                 ====================    ==================

                          LIABILITIES AND SHAREHOLDERS' EQUITY
                          ------------------------------------
Current liabilities:
      Accounts payable                                                            $          7,236         $       4,770
      Accrued liabilities                                                                    3,588                 1,636
      Line of credit                                                                         4,398                 1,051
      Current portion of long term debt - related parties                                        -                    50
      Current portion of long term debt                                                        496                   452
                                                                                 --------------------    ------------------
         Total current liabilities                                                          15,718                 7,959

Long-term debt, net of current portion - related parties                                         -                   524

Long-term debt, net of current portion                                                          70                 1,353
                                                                                 --------------------    ------------------

         Total liabilities                                                                  15,788                 9,836
                                                                                 --------------------    ------------------
Commitments and contingencies

Shareholders' equity
      Preferred stock, par $0.001, 10,000,000 shares authorized,
         no shares issued or outstanding
      Common stock, par $0.001, 40,000,000 shares authorized
         30,573,383 and 20,984,913  shares issued and outstanding
         at October 31, 2004 and October 31, 2003 respectively                              65,642                41,806
      Accumulated deficit                                                                  (36,579)               (37,653)

      Cumulative translation adjustment                                                         71                     71
                                                                                 --------------------    ------------------
         Total shareholders' equity                                                         29,134                  4,224
                                                                                 --------------------    ------------------
         Total liabilities and shareholders' equity                               $         44,922        $        14,060
                                                                                 ====================    ==================

The accompanying notes are an integral part of these financial statements
</TABLE>

                                      F-3
<PAGE>


<TABLE>
<CAPTION>
            <C>                                          <C>                      <C>                     <C>

                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, Except Share and per share data)


                                                     -----------------------------------------------------------------
                                                                           For the Years Ended
                                                     -----------------------------------------------------------------
                                                      October 31, 2004         October 31, 2003      October 31, 2002
                                                     -------------------- --- ------------------- -- -----------------

Revenue                                               $       46,234           $         22,715       $       20,806

Cost of goods sold                                            36,123                     17,600               15,730
                                                     --------------------     -------------------    -----------------
     Gross profit                                             10,111                      5,115                5,076
                                                     --------------------     -------------------    -----------------

Operating expenses:
     General and administrative                                5,403                      3,487                4,036
     Sales, marketing and customer service                     2,096                      1,524                1,440
     Engineering, advanced design and
        product management                                       625                        593                  691
     Litigation settlement                                       625                          -                    -
     Impairment of machinery                                       -                          -                  270
     Impairment of goodwill                                        -                          -                5,287
                                                     --------------------     -------------------    -----------------
        Total operating expenses                               8,749                      5,604               11,724
                                                     --------------------     -------------------    -----------------

Income (loss) from operations                                  1,362                       (489)              (6,648)
                                                     --------------------     -------------------    -----------------

Other income (expense):
     Interest expense                                           (396)                     (389)                (464)
     Other income                                                108                        70                  170
                                                     --------------------     -------------------    -----------------
        Total other expense                                     (288)                     (319)                (294)
                                                     --------------------     -------------------    -----------------

Income (loss) before income taxes                              1,074                      (808)              (6,942)

     Provision for income taxes                                    -                         -                    -
                                                     --------------------     -------------------    -----------------
Net income (loss)                                     $        1,074           $          (808)       $       (6,942)
                                                     ====================     ===================    =================

Net income (loss) per common share:
     Net income (loss) - basic                        $         0.04           $         (0.04)       $        (0.36)
                                                     ====================     ===================    =================
     Net income (loss) - diluted                      $         0.04           $         (0.04)       $        (0.36)
                                                     ====================     ===================    =================

Weighted average number of shares used in
computing share amounts:
     Basic                                                25,647,763                19,448,718            19,207,246
                                                     ====================     ===================    =================

     Diluted                                              27,511,228                19,448,718            19,207,246
                                                     ====================     ===================    =================

    The accompanying notes are an integral part of these financial statements
</TABLE>
                                      F-4

<PAGE>

<TABLE>
<CAPTION>
     <C>                                  <C>                       <C>                <C>               <C>                 <C>


                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 (In Thousands, Except Share and Per Share Data)

                    For the Year Ended October 31, 2004, the
                    Year Ended October 31, 2003 and the Year
                             Ended October 31, 2002


                                                                                                 Cumulative
                                                    Common Stock                Accumulated      Translation
                                         -----------------------------------
                                             Shares              Amount          Deficit         Adjustment         Total
                                         ----------------  ---------------  ----------------  ---------------  --------------

                                         ----------------                   ----------------  ---------------  --------------
 Balance, November 1, 2001                 $ 19,321,246       $ 41,205        $   (29,903)           88         $    11,390
---------------------------              ----------------  ---------------  ----------------  ---------------  --------------
     Comprehensive loss
        Net loss                                                                   (6,942)                           (6,942)
        Translation adjustment                                                                      (17)                (17)
                                                                                                               --------------
     Total comprehensive loss                                                                                        (6,959)
     Common stock options exercised            (104,000)            7                                                       7
     Warrants issued                                                4                                                       4

                                         ----------------  ---------------  ----------------  ---------------  --------------
Balance, October 31, 2002                    19,217,246        41,216             (36,845)           71                 4,442
-------------------------                ----------------  ---------------  ----------------  ---------------  --------------
     Comprehensive loss
        Net loss                                                                     (808)                               (808)
        Translation adjustment                                                                        -                     -
                                                                                                                --------------
     Total comprehensive loss                                                                                            (808)
     Common stock options exercised
     Warrants issued                                 -             74                                                        74
     Stock issued                             1,767,667           516                                                       516
                                         ---------------    ---------------- ---------------- ---------------   ---------------
Balance, October 31, 2003                    20,984,913        41,806              (37,653)            71                 4,224
-------------------------                ================   ===============  ================ =============== == ==============
      Comprehensive income
        Net income                                                                   1,074                                1,074
        Translation adjustment                                                                          -                     -
                                                                                                                 --------------
     Total comprehensive loss                                                                                             1,074
     Common stock options exercised             635,375           302                                                       302
     Common stock warrants exercised          1,051,760           608                                                       608
     Warrants issued                                               85                                                        85
     Stock issued                             7,901,335        22,841                                                    22,841
                                         ----------------   --------------- ---------------- -- --------------- -- --------------
Balance October 31, 2004                     30,573,383        65,642              (36,579)            71                29,134
------------------------                 ================   =============== ================ == =============== == ==============


The accompanying footnotes are an integral part of these financial statements.
</TABLE>

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>



                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                                                                             For the Years Ended
                                                                                 -----------------------------------------------
                                                                                   October 31,     October 31,      October 31,
                                                                                         2004            2003           2002
                                                                                 -----------------------------------------------
Cash flows from operating activities:
     Net income (loss)                                                            $     1,074     $     (808)      $    (6,942)
     Adjustments to reconcile net loss to net cash provided
         by (used in) operating activities:
            Depreciation                                                                  910            811             1,096
            Impairment of goodwill                                                          -              -             5,287
            Amortization of goodwill                                                        -              -               432
            Stock issued for services                                                      58             16                 -
            Warrants issued for extension of debt terms                                     -             29                 -
            Impairment of machinery                                                         -              -               270
            Loss on disposal of fixed assets                                                9             58                 9
            Loss (income) on foreign currency translation                                   -              -               (17)

            Changes in operating assets and liabilities, net of business
                 combinations:
                     (Increase) decrease in accounts receivable                        (7,118)        (1,196)              167
                     (Increase) in inventories                                         (3,315)        (1,005)             (138)
                     Increase (Decrease) in prepaid expenses and other current
                     assets                                                               201           (823)             (123)
                     Increase in accounts payable                                       2,466          1,700             1,120
                     Increase in accrued liabilities                                    1,952            271               107
                                                                                 ---------------- -------------- ---------------
                                   Net cash provided by (used in)
                                                 operating activities                  (3,763)          (947)            1,268
Cash flows from investing activities:
     Acquisitions of property, plant and equipment                                    (12,541)          (491)             (183)
     Proceeds from disposal of property, plant & equipment                                  -             23                 -
                                                                                 ---------------- -------------- ---------------
                                   Net cash used in investing activities
                                                                                      (12,541)          (468)             (183)
Cash flows from financing activities:
     Proceeds from issuance of common stock                                            23,693            500                 7
     Issuance of warrants                                                                  85             45                 4
     Proceeds (payment) from lines of credit, net                                       3,347             46              (447)
     Proceeds on debt - related parties                                                     -            100                 -
     Proceeds from debt                                                                     -            848                 -
     Payment on debt - related parties                                                   (574)          (100)              (75)
     Payment on debt                                                                   (1,239)          (402)                -
                                                                                 ---------------- -------------- ---------------

         Net cash provided by (used in) financing activities                           25,312          1,037              (511)
Increase (decrease) in cash and cash equivalents                                        9,008           (378)              574
Cash and cash equivalents at beginning of period                                        1,178          1,556               982
                                                                                 ---------------- -------------- ---------------
Cash and cash equivalents at end of period                                        $    10,186      $   1,178      $      1,556
                                                                                 ================ ============== ===============
Supplemental disclosure:
     Cash paid for interest                                                       $       396      $     389      $        464
                                                                                 ================ ============== ===============
     Cash paid for income taxes                                                   $         -      $       -      $          -
                                                                                 ================ ============== ===============
Non-cash financing activities:
     Stock issued for services                                                    $        58      $      16      $          -
                                                                                 ================ ============== ===============
     Warrants issued for extension of debt terms                                  $         -      $      29      $          -
                                                                                 ================ ============== ===============

                   The accompanying notes are an integral part of these financial statements
</TABLE>

                                      F-6
<PAGE>

                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   THE BUSINESS

     Description of Business

     International DisplayWorks, Inc. (the "Company"), headquartered in Rocklin,
     California,  was  incorporated in the state of Delaware in July of 1999. On
     October  31,  2001,  the  Company  merged  with  its  parent,  Granite  Bay
     Technologies, Inc., a California corporation.

