<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

          [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended: December 31, 2001

                         Commission file number 0-28225

                            ASSET EQUITY GROUP, INC.
             (Exact name of registrant as specified in its charter)

                        Utah                           91-2063239
          (State or other jurisdiction of          (I.R.S. Employer
           incorporation or organization)         Identification No.)

                           10120 S. Eastern Ave, #218
                               Henderson, NV 89052

                    Issuer's Telephone Number: (702) 492-1218

         Securities registered under Section 12(b) of the Exchange Act:
                                      None

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.001 par value
                                (Title if Class)

Indicate by check mark whether the registrant (a) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

The number of shares of Common Stock, $0.001 par value, outstanding on December
31, 2001, was 4,813,805 shares, held by approximately 510 stockholders.

<PAGE>

INDEX

Part I

Item 1. Business

Item 2. Properties

Item 3. Legal Proceedings

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

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholders Matters

Item 6. Management Discussion and Analysis of Financial Condition and Results of
        Operations

Item 7. Financial Statements and Supplementary Data

Item 8. Changes in Accountant

Part III

Item 9. Directors and Executive Officers of the Registrant

Item 10. Executive Compensation

Item 11. Security Ownership of Certain Beneficial Owners and Management

Item 12. Certain Relationships and Related Transactions

Item 13. Exhibits and Reports

<PAGE>

Part I

When used in this 10-KSB and elsewhere by management or Asset Equity Group, Inc.
(`ASEQ" or the "Company") from time to time, the words "expect," "estimate,"
"anticipate," "predict," "believe," "plans" and similar expressions are intended
to identify forward-looking statements concerning economic performance, future
financial condition, and the Company's business operations. Such statements
involve risks, uncertainties and assumptions, including industry and economic
conditions, customer actions and other factors discussed in this filing and
other filings with the Securities and Exchange Commission (the "SEC"). These
statements are based on a number of assumptions and estimates that are
inherently subject to significant risks and uncertainties, many of which are
beyond our control, and reflect future business decisions which are subject to
change. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this Form 10-KSB.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual outcomes may vary materially from
those indicated. Furthermore, the Company cannot give assurance regarding
returns to investors.

Item 1. Business

OVERVIEW

Asset Equity Group, Inc. ("ASEQ" or the "Company," which includes the parent
company and all of its subsidiaries) is a real estate development company
engaged in operating and developing family entertainment venues. The Company was
incorporated in 1981 in the state of Utah under the name M-K Energy. The Company
changed its name in 1982 to Cache Drilling, Inc. and again in 1988 to Almur
Cosmetics, Inc. The Company originally sold securities to the public pursuant to
a registration granted by the Utah Securities Division on May 1, 1981, and the
exemption from registration under section 3(a)(11) of the Securities Act of
1933. In January 2000, control of the Company was acquired by the current
controlling shareholders. Since that time, the Company has undertaken to
reorganize its management and business strategy in order to become a development
company. Asset Equity Group will develop these properties in part with its
existing technology and entertainment relationships to provide state-of-the-art
electronic game systems and IP based competition over LANs or the Internet.

The Company will also seek to realize gains through the sponsorship of
professional sports leagues, leading electronic game companies and on site
product endorsement, as well as leasing of prime real estate within the venues
to recognized dining, streetware and sporting goods chains. The Company expects
to continue to develop and replicate these venues, with the goal of increasing
revenue as new products and trends are commercially introduced, and to continue
to pursue affiliations with additional allied companies and technologies.

<PAGE>

BUSINESS STRATEGY

In 2001, ASEQ's key initiative focused on creating value by developing,
acquiring, and investing in companies that had the potential to become market
leaders. The Company helped these ventures by infusing new technology, new
management, or corporate development support. ASEQ planned to capitalize on
these opportunities through the selective sale of its investments to outside
investors. ASEQ planned to eventually divest these ventures either through an
IPO process, a reverse merger, or through the sale of the venture to a strategic
buyer. In some cases, ASEQ will continue to operate the entity indefinitely
until a favorable way of divesting the entity arises. This divestment process
will eventually allow each of the subsidiaries to be a stand-alone company.

The Company's strategic initiatives revolve around the following:

     Operation, Development & Support - Operating units are managed, developed
     --------------------------------
     and operated by an appointed management team. Asset Equity Group provides
     strategic guidance, management services and support in the area of
     technology, corporate development, financial management, business affairs,
     and human resources. Each ASEQ subsidiary or investment maintains its own
     separate sales and marketing staffs, enabling the sales personnel to
     develop strong customer relationships and expertise in their respective
     areas.

     Divestment -ASEQ business units are developed and geared to become
     ----------
     independent business units that can operate as stand-alone enterprises
     within the ASEQ network.

     Promotion of Synergies - Asset Equity Group will promote an environment of
     ----------------------
     collaboration and sharing of knowledge within its network of companies and
     strategic partners.

     Mergers & Acquisition - The Company will acquire majority ownership or
     ---------------------
     invest in businesses that will benefit from new technologies provided by
     Asset Equity Group operating units. The Company is also actively looking
     for new opportunities in this area that would benefit and integrate with
     the operation of its subsidiaries

     Integration - As the industry evolves and new technology comes into
     -----------
     fruition, there will be a continuous process of integration as the Company
     evolves with the changing environment.

     Value Engineering - Asset Equity Group will continually seek new technology
     -----------------
     partners and integrate new technology to enhance operational efficiency and
     reduce costs. The Company will pursue cost improvement opportunities and
     shareholder value-based decisions through benchmarking, budgeting and
     strategic planning.

     Investment Criteria -- The Company invests its resources in businesses that
     -------------------
     meet the following criteria: first -- ASEQ acquires, develops and operates
     ventures that are positioned to add new life and value to traditional
     business models; second - critical acquisition focus is on the targeted
     company's ability to bring synergy and value to existing entities; third -
     ability of the targeted company or business model to generate revenue
     within a 120 day period after acquisition; and fourth - the venture is
     involved in an emerging industry and has potential to become a market
     leader.

<PAGE>

OPERATING UNITS AND INVESTMENTS

The Company organizes its portfolio into key areas of focus, which are:
streaming media, wireless media, e-commerce, and entertainment. The Company
currently owns the majority or has minority interest in the following companies:

Entertainment
-------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                                      Initial
                                                      Percentage                                    Investment
                Company Name                         of Ownership                 Status               Date
------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                 <C>                        <C>
SprocketMusic                                            100%            Ceased Operation                  Aug-00
------------------------------------------------------------------------------------------------------------------
Entertech Media Group                                    20%             Cancelled Full Merger             Aug-00
------------------------------------------------------------------------------------------------------------------

Streaming Media
---------------

------------------------------------------------------------------------------------------------------------------
                                                                                                      Initial
                                                      Percentage                                    Investment
                Company Name                         of Ownership                 Status               Date
------------------------------------------------------------------------------------------------------------------
UltraVu                                                  100%            Operating                         Jul-00
------------------------------------------------------------------------------------------------------------------
Corporate Interviewing Network                           100%            Operating                         Feb-01
------------------------------------------------------------------------------------------------------------------

E-Commerce
----------

------------------------------------------------------------------------------------------------------------------
                                                                                                      Initial
                                                      Percentage                                    Investment
                Company Name                         of Ownership                 Status               Date
------------------------------------------------------------------------------------------------------------------
AnythingSurplus                                          100%            Ceased Operation                  Dec-99
------------------------------------------------------------------------------------------------------------------
Iccount                                                  100%            Ceased Operation                  Jan-00
------------------------------------------------------------------------------------------------------------------
Autopoint.com                                            100%            Ceased Operation                  Dec-00
------------------------------------------------------------------------------------------------------------------

Wireless Media
--------------
------------------------------------------------------------------------------------------------------------------
                                                                                                      Initial
                                                      Percentage                                    Investment
                Company Name                         of Ownership                 Status               Date
------------------------------------------------------------------------------------------------------------------
MyMobileCity                                             100%            Operating                         Aug-00
------------------------------------------------------------------------------------------------------------------
</TABLE>

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The products and services of the Company's subsidiaries as of December 31, 2001,
include the following:

UltraVu.com
-----------

UltraVu, Inc. ("UltraVu,"), a Nevada corporation, is a national provider of
custom-formatted interviews primarily for corporate clients. The Company offers
its services through its forty locations nationwide and through its streaming
media technology and other web based products. UltraVu's key areas of focus are
driven by its product offerings and services, which include the following: The
UltraVu, CorporateVu Corporate Profile, CareerVu Streaming Resume, and DateVu
(Video Dating Interview). The UltraVu product offers clients its forty locations
in conducting preliminary interviews, which will be streamed over a password
secured extranet along with other value-added web-based products. CorporateVu is
a medium of communication that allows corporate clients to showcase their
companies to a targeted audience (i.e. job seekers) through a customized video
player over the Internet. CareerVu offer the job seekers a two or three minute
video overview of themselves and their career aspirations for the purpose of
matching jobseekers and employers. UltraVu is providing dating services its
DateVu product, a service that allows their clients a two or three minute video
presentation of themselves over the Internet. Although DateVu targets a
different market, the application of the technology is the same; for that reason
DateVu is expected as an ancillary source of revenue.

The value behind UltraVu's services is that it offers businesses a single point
of management for all of their streaming content publishing and delivery needs.
In addition, UltraVu provides professional support for website integration and
free consulting services to enable clients to make the most of their video
content. UltraVu will sell its services to businesses as an OEM (original
equipment manufacturer) product.