     The Company, together with its subsidiaries, all of which are wholly owned,
     is engaged in the design,  manufacture and worldwide distribution of liquid
     crystal  displays  (LCDs),  modules,  and  assemblies  for  major  original
     equipment  manufacturers  (OEMs) with  applications in  telecommunications,
     automotive, industrial, medical, and consumer products.

     The Company's manufacturing  operations are in Shenzhen,  People's Republic
     of China (PRC). The display company MULCD Microelectronics  (Shenzhen) Co.,
     Ltd. ("MULCD") and the module company IDW Technologies (Shenzhen) Co., Ltd.
     ("IDWT")  manufacture  Liquid Crystal Displays (LCDs) and LCD modules using
     various display technologies such as chip-on-glass  ("COG"),  chip-on-board
     ("COB"),  chip-on-flex ("COF"),  surface mount technology ("SMT"), and tape
     automated  bonding ("TAB").  IDWT also provides  additional module enhanced
     services by adding other  components such as back lighting,  and keypads to
     module  assemblies as well as having the  capabilities to produce  complete
     turn-key products.

2.   LIQUIDITY

     The  Company  and  its   subsidiaries   generated  income  from  continuing
     operations of  $1,074,000  during the period ended October 31, 2004 and net
     losses from  continuing  operations of $808,000,  and $6,942,000  ($953,000
     before charges for amortization and write-off of goodwill of $5,719,000 and
     equipment  impairment charges of $270,000) during the periods ended October
     31, 2003 and 2002, respectively. The Company and its subsidiaries also have
     an  accumulated  deficit  of  $36,579,000,  of  which  $23,833,000  is from
     discontinued operations and $12,746,000 is from continuing operations.

     The Company requires  capital to repay certain existing fixed  obligations,
     and to provide for  additional  working  capital and  investment in capital
     equipment if it is to grow in  accordance  with its business  plan. To this
     end the Company has completed the following transactions:

                                      F-7
<PAGE>

          o    A $5,000,000 private placement, on December 23, 2003, through the
               sale of 3,333,335 shares of the Company's common stock at $1.50 a
               share. Proceeds, net of expenses of $426,000 were $4,574,002. The
               placement agent received a five-year  warrant to purchase 166,666
               shares at $1.75 a share.

          o    A new  $5,000,000  asset  based  credit  line  with  Wells  Fargo
               Business Credit,  Inc. The new line replaced an existing domestic
               only  receivable  line and creates up to $3,000,000 in additional
               working capital with more favorable terms

          o    A  $20,250,000  private  placement  through the sale of 4,500,000
               shares of the Company's common stock at $4.50 a share.  Proceeds,
               net of expenses of $1,770,000 were a $18,480,000.

     Management  believes  that these  transactions,  the asset  based  lines of
credit,  and cash flows from  operations  will  provide the  Company  sufficient
working capital to fund operations for the foreseeable future.

     In addition  the Company  made an early  repayment of notes due on December
31, 2004,  bearing an interest rate of 12%, in the amount of  $1,524,000.  There
was no prepayment penalty for the early payment but an interest saving.

     On October 31,  2004 the  company had debt  falling due in 2005 of $496,000
and a further amount due of $70,000 all of which was repayable in 2006.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     a. Principles of Consolidation

          The consolidated financial statements include the financial statements
          of  International  DisplayWorks,   Inc.,  and  all  of  the  following
          wholly-owned subsidiaries:

          o  International  DisplayWorks  (Hong  Kong)  Limited,  (a  Hong  Kong
          company)
          o MULCD Microelectronics (Shenzhen) Co., Ltd., (a PRC company)
          o IDW Technology (Shenzhen) Co., Ltd. (a PRC company)
          o International DisplayWorks Ltd., (a BVI company)
          o International DisplayWorks Pte., Ltd., (a Singapore company)

     All significant intercompany accounts and transactions have been eliminated
on consolidation.

     b. Fiscal Year

     The Company operates on a fiscal year which ends on October 31.

                                      F-8
<PAGE>

     c. Cash and Cash Equivalents

     The Company considers all highly liquid investments with maturity,  at date
     of purchase, of three months or less to be cash equivalents.

     d. Financial Instruments

     The carrying  amounts of cash and cash  equivalents,  accounts  receivable,
     notes  payable,  lines of credit,  accounts  payable,  and  amounts  due to
     related parties  approximate  fair value due to the short-term  maturity of
     these   instruments.   The  carrying  amount  of  the  mortgage  debt  also
     approximates  fair value as the exchange rate of the RMB to the U.S. dollar
     that has been applied has remained relatively stable. Because of the length
     of the mortgage  contract,  movements in the RMB could affect this carrying
     value.

     e. Inventories

     Inventories  are stated at the lower of cost or market.  Cost is determined
     on the weighted  average-cost  basis.  Costs  included in the  valuation of
     inventory   are  labor,   materials   (including   freight  and  duty)  and
     manufacturing  overhead.  Provisions  are made for obsolete or  slow-moving
     inventory based on management estimates.

     f. Property, Plant and Equipment

     Property,  plant  and  equipment  are  recorded  at cost  less  accumulated
     depreciation   and  any  provision  for  impairment.   The  cost  of  major
     improvements is capitalized  whereas the cost of maintenance and repairs is
     expensed  in the period  incurred.  Gains and losses  from the  disposal of
     property, plant and equipment are included in income/loss from operations.

     All land in the PRC is owned by the PRC  government.  According  to PRC law
     the government may sell the right to use the land for a specified period of
     time.  Thus all of the Company's land holdings in the PRC are considered to
     be leasehold  land and are  amortized on the  straight-line  basis over the
     respective term of the right to use the land. The buildings on the land are
     also depreciated over the same period.

     Depreciation  charges are calculated from the latter of date of acquisition
     or when the asset is placed in service.

     Amortization of leasehold  improvements is provided using the straight-line
     method  over the  shorter of the  expected  useful life of the asset or the
     remaining lease term.

     Depreciation rates computed using the straight-line method is as follows:

       Land and Buildings                                            30 years
       Machinery                                                     10 years
       Furniture, fixtures, and equipment                             5 years

                                      F-9
<PAGE>

     g. Impairment or Disposal of Long-Lived Assets

     In August 2001,  the  Financial  Accounting  Standards  Board (FASB) issued
     Statement of Financial  Accounting Standard (SFAS) No. 144, "Accounting for
     the  Impairment or Disposal of Long-Lived  Assets," that was  applicable to
     financial  statements  issued for fiscal years beginning after December 15,
     2001.  The FASB's new rules on asset  impairment  supersede  SFAS No.  121,
     "Accounting  for the  Impairment  of Long-Lived  Assets and for  Long-Lived
     Assets to Be Disposed  Of" and  portions  of  Accounting  Principles  Board
     ("APB")  Opinion  No. 30,  "Reporting  the  Results  for  Operations."  The
     statement  requires a single  accounting model for long-lived  assets to be
     disposed of and  significantly  changes the criteria  that would have to be
     met to classify an asset as held-for-sale.  Classification as held-for-sale
     is an important  distinction  since such assets are not depreciated and are
     stated at the lower of fair value or carrying  amount.  The statement  also
     requires expected future operating losses from  discontinued  operations to
     be recorded in the period(s) in which the losses are incurred,  rather than
     as of the measurement date as previously required. On November 1, 2002, the
     Company adopted SFAS No. 144. The adoption of SFAS No. 144 did not have any
     significant  impact on the financial  position and results of operations of
     the Company.

     h. Warranty Costs

     The Company  warrants its products  against  defects for fifteen days after
     delivery to  customers.  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 and therefore no provision has been made.

     i. Advertising and Promotion Costs

     Advertising  and promotion  costs are expensed as incurred and are included
     in selling,  marketing and customer service expenses.  Advertising expenses
     were  approximately  $70,000,  $44,000,  and $2,200 for the periods  ending
     October 31, 2004, 2003 and 2002, respectively.

     j. Revenue Recognition

     The Company  recognizes revenue from product sales in accordance with Staff
     Accounting  Bulletin  (SAB)  No.  104  "Revenue  Recognition  in  Financial
     Statements."  SAB No. 104 requires that revenue be  recognized  when all of
     the following conditions are met:

                    o   Persuasive evidence of an arrangement exists,
                    o   Delivery has occurred or services have been rendered,
                    o   Price to the customer is fixed or determinable, and
                    o   Collectability is reasonably assured.

                                      F-10
<PAGE>

Our  standard  terms  provide  that  shipments  are FOB from  our  manufacturing
facility,  and title and risk of loss shift to the customer upon  shipment,  and
there are no continuing services other than delivery.  Accordingly, we recognize
revenue  from the sale of our  products  when the  products are shipped from our
factory.  Sales  revenue is recorded  net of  discounts,  rebates and prompt pay
discounts. Returns and adjustments are booked as soon as they have been assessed
for validity.  The Company does not provide an allowance for returns at shipment
because we make custom product which are customer  specific,  and no returns are
allowed.  The Company  warrants its product for replacement only in the event of
defects,  and  customers  are  required  to notify us within 10 days of  product
receipt if there is a defect.  Historically,  the  Company  has not  experienced
significant defects,  and replacements for defects is not material.  The Company
does not offer  discounts,  and in  limited  circumstances  rebates  on  tooling
expense after certain threshold revenue.  Those minimal rebates, if any, are not
material and infrequent.

     k.Shipping and Handling Costs

     Shipping  and  handling  costs are  expensed to cost of sales for  material
     purchases;  and cost of sales or selling expenses for delivery for finished
     products.  During  the  periods  ended  October  31,  2004,  2003 and 2002,
     shipping  and  handling  costs  expensed to cost of sales were  $1,234,000,
     $535,000 and $356,000,  respectively.  During the periods ended October 31,
     2004 and 2003,  shipping and handling  costs  expensed to selling  expenses
     were nil, and for the period ended October 31, 2002 were $50,337.

     l. Income Taxes

     Deferred  tax  assets and  liabilities  are  recognized  for the future tax
     consequences  attributable to differences  between the financial  statement
     carrying  amounts of existing assets and  liabilities and their  respective
     tax  bases.  Deferred  tax  assets,  including  tax loss and  credit  carry
     forwards,  and liabilities are measured using enacted tax rates expected to
     apply to taxable income in the years in which those  temporary  differences
     are expected to be recovered or settled.  The effect on deferred tax assets
     and  liabilities  of a change in tax rates is  recognized  in income in the
     period  that  includes  the  enactment  date.  Deferred  income tax expense
     represents  the change  during the  period in the  deferred  tax assets and
     deferred tax  liabilities.  The  components  of the deferred tax assets and
     liabilities are individually classified as current and non-current based on
     their  characteristics.  Deferred  tax  assets are  reduced by a  valuation
     allowance  when, in the opinion of  management,  it is more likely than not
     that some portion or all of the deferred tax assets will not be realized in
     the foreseeable future.

     m. Stock Options and Warrants

     SFAS No. 123, "Accounting for Stock-Based  Compensation,"  allows companies
     which have stock-based compensation  arrangements with employees to adopt a
     new fair value  basis of  accounting  for stock  options  and other  equity

                                      F-11
<PAGE>

     instruments or to continue to apply the existing accounting rules under APB
     Opinion  No.  25,  "Accounting  for Stock  Issued to  Employees,"  but with
     additional financial statement disclosure. The Company continues to account
     for  stock-based  compensation  arrangements  under APB Opinion No. 25. See
     also the adoption of SFAS No. 148, "Accounting for Stock-Based Compensation
     - Transition and Disclosure" at note 3(r).

     n. 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  $69,000,  $13,000 and $28,000 for the
     periods ended October 31, 2004, 2003 and 2002, respectively.

     o. Net Earnings (Loss) per Share

     Basic net  earnings  per common  share is  computed  by  dividing  net loss
     applicable to common shareholders by the weighted-average  number of common
     shares  outstanding  during the period.  Weighted-average  number of shares
     outstanding  at  October  31,  2004 were  25,647,763  basic and  27,511,228
     diluted.  Diluted net earnings (loss) per common share is determined  using
     the weighted-average number of common shares outstanding during the period,
     adjusted for the dilutive effect of common stock equivalents, consisting of
     shares  that might be issued  upon  exercise of common  stock  options.  In
     periods where losses are reported,  the  weighted-average  number of common
     shares  outstanding  excludes  common  stock  equivalents,   because  their
     inclusion  would be  anti-dilutive.  For the periods ended October 31, 2003
     and 2002 the weighted-average  number of common shares outstanding excludes
     common stock equivalents of 3,936,481 and 2,889,709 shares, respectively.

     p. Foreign Currency

     All transactions in currencies other than functional  currencies during the
     year are  translated at the exchange  rates  prevailing  on the  respective
     transaction dates.  Monetary assets and liabilities existing at the balance
     sheet date denominated in currencies  other than functional  currencies are
     translated  at  the  exchange  rates   existing  on  that  date.   Exchange
     differences are recorded in the consolidated  statement of operations.  For
     the periods ended October 31, 2004, 2003 and 2002, the exchange differences
     resulted in expense of $116,000, $67,000 and $48,900, respectively.

     The Company and its subsidiaries  have adopted the U.S.  dollar,  Hong Kong
     dollar and the PRC Renminbi as their functional  currencies.  The financial
     statements of all  subsidiaries  with functional  currencies other than the
     U.S.  dollar  are  translated  in  accordance  with SFAS No.  52,  "Foreign
     Currency  Translation."  All assets and  liabilities  are translated at the
     rates of  exchange  ruling at the  balance  sheet  date and all  income and
     expense  items are  translated  at the average  rates of exchange  over the
     year.   All  exchange   differences   arising  from  the   translation   of
     subsidiaries'   financial   statements  are  recorded  as  a  component  of
     comprehensive income.

                                      F-12
<PAGE>

     The exchange rate between the Hong Kong dollar and the U.S. dollar has been
     pegged  (HK$7.80 to US$1.00)  since October 1983. The exchange rate between
     the Renminbi and the U.S.  dollar is based on the  prevailing  market rate,
     which was  approximately  Renminbi 8.3 to US$1.00 at October 31, 2004, 2003
     and 2002.

     q. Segment Reporting

     The Company accounts for its segments pursuant to SFAS No. 131 "Disclosures
     about  Segments  of  an  Enterprise  and  Related  Information."  Operating
     segments,  as defined in SFAS No. 131, are  components of an enterprise for
     which  separate  financial   information  is  available  and  is  evaluated
     regularly  by the Company in  deciding  how to  allocate  resources  and in
     assessing performance. The financial information is required to be reported
     on the  basis  that  it is  used  internally  for  evaluating  the  segment
     performance. The Company believes it operates in only one segment.

     r. New Accounting Pronouncements

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
     Compensation  -- Transition and  Disclosure."  SFAS No. 148 amends SFAS No.
     123  "Accounting  for  Stock-Based  Compensation,"  to provide  alternative
     methods of transition for a voluntary change to the fair value-based method
     of accounting for stock-based employee compensation.  In addition, SFAS No.
     148 amends the disclosure requirements of SFAS No. 123 to require prominent
     disclosures  in both  annual and  interim  financial  statements  about the
     method of accounting for stock-based  employee  compensation and the effect
     of the method  used on  reported  results.  SFAS No. 148 is  effective  for
     fiscal years  beginning  after  December 15, 2002 (November 1, 2003 for the
     Company).  The expanded annual  disclosure  requirements and the transition
     provisions  are effective  for fiscal years ending after  December 15, 2002
     (October 31, 2003 for the Company). Management does not expect the adoption
     of SFAS  No.  148 to have a  material  effect  on the  Company's  financial
     position, results of operations, or cash flows.

     In  December  2004,  the FASB issued SFAS No. 123R that amends SFAS No. 123
     "Accounting  for  Stock-Based  Compensation,"  to require  public  entities
     (other than those filing as small business  issuers) to report  stock-based
     employee compensation in their financial statements.  Unless modified,  the
     Company will be required to comply with the  provisions of SFAS No. 123R as
     of the first interim period that begins after June 15, 2005 (August 1, 2005
     for the  Company).  The  Company  currently  does not  record  compensation
     expense  related  to its  stock-based  employee  compensation  plans in its
     financial statements.

     At  October  31,  2004,   the  Company  has  three   stock-based   employee
     compensation  plans,  as more fully  described  in note 10(b).  The Company
     accounts for these plans under the recognition  and measurement  principles
     of APB No. 25,  "Accounting  for Stock  Issued to  Employees"  and  related
     interpretations.  Stock-based employee compensation costs are not reflected
     in net income when  options  granted  under the plan had an exercise  price
     equal to the market  value of the  underlying  common  stock on the date of
     grant.  During the periods  ending  October 31,  2004,  2003 and 2002,  the
     Company  recorded  no  compensation  expense  related  to  its  stock-based
     employee compensation plans.

                                      F-13
<PAGE>

     The following  table  illustrates the effect on net loss and loss per share
     as if the Company had applied the fair value recognition provisions of SFAS
     No. 123, "Accounting for Stock-Based Compensation," to stock-based employee
     compensation.
<TABLE>
<CAPTION>
    <C>                                                        <C>                 <C>                    <C>

                                                      -----------------------------------------------------
                                                                For the Years Ended October 31,
                                                           2004               2003               2002
                                                      --------------- -- --------------- -- ---------------
Net income (loss) as reported                          $      1,074       $      (808)       $     (6,942)

Deduct:  Total stock-based employee compensation
expense determined under fair value based method
for all awards.                                                (181)              (65)               (130)
                                                      ---------------    --------------- -- ---------------
Pro-forma net income (loss)                                     893              (873)             (7,072)
                                                      ===============    ===============    ===============
Earnings per share:
Basic - as reported                                            0.04             (0.04)             (0.36)
                                                      ===============    ===============    ===============
Basic - pro-forma                                              0.03             (0.04)             (0.37)
                                                      ===============    ===============    ===============
Diluted - as reported                                          0.04             (0.04)             (0.36)
                                                      ===============    ===============    ===============
Diluted - pro-forma                                            0.03             (0.04)             (0.37)
                                                      ===============    ===============    ===============

              The Company has computed the value of all options granted during
              the periods ending October 31, 2004, 2003 and 2002 using the
              Black-Scholes option-pricing model and the following weighted
              average assumptions for grants for the periods ended:

                                           October 31,           October 31,         October 31, 2002
                                              2004                  2003
                                         ----------------    --------------------   --------------------
            Risk-free interest rate          3.7%                  3.7%                   3.7%
            Expected dividend yield          0.0%                  0.0%                   0.0%
            Expected life (years)              5                     5                      5
            Expected volatility            100.7%                 92.4%                 100.1%
</TABLE>

     Using the  Black-Scholes  methodology,  the total value of options  granted
     during the periods ending October 31, 2004,  2003 and 2002 was  $1,033,515,
     $90,955 and $94,025, respectively,  which would be amortized on a pro forma
     basis over the vesting period of the options  (typically  four years).  The
     weighted average fair value per share of options granted during the periods
     ending  October  31,  2004,  2003 and  2002 was  $0.75,  $0.29  and  $0.42,
     respectively.