UltraVu.com, Inc. was acquired in July 31, 2000 for 150,000 restricted shares of
Company common stock. Mr. Brown received 125,000 of those shares. The remaining
shares went to a non-affiliated third party. The primary developer of UltraVu is
Scott Salter, UltraVu's President. UltraVu officially commenced operation in
November 2000, after the initial funding of Asset Equity Group, Inc ("ASEQ"). As
of December 31, 2001, UltraVu has received approximately $ 40,151.00 in the form
of financing from ASEQ. Asset Equity Group plans to continue its support of
UltraVu until it becomes self-sustaining. In addition to funding, UltraVu is
receiving technology, corporate development, and financial management support
from Asset Equity Group. The goal of Asset Equity Group is to find co-investors
for the companies under its portfolio through a divestment process. This
divestment process will eventually allow each of the subsidiaries to stand on
its own. Asset Equity Group eventually plans to maintain a minority interest in
UltraVu. Other cash-inflow, which is not sufficient to fund further development
of UltraVu, is currently coming from receivables from existing business
relationships. UltraVu plans to obtain further funding from venture capital
firms, angel investors, strategic partners, financial institutions or other
interested investors in order for the management team to successfully expedite
the UltraVu mission and objectives. With the addition of investment capital, we
expect to transition from a development level company to lean high-margin
service provider achieving profitability in the second year of operation.

From its commencement of operations through present day, the UltraVu has been in
the developmental stage. During this period, the company was engaged primarily
in testing and proving the business model, establishing strategic partnerships,
conducting market research, completing the acquisition of the Corporate
Interviewing Network, and signing up customers. UltraVu plans to further grow
through strategic alliances, through its franchise program, through branding,
and through mergers and acquisitions. The business model requires the ability to
establish a network of interviewing locations that can conduct and videotape
interviews. The interviews are encoded and delivered over the Internet utilizing
streaming media technology. This process requires tools and training of field
representatives and efficient processes for handling the delivery of

<PAGE>

the content in a timely manner. Field representatives or franchisees will also
be trained as field sales personnel.

In March 2001, the Company acquired Corporate Interviewing Network, Inc., which
became the foundation for the "The Streaming Interviews" product offering. This
acquisition gave us a field network of trained interviewers, a proven business
model, and an existing stream of revenue from an established customer base. The
following are Corporate Interviewing Network customers taking advantage of the
Streaming Interview Product: National Gypsum, Ruan Transportation, Las Vegas
Valley Water District, City of Henderson, NV, Richland County SC, City of
Richmond, VA, and Clarke County, Nevada. New Streaming Interviews customer
trials are underway with Intel, Target, and IBM.

Numerous strategic alliances have also been formed. Examples of these include:
Microsoft, Headhunter.net, WirelessResumes.com, Haines Cotti & Associates,
Collegegrad.com, and various government organizations. Numerous key vendor
relationships have also been formed with companies such as Navisite and Exodus.
Streaming Interviews relies on these vendors for delivering its services. For
that reason Streaming Interviews plans to maintain relationships with multiple
vendors to generate best price competition. These partnerships and relationships
provide us with the streaming media platform, hosting, storage and bandwidth to
deliver the video over the Internet.

MyMobileCity
------------

MyMobileCity is a developer and application service provider. MyMobileCity will
provide businesses with application, service, distribution and promotional
solutions on wireless devices. Their niche in the emerging wireless industry
lies in device and carrier interoperability. From Palm(TM), IPAQ(TM) and
Cybiko(TM) to Nokia(TM), Samsung(TM), Nextel(TM) and Sprint(TM), MyMobileCity
unites device demographics to its clientele's audience. MyMobileCity's suite of
applications not only recognizes the wide variety of new and emerging platforms
and devices but also provides optimized content and a consistent user experience
regardless of device or carrier. The Company acquired Stephen Brown's 20%
interest in MyMobileCity in exchange for 100,000 restricted shares of Company
common stock in August 2000.

MyMobileCity currently two main products, which are Mobile Messenger and the
Mobile Adoption Engine. The Mobile Messenger is being marketed at this time,
while the Mobile Adoption Engine is under development. The Mobile Messenger
allows businesses to instantly send text messages or advertising to a targeted
audience on digital communication devices such as cell phones, pagers, and
PDA's. The Mobile Adaptation Engine is a proprietary middleware product designed
to support the re-purposing of content for display over various Internet-enabled
devices. Through XML-based templates, unique application modules, and an
efficient server application, the Mobile Adaptation Engine is able to recognize
the origin of page requests and transparently return optimized content to the
unique device. On March 27, 2001 New Line Cinema signed a letter of intent to
use MyMobileCity's Mobile Messenger application.

Open source template architecture allows designers and businesses to develop
device-specific user interfaces or rely on MyMobileCity's available templates.
Subscription to the mobile adaptation engine includes master templates as well
as device-specific templates to reduce the burden of development for existing
and emerging devices.

Application "modules" allow extended device specific features such as location
relationship and m-commerce to be driven off of static data or active databases
with minimal client development time. This adaptation technology is built into
MyMobileCity's Mobile Adaptation Engine, a product that can run independently or
on top of current XML conversion technologies.

<PAGE>

EnterTech Media Group
---------------------

Entertech Media (OTC BB: EMGI) was originally a motion picture company formed by
John Daly, whose previous film company won 21 Academy Awards for such films as
"Platoon," "The Last Emperor," and "The Falcon and the Snowman." Entertech Media
operates as a traditional motion picture company which is branching out into
broadband with their new feature films as well as with their existing catalog of
films. Entertech Media will collaborate with Asset Equity Group, Inc. on the
production of programming for the Internet and visual telephone-based
technologies, both wired and wireless. The companies are also considering
expanding their Web sites to include areas devoted to original and re-purposed
3D content, as well as specific programming such as children's programming and
science fiction. It is anticipated that this content will be marketed on a
business-to-business basis to sites using the UltraVu Player. The plan is for
EnterTech Media Group, Inc. to eventually acquire Sprocket Music and Sprocket
Radio and other ASEQ entertainment related properties to create Igo Media
(EnterTech Media Group, Inc. will file a name change to become Igo Media), an
entertainment content aggregator that focuses on many different media platforms.
Igo Media will operate in all aspects of the film and music industries, through
both traditional arenas and the on-line realm. Igo Media will eventually
organize itself into three reporting segments, which are: Igo Film, Igo Music,
and Igo Radio.

In August 2000, the Company exchanged 500,000 restricted shares of its common
stock for 2,000,000 restricted shares of EnterTech common stock. ASEQ currently
owns 20% of EnterTech Media Group, Inc. It was intended for ASEQ to merge its
fully-owned entities, Sprocket Music, a record label, and Sprocket Radio, an
Internet streaming audio vehicle, with Entertech Media to create a new
multimedia entertainment venture called Igo Media. The company also entered into
an Agreement to acquire additional shares to bring the Company's interest to
65%, this transaction was cancelled my mutual consent of both parties, with no
further obligations on either part.

Eccount
-------

The Company acquired Eccount in January 2000, when it issued 600,000 shares to
Stephen Brown to acquire all of the issued and outstanding shares of Eccount.
Eccount has ceased operation.

AnythingSurplus.com
-------------------

AnythingSurplus was established to be the premier Internet site providing an
on-line discount store that specializes in providing retail surplus inventory to
consumers, and to a lesser extent to businesses.

On January 12, 2001, the Company announced that Eccount and AnythingSurplus.com
would merge to become Iccount.com. Iccount.com will involve innovative ways in
which on-line retail customers reap additional financial benefits from their
on-line purchases. Iccount.com membership will be free. Users will submit their
receipts from any on-line vendor in order to accumulate Iccount Dollars. These
Iccount Dollars can then be converted to make purchases from Iccount vendors.
The Company will target a wide range of businesses to be member merchants
including supermarkets, telecommunications companies, airlines, credit card
companies, music and book sellers, leading online merchants and content
providers, and others. In addition, Iccount will make its own products
available. Through relationships established in the development of
AnythingSurplus.com, Iccount has access to a wide variety of surplus products
that it can, in turn, sell to its users at an extremely discounted rate. The
surplus inventory will come from a variety of industries including home
electronics, furniture, sporting goods, pet supplies, clothing, and more. All
merchandise will be sold on consignment. Revenue will be generated by equally
splitting excess revenues over merchandise liquidation

<PAGE>

value with the partnering companies. AnythingSurplus.com, Eccount.com and
Iccount.com have all ceased operations.

<PAGE>

Autopoint.com
-------------

Autopoint.com is an auto service website designed as an additional channel for
marketing communications, sales and distribution channels for locally operated
brick-and-mortar auto service centers. Autopoint.com is expected to serve as a
central location on the Internet where individuals in need of automotive repairs
and services can easily determine the location of available service
representatives who will help retrieve necessary parts for repairs and make
service calls for customers. Expected to launch in mid-summer of 2001,
AutoPoint.com will offer customers the convenience of reserving a mechanic via
the Internet to be dispatched to their home or office. Autopoint.com's mission
is to provide motorists across the nation the convenience of scheduling routine
automotive service and maintenance through wired and wireless Internet.

The value behind Autopoint.com is its ability to leverage Internet technology in
assisting partnered brick-and-mortar auto service centers to reach their
customers. In addition, this new channel will help grow their traditional
revenue streams. Autopoint.com is compiling a nationwide network of
independently operated auto service centers in order to offer this convenience
to motorists around the country.

These independently operated auto service centers are motivated to be a part of
this network because of the following value propositions:

     .    New Revenue Stream & Distribution Channel - at a minimal fee,
          partnered companies will be able to utilize the Internet as a new way
          to bring in sales.

     .    Focused Operations - partnered companies may concentrate on their core
          competencies while Autopoint.com provides additional marketing and
          digital branding with almost no additional costs.

     .    Reduced Risk - with no capital expenditure on software and IT
          personnel, the partnered auto service center or centers may test a new
          technology development with no negative impact on their existing
          operations.