     In November  2002,  the FASB  issued  Interpretation  No. 45,  "Guarantor's
     Accounting and Disclosure  Requirements for Guarantees,  Including Indirect
     Guarantees of  Indebtedness  of Others" (FIN 45). FIN 45 requires that upon

                                      F-14
<PAGE>

     issuance of a guarantee,  a guarantor  must  recognize a liability  for the
     fair value of an obligation assumed under a guarantee. FIN 45 also requires
     additional  disclosures by a guarantor in its annual  financial  statements
     about the obligations  associated with guarantees  issued.  The recognition
     provisions of FIN 45 are effective  for any  guarantees  issued or modified
     after  December 31, 2002.  The  disclosure  requirements  are effective for
     financial statements of interim or annual periods ending after December 15,
     2002 (January 31, 2003 for the Company). The adoption of FIN No. 45 did not
     have a material  effect on the  Company's  financial  position,  results of
     operations, or cash flows.

     In January  2003,  the FASB issued FIN No. 46,  "Consolidation  of Variable
     Interest  Entities"  ("FIN 46") which is an  interpretation  of  Accounting
     Research  Bulletin  No. 51,  "Consolidated  Financial  Statements."  FIN 46
     requires a variable  interest  entity (VIE) to be consolidated by a company
     that is considered to be the primary  beneficiary  of that VIE. In December
     2003, the FASB issued FIN No. 46 (revised December 2003), "Consolidation of
     Variable  Interest  Entities"  ("FIN  46-R")  to  address  certain  FIN  46
     implementation  issues.  The  effective  dates and impact of FIN 46 and FIN
     46-R for the Company's consolidated financial statements are as follows:

          1.   Special purpose  entities  ("SPEs")  created prior to February 1,
               2003.  The Company must apply either the  provisions of FIN 46 or
               early  adopt the  provisions  of FIN 46-R at the end of the first
               interim or annual  reporting  period  ending  after  December 15,
               2003. The Company has determined that it has no SPE's.

          2.   Non-SPEs  created  prior to  February  1,  2003.  The  Company is
               required  to adopt  FIN 46-R at the end of the first  interim  or
               annual  reporting  period ending after March 15, 2004.  While not
               required, the Company could elect to adopt FIN 46 or FIN 46-R for
               these  non-SPEs  as of the end of the  first  interim  or  annual
               reporting period ending after December 15, 2003.  Management does
               not  believe  that the  adoption  of this  provision  will have a
               material effect on the Company's financial  position,  results of
               operations or cash flows.

          3.   All  entities,  regardless  of whether a SPE,  that were  created
               subsequent to January 31, 2003.  The Company is required to apply
               the provisions of FIN 46 unless  management elects to early adopt
               the  provisions  of FIN 46-R as of the  first  interim  or annual
               reporting  period ending after  December 15, 2003. If the Company
               does not  elect to early  adopt  FIN 46-R,  then the  Company  is
               required to apply FIN 46-R to these entities as of the end of the
               first interim or annual  reporting  period ending after March 15,
               2004. The Company has not entered into any material joint venture
               or partnership  agreements subsequent to January 31, 2003 and the
               Company  does  not  expect  to  enter  into  any  such   material
               agreements  during the first  interim  period  ended  January 31,
               2004. If the Company  enters into any  significant  joint venture
               and  partnership  agreements  in the future  that  would  require
               consolidation  under FIN 46 or FIN 46-R, it could have a material

                                      F-15
<PAGE>

               impact on the Company's future consolidated financial statements.

     In April 2003,  FASB issued SFAS No. 149,  "Amendments  of Statement 133 on
     Derivative   Instruments  and  Hedging   Activities,"   which   establishes
     accounting and reporting  standards for derivative  instruments,  including
     derivatives  embedded in other contracts and hedging  activities.  SFAS No.
     149  amends  SFAS  No.  133 for  decisions  made by the FASB as part of its
     Derivatives Implementation Group process. SFAS No. 149 also amends SFAS No.
     133 to incorporate  clarifications of the definition of a derivative.  SFAS
     No. 149 is  effective  for  contracts  entered into or modified and hedging
     relationships  designated  after June 30, 2003.  The provisions of SFAS No.
     149 are not expected to have a material  impact on the Company's  financial
     position,  results of  operations,  or cash  flows.

     In May 2003,  the FASB issued  Statement No. 150,  "Accounting  for Certain
     Financial Instruments with Characteristics of both Liabilities and Equity."
     SFAS  No.  150  establishes  standards  for how an  issuer  classifies  and
     measures  certain  financial   instruments  with  characteristics  of  both
     liabilities and equity.  SFAS No. 150 requires that an issuer  classifies a
     financial  instrument  that is within its scope as a liability (or an asset
     in  some   circumstances).   SFAS  No.  150  was  effective  for  financial
     instruments  entered into or modified after May 31, 2003, and otherwise was
     effective for the Company's  fourth  quarter of 2003.  The adoption of SFAS
     No.  150  is not  expected  to  have a  material  impact  on the  Company's
     financial   position,   results   of   operations,   or  cash   flows.

     s. Reclassifications

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

     t. Use of Estimates

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

4.   INVENTORIES

     Inventories consisted of the following at October 31 (in thousands):

                                      F-16
<PAGE>
<TABLE>
<CAPTION>
    <C>                                                              <C>                  <C>

                                                                    2004                   2003
                                                             -------------------    --------------------

        Finished goods                                        $     917              $     687
        Work-in-progress                                          1,820                    752
        Raw materials                                             3,510                  1,537
        Less: reserve for obsolete inventory                       (467)                  (511)
                                                             -------------------    --------------------
                                                             $    5,780              $   2,465
                                                             ===================    ====================

5.   PREPAID EXPENSES AND OTHER CURRENT ASSETS

     Prepaid  expenses and other  current  assets  consisted of the following at
October 31 (in thousands):


                                                                    2004                   2003
                                                             -------------------    --------------------

        Prepaid expenses                                     $       259              $     377
        Advances to suppliers                                        447                    303
        PRC VAT recoverable                                          145                    354
        Other                                                        309                    327

                                                             -------------------    --------------------
                                                             $     1,160             $    1,361
                                                             ===================    ====================

6.   PROPERTY, PLANT AND EQUIPMENT

     Property,  plant and equipment consisted of the following at October 31 (in
thousands):

                                                                    2004                   2003
                                                             -------------------    --------------------

        Land and buildings                                   $     1,185             $    1,185
        Furniture, fixtures and equipment                          2,503                  1,798
        Machinery                                                 14,476                  4,865
        Leasehold improvements                                       410                     83
        Construction in progress                                   1,857                      -
                                                             -------------------    --------------------
                                                                  20,431                  7,931
        Less accumulated depreciation                             (4,013)                (3,135)
                                                             -------------------    --------------------
                                                             $    16,418             $    4,796
                                                             ===================    ====================
</TABLE>

     Depreciation  expense  totaled  $910,000,  $811,000 and  $1,096,000 for the
     periods ended October 31, 2004, 2003 and 2002, respectively.

     In October 2002, the Company  assessed the  recoverability  of the carrying
     value of a certain machine.  The assessment  resulted in an impairment loss
     of the machine's entire net book value of $270,000.  This loss reflects the
     amount by which the carrying  value of the machine  exceeded its  estimated
     fair value.  The  impairment  loss is recorded as a component  of operating
     expenses in the statement of operations for fiscal 2002.

                                      F-17
<PAGE>

     As of October 31, 2004, the Company had purchased $8.7 million of machinery
     related to its new color line which had been  delivered but not placed into
     service as of year end.

     As of October 31, 2004, the Company had, issued and  outstanding,  purchase
     commitments for $2,086,000 of capital equipment.

7.   GOODWILL

     Goodwill  represents  the  unamortized  excess of the cost of  acquiring  a
     business  over the fair  values of the net assets  received  at the date of
     acquisition.  The Company had no goodwill on its balance  sheet  during the
     fiscal period ended October 31, 2004.

     In accordance with the provisions of SFAS No. 121,  management was required
     to  periodically  review the operating  environment  and performance of the
     Company to  determine if there are any grounds for  reviewing  the carrying
     value of goodwill to determine whether impairment may exist.

     In October 2002, the Company  applied the provisions of SFAS No. 121 to its
     goodwill and recorded an impairment charge of $5,287,000,  which eliminated
     all  remaining  goodwill  of the  Company  and  included  this  charge as a
     component of operating expenses in fiscal 2002.

     Goodwill  was  being  amortized  on a  straight-line  basis  over 15 years.
     Amortization  expense  charged to  operations  was  $432,000 for the period
     ended October 31, 2002.