     .    Product Recognition - branding on a national basis.

     .    Just-in-time inventory system - allows affiliated businesses to know
          which parts to order prior to the job, allowing a JIT (just-in-time
          inventory system).

Consumer value is primarily derived from the convenience Autopoint provides.
Autopoint users may, from the convenience of their home, office, or mobile
phone, schedule and carry out all the necessary transactions within minutes, and
have a mechanic, tow truck or an auto detailer make the house call service
twenty-four hours a day and seven -days -a week.

Autopoint.com is currently a concept stage enterprise. This entity does not yet
have a management team in place. Accordingly, Autopopint.com has minimal
operation, and the ability of this entity to expeditiously accomplish its
mission and objectives is highly dependent upon ASEQ's ability to attract a
capable management team and raise the necessary capital. Products and services
offered by this subsidiary are new and commercially untried. Therefore, market
acceptance for this new concept is crucial for its success.Autopoint.com has
ceased operations.

Hall of Fame and Auctionfun.com
-------------------------------

The Company has determined that Auctionfun.com and Jazz Hall of Fame do not fit
within its current business model. Therefore, the Company has accordingly
written off assets related to both entities.

<PAGE>

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS

THE OCCURRENCE OF ANY OF THE FOLLOWING RISKS COULD MATERIALLY AND ADVERSELY
AFFECT OUR BUSINESS, FINANCIAL CONDITION AND OPERATING RESULTS. IN THAT CASE,
THE TRADING PRICE OF OUR COMMON STOCK COULD DECLINE AND YOU MIGHT LOSE ALL OR
PART OF YOUR INVESTMENT.

OUR BUSINESS IS DIFFICULT TO EVALUATE DUE TO OUR LIMITED OPERATING HISTORY.

In January 2000, the current controlling shareholders acquired control of
Multimedia Industries, Inc. New management was set in place the following month,
and re-organization of the Company immediately followed. During the 1/st/ and
2/nd/ quarter of 2000, the Company's management team was focused on developing
its strategy, establishing its services, and securing financing to support its
business objectives. On July 31, 2000, the Company acquired the 100% interest in
UltraVu and 100% of MyMobileCity, while in August 2000 the Company acquired 20%
interest in Entertech Media Group, Inc. The operation and management of all
three subsidiaries are supported by Asset Equity Group. All of the other
companies under our portfolio are either in the concept stage or have minimal
operating activities, while the previously mentioned three are development stage
enterprises. As a result, it is difficult to anticipate what revenue may be
generated from the different segments of our business over the long term.

Our limited operating history will make it difficult to forecast our future
operating results because, among other things, we have only recently begun
marketing products from UltraVu. You should evaluate our chances of financial
and operational success in light of the risks, uncertainties, expenses, delays
and difficulties associated with operating a new business. Our principal risks
are that:

     .    We may not be able to increase usage of our services and derive
          revenue from these services;

     .    Our marketing and sales efforts may not be successful;

     .    We may not be able to effectively respond to competitive developments;

     .    We may not be able to integrate the business, products, services and
          technology of our recent acquisitions and possible future
          acquisitions; and

     .    We may not be able to provide the necessary personnel to manage the
          numerous development stage enterprises under our portfolio.

The uncertainty of our future performance and the uncertainties of our operating
in a new and expanding market increase the risk that the value of your
investment in our common stock will decline.

WE HAVE A HISTORY OF LOSSES AND WE ANTICIPATE LOSSES WILL CONTINUE.

As of December 31, 2001, we had an accumulated deficit of $24,972,687 million.
We have not achieved profitability and expect to continue to incur net losses in
2002. We expect to continue to incur significant operating expenses and, as a
result, will need to generate significant revenues to achieve profitability,
which may not occur. Even if we do achieve profitability, we may be unable to
sustain or increase profitability on a quarterly or annual basis in the future.

<PAGE>


OUR OPERATING RESULTS MAY VARY FROM QUARTER TO QUARTER IN FUTURE PERIODS, WHICH
MAY CAUSE OUR STOCK PRICE TO FLUCTUATE OR TO DECLINE.

ASEQ quarterly future expected revenues may vary depending on a number of
factors including:

     .    Our ability to successfully divest companies under our portfolio,
          which would result in capital gains or cash infusion for ASEQ.

     .    Our ability to develop and successfully market products introduced to
          the market by our subsidiaries.

     .    Demand for our products and services introduced to the market by our
          subsidiaries.

     .    The ability of our subsidiaries to become viable and profitable
          businesses.

     .    Actions taken by competitors of our subsidiaries.

     .    Technological changes in the market.

Our operating results in any quarter will be harmed if our revenues for that
quarter fall below our expectations, and we are not able to quickly reduce our
operating expenses in response. Our operating expenses, which include sales and
marketing, service and product development, and general and administrative
expenses, are based on our expectations of future revenues and are relatively
fixed over a 30 to 45 day period. As a result, our ability to rapidly adjust
these expenses is limited, which may increase the fluctuations in our quarterly
operating results. In addition, we do not have a sufficiently long operating
history to be able to determine whether revenue expectations are achievable,
which could have an adverse impact on our stock price.

OUR BUSINESS MODEL IS HIGHLY DEPENDENT UPON THE FINANCIAL MARKET.

The Company's ability to realize capital gains through the selective sale of its
subsidiaries to outside investors may be adversely affected by macro-economic
forces outside the control of the management. If we are unable to anticipate
changes in the financial markets for obtaining capital for our subsidiaries we
may not be able to expand these businesses to successfully compete with other
companies, or be able to fully implement their business plans.

THE BUSINESS MODELS OF OUR SUBSIDIARIES DEPEND HIGHLY ON UNPROVEN TECHNOLOGY.

The numerous development stage enterprises under our portfolio depend upon the
Internet and other new technology (i.e. wireless media) to enable them to build
and deliver their services and products. Therefore, our subsidiaries' revenue
models and profit potentials are also unproven. We may be required to further
adapt our business model in response to additional changes in the market for
these services, or if our current business model is not successful.

OUR SUBSIDIARIES ARE INVOLVED IN A HIGHLY EVOLVING AND COMPETETIVE MARKET

The Company's subsidiaries are primarily involved in, but not limited to, the
Internet market. The market for Internet products and services is rapidly
evolving and highly competitive. Although the Company has invested in ventures
involved in diverse segments of the Internet market, a single supplier or key
player could dominate the market. New competitors and substitutes are
continually entering the market, which may

<PAGE>

significantly affect the Company's performance in the long run. The Company
therefore cannot give assurance regarding returns to investors.

IF WE ARE UNABLE TO OBTAIN ADDITIONAL FINANCING, WE MAY NOT BE ABLE TO CONTINUE
OR EXPAND OUR OPERATIONS.

Since our inception, our operating activities have used more cash than they have
generated. At this time, we are required to raise additional funds to support
current operations and expedite our business objectives. Such funds may be
required in order to do any or all of the following: fund more aggressive
marketing in the subsidiary level, support corporate development objectives,
develop new or enhanced products or services, respond to competitive pressures,
and/or to acquire complementary businesses, products or technologies. We cannot
be certain that additional financing will be available on terms favorable to us,
if at all. If adequate funds are not available on acceptable terms or not
available at all, we may be unable to successfully promote our products and
services, fund our expansion, develop or enhance our products or services,
respond to competitive pressures or take advantage of acquisition opportunities.

YOU WILL EXPERIENCE DILUTION IF WE RAISE ADDITIONAL FUNDS THROUGH THE ISSUANCE
OF ADDITIONAL EQUITY OR CONVERTIBLE DEBT SECURITIES.

If we raise additional funds through the issuance of equity securities or
convertible debt securities, you will experience dilution of your percentage
ownership of our company. This dilution may be substantial. In addition, these
securities may have powers, preferences and rights that are preferential to the
holders of our common stock and may limit our ability to pay dividends on our
common stock.

OUR REVENUES WILL NOT INCREASE IF WE DO NOT SUCCESSFULLY DEVELOP AWARENESS OF
OUR BRAND NAMES.

If we fail to successfully promote and maintain our subsidiaries' brand names,
fail to generate a corresponding increase in revenues as a result of our
branding efforts, or encounter legal obstacles in connection with our continued
use of our brand names, our revenues will not increase and our prospects for
growth will be diminished. We believe that continuing to build awareness of each
of our brand names is critical to achieving widespread acceptance of our
services.

We believe that brand recognition will become a key differentiating factor among
our subsidiaries as competition in the market for these services increases. We
will be unable to maintain and build brand awareness if we do not succeed in our
marketing efforts, provide high quality services and increase the number of
professionals and buyers requiring individuals with specific professional skills
to fulfill project needs.

THE SALES CYCLES FOR THE PRODUCTS AND SERVICES OFFERED BY OUR SUBSIDIARIES MIGHT
BE LENGTHY, WHICH COULD DELAY THE GROWTH OF OUR REVENUES AND INCREASE OUR
EXPENDITURES.

Products and services offered by our subsidiaries are new and commercially
untried and have only recently been released commercially. We may face
significant delays in their acceptance. We will not be able to recognize any
revenues during the period in which a potential customer evaluates and decides
whether or not to use them, and we expect that this period will be substantial,
ranging between six and 12 months. The decision of a customer to use any of our
services may be expensive, time consuming and complex and may require an
organization to make a significant commitment of resources. As a result, we will
have to expend valuable time and resources to educate interested persons at all
levels in these organizations on their use and

<PAGE>

benefits. Our expenditure of substantial time and resources to persuade
customers to use our services or an unexpectedly long sales and implementation
cycle for them will have a negative impact on the timing of our revenues.