8.   ACCRUED LIABILITIES

     Accrued   liabilities   consisted  of  the  following  at  October  31  (in
thousands):
<TABLE>
<CAPTION>
            <C>                                                            <C>             <C>

                                                                    2004                   2003
                                                             -------------------    --------------------

        Accrued payroll and related liabilities              $     1,335                    747
        Accrued staff expenses                                       190                    219
        Accrued inventory purchases                                   27                     68
        Accrued royalties                                             38                    129
        Accrued PRC government management fees                        72                    102
        Accrued  asset  acquisition  costs for new LCD line
        equipment                                                  1,560                      -
        Other accrued liabilities                                    366                    371
                                                             -------------------    --------------------
                 Total accrued liabilities                    $    3,588             $    1,636
                                                             ===================    ====================
</TABLE>

9.       LONG-TERM DEBT

         Loans and notes payable consisted of the following at October 31 (in
         thousands, except interest payments):

                                      F-18
<PAGE>
<TABLE>
<CAPTION>
    <C>                                                             <C>                    <C>

                                                                                    October 31,             October 31,
                                                                                        2004                   2003
                                                                                 -------------------    --------------------

Notes payable to directors,  stockholders and immediate family members thereof ,
interest only payments due in monthly  installments  ranging from  approximately
$2,400  to $3,700 at a yearly  interest  rate  ranging  from  12.00% to  12.68%;
principal  balance due and payable in full December 31, 2004,  collateralized by
the accounts receivable,  inventory,  equipment and other tangible assets of the
Company.                                                                             $      -               $      624

Note payable to a director of the Company,  interest and principal  payments due
in  monthly  installments  of  $10,000  at a  yearly  interest  rate of  12.68%;
principal  balance  due in full March 1, 2004,  collateralized  by the  accounts
receivable, inventory, equipment and other tangible assets of the Company.                  -                       50

Notes  payable  to   third-parties,   interest  only  payments  due  in  monthly
installments  ranging from $500 to $3,850 at a yearly  interest  rate of 12.00%;
principal balance due and payable in full on June 30, 2004 or December 31, 2004,
collateralized  by the  accounts  receivable,  inventory,  equipment  and  other
tangible assets of the Company.                                                             -                      900

Mortgage loan, at a variable  yearly interest rate that ranges from 7.9% to 8.3%
to be repaid in three annual  installments,  collateralized by the three factory
buildings in Shenzhen,  PRC. There are two equal additional  installments due in
June 2004 and June 2005.                                                                  403                      805

Capitalized  Lease,  term  twenty  four  months,   payable  in  eight  quarterly
installments of $23,260 beginning October 1, 2004,                                        163                        -
                                                                                  -------------------    --------------------
                                                                                          566                    2,379
        Less: current portion                                                            (496)                   (502)

                                                                                  -------------------    --------------------
                                                                                  $        70             $     1,877
                                                                                  ===================    ====================
</TABLE>
                                      F-19
<PAGE>

     Maturities of long-term debt are as follows:
<TABLE>
<CAPTION>
                <C>                      <C>                             <C>                      <C>

            Year Ending
            October 31,               Related parties            Third parties                  Total
        --------------------    ------------------------    ---------------------   --------------------
               2005             $                   -       $              496      $             496
               2006                                 -                       70                     70
                                ------------------------    ---------------------   --------------------
                                $                   -       $              566      $             566
                                ========================    =====================   ====================

</TABLE>

     In the quarter ended December 30, 2000,  the Company  issued  approximately
     $349,000 of  collateralized  notes  payable due  December 15, 2001 to a key
     employee,  board members and other  individual  investors.  In February and
     June of 2003 the due dates were  extended to December 31, 2004. In exchange
     for the  extension of the due dates the note holders  received  warrants to
     purchase  228,437 shares of the Company's common stock at between $0.16 and
     $0.21 per  share.  The  expense  of  $26,000  associated  with the  228,437
     warrants was calculated  using Black Scholes  model.  The fair value method
     for  these   options  was   estimated  at  the  date  of  grant  using  the
     Black-Scholes  option  pricing  model with the following  weighted  avarage
     assumptions for 2004, 2003 and 2002, respectively: risk-free interest rates
     were  3.61%,  3.61%  and  3.61%;  an  expected  dividend  yeild of 0%,  the
     volatility  factors of the expected  market price of the  Company's  common
     stock were 169%, 92% and 93%; and a weighted  avarage  expected life of the
     option of 5 years for each period.  The expense is being amortized over the
     life of the  associated  note  extensions.  At the  time of  issuance,  the
     proceeds  were used  primarily  for  working  capital.  The  notes  carried
     interest at rates between 12% and 12.68%, payable monthly in arears.

     During the year ended October 31, 2003, the Company  extended the due dates
     on $524,000 of the unpaid notes  payable due to related  parties and others
     to March 1, 2004 or December 31, 2004.

     From July 2003 through  September 2003, the Company,  in conjunction with a
     private  placement  of  stock  (see  note  12(a)),   issued  $1,000,000  of
     collateralized notes payable due December 31, 2004 to individual investors.
     The notes carry an  interest  rate of 12% and  warrants to purchase  common
     shares of the Company's  stock equal to 20% of the face value of the notes.
     The Company  issued  200,000  warrants to  purchase  200,000  shares of the
     Company's  common stock at $0.35 per share for a period of three years. The
     expense of $45,000  associated  with the 200,000  warrants  was  calculated
     using the Black Scholes model.  The fair value method for these options was
     estimated at the date of grant using the Black-Scholes option pricing model
     with the following  weighted  avarage  assumptions for 2004, 2003 and 2002,
     respectively:  risk-free  interest  rates were 3.61%,  3.61% and 3.61%;  an
     expected  dividend  yeild of 0%, the  volatility  factors  of the  expected
     market price of the  Company's  common stock were 169%,  92% and 93%; and a
     weighted  avarage  expected  life of the option of 5 years for each period.
     The expense is being amortized over the life of the associated  notes.  The
     notes are collateralized by the accounts receivable,  inventory,  equipment
     and  intangible  assets of the  Company.  These  notes do not  contain  any
     covenants.  The notes were issued to third parties and a related party. The
     related  party  subscribed  to  $100,000  of the debt and  received  20,000
     warrants to purchase  20,000  shares of the  Company's  common  stock.  The
     related  party is an immediate  family member of a director of the Company.
     Interest is payable  monthly in arrears with the principal due December 31,
     2004. The proceeds were used for general working capital of the Company.

     On May 20, 2004, the Company repaid notes due December 31, 2004, bearing an
     annual  interest  rate of 12%,  in the amount of  $1,524,000.  There was no
     prepayment penalty for early payment.

     In June of 2001 and as amended  in June  2002,  the  Company,  through  its
     wholly  owned  subsidiary,  IDWT,  entered  into a  mortgage  on the  three
     buildings  located at its  manufacturing  facility in  Shenzhen,  PRC.  The
     amount borrowed was RMB 10,000,000,  approximately $1,200,000 at prevailing

                                      F-20
<PAGE>

     exchange  rates,  for three years at a variable  interest  rate that ranged
     from 7.9% to 8.3% during the year,  scheduled  to be repaid in three annual
     installments,  the  first  due  in  June  2003.  As  of  October  31,  2004
     approximately  $403,000 remains  outstanding.  If the exchange rate between
     the RMB and the USD should  change the  remaining  outstanding  amount will
     vary in USD terms.

10.  LINES OF CREDIT

     On March 9, 2004,  as  subsequently  amended,  the Company  entered into an
     asset based  lending  program for a  $5,000,000  line of credit  secured by
     IDW's accounts  receivable,  inventory,  equipment,  and  intangibles.  The
     agreement  was for twenty four  months at an interest  rate of 4% above the
     "prime rate" (4.75% at October 31, 2004) with a minimum  monthly  charge of
     $10,000.  As of October 31, 2004 the Company had  approximately  $4,398,000
     currently due on the facility and had available  approximately $231,000 for
     use under this facility, based on eligible receivables.  This line replaced
     the Company's previously existing lines.

11.  COMMITMENTS AND CONTINGENCIES

     a. Lease Obligations

     The Company leases premises under various operating leases.  The Company is
     currently obligated under the following significant operating leases:

          i.   In March 2000, and as amended,  the Company entered into a 5-year
               lease for office space in Rocklin,  California. The payment terms
               are $73,000 per year.

          ii.  In February  2003 the  Company  entered  into a 2-year  lease for
               office  space in Hong Kong.  The  payment  terms are  $15,000 per
               year.

          iii.The Company  has  entered  into a lease  agreement  for a workers'
               dormitory in Shenzhen,  PRC. The lease on the workers'  dormitory
               expires on May 1, 2020 and costs  $233,700 per year.  The expense
               recorded  in fiscal  years  ended  October  31, 2004 and 2003 was
               offset by rental income of $85,000 and $67,000, respectively.

          iv.  The  Company  has  entered  into  various  lease  agreements  for
               individual employee quarters in Shenzhen, PRC. The lease terms of
               these quarters  range from six to sixty months.  The yearly lease
               payments  range from  $1,800 to  $23,100.  During the fiscal year
               ended  October  31,  2004,  the Company  entered  into six of the
               aforementioned leases with terms of between six and twelve months
               and yearly lease payments of between $1,500 and $13,000.

          v.   In November 2002 the Company  entered into a one-year lease at an
               annual cost of $40,600 for housing  accommodation  for an officer
               of the  Company.  In August  2004 the lease term was  extended to
               expire in July 2005.

                                      F-21
<PAGE>

          vi.  In July 2004 the Company  entered into a ten-year lease agreement
               for additional factory and dormitory space in Shenzhen,  PRC. The
               lease expires on August 31, 2014 and costs $283,000 per year. The
               lease has an option to renew for an  additional  ten years at the
               same terms and lease  rate.  The  expense  recorded in the fiscal
               year ended October 31, 2004 was $47,000.

          The  following is a schedule of future  minimum lease  payments  under
          non-cancelable operating leases as of October 31, 2004 (in thousands):

                                      F-22
<PAGE>



                          Minimum Lease    Sublease Income    Net Lease
                          Commitments                         Commitments
                     -------------------- ------------------ -------------------

2005                           645                 (89)            556
2006                           547                   -             547
2007                           547                   -             547
2008                           524                   -             524
2009                           517                   -             517
Thereafter                   3,822                   -           3,822

                     -------------------- ------------------ -------------------
                      $      6,602                 (89)          6,513
                     ==================== ================== ===================

          For the periods ended October 31, 2004, 2003 and 2002,  rental expense
          was $515,000, $365,000 and $117,000, respectively.

     b. Legal Matters

          From time to time,  the Company is involved in routine  litigation  in
          the  normal  course  of  business.  Management  is  not  aware  of any
          outstanding litigation involving the Company.

     c. Purchase Commitments

          The Company  enters into forward  purchase  commitments  in the normal
          course of business in anticipation of orders from customers not all of
          which are matched by contracts from  customers.  The Company  believes
          that such commitments will be required for future  production or could
          be cancelled without material cost.