IF WE ARE UNABLE TO HIRE AND RETAIN HIGHLY SKILLED PERSONNEL, OUR SUBSIDIARIES
WILL NOT BE ABLE TO GROW AND COMPETE EFFECTIVELY.

The future success of our subsidiaries depends to a significant extent on our
ability to attract and retain senior management, experienced sales and marketing
personnel, software developers, qualified engineers and other highly skilled
personnel to fill positions as our Company and subsidiaries grow. Competition
for these highly skilled employees is intense, particularly in the technology
industry. We may experience difficulty from time to time in hiring the personnel
necessary to support the growth of our business.

IF WE FAIL TO MANAGE OUR GROWTH, OUR REVENUES MAY NOT INCREASE, AND WE MAY INCUR
ADDITIONAL LOSSES.

Since we have only been in business a short time, our expansion has placed, and
will continue to place, significant strains on our infrastructure, management,
internal controls and financial systems. Our personnel, systems, procedures and
controls may be inadequate to support our future operations. In order to
accommodate the growth of our business, we will need to hire, train and retain
appropriate personnel to manage our operations. We will also need to improve our
financial and management controls, reporting systems and operating systems. We
may encounter difficulties in developing and implementing these new systems. If
we are unable to manage our growth effectively and maintain the quality of our
products and services, our business may suffer.

ANY ACQUISITIONS OF TECHNOLOGIES, PRODUCTS OR BUSINESSES THAT WE MAKE MAY NOT BE
SUCCESSFUL, MAY CAUSE US TO INCUR SUBSTANTIAL ADDITIONAL COSTS, AND MAY REQUIRE
US TO INCUR INDEBTEDNESS OR TO ISSUE DEBT OR EQUITY SECURITIES ON TERMS THAT MAY
NOT BE ATTRACTIVE.

As part of our business strategy, we have in the recent past acquired or
invested in technologies, products or businesses that were expected to be
complementary to our business and may do so in the future. The process of
integrating any future acquisitions could involve substantial risks for us,
including:

     .    Unforeseen operating difficulties and expenditures;

     .    Difficulties in assimilation of acquired personnel, operations,
          technologies and products;

     .    The need to manage a significantly larger and more
          geographically-dispersed business;

     .    Amortization of large amounts of goodwill and other intangible assets;

     .    The diversion of management's attention away from ongoing development
          of our business or other business concerns;

     .    The risks of loss of employees of an acquired business, including
          employees who may have been instrumental to the success or growth of
          that business; and

     .    The use of substantial amount of our available cash, including in the
          case of any future acquisitions the proceeds of this offering, to
          consummate the acquisition.

<PAGE>

We may never achieve the benefits that we expect from the acquisitions of
Entertech Media Group, Corporate Interviewing Network, MyMobileCity,
AnythingSurplus, and Eccount or that we might anticipate from any future
acquisition. If we make future acquisitions, we may issue shares of our capital
stock that dilute other stockholders, incur debt, assume significant liabilities
or create additional expenses related to amortizing goodwill and other
intangible assets, any of which might reduce our reported earnings and cause our
stock price to decline. Any financing that we might need for future acquisitions
may only be available to us on terms that materially dilute existing
shareholders, restrict our business or impose on us costs that would reduce our
net income or increase our net losses.

DEFENDING AGAINST INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS COULD BE TIME
CONSUMING AND EXPENSIVE, AND ANY LIABILITIES IMPOSED ON US FOR INFRINGING ON THE
INTELLECTUAL PROPERTY RIGHTS OF OTHERS COULD REQUIRE US TO PAY SIGNIFICANT
DAMAGES OR DISRUPT OUR BUSINESS.

Successful intellectual property infringement claims against us could result in
monetary liability or a material disruption in our operations. We cannot be
certain that our services, products, content, technology and brand names do not
or will not infringe upon valid patents, copyrights or other intellectual
property rights held by others. We expect that the number of infringement claims
will increase as more participants enter our markets. We may be subject to legal
proceedings and claims from time to time relating to the intellectual property
of others in the ordinary course of our business. We may incur substantial
expenses in defending against these third party infringement claims, regardless
of their merit. In the event of a successful infringement suit against us, we
could be liable for substantial damages and be required to pay substantial
royalties for our use of third party intellectual property or be prohibited from
using third party intellectual property in our products or services. Any of
these outcomes could reduce our revenues and prospects for growth.

WE MAY BE UNABLE TO OBTAIN U.S. TRADEMARK REGISTRATION FOR OUR BRANDS OR TO
PROTECT OUR OTHER PROPRIETARY INTELLECTUAL PROPERTY RIGHTS.

If we fail to obtain federal trademark or service mark registrations for our
marks and any related derivative marks, our promotion of these marks as our
brands could be disrupted. If we are unable to secure the rights to use these
marks and related derivative marks, a key element of our strategy of promoting
these marks as brands in our target markets could be disrupted.

EMPLOYEES

As of December 31, 2001, the Company employed 2 persons, all of whom were
employed on a full-time basis. None of the Company's employees are members of a
labor union or are covered by collective bargaining agreement.

<PAGE>

Item 2. Properties

ASEQ's corporate headquarters occupy approximately 1,400 square feet of office
space in Henderson, Nevada.

Item 3. Legal Proceedings

On or about August 4, 2001, the Company and its President, Stephen Brown, were
named as defendants in a complaint filed in the United States District Court,
Central District of California (Western Division) by H.A.A., Inc., a New York
corporation, Birdie Capital Corporation, a New York corporation, Forest
Equities, a British Virgin Islands corporation, and Steven Berger (collectively
"Plaintiffs") seeking to recover payment of $555,000 of Notes sold by the
Company on March 1, 2001, which were due and payable on May 1, 2001, and a Note
for $300,000 sold on March 16, 2001, which was due and payable on June 16, 2001,
as well as, interest on the Notes, prejudgment interest, attorneys fees and
costs. On or about October 16, 2001, a default judgment was entered by the Court
against the Company and Steven Brown in the amount of $1,204,245.64.

On December 18, 2001, the Plaintiffs and Asset Equity Group, Inc. entered into
an agreement to stay collection of the default judgment listed above.

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

On November 29, 2001, the following matters were submitted to a vote of security
holders and were approved by a majority vote:

     a.   to perform a reverse split of outstanding common stock at an exchange
          ratio of twenty-to-one and to change the name of the corporation to
          Asset Equity Group, Inc.

     b.   to approve a resolution of the board of directors that the provisions
          of Section 16-10a-1704 shall not apply to the Company, and that in
          lieu of 16-10a-1704, the Company adopt section 16-10a-704 of the
          Revised Business Corporation Act which permits corporations to take
          action by the written consent of fewer than all of the shareholders
          entitled to vote

PART II

Item 5. Market for Common Equity and Related Stockholder Matters

The Company's common stock, $0.001 par value per share (the "Common Stock"), has
traded on the NASDAQ Over the Counter Bulletin Board (NASDAQ.OTC) under the
symbol "ASEQ" since the symbol change on February 16, 2001. Prior to the symbol
change the Common Stock was trading under the symbol WNRG.

The closing price of the Common Stock as reported on the NASDAQ.OTC on December
30, 2001 was $0.15. As of December 30, 2001, there were approximately 510
shareholders of the Company's Common Stock.

<PAGE>

Item 6. Management Discussion and Analysis of Financial Condition and Plan of
Operation

The Following discussion and analysis of the financial condition and plan of
operation of Asset Equity Group, Inc. and its subsidiaries (collectively "ASEQ"
or the "Company") should be read in conjunction with ASEQ's consolidated
financial statements and related notes appearing elsewhere in this report. This
discussion and analysis contains forward-looking statements that involve risks,
uncertainties and assumptions. The actual results may differ materially from
those anticipated in these forward looking statements as a result of certain
factors, including but not limited to, those set forth under "Risk Factors" and
elsewhere in this report.

OVERVIEW

Asset Equity Group, Inc (f/k/a WorldNet Resource Group, Inc.), a Utah
corporation, was incorporated in 1981. In February 2001, the Company changed its
name to Asset Equity Group, Inc. In January 2001, the current controlling
shareholders acquired control of the Company, and re-organization followed
shortly. The Company has since been involved in a diverse number of markets
within, although not limited to, the Internet industry. The Company has actively
acquired development stage entities for the purpose of building a portfolio of
companies engaged in emerging markets. The Company plans to realize gains on its
investments through the selective divestment of its subsidiaries to outside
investors. In some cases, the Company will indefinitely operate the subsidiary
until a favorable way of divesting it arises. ASEQ adds value to its
acquisitions by providing them with the following services: technology
development, corporate development, management consulting, financial management,
and administration. Each development stage entity has its own marketing and
sales staff and will eventually have its own management team. The Company plans
to further grow through mergers and acquisitions, new venture developments, and
strategic alliances.

Below are acquisitions and new venture developments made by the Company for
fiscal year 2000, and from January to December 2001:

Eccount
-------
On January 28, 2000 the Company, then known as Multi-Media Industries, acquired
Eccount, an online rewards program provider, from Stephen Brown. The Company
agreed to issue Stephen Brown 600,000 shares of Multi-Media Industries, after a
reverse split on a 1 share for 12 shares, for the acquisition of Eccount. The
total purchase price consisted of approximately $2.4 million. These shares were
issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933. This transaction did not involve cash.Eccount has ceased
operations.

UltraVu
-------
On July 31, 2000, the Company issued 25,000 restricted common shares and on
August 11, 2001, the Company issued 125,000 restricted common shares to acquire
certain information in streaming technology, domain names, business concepts,
business plans, industry contacts and know-how from its developers. These shares
were issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933. This transaction did not involve cash. Stephen Brown,
the Company President, received 125,000 shares of the restricted common stock.
The remaining shares were issued to a non-affiliated party.

UltraVu, Inc., a Nevada corporation, is a national provider of custom-formatted
interviews primarily for corporate clients. The Company offers its services
through its forty locations nationwide and through its streaming media
technology and other web based products. The Company's key areas of focus are
driven by its product offerings and service, which include the following: The
Streaming Interview, CorporateVu Corporate Profile, CareerVu Streaming Resume,
and DateVu (Video Dating Interview). The Streaming Interview product offers
clients its forty locations in conducting preliminary interview, which will be

<PAGE>

streamed over a password secured extranet along with other value-added web-based
products. CorporateVu is a medium of communication that allows corporate clients
to showcase their company to a targeted audience (i.e. job seekers) through a
customized video player over the Internet. CareerVu offers job seekers a two or
three minute video overview of themselves and their career aspirations for the
purpose of matching jobseekers and employers. The Company is providing dating
services its DateVu product, a service that allows their clients a two or three
minute video presentation of themselves over the Internet. Although DateVu
targets a different market, the application of the technology is the same, for
that reason DateVu is expected as an ancillary source of revenue.

SprocketMusic, Inc.
-------------------
On August 8, 2000, the Company issued of 225,000 to acquire certain domain
names, business concepts, business plans, industry contacts and know how. The
shares were issued pursuant to an exemption from registration under Section 4(2)
of the Securities Act of 1933. No cash was received by the Company. Stephen
Brown, the Company President, received 75,000 shares of the restricted common
stock. The remaining shares were issued to a non-affiliated third party.
Sprocket Music, Inc. has ceased operations.

EnterTech Media Group, Inc.
---------------------------
On August 11, 2000, the Company issued 500,000 shares of its restricted common
stock in exchange for 2,000,000 restricted shares of EnterTech Media Group,
Inc., common shares. The shares were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933. No cash was
received by the Company. The company also entered into an Agreement to acquire
additional shares to bring the Company's interest to 65%, this transaction was
cancelled my mutual consent by both parties, with no further obligations on
either part. ASEQ maintains it's original 2,000,000 shares which translate to
20% ownership of the company.

MyMobileCity
------------
On August 21, 2000, the Company issued 100,000 restricted shares to acquire 20%
interest in MyMobileCity. The shares were issued pursuant to an exemption from
registration under Section 4(2) of the Securities Act of 1933. Stephen Brown,
the owner of the 20% interest in MyMobileCity, received the 100,000 shares of
the restricted common stock. This transaction did not involve cash. On January
23, 2001, the Company issued 60,000 restricted shares to Joseph Maloney to
acquire the remaining interest in MyMobileCity therefore giving the Company a
100% ownership of MyMobileCity.

MyMobileCity currently offers its Mobile Messenger product, an application and
service that allows businesses to reach their audiences on wireless devices.
With the entry of a device number and carrier by the client's users, on a client
branded page, user information is passed to a secure database hosted by
MyMobileCity. The users' information is then processed with the current carrier
protocols to allow high-speed message delivery via MyMobileCity's proprietary
delivery network. The Mobile Messenger application is a complete solution,
providing hosting of the customer registration, message set-up and delivery, and
administrative and statistical tracking applications. Furthermore, device
adaptation, carrier updates, database hosting, device updates and user support
are handled transparently at MyMobileCity.

AutoPoint
---------
On December 5, 2001, the AutoPoint domain name was purchased in exchange for
20,000 shares and $50,000.The $50,000 was not paid and the deal was cancelled.
Autopoint has ceased operations.

<PAGE>

Corporate Interviewing Network, Inc.
------------------------------------
On April 6, 2000, pursuant to ASEQ's Purchase Agreement of the Corporate
Interviewing Network, Inc., the Company issued 16,000 restricted common shares
to a non-affiliated third party as payment for the purchase. The shares were
issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act of 1933. The Company plans to merge UltraVu with the Corporate
Interviewing Network, which will then serve as the platform for the Streaming
Interviews product. This transaction did not involve cash.

LIQUIDITY AND CAPITAL RESOURCES

Since our inception, we have financed our operations primarily through advances
from stockholder, loans and private sales of our equity securities. As of
December 31, 2001, we had bank overdraft of $27,133.00. For the year ended
December 31, 2001, operating activities used net cash of $3,525,532 primarily
from a net loss from operations of $11,481,956.00, which was offset by
depreciation and amortization of $23,517. Advances made by the officer of the
company amounted to $108,000 which was applied to his account with the Company.

Funding from investors and proceeds of convertible notes amounted to $224,000 as
of year ended December 31, 2001. During this period, the Company issued 20,000
shares of common stock valued at $80,000 and negotiated convertible notes and
bridge loans amounting to $144,000. The Company also posted a stock subscription
receivable of $200,000 from a financial institution


GENERAL AND ADMINISTRATIVE

General and administrative expenses increased by $6,501,566 to $6,846,570 for
the year ended December 31, 2001 from $345,004 for the year ended December 31,
2000. The increase was primarily due to increased business development and
payroll expenses associated with the management team and additional support
staff required by our growth.

Site development and content expenses increased to $117,052 for the year ended
December 31, 2001. The increase was primarily due to increased payroll costs for
site development and consulting fees for content management guidance.

Advertising and Marketing expenses increased to $56,449 for the year ended
December 31, 2001. The increase is primarily due to considerable announcements
made regarding activities of the Company and advertising agendas to uphold stock
promotions and other investor relations expenses.

Loan fees increased by $1,744,000 to $1,780,000. For the year ended December 31,
2001 from $36,000 for the year ended December 31, 2000. The increase was
attributed from negotiation of various interest bearing notes for the purpose of
covering operational expenses and the impending growth of the Company.

<PAGE>

Item 7. Financial Statements and Supplemental Data

   Asset Equity Group, Inc. and Subsidiaries Index to Consolidated
    Financial Statements:

   Consolidated Financial Statements:

      Consolidated Balance Sheet                                             F-3

      Consolidated Statements of Operations                                  F-4

      Consolidated Statement of Stockholders' (Deficit)                      F-5

      Consolidated Statements of Cash Flows                                  F-6

      Notes to Consolidated Financial Statements                             F-7

<PAGE>

                            ASSET EQUITY GROUP, INC.
                (f/k/a WORLDNET RESOURCE GROUP) AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 2001
                               =================

ASSETS
------

     CURRENT ASSETS:

          Cash                                                  $         85
          Prepaid expenses                                            66,667
                                                                ------------

                 Total Current Assets                                 66,752

     EQUIPMENT, net                                                  193,010

     INVESTMENTS                                                     565,383

     OTHER ASSETS                                                     17,090
                                                                ------------

                                                                $    842,235
                                                                ============

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-3

<PAGE>

                            ASSET EQUITY GROUP, INC.
              (f/k/a WORLDNET RESOURCE GROUP, INC) AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEET (Continued)
                                DECEMBER 31, 2001
                                =================


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

CURRENT LIABILITIES:
     Bank overdrafts                                             $       27,218
     Accounts payable and accrued expenses                              836,425
     Convertible notes payable                                           75,000
     Due to investments                                                 324,800
     Convertible debt in default                                      1,207,132
     Due to stockholders                                                315,147
     Capital lease obligations, current portion                           9,910
                                                                 --------------

                  Total Current Liabilities                           2,795,632


CAPITAL LEASE OBLIGATIONS, net of current portion                        36,810
                                                                 --------------

                  Total Liabilities                                   2,832,442
                                                                 --------------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' (DEFICIT):
     Preferred stock, $.001 par value; 50,000,000 shares
         authorized; no shares issued and outstanding                         -
     Common stock, $.001 par value; 100,000,000 shares
     authorized; 55,839,021 shares issued and
     outstanding                                                         55,839
     Additional paid-in capital                                      22,925,001
     Stock subscription receivable                                      (75,360)
     Reserved common stock, 350,000 shares                               77,000
     Accumulated (deficit)                                          (24,972,687)
                                                                 --------------

                  Total Stockholders' (Deficit)                      (1,990,207)
                                                                 --------------

                                                                 $      842,235
                                                                 ==============

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-4

<PAGE>

                            ASSET EQUITY GROUP, INC.
              (f/k/a WORLDNET RESOURCE GROUP, INC) AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      =====================================

<TABLE>
<CAPTION>
                                                                  Years Ended December 31,
                                                             --------------------------------
                                                                  2001               2000
                                                             -------------      -------------
<S>                                                          <C>                <C>
REVENUES                                                     $       1,238      $          -
                                                             -------------      -------------

OPERATING EXPENSES:
  General and administrative                                     3,161,288           955,629
  Depreciation and amortization                                     69,208            96,926
  Loan fees                                                              -        (1,780,000)
  Loss on impairment of assets                                           -                 -
  Failed acquisition costs                                           1,146           218,343
  Loss on investments                                                    -                 -
                                                             -------------      ------------
         Total Operating Expenses                                3,231,642         3,050,898
                                                             -------------      ------------

(LOSS) FROM OPERATIONS                                          (3,231,642)       (3,050,898)
                                                             -------------      ------------

OTHER INCOME (EXPENSE):
  Interest income                                                        -             1,257
  Interest expense                                                  (6,438)          386,532
  Loss on minority interest                                              -                 -
                                                             -------------      ------------

        Net other income (expense)                                  (6,438)          387,789
                                                             -------------      ------------

(LOSS) FROM CONTINUING OPERATIONS                               (3,236,842)       (2,663,109)

(LOSS) ON DISCONTINUED OPERATIONS                                        -                 -
                                                             -------------      ------------

NET (LOSS)                                                   $ (11,481,956)     $ (2,663,109)
                                                             =============      ============
NET (LOSS) PER COMMON SHARE BASIC AND DILUTED                $        .065      $       (.13)
                                                             =============      ============