12.      STOCKHOLDERS' EQUITY

     a. Issuance of Common Stock

          In November  2003 the Company  issued  68,000  shares of the Company's
          common stock at $0.85 per share,  valued at the market  closing  price
          for the  Company's  common  stock on the date of grant,  for  services
          rendered.  55,000  shares  were  issued to the  Company's  independent
          Directors as compensation and 13,000 shares were issued for consulting
          services.  The  securities  issued for services  rendered,  other that
          those issued for Directors'  compensation  which were registered under
          an  S-8  registration   statement,   were  not  registered  under  the
          Securities  Act of 1933,  as  amended,  and  therefore  fall under the
          restrictions of Rule 144 of The Securities Act of 1933, as amended.

          In December 2003, the Company issued 3,333,335 shares of the Company's
          common stock at $1.50 per share in a private  placement.  The proceeds
          of $5,000,000  were used for working  capital and operating  expenses.
          The securities  issued in this private placement were registered under
          Form S-1 with the Securities  and Exchange  Commission on February 18,
          2004. In conjunction with the private  placement,  the placement agent
          received  an 8%  commission  on the  gross  proceeds,  and a five year

                                      F-23
<PAGE>

          warrant to purchase  166,666  shares of the Company's  common stock at
          $1.75 per share.  The expense  associated with the warrant was $65,000
          calculated  using  the  Black  Scholes  method  of  valuation  and was
          included in the cost of the placement. The fair value method for these
          options was  estimated  at the date of grant  using the  Black-Scholes
          option pricing model with the following  weighted avarage  assumptions
          for 2004, 2003 and 2002,  respectively:  risk-free interest rates were
          3.61%,  3.61%  and  3.61%;  an  expected  dividend  yeild  of 0%,  the
          volatility  factors  of the  expected  market  price of the  Company's
          common stock were 169%, 92% and 93%; and a weighted  avarage  expected
          life of the option of 5 years for each period.

          In May 2004,  the Company  issued  4,500,000  shares of the  Company's
          common stock at $4.50 per share in a private  placement.  The proceeds
          of $20,250,000  were used for working capital and operating  expenses.
          The securities  issued in this private placement were registered under
          Form S-1 with the Securities and Exchange Commission on June 25, 2004.
          The placement agent received an 8% commission on gross  proceeds,  and
          no warrants were issued.

          During the fiscal year ended  October  31,  2004,  the Company  issued
          1,051,760  shares of the Company's common stock as a result of warrant
          exercises.  The shares  were issued at exercise  prices  ranging  from
          $0.16 to $2.45 per share.  280,000 shares of the securities  issued by
          exercise  of  warrants  were  registered   under  Form  S-1  with  the
          Securities and Exchange Commission on February 18, 2004. The remaining
          771,760 shares were not  registered  under the Securities Act of 1933,
          as amended,  and therefore fall under the  restrictions of Rule 144 of
          The Securities Act of 1933, as amended.

          The  following  is a summary  of the  status  of all of the  Company's
          warrants  issued as of October  31,  2004,  2003 and 2002 and  changes
          during the periods ended on those dates:

                              Number Of Shares         Weighted Average Exercise
                                                                Price
Warrants outstanding at
   October 31, 2001              1,119,861                     $      0.74
   Granted                          15,000                            0.21
   Exercised                             -                               -
   Cancelled                             -                               -
                              --------------------    --------------------------

Warrants outstanding at
   October 31, 2002              1,234,861                     $      0.73
   Granted                         458,437                            0.25
   Exercised                             -                               -
   Cancelled                             -                               -
                             ---------------------    --------------------------

Warrants outstanding at
   October 31, 2003              1,693,298                     $      0.60
   Granted                         206,666                            2.28
   Exercised                    (1,051,760)                           0.58
   Cancelled                       (19,240)                           1.24
Warrants outstanding at
   October 31, 2004                828,964                     $      1.02
                            ======================    ==========================

                                      F-24
<PAGE>

Warrants exercisable at:
   October 31, 2004                828,964                     $      1.02
                            ======================    ==========================

   October 31, 2003              1,693,298                     $      0.70
                            ======================    ==========================

   October 31, 2002              1,234,861                     $      0.74
                            ======================    ==========================

     b. Stock Option Plans

          The Company  maintains the 1990  Employee  Equity  Incentive  Plan for
          selected executives,  employees and directors for which 360,666 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
          generally  been equal to or greater than fair market value at the date
          of grant.  There were 8,166 options  cancelled in the plan in the year
          ended October 31, 2004,  25,000  options  cancelled in the plan in the
          year ended October 31, 2003,  and there was no activity in the plan in
          the year ended October 31, 2002.  This Plan has now expired and no new
          options are available for grant.

          In September  2000, the Company  established  the 2000 Employee Equity
          Incentive Plan for certain key employees of the Company. The Plan also
          permits the granting 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 1,632,800  shares of
          stock that are  authorized  for  issuance.  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.
          There were 1,375,000  options granted,  238,375 options  exercised and
          19,131  options  cancelled  during the year ended  October  31,  2004;
          536,006 options granted and 205,000 options  cancelled during the year
          ended October 31, 2003 and 515,000  options granted and 68,000 options
          cancelled  during the year ended October 31, 2002. At October 31, 2003
          approximately 413,800 options are available for grant under the Plan.

                                      F-25
<PAGE>

          In October 1999,  the Company  established  the 1999 Stock Option Plan
          for Non-Employee Directors.  This Plan provides for the issuance of up
          to 300,000 shares of 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.
          During the year ended  October  31,  2004 there were  165,000  options
          exercised and 11,432 cancelled; during the year ended October 31, 2003
          there were 6,000  options  granted  under the plan and 12,250  options
          were cancelled;  and during the year ended October 30, 2002 there were
          30,000 options exercised under the Plan.

          From  fiscal  1999 to 2001 the board had  granted  235,000  options to
          various  current and former  directors at exercise prices ranging from
          $0.50  to  $0.78  that  are  not  part  of   compensation   plans.  No
          compensation  expense was recorded  for these  options for the periods
          ended October 31, 2004, 2003, and 2002.  During the year ended October
          31,  2004,  232,000 of these  options  were  exercised.  In  addition,
          1,000,000  additional  options were granted to the Company's  incoming
          CEO at an exercise price of $3.85.

          The following is a summary of the status of all of the Company's stock
          option plans as of October 31, 2004,  2003 and 2002 and changes during
          the periods ended on those dates:

                                                            Weighted
                                     Number                 Average
                                   Of Shares            Exercise Price
                              ---------------------   --------------------
Options outstanding at
    October 31, 2001             1,237,848             $     1.21

    Granted                        515,000                   0.42
    Exercised                      (30,000)                  0.25
    Cancelled                      (68,000)                  0.76

                              ---------------------   --------------------
Options outstanding at
    October 31, 2002             1,654,848             $     1.00

    Granted                        542,006                   0.26
    Exercised                            -                      -
    Cancelled                     (242,250)                  0.70
                              ---------------------   --------------------
Options outstanding at
    October 31, 2003             1,954,604             $     0.78
    Granted                      1,375,000                   3.97
    Exercised                     (635,375)                  0.46
    Cancelled                      (38,729)                  2.04

Options outstanding at
    October 31, 2004             2,655,500              $    2.57
                              =====================   ====================
Options exercisable at :
    October 31, 2004             1,034,501              $    1.70
                              =====================   ====================
    October 31, 2003             1,157,098              $    1.18
                              =====================   ====================
    October 31, 2002             1,038,332              $    0.93
                              =====================   ====================

     During the fiscal year ended October 31, 2004,  the Company  issued 635,375
     shares as a result of stock  options  exercised.  The shares were issued at
     exercise  prices ranging from $0.15 to $2.50.  The shares were issued under
     the Company's stock option plans.

                                      F-26

<PAGE>

              The following table summarizes information about stock options
              outstanding and exercisable at October 31, 2004:
<TABLE>
<CAPTION>
                                  <C>                   <C>             <C>             <C>                 <C>

----------------------- ------------------- ------------------- ---------------- -------------------- ----------------
  Range of exercise      Number of shares    Weighted average      Weighted       Number of options      Weighted
                                                remaining           average                               average
                          outstanding at     contractual life   exercise price     exercisable at     exercise price
        price            October 31, 2004        (years)           per share      October 31, 2004       per share
----------------------- ------------------- ------------------- ---------------- -------------------- ----------------
$0.15-$0.25                     41,000             3.12          $      0.15                  41,000  $       0.15
$0.26-$0.35                    422,000             3.62          $      0.32                 153,751  $       0.32
$0.36-$0.55                    300,000             2.26          $      0.41                 224,000  $       0.41
$0.56-$0.80                    118,000             1.19          $      0.67                 118,000  $       0.67
$0.81-$1.20                     60,000             1.11          $      0.85                  60,000  $       0.85
$1.21-$1.80                    314,500             1.82          $      1.93                 202,750  $       1.74
$1.81-$2.70                     75,000             0.82          $      3.70                  75,000  $       3.70
$2.71-$4.00                  1,000,000             6.85          $      3.85                       -             -
$4.01-$6.00                    325,000             4.21          $      5.19                 160,000  $       5.38
                        ------------------- ------------------- ---------------- -------------------- ----------------
                             2,655,500             4.29          $      2.57               1,034,501  $       1.70
                        =================== =================== ================ ==================== ================
</TABLE>

     c. Stock Warrants

          The Company,  from  time-to-time  has issued stock warrants as payment
          for fees,  interest,  and  services  rendered.  For the periods  ended
          October 31, 2004, 2003 and 2002, the Company had outstanding  warrants
          to purchase  828,964,  2,066,887 and 1,234,861 shares of common stock,
          respectively. All warrants are exercisable at a weighted average price
          per share of  $1.02,  have a term of five  years  and are  exercisable
          immediately  or over  the  term of the  related  note if any.  For the
          period ended October 31, 2004, 206,666 warrants were issued, 1,051,760
          warrants were exercised and 67,440  warrants were  cancelled.  For the
          periods  ended  October  31,  2003 and 2002,  no  warrants to purchase
          common stock were  exercised  and none lapsed.  For the periods  ended
          October 31, 2003 and 2002,  458,437 and 15,000  warrants were granted,
          respectively.