Weighted Average Number of Common Shares Outstanding             4,813,805        24,873,351
                                                             =============      ============
</TABLE>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-5

<PAGE>

                            ASSET EQUITY GROUP, INC.
             (f/k/a WORLDNET RESOURCE GROUP, INC) AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' (DEFICIT)


<TABLE>
<CAPTION>
                                                                     Common Stock        Additional      Reserved        Stock
                                                                ----------------------    Paid-In       Stock Under  Subscriptions
                                                                  Shares      Amount      Capital        Agreement     Receivable
                                                                ----------  ----------  ------------   ------------- --------------
<S>                                                              <C>        <C>         <C>            <C>           <C>
Balances, December 31, 1999                                       164,666   $  3,294     $13,261,959   $       -     $       -
Issuance of common stock for debt                                  127,65          3           3,060           -             -
Sale of common stock                                               77,083        154         293,596           -             -
Issuance of common stock for acquisition
   of AnythingSurplus.com                                           41,67        833         165,834           -             -
Issuance of common stock for investments                           91,667      1,833         364,834           -             -
Issuance of common stock for services                              13,750        275          54,725           -             -
Net (loss) for the year ended December 31, 2000                         -          -               -           -             -
                                                                ---------   --------     -----------   ---------     ---------
Balances, December 31, 2000                                       319,586      6,392      14,144,008           -             -

Issuance of common stock for services                             500,639     10,013       2,358,276           -             -
Sale of common stock                                               22,670        453         253,197           -             -
Issuance of common stock for acquisition of Eccount, Inc.         600,000     12,000          11,500           -             -
Conversion of convertible debt                                     26,042        521         499,479           -             -
Issuance of common stock for loan fees                             35,000        700       1,620,300           -             -
Issuance of common stock for conversion of accrued
   expenses and salaries                                            8,209        164         245,660           -             -
Issuance of common stock for debt                                   6,715        134         201,333           -             -
Issuance of common stock to Chairman for compensation             440,002      8,800       1,978,719           -             -
Issuance of common stock and common stock reserved
   for failed acquisition of WorldAg.com                           37,500        750         421,500      77,000             -
Issuance of common stock for services to related party            225,000      4,500         745,500           -             -
Issuance of common stock in exchange for
   investment in Entertech Media Group, Inc.                      500,000     10,000         100,206           -             -
Issuance of common stock for Autopoint.com domain name             20,000        400          49,600           -             -
Issuance of common stock for adjustment                         1,657,756      1,658
Sale of common stock for stock subscription receivable             50,588      1,012          74,348           -       (75,360)
Stock based compensation for consultants                                -          -          62,000           -             -
Value of beneficial conversion feature of note payable                  -          -         159,375           -             -
Net (loss) for the year ended December 31, 2001                         -          -               -           -             -
                                                                ---------   --------     -----------   ---------     ---------

Balances, December 31, 2001                                     4,813,805   $ 63,889     $22,925,001   $  77,000     $ (75,360)
                                                                =========   ========     ===========   =========     =========

<CAPTION>
                                                                 Accumulated
                                                                  (Deficit)               Total
                                                               ---------------      ---------------
<S>                                                            <C>                  <C>
Balances, December 31, 1999                                     $(12,098,611)       $   1,166,642
Issuance of common stock for debt                                          -                3,063
Sale of common stock                                                       -              293,750
Issuance of common stock for acquisition
   of AnythingSurplus.com                                                  -              166,667
Issuance of common stock for investments                            (137,960)             228,707
Issuance of common stock for services                                      -               55,000
Net (loss) for the year ended December 31, 2000                   (1,254,160)          (1,254,160)
                                                                ------------        -------------

Balances, December 31, 2000                                      (13,490,731)             659,669

Issuance of common stock for services                                      -            2,368,289
Sale of common stock                                                       -              253,650
Issuance of common stock for acquisition of Eccount, Inc.                  -               23,500
Conversion of convertible debt                                             -              500,000
Issuance of common stock for loan fees                                     -            1,621,000
Issuance of common stock for conversion of accrued
   expenses and salaries                                                   -              245,824
Issuance of common stock for debt                                          -              201,467
Issuance of common stock to Chairman for compensation                      -            1,987,519
Issuance of common stock and common stock reserved
   for failed acquisition of WorldAg.com                                   -              499,250
Issuance of common stock for services to related party                     -              750,000
Issuance of common stock in exchange for
   investment in Entertech Media Group, Inc.                               -              110,206
Issuance of common stock for Autopoint.com domain name                     -               50,000
Issuance of common stock for adjustment
Sale of common stock for stock subscription receivable                     -                    -
Stock based compensation for consultants                                   -               62,000
Value of beneficial conversion feature of note payable                     -              159,375
Net (loss) for the year ended December 31, 2001                  (11,481,956)         (11,481,956
                                                                ------------        -------------

Balances, December 31, 2001                                     $(24,972,687)       $  (1,990,207)
                                                                ============        =============
</TABLE>

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-6

<PAGE>

                            ASSET EQUITY GROUP, INC.
             (f/k/a WORLDNET RESOURCE GROUP, INC) AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                     =====================================

<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                      -----------------------------
                                                                                         2001              2000
                                                                                      ------------     ------------
<S>                                                                                   <C>              <C>
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
   Net (loss)                                                                         $(3,230,536)     $(3,436,173)
   Adjustments to reconcile net (loss) to net cash provided (used) by
     operations:
     Depreciation and amortization                                                         69,208           96,926
     Stock issued for services and failed acquisition                                     750,155          240,002
     Stocks Issued for Loan Fees                                                                         1,621,000
     Stock based compensation to the Chairman                                             300,000                -

     Changes in:
       Prepaid Expenses                                                                    83,757          100,000
       Accounts payable and accrued expenses                                            1,309,190           85,633
       Advances to acquisition target                                                           -         (650,000)
       Accrued Interest                                                                     7,188           34,400
       Due from stockholder                                                               (68,824)          40,000
       Payments received from stockholder                                                       -          469,116
                                                                                      -----------      -----------

       Cash Flows (Used) by Operating Activities                                         (779,862)      (1,399,096)
                                                                                      -----------      -----------


CASH FLOWS PROVIDED (USED BY) INVESTING ACTIVITIES:

   Advances to MyMobileCity                                                               (80,713)               -
   Advances to Sprocket Music                                                             (13,279)               -
   Advances to UltraVu                                                                   (134,453)               -
   Purchase of equipment                                                                        -          (91,094)
   Write off of leased assets                                                             148,557                -
   Cash paid for acquisition of Navitec                                                         -         (150,000)
   Cash paid for investments                                                                    -          (66,879)
   Collection of notes receivable                                                               -           20,000
                                                                                      -----------      -----------

         Cash Flows Provided (Used) by Investing Activities                               (79,888)        (287,973)
                                                                                      -----------      -----------


CASH FLOWS FROM (TO) FINANCING ACTIVITIES:

   Sale of common stock                                                                   667,500          153,648
   Sale of preferred stock                                                                 35,000                -
   Repayment of advances by stockholders                                                        -          (69,035)
   Proceeds of sale from convertible debt                                                       -        1,355,000
   Payments received for stock subscription receivable                                     39,750                -
   Proceeds of Short Term Debt                                                            117,500                -
   Advances from stockholders                                                                              245,831
                                                                                      -----------      -----------

         Cash Flows Provided (used) by Financing Activities                               859,750        1,685,444
                                                                                      -----------      -----------

NET CHANGES IN CASH                                                                           194           (1,625)

CASH, beginning of period                                                                      85            2,616
                                                                                      -----------      -----------

CASH, end of period                                                                   $       279      $       991
                                                                                      ===========      ===========
</TABLE>

See Note 12

          SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                       F-7

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
         POLICIES

History and Activity
--------------------
Asset Equity Group, Inc. (the Company or ASEQ) was incorporated in Utah on April
10, 1981.

The Company, previously reporting as a development stage enterprise, commenced
operations during the year ended December 31, 1997, and earned revenues in
connection with a production agreement with a related party.

Management discontinued plans to market its music library. ASEQ is a holding
company which engages in developing companies in different markets. ASEQ
currently consists of the following:

<TABLE>
<CAPTION>
          Name                       Ownership           Business                   Accounting
          ----                       ---------           --------                   ----------
<S>                                  <C>         <C>                             <C>
Sprocket Music, Inc.                   100%      Record label                    Consolidated
UltraVu, Inc.                          100%      Streaming media                 Consolidated
Streaming Interviews, Inc.             100%      On line employment recruiting   Consolidated
Corp. Interviewing Network, Inc.       100%      On line employment recruiting   Consolidated
AnyThingSurplus, Inc.                  100%      Inactive                        Consolidated
Eccount, Inc.                          100%      Inactive                        Consolidated
Entertech Media Group, Inc.             20%      Movie Titles                    Equity
MyMobileCity, Inc.                     100%      Wireless application            Equity
</TABLE>

Principles of Consolidation
---------------------------
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Equity Investment
-----------------
The Company accounts for its 20% equity investment under the equity method. The
Company's share of earnings is included in income as earned. During the years
ended December 31, 2000 and 2001, earnings from the Company's equity investment
were immaterial.

Other Investments
-----------------
The Company accounts for other investments at fair value which approximates cost
at December 31, 2001.

Shareholders Meeting
--------------------
In November 2001 the Company's Board of Directors and the majority of it's
shareholders approved a one for twenty reverse split of the outstanding common
shares of the Company. This reverse split became effective on December 12, 2001.

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

Name Change
-----------
In November 2001 the Company changed its name from WorldNet Resource Group, Inc.
to Asset Equity Group, Inc.