13.      INCOME TAXES

          The Company has not  recorded an income tax expense or benefit for the
          years ended October 31, 2004 and 2003.

         Income before provision for income taxes consisted of the following (in
thousands):

                                      F-27
<PAGE>

                             October 31,         October 31,         October 31,
                                2004                2003                 2002

Domestic                      (1,110)               (789)              (6,940)
Foreign                        2,184                 (19)                  (2)
                              -------               ------             ---------
Pre-tax profit (loss)     $    1,074          $      808          $    (6,942)
                          ==============      ==============      ==============

     The provision for income taxes differs from the amount obtained by applying
     the  statutory  federal  income tax rate to income before taxes and follows
     (in thousands):
<TABLE>
<CAPTION>
    <C>                                          <C>                     <C>                    <C>

                                                 October 31,         October 31,         October 31,
                                                     2004               2003                 2002

Pre-tax profit (loss)                           $        1,074     $        (808)      $      (6,942)
                                                --------------     --------------      --------------

Computed Federal income tax
benefit at 34.0%                                           365              (275)             (2,360)
Computed state income tax
benefit at 8.4%, net of federal
income benefit                                             (65)              (47)               (202)
Effect of difference between Hong
 Kong and PRC tax rates and U.S.
 Federal and state tax rates                              (341)              161                 207
Impairment of goodwill                                       -                 -               1,937
Other permanent differences                               (447)             (234)                561
Change in valuation allowance                              488               395                (143)
                                                -----------------------------------------------------

                                                $                  $                   $
                                                ----------------   ---------------     --------------
</TABLE>

     The tax  effects of  temporary  differences  that give rise to  significant
     portions of deferred tax assets and deferred tax liabilities at October 31,
     2004 and 2003 are presented below (amounts in thousands):

                                      F-28
<PAGE>
<TABLE>
<CAPTION>
                   <C>                                                   <C>                     <C>

                                                                        2004                2003
                                                                 ------------------- -------------------
         Deferred tax assets:
             Net operating loss (NOL) carry forwards                  $      3,996        $      3,564
             Allowance for doubtful accounts receivable                          -                   7
             Inventory obsolescence                                              2                  77
             Write-off of machinery                                              -                  41
             Accrued expenses                                                  302                  19
                                                                 ------------------- -------------------
               Total gross deferred tax assets                               4,269               3,708

         Deferred tax Liabilities:
             Depreciation and amortization                                     (77)                 (4)
                                                                 ------------------- -------------------
               Total gross deferred tax Liabilities                            (77)                 (4)

               Less valuation allowance                                     (4,192)             (3,704)
                                                                 ------------------- -------------------
                  Net deferred tax asset                         $               -   $               -
                                                                 =================== ===================
</TABLE>

     The Company has provided a valuation allowance for 100% of its deferred tax
     assets at October 31, 2004, 2003 and 2002 as the Company  concluded that it
     was not more likely than not that it would be able to realize  these assets
     due principally to the Company's history of losses.

     As of October 31, 2004 and 2003,  the Company had an estimated  federal net
     operating loss carry forward of  approximately  $10,351,000  and $9,493,000
     respectively, expiring through 2024.

     PRC Taxation:

     The fiscal tax year end of the PRC  subsidiaries  is  December  31. The tax
     rate for both  companies  is 15%. At December 31, 2003 IDWT and MULCD had a
     tax loss carry  forward of  $116,000  and  $222,000,  respectively.  A 100%
     valuation  allowance  for the deferred  tax assets has been  provided as it
     could not be  concluded  that it was more likely than not that these assets
     would be realized.

     Hong Kong Taxation:

     The rate of taxation in Hong Kong is 17.5%. A 100% valuation  allowance for
     the deferred tax assets has been provided as it could not be concluded that
     it was more  likely than not that these  assets  would be  realized.  As of
     October  31, 2004 and 2003 the Company had  estimated  net  operating  loss
     carry  forwards  in  Hong  Kong of  approximately  $256,000  and  $729,000,
     respectively.

                                      F-29
<PAGE>

14.      RETIREMENT PLANS

         The Company maintains the "IDW 401(k) Plan" (the "Plan") under the
         provisions of Section 401(k) of the Internal Revenue Code. The Plan
         covers substantially all full-time U.S. employees. At its option, the
         Company can make discretionary matching contributions. To date, the
         Company has not made such a contribution.

         For its Hong Kong employees, the Company currently contributes
         approximately $9,000 per year to a "Mandatory Provident Fund" (MPF)
         under the laws of the Hong Kong Special Administrative Region of the
         PRC.

15.      SEGMENT AND GEOGRAPHIC INFORMATION

         The Company produces displays or display modules for end products of
         OEMs manufacturers and hence operates in one segment. However, the
         Company has four major geographic territories where it sells and
         distributes essentially the same products. The geographic territories
         are the United States, Hong Kong (including China), Asia (excluding
         Hong Kong and China), and Europe. The following represents geographical
         data for continuing operations (in thousands).
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

        Revenues                                                    Fiscal Year Ended October 31
        -------------------------------------------- ------------------- ------------------ ---------------------
                                                                  2004                2003               2002
                                                     ------------------- ------------------ ---------------------
        United States                                           19,472              10,693             11,144
        China (including Hong Kong)                              8,440               4,916              6,753
        Asia (excluding Hong Kong and China)                    10,152               4,538              2,183
        Europe                                                   7,051               1,690                566
        Other                                                    1,119                 878                160
                                                     ------------------- ------------------ ---------------------
                                                               $46,234             $22,715            $20,806
                                                               =======             =======            =======



        "Long-lived Assets"
        --------------------------------------------
                                                                  2004                2003
                                                     ------------------- ------------------
        United States                                              112                 109
        China (including Hong Kong)                             16,306               4,687
        Asia (excluding Hong Kong and China)                         -                   -
        Europe                                                       -                   -
        Other                                                        -                   -

                                                     ------------------- ------------------
                                                               $16,418              $4,796
                                                               =======              ======
</TABLE>

                                      F-30
<PAGE>

         Major Customer

         Sales to one customer for the periods ended October 31, 2004, 2003 and
         2002, accounted for approximately 16%, 29% and 30%, respectively of
         total sales. This customer represented 5% and 9% of the Company's
         accounts receivable at October 31, 2004 and 2003, respectively.

16.      QUARTERLY CONSOLIDATED FINANCIAL DATA (UN-AUDITED)

         The following financial information reflects all normal recurring
adjustments that are, in the opinion of management, necessary for a fair
statement of the results of the interim periods. The quarterly results for the
years ended October 31, 2004, 2003 and 2002 are set forth in the following
table:
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                                                                          Diluted          Basic
                                                                                         Earnings        Earnings
                                                                       Net Earnings     (Loss) Per      (Loss) Per
              2004                     Sales          Gross Profit       (Loss)           Share            Share
              ----                     ------         -------------      -------          ------           -----
First Quarter                      $     9,796       $     2,378        $     621      $      0.03       $     0.02
Second Quarter                          10,624             2,168             (449)           (0.02)           (0.02)
Third Quarter                           11,654             2,434              370             0.01             0.01
Fourth Quarter                          14,160             3,131              532             0.02             0.02
                                  ----------------- ----------------- --------------- ---------------- ---------------
Total                              $    46,234        $   10,111        $   1,074       $     0.04       $    0.04
                                  ================= ================= =============== ================ ===============
              2003
              ----
First Quarter                      $     5,121       $     1,492       $       24      $        -       $        -
Second Quarter                           4,688               931             (628)          (0.03)           (0.03)
Third Quarter                            5,889             1,305             (314)          (0.02)           (0.02)
Fourth Quarter                           7,017             1,387              110            0.01             0.01
                                  ----------------- ----------------- --------------- ---------------- ---------------
Total                              $    22,715        $    5,115       $     (808)     $    (0.04)      $    (0.04)
                                  ================= ================= =============== ================ ===============
              2002
              ----
First Quarter                      $     4,611       $     1,155       $     (299)      $   (0.02)       $   (0.02)
Second Quarter                           5,584             1,383             (178)          (0.01)           (0.01)
Third Quarter                            5,316             1,321             (347)          (0.02)           (0.02)
Fourth Quarter                           5,295             1,217           (6,118)          (0.32)           (0.32)
                                  ----------------- ----------------- --------------- ---------------- ---------------
Total                              $    20,806        $    5,076       $   (6,942)      $   (0.36)       $   (0.36)
                                  ================= ================= =============== ================ ===============
</TABLE>

                                      F-31
<PAGE>

                            SUPPLEMENTARY INFORMATION

                                      F-32
<PAGE>


                INTERNATIONAL DISPLAYWORKS, INC. AND SUBSIDIARIES

                                   SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In Thousands)

      For the Year Ended October 31, 2004, the Year Ended October 31, 2003
                         The Year Ended October 31, 2002
<TABLE>
<CAPTION>
<S>     <C>    <C>    <C>    <C>    <C>    <C>

                                             Balance at         Charged to                             Balance
                                             beginning          costs and          Deductions          at End
             Description                     of Period           Expenses         (write-offs)        of Period
---------------------------------------    ---------------    ---------------    ---------------    --------------
October 31, 2002
   Allowance for doubtful accounts         $        196       $    237              $       (92)       $       341
   Allowance for obsolete inventory        $        585       $      -              $      (216)       $       369

October 31, 2003
   Allowance for doubtful accounts         $        341       $      6              $      (307)       $        40
   Allowance for obsolete inventory        $        369       $    142              $         -                511

October 31, 2004
   Allowance for doubtful accounts         $         40       $     82              $       (21)       $       101
   Allowance for obsolete inventory        $        511       $     24              $       (68)       $       467

</TABLE>
                                      F-33


<PAGE>


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND
         FINANCIAL DISCLOSURE.