Equipment
---------
Equipment is carried at cost and depreciated on a straight-line basis over the
estimated useful lives of five to ten years. Depreciation expense was $23,517
and $932 for the years ended December 31, 2001 and 2000, respectively.

Advertising Expenses
--------------------
The Company expenses advertising costs as incurred. During the years ended
December 31, 2001,2000 and 1999 the Company had $59,400 and $-0- in advertising
costs, respectively.

Fair Value of Financial Instruments
-----------------------------------
Fair value of financial instruments approximate carrying value due to the short
maturity of the instruments. Fair value of notes payable was based upon current
borrowing rates available for financings with similar maturities.

Goodwill
--------
The Company amortizes costs in excess of the fair value of net assets of
businesses acquired (goodwill) using the straight-line method over the estimated
recovery periods. Recoverability is reviewed annually (or sooner), if events or
circumstances indicate that the carrying amount may exceed fair value.
Recoverability is determined by comparing the undiscounted net cash flows of the
assets, to which goodwill applies, to the net book value including goodwill of
those assets. The analysis involves significant management judgment to evaluate
the capacity of an acquired business to perform within projections.

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

Income Taxes
------------
Deferred income taxes are recorded to reflect the tax consequences in future
years of temporary differences between the tax basis of the assets and
liabilities and their financial statement amounts at the end of each reporting
period. Valuation allowances are established when necessary to reduce deferred
tax assets to the amount expected to be realized. Income tax expense is the tax
payable for the current period and the change during the period in deferred tax
assets and liabilities. Deferred tax assets and liabilities have been netted to
reflect the tax impact of temporary differences.

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

The Company has a net operating loss carryforward in excess of $15,000,000,
expiring in 2017- 2020. Since it is more likely than not that the Company will
not utilize the net operating loss in the near term, a valuation allowance equal
to the deferred tax asset, which consisted primarily of the net operating loss
carryforwards, has been provided. Upon a change in control, the net operating
loss carryforward may be limited.

<PAGE>

Earnings Per Common Share
-------------------------
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (SFAS
No. 128) was issued in February 1997 (effective for financial statements issued
for periods ending after December 15, 1997). This Statement simplifies the
standards for computing earnings per share (EPS) previously found in Accounting
Principles Board Opinion No. 15, "Earnings Per Share", and makes them more
comparable to international EPS standards. SFAS No. 128 replaces the
presentation of primary EPS with a presentation of basic EPS. In addition, the
Statement requires dual presentation of basic and diluted EPS on the face of the
income statement for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. Diluted EPS is not
presented since the computation is anti-dilutive.

Reclassification
----------------
Certain amounts reported in the Company's financial statements for the year
ended December 31, 1999 have been reclassified to conform to the current year
presentation.

NOTE 2 - GOING CONCERN AND MANAGEMENT PLANS

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern which contemplates the
realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has incurred operating losses since inception, has a
working capital deficit, a significant accumulated deficit and has defaulted on
$855,000 convertible debt which resulted in a $1,207,000 default judgement. The
Company's continuation as a going concern is dependent upon its ability to
generate sufficient cash flow from operations to meet its obligations on a
timely basis, and/or obtain financing as may be required. The accompanying
consolidated financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

On May 8, 2001 Streaming Interviews, Inc. (SII), a 100% owned subsidiary of the
Company, (also known as Corporate Interviewing Network, Inc.) signed a letter of
intent with an investment firm (IF) for the following: SII will merge into a
publicly traded shell company and IF will provide for seed funding of $1,250,000
plus warrants to acquire an additional equity interest for an additional
$1,250,000 for twice the original investment price. After the completion of the
transaction, the Company will own approximately 40% of SII. SII intends to use
some of the proceeds to repay some of the debt owed to the Company and will
absorb a larger share of the Company overhead. This transaction due to mutual
consent did not materialize.

<PAGE>

NOTE 3 - ACQUISITIONS AND SIGNIFICANT TRANSACTIONS

AnythingSurplus.Com
-------------------
During December 1999, the Company acquired 100% of the common stock of
AnythingSurplus.com, Inc. ("AnythingSurplus"), in exchange for 833,333 shares of
the Company's restricted common stock. Two entities, which are controlled by two
of the majority stockholders of the Company ("Majority Stockholders") one of
whom was the Company's President, owned an aggregate of 40% shares of
AnythingSurplus. The purchase price amount in excess of the Majority
Stockholders' historical cost basis has been reflected as a distribution to the
stockholders and reduction of the purchase price. AnythingSurplus was formed on
September 30, 1999 and has had minimal operations to date.

The Company had advanced $100,000 to AnythingSurplus as required by the stock
purchase agreement. No further advances were made during 2001 due to
management's decision to write off the goodwill associated with this
transaction.

The purchase price has been allocated as follows:

               Furniture and fixtures                  $      16,288
               Stockholder receivable                         47,612
               Advances forgiven                            (100,000)
               Goodwill                                      150,540
               Distributions to stockholders                  52,227
                                                       -------------

               Value of stock issued                   $     166,667
                                                       =============

Hall of Fame Partners, Inc.
---------------------------
During December 1999, the Company acquired 20% the outstanding common stock of
Hall of Fame Partners, Inc. (Hall of Fame), in exchange for 41,666 shares of the
Company's restricted common stock valued at $.20 per share and $262,000 cash.
Two entities, which are controlled by two of the majority stockholders of the
Company, one of whom was the Company's President, own an aggregate of 20% of the
shares of Hall of Fame. The purchase price amount in excess of the majority
stockholders' historical cost basis has been reflected as a distribution to the
stockholders and reduction of the purchase price. The investment was written off
in 2001.

Auctionfun.com, Inc.
--------------------
During December 1999, the Company acquired 5% of the outstanding shares of
Auctionfun.com, Inc. (Auctionfun) in exchange for 50,000 shares of the Company's
restricted common stock valued at $.20 per share and approximately $437,000 in
cash. The investment was written off in 2001.

Eccount, Inc.
-------------
During January 2000, the Company acquired 100% of the outstanding shares of
Eccount, Inc. in exchange for 600,000 shares of the Company's restricted common
stock. Eccount was owned by the Company's Chairman of the Board. By exchanging
600,000 shares of the Company's restricted common stock, there was a change in
control of the Company. The Company is currently inactive.

<PAGE>

NOTE 3 - ACQUISITIONS AND SIGNIFICANT TRANSACTIONS (Continued)

Car Rental Direct.com, Inc.
---------------------------
During February 2000, the Company entered into a letter of intent to purchase
all of the outstanding stock of Car Rental Direct.com, Inc. (CRD), an internet
based car rental service. The Company was to fund CRD with $5 million and common
stock of the Company valued at $3 million. The Company advanced $650,000 to CRD
pending the completion of the acquisition. The acquisition was not completed and
in May 2000, the Company sold its $600,000 receivable from CRD to an unrelated
third party for a $600,000 non-interest bearing promissory note. The Company
received payments of $200,000 on May 12, 2001 and May 17, 2000, and the
remaining payment of $200,000 was due on June 24, 2001. The payments were made
directly to the Company's Chairman of the Board of Directors as repayments of
advances he made to the Company. The balance due of $200,000 has been valued at
-0-.

WorldAg.com, Inc.
-----------------
During March 2000, the Company entered into a letter of intent with Hagen
Marketing and Communications, Inc. (Hagen) to form a joint venture called
WorldAg.com, Inc. (WorldAg), a company which will sell agricultural and related
industry products over the internet. During April 2000, the Company entered into
a development agreement with Hagen to design and build the WorldAg.com website
to be owned 60% by the Company and 40% by Hagen. The Company was to fund WorldAg
$200,000 delivered in six equal monthly installments and to pay the rental costs
for WorldAg at the Company's corporate headquarters. In addition, the Company
was to issue 37,500 shares of its common stock and grant a warrant to purchase
an additional 37,500 shares at $1.00 expiring three years from the date of the
agreement to the principals of Hagen. On February 9, 2001 the Company rescinded
the agreement and in settlement transferred the original 37,500 shares of common
stock, an additional 17,500 shares together with it's ownership of a subsidiary
whose only assets were a music library and inventory.

Corporate Interviewing Network, Inc.
------------------------------------
On April 6, 2001, the Company acquired Corporate Interviewing Network, Inc.
(CIN) a corporation in the business of connecting employers and job seekers
through web based streaming interviews. The Company issued 16,000 shares of its
common stock, valued at $57,600 for all the outstanding common stock of CIN. The
previous owner of CIN has been employed for an annual salary of $125,000 and
received an additional 38,827shares of the Company's common stock valued at
$139,777 as a signing bonus. The purchase price has been allocated as follows:


                         Cash                          $         141
                         Accounts receivable                   4,277
                         Equipment                            32,045
                         Accounts payable                    (91,537)
                         Goodwill                            112,674
                                                       -------------

                         Value of stock issued         $      57,600
                                                       =============

<PAGE>

NOTE 3 - ACQUISITIONS AND SIGNIFICANT TRANSACTIONS (Continued)

Autopoint.com
-------------
On November 27, 2000 the Company purchased the domain name "Autopoint.com" for
$50,000 in cash and 20,000 shares of the Company's common stock valued at
$50,000. The $50,000 was not paid, the Company cancelled the transaction in
exchange for the 400,000 shares.

My MobileCity, Inc.
-------------------
On September 8, 2000 the Company purchased 20% of the outstanding stock of My
Mobile City, Inc. (City), which owns the domain name "MyMobileCity.com", for
$500,000 to be paid through funding operations of City. The Company intends to
develop a wireless application service provider. On January 23, 2001, the
Company issued 60,000 restricted shares to Joseph Maloney for the remaining
interest of MyMobileCity therefore giving the Company a 100% ownership of
MyMobileCity.

EnterTech Media Group, Inc.
---------------------------
On August 10, 2000 the Company acquired 2,000,000 shares of EnterTech Media,
Inc., a high definition digital video company, (approximately 20%) in exchange
for 500,000 shares of the Company's common stock. On March 13, 2001. The company
also entered into an Agreement to acquire additional shares to bring the
Company's interest to 65%, this transaction was cancelled my mutual consent by
both parties, with no further obligations on either part.

NOTE 4 - EQUIPMENT

Equipment consisted of the following:

                                                          December 31,
                                                              2001
                                                         -------------

Furniture and equipment                                  $      81,813
Office and computer equipment                                   97,253
Leasehold improvements                                          35,976
                                                         -------------
                                                               215,042
Less accumulated depreciation                                   22,032
                                                         -------------

                                                         $     193,010
                                                         =============

NOTE 5 - IMPAIRMENT OF ASSETS

In accordance with Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting For the Impairment of Long-Lived Assets and For Long-Lived Assets to
be Disposed Of", the Company records impairment losses on long-lived assets used
in operations when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the assets'
carrying amount.

During 1999 the Company adjusted the carrying value of certain record masters
which it owned, resulting in a reduction of the asset and a charge to operations
of $812,000.

<PAGE>

NOTE 6 - COMMITMENTS AND CONTINGENCIES

Investor Relations
------------------
The Company has entered into many agreements with consultants to assist with
locating merger candidates, structuring acquisitions, financing structuring,
public relations and locating potential investors. Most of the compensation has
been paid by issuing stock and the expense related to it has been recorded.

Employment Agreements
---------------------
During 2001 the Company entered into employment agreements with certain
executives that provide for annual salaries ranging from $55,000 to $200,000 and
granted 1,500,000 stock warrants to purchase the Company's common stock at $.06
per share. Certain of these agreements shall automatically renew if employment
continues.

Future obligations of minimum salary payments are as follows:

                          Year Ended December 31,
                          -----------------------
                                     2001            $    579,584
                                     2002                 255,000
                                                     ------------

                                                     $    834,584
                                                     ============

Insurance
---------
The Company does not maintain insurance to cover damages from fire, flood or
other casualty losses. Costs resulting from uninsured property losses will be
charged against income upon occurrence. No amounts for uninsured casualty
property losses were charged to operations for the years ended December 31, 2000
and 2001.

Office Space
------------
The Company utilized nominal office space in Salt Lake City, Utah and Montvale,
New Jersey provided by stockholders of the Company at a minimal charge.

On December 1, 2001 the Company entered into a lease for office space in
Henderson, Nevada ending November 30, 2002. Monthly payments under the lease are
$1,990.00 plus services.

<PAGE>

NOTE 7 - CAPITALIZED LEASE OBLIGATIONS

The Company leases furniture and equipment under a capitalized lease expiring in
May 2003. The assets have been recorded at the lower of the present value of the
minimum lease payments or their fair value and are depreciated over the assets'
estimated useful lives.

Minimum future lease payments under the capital leases as of December 31, 2001
are as follows:

       Year ended December 31,
       -----------------------
       2001                                                   $      44,276
       2002                                                          44,276
       2003                                                          18,449
                                                              -------------

       Total minimum lease payments                                 107,001
       Less amount representing interest                             60,281
                                                              -------------
       Present value of net minimum lease payments
                With interest at approximately 80%                   46,720
       Less current portion                                           9,910
                                                              -------------

                                                              $      36,810
                                                              =============

As of December 31, 2001 furniture and fixtures includes $31,825 and office and
computer equipment includes $18,585 acquired through a capital lease.
Accumulated depreciation related to these assets was $523.

NOTE 8 - RELATED PARTY TRANSACTIONS

In addition to transactions with related parties discussed throughout the notes
to consolidated financial statements, the following related party transactions
have taken place:

Stockholder Advances
--------------------
During the year ended December 31, 2001, advances made to or from the chairman
and majority stockholder and to or from the Company are non-interest bearing and
due on demand.

During 1999, the Company received advances of $357,669 from two stockholders,
one of whom was a company controlled by the Company's former President. The
loans are unsecured and non-interest bearing and are due on demand.

<PAGE>

NOTE 9 - CONVERTIBLE NOTES AND DEFAULT

On February 3, 2000, the Company sold an 8% Series A Senior Subordinated
Convertible Redeemable Debenture due on February 3, 2002 with a face amount of
$500,000. The Company paid loan fees of approximately $65,000 in cash. Interest
was payable at 8% per annum. The notes were converted into 520,835 shares of
common stock in February 2001.

On March 1, 2000, the Company sold Series A 8% Convertible Notes due on May 1,
2001 with a face amount of $555,000. The Company paid loan fees of approximately
$55,000 in cash and issued 550,000 shares of common stock valued at $1,249,000.
The notes are convertible into shares of common stock based upon the current
market price of the Company's common stock on the date of conversion at the
option of the note holder.

On March 15, 2000, the Company sold Series B 8% Notes due on June 16, 2001 with
a face amount of $300,000. The Company paid loan fees of approximately $39,000
in cash and issued 150,000 shares of common stock valued at $365,000.

Both this note and the convertible notes are in default. Judgement has been
given to the creditors for $1,207,000 which includes $352,000 of accrued
interest. The Company is attempting to continue an agreement to stay collection.

During 2001 the Company entered into a promissory note, which included a
beneficial conversion feature at a rate less than market value. The promissory
note is convertible to common stock at $.12. The Company recognized additional
interest costs related to the beneficial conversion feature of $159,375 during
the year ended December 31, 2001.

NOTE 10 - DISCONTINUED OPERATIONS

The Company discontinued its plans to market its music library and transferred
ownership of the subsidiary to a third party in settlement of a rescission of a
joint venture.

NOTE 11 - BUSINESS RECAPITALIZATION AND RESTATEMENT

On February 7, 2000, the Company was acquired by Navitec Group, Inc (Navitec) a
public corporation.

The stock exchange transaction is treated as an acquisition by the Company of
the net tangible book value of the assets of Navitec at the date of acquisition,
which was minimal. Operating results of Navitec for all periods prior to the
date of its acquisition were immaterial.

The Company issued 3,472 shares of common stock valued at $13,889 and paid
$150,000 in consulting fees in conjunction with the acquisition of Navitec.

<PAGE>

NOTE 12 - SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES

During April 1999, accrued expenses totaling $3,063 were exchanged for 2,553
fully paid, non-assessable common shares of ASEQ as payment in full.

<PAGE>

Item 8. Changes in Accountant

The Company filed a report on Form 8-K dated March 15, 2001 reporting that the
Company's independent auditors, A.J. Robbins PC, were terminated. The Company
were to engaged Singer, Lewak, Greenbaum and Goldstein LLP as its new
independent auditors, but were subsequently declined on March 20, 2001. The
Company reinstated A.J. Robbins PC as its independent auditors in April 2001.

PART III

Certain information required by Part III is omitted from this report in that the
registrant will file a Definitive Proxy Statement pursuant to Regulation 14A
("Proxy statement") not later that 120 days after the filing of this 10-KSB.

Item 9. Directors and Executive Officers of the Registrant

Our current executive officers and directors are set forth below:

Name                                             Position
--------------------------------------------------------------------------------
Stephen Brown                                    Chief Executive Officer,
                                                 President, and Chairman of
                                                 the Board

Samy Salem                                       Director, Chairman of the
                                                 Audit Committee

Kenneth Hess                                     Director

Directors are elected to serve indefinitely. Mr. Salem serves as a director
since June 1, 1998. Other than ASEQ stock payments, non-employee directors do
not currently receive cash remuneration for their services as such, but may be
reimbursed for expenses incurred in connection therewith, such as the cost of
travel to Board meetings. Officers serve at the pleasure of the Board of
Directors until their successors have been elected and have qualified. The Audit
Committee has the authority to recommend annually to the Board of Directors the
engagement of our independent auditors and to review the scope and results of
the audits, our internal controls, our audit practices and the professional
services furnished by the independent auditors.

Mr. Brown has served as the Chief Executive Officer and Chairman of the Board
since May 2000. Prior to joining the Company Mr. Brown was the founder, Chief
Executive Officer, and Chairman of Vidnet.com, the first entertainment Web site
with a comprehensive interactive music video library as well as a vast selection
of movie previews and clips of extreme sports programming. He served Vidnet.com
as their CEO from 1996 to May 2001; and from 1988 to 1996, he founded an
independent record company. Mr. Brown graduated with honors from Easingwold
Technical Institute in Yorkshire, England with a degree in Commercial Design.

Mr. Salem served as the President and Chairman of the Board for Multi-Media
Industries prior to the re-organization of the Company in January 2000. He has
remained as a Director and as Chairman of the Audit Committee. Mr. Salem brings
over fifty years of experience working in finance and banking from across the
globe. He is a consultant specializing in corporate finance, investment
management and financial engineering. Currently Mr. Salem is the President of
International Yield Enhancement Services, Inc., a money management and financial
consulting company. He specializes in market neutral strategies, and consults
both financial institutions and private investors in developing hedging
strategies using futures,

<PAGE>

options, warrants and convertible securities. Prior to his association with
International Yield Enhancement Services, Inc. and ASEQ, Mr. Salem was involved
with various NYSE member brokerage firms for over eighteen-years. He also held
management positions in finance for Zilkha Organization, an international
banking firm, in their offices in Cairo, Paris and New York. Mr. Salem received
his education in Victoria College in Cairo, Egypt.

<PAGE>

Item 10. Executive and Director Compensation

The information required by this item is incorporated herein by reference to the
Company's Proxy Statement.