         None.

ITEM 9A.  CONTROLS AND PROCEDURES.

     Our  management,  with the  participation  and under the supervision of our
Chief Executive Officer and our Chief Financial Officer,  reviewed and evaluated
the  effectiveness  of the design and operation of our  disclosure  controls and
procedures, as of the end of the fiscal year covered by this report, as required
by  Securities  Exchange  Act Rule 13a-15,  and  concluded  that our  disclosure
controls and procedures are effective to ensure that information  required to be
disclosed  in our reports  filed with the  Securities  and  Exchange  Commission
pursuant  to  the  Securities  and  Exchange  Act of  1934  is  accumulated  and
communicated to mamagement  timely,  including our Chief  Executive  Officer and
Chief Financial Officer.  Based on this evaluation,  our Chief Executive Officer
and Chief  Financial  Officer have concluded that, as of the end of such period,
our  disclosure  controls and procedures are effective to ensure that we record,
process,  summarize,  and report  information  required to be  disclosed  in the
reports  we filed  under the  Securities  Exchange  Act of 1934  within the time
periods  specified  by  the  Securities  and  Exchange  Commission's  rules  and
regulations.  During the year ended October 30, 2004, there have been no changes
in our internal control over financial reporting,  or to our knowledge, in other
factors,  that have materially  affected or are reasonably  likely to materially
affect our internal controls over financial reporting.

ITEM 9B.  OTHER INFORMATION

          None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     The  information  called  for in  Item 10 of Part  III is  incorporated  by
reference  from the definitive  proxy  statement of the Company to be filed with
the Securities and Exchange Commission within 120 days from fiscal year end.

ITEM 11.  EXECUTIVE COMPENSATION.

     The  information  called  for in  Item 11 of Part  III is  incorporated  by
reference  from the definitive  proxy  statement of the Company to be filed with
the Securities and Exchange Commission within 120 days from fiscal year end.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The  information  called  for in  Item 12 of Part  III is  incorporated  by
reference  from the definitive  proxy  statement of the Company to be filed with
the Securities and Exchange Commission within 120 days from fiscal year end.

                                       39
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The  information  called  for in  Item 13 of Part  III is  incorporated  by
reference  from the definitive  proxy  statement of the Company to be filed with
the Securities and Exchange Commission within 120 days from fiscal year end.

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

     The  information  called  for in  Item 14 of Part  III is  incorporated  by
reference  from the definitive  proxy  statement of the Company to be filed with
the Securities and Exchange Commission within 120 days from fiscal year end.

                                     PART IV

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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

         (1)   Financial Statements (see Item 8.)

               o    Report of  Independent  Registered  Public  Accounting  Firm
                    (Grant Thornton) o Consolidated Balance Sheets - October 31,
                    2004 and  October  31,  2003 o  Consolidated  Statements  of
                    Operations - Years Ended October 31, 2004,  October 31, 2003
                    and October 31, 2002
               o    Consolidated  Statements  of  Stockholders'  Equity  - Years
                    Ended  October  31,  2004,  October 31, 2003 and October 31,
                    2002
               o    Consolidated  Statements of Cash Flows - Years Ended October
                    31, 2004, October 31, 2003 and October 31, 2002
               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)

                                       40
<PAGE>

         (3)   Exhibits

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(22)
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)
4.3  Forms of Warrant (26)
4.4  Forms of Placement Agent Warrant (27)
10.1 Forms of Warrant (3)
10.2 Morrow  Snowboards,  Inc.  Employee  Equity  Incentive  Plan as amended and
     restated February 13, 1997 (4)
10.3 Form of Nonqualified Stock Option Agreement (3-4)
10.4 Form of Incentive Stock Option Agreement (3-4)
10.5 Form of Indemnification Agreement (3-4)
10.6 Stock Option Plan for Non-Employee Directors (3-4)
10.7 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)
10.8 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)
10.9 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)
10.10 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)
10.11 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)
10.12 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)
10.13 Acquisition  Agreement  dated as of March  26,  1999,  by and  between  K2
     Acquisitions, Inc. and the Registrant (10)
10.14 Memorandum of Understanding  between Capitol Bay Management,  Inc. and the
     Company (11)
10.15 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)
10.16 Promissory Note dated August 25, 1999, given by Morrow Snowboards, Inc. to
     Dennis and Carol Pekkola (12)

                                       41
<PAGE>

10.17 Trust Deed dated  August 25,  1999,  given by Morrow  Snowboards,  Inc. to
     Robert Smejkel, as Trustee,  with Dennis and Carol Pekkola as beneficiaries
     (13)
10.18 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)
10.19 Morrow Snowboards,  Inc. 1999 Stock Option Plan for Non-Employee Directors
     (14)
10.20 Asset Purchase  Agreement  dated as of November 12, 1999,  among Westbeach
     Canada ULC and Westbeach Sports Inc.(15)
10.21 General  Assignment  dated as of November 12, 1999, among Westbeach Canada
     ULC and Westbeach Sports Inc.(15)
10.22 Assignment  of Lease and Consent  among  Westbeach  Canada ULC,  Westbeach
     Sports Inc. and Western Immo  Holdings,  Inc. dated as of November 12, 1999
     (15)
10.23 Assignment  of Lease and Consent  among  Westbeach  Canada ULC,  Westbeach
     Sports Inc. and Welf Arne Von Dehn dated as of November 12, 1999 (15)
10.24 Bill of Sale between  Westbeach Canada ULC and Westbeach Sports Inc. dated
     as of November 12, 1999 (15)
10.25 Letter from Arthur Andersen, LLP dated January 24, 2000 (16)
10.26 Placement  Agent   Agreement  dated  January  13,  2000,   between  Morrow
     Snowboards, Inc. and Capitol Bay Securities, Inc (17)
10.27 Securities  Purchase  Agreement  effective as of January 31,  2000,  among
     Morrow Snowboards, Inc. and the Sellers (18)
10.28 Sale and Purchase  Agreement February 1, 2000 among Vikay Industrial (Hong
     Kong) Ltd. and International DisplayWorks, Inc. (19)
10.29 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)
10.30 2000 Equity Incentive Plan for Non-Employee Directors (21)
10.31 Stock Option Agreements [Form of] (23)
10.32 Equity Incentive Plan (21)
10.33 Employment Contract with Ian Bebbington (24)
10.34 Manufacturing Agreement (25)
10.35 Form of Common Stock Purchase Agreement (26)
10.36 Form of Promissory Note (26)
10.37 Form of Securities Purchase Agreement (27)
10.38 Form of Registration Rights Agreement (27)
10.39 Memorandum  of  Understanding   between  Grand  Pacific   Optoelectronincs
     Corporation and International DisplayWorks, Inc. (28)
10.40 Form of Securities Purchase Agreement (29)
10.41 Form of Registration Rights Agreement (29)
10.42 Asset Purchase Agreement by and between  International  DisplayWorks (Hong
     Kong) Limited and Grand Pacific  Petrochemical  Corporation  dated June 24,
     2004 (30)
10.43 Employment  Letter  Agreement with Thomas A. Lacey dated September 7, 2004
     (31)
23.1 Consent of Grant Thornton
31.1 Certification  of Chief  Executive  Officer  pursuant to Section 302 of the
     Sarbanes-Oxley Act
31.2 Certification  of Chief  Financial  Officer  pursuant to Section 302 of the
     Sarbanes-Oxley Act
32   Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant to Section 906 of the Sarbanes-Oxley Act

                                       42
<PAGE>

(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)  Incorporated  by  reference  from the  Company's  Proxy  Statement  for the
     meeting held on May 22, 1997 (File No. 000-27002).
(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).
(20) Incorporated  by  reference  from the  Company's  Proxy  Statement  for the
     meeting held on September 28, 2000 (File No. 707647).
(21) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed October 15, 1999 (File No. 000-27002).
(22) Incorporated by reference from the Company's Annual Report on Form 10-K for
     the year ended October 31, 2001 (File No 000-27002).
(23) Incorporated by reference from the Company's registration statement on Form
     S-8 effective May 1, 2002 (File No. 333-87296).
(24) Incorporated by reference from the Company's Annual Report on Form 10-K for
     the year ended October 31, 2002 (File No 000-27002).
(25) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed on April 24, 2003 (File No. 000-27002).
(26) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed on October 10, 2003 (File No. 000-27002).
(27) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed on December 30, 2003 (File No 000-27002).
(28) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed on April 15, 2004 (File No 000-27002).

                                       43
<PAGE>

(29) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed on May 13, 2004 (File No 000-27002).
(30) Incorporated  by reference  from the Company's  current  report on Form 8-K
     filed on June 24, 2004 (File No 000-27002).
(31) Incorporated by reference from the Company's registration statement on Form
     S-8 filed on November 12, 2004 (File No 333-120404).


                                       44

<PAGE>



                                   SIGNATURES

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

                             INTERNATIONAL DISPLAYWORKS, INC.,
                             A Delaware corporation


Dated:   July 21, 2005       By:/s/ Thomas A. Lacey
                             ------------------------------------------------
                             Thomas A. Lacey,
                             Chief Executive Officer
                             (Principal Executive Officer)



                             By:/s/ Jeff Winzeler
                             -----------------------------------------------
                             Jeff Winzeler
                             Chief Financial Officer
                             (Principal Accounting and Principal
                             Financial Officer)