SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
                     ANNUAL REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2001
                           COMMISSION FILE NO. 0-25658

                        DIGITAL BROADBAND NETWORKS, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

              COLORADO                                     84-1357927
      (STATE OR OTHER JURISDICTION                       (IRS EMPLOYER
          OF INCORPORATION)                           IDENTIFICATION NO.)

                     SUITE 11.02, 11TH FLOOR, MENARA MERAIS
                                NO. 1, JALAN 19/3
                               46300 PETALING JAYA
                               SELANGOR, MALAYSIA
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                               011 (603) 7956-7026
                (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)

                             KALAN GOLD CORPORATION
          (FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

              SECURITIES REGISTERED UNDER SECTION 12(g) OF THE ACT:

                   COMMON STOCK, $0.00001 PER SHARE PAR VALUE

Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes:  X      No:

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

     Issuer's revenues for its most recent fiscal year: $4,958,421

     The aggregate market value of the voting stock of the Company held by
non-affiliates as of March 27, 2002 was approximately $4,250,850.


     The number of shares outstanding of the Company's common stock, as of March
27, 2002, was 98,723,499.

     Documents incorporated by reference: None
<PAGE>

                                TABLE OF CONTENTS

PART I

Item 1     Description of Business

Item 2     Description of Property

Item 3     Legal Proceedings

Item 4     Submission of Matters to a Vote of Security Holders


PART II

Item 5     Market for Common Equity and Related Stockholder Matters

Item 6     Management's Discussion and Analysis

Item 7     Financial Statements

Item 8     Changes In and Disagreements with Accountants on Accounting and
           Financial Disclosure


PART III

Item 9     Directors, Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act

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 on Form 8-K


     THIS ANNUAL REPORT CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING
OF SECTION 27A OF THE  SECURITIES  ACT OF 1933 AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934. ANY STATEMENTS CONTAINED HEREIN THAT ARE NOT STATEMENTS OF
HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING
THE  FOREGOING,   THE  WORDS   "BELIEVES,"   "MAY",   "SHOULD",   "ANTICIPATES,"
"ESTIMATES",  "EXPECTS,"  "FUTURE",  "INTENDS",  "HOPES",  "PLANS"  AND  SIMILAR
EXPRESSIONS   ARE   INTENDED  TO  IDENTIFY   FORWARD-LOOKING   STATEMENTS.   THE
FORWARD-LOOKING  STATEMENTS  INVOLVE KNOWN AND UNKNOWN RISKS,  UNCERTAINTIES AND
OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE AND ACHIEVEMENTS OF
DIGITAL  BROADBAND  NETWORKS,  INC. TO DIFFER MATERIALLY FROM THOSE INDICATED BY
THE FORWARD-LOOKING STATEMENTS, INCLUDING THE OTHER FACTORS SET FORTH IN "ITEM 1
- RISK FACTORS."

                                       2
<PAGE>


PART I

ITEM 1. DESCRIPTION OF BUSINESS.

HISTORICAL DEVELOPMENT

     Digital Broadband Networks, Inc. (the "Company") is a Colorado corporation.
The  Company  was  originally  incorporated  on  September  19,  1985  as a  gas
exploration company under the name Knight Natural Gas, Inc. and changed its name
to "Kalan  Gold  Corporation"  in November  1996.  In August  2001,  the Company
adopted its present name,  "Digital Broadband  Networks,  Inc.". The Company has
two subsidiaries:  Animated  Electronic  Industries Sdn Bhd ("AEI") and Perwimas
Telecommunications  Sdn Bhd  ("PTSB").  The  principal  business  address of the
Company is Suite 11.02,  11th Floor,  Menara  Merais,  No. 1, Jalan 19/3,  46300
Petaling Jaya, Selangor, Malaysia.

     On April 20, 1999, the Company acquired 100% of the issued and outstanding
common stock of Animated Electronic Industries Sdn Bhd, a private company
organized under the laws of Malaysia ("AEI"). Under the terms of the
acquisition, the Company was required to divest all of the assets and
liabilities of the Company. The acquisition was accomplished through a reverse
merger whereby the Company merged with and into AEI and AEI became a wholly
owned subsidiary of the Company (the "Reverse Acquisition").

     AEI was incorporated in October 1988 under the Malaysian Companies Act of
1965 (the "Malaysian Companies Act"). AEI is involved in the design, development
and production of multimedia content; provision of consulting services for
website development, network engineering and project management in IT related
projects.

     PTSB, a 86%-owned subsidiary of AEI, was incorporated in January 1993 under
the Malaysian Companies Act. PTSB was granted a 10-year Wireless Video
Communication Network ("WVCN") license from the Malaysian Ministry of Energy
Communications & Multimedia to operate a national wireless broadband
communication network in Malaysia. In September 2001, PTSB was awarded an
Application Service Provider ("ASP") license by the Malaysian Communications and
Multimedia Commission. These licenses are described in Part I of this report
under "Regulations".

     As of December 31, 2001, the Company had a total of 97,753,499 shares of
common stock issued and outstanding. The Company has not been subject to any
bankruptcy, receivership or similar proceeding.

BUSINESS

     The Company is a facilities-based  and network service provider of wireless
broadband  applications and services in Malaysia.  The Company hopes to position
itself as a total broadband solution provider from content production to network
operation,  provision  of  value-added  service/applications  and  supply of its
Eystar SmartHome  Console.  The EyStar  SmartHome  Console bridges external data
networks such as the Internet to internal home networks like Ethernet, telephone
line,  power line and the 802.11b wireless LAN thus eliminating the need for any
additional wiring in the home. The Console will enable more value-added services
to be  offered  to  subscribers.  These  services  include  home  healthcare  in
conjunction with hospitals and health advisors;  interconnection  and control of
appliances produced by different  manufacturers;  and security applications that
allow subscribers to check on their homes remotely.  This Console is designed to
operate on both the narrow and broadband fixed line/wireless networks.

     In 2001, the Company was primarily involved in the design,  development and
production  of  interactive  multimedia  websites  and content.  Presently,  the
Company is in the process of building a wireless broadband network,  "VISIONET",
in  Malaysia  and the  Company  plans to seek to  acquire  additional  broadband
licenses  and spectrum  rights in other  markets in Asia.  The Company  plans to
offer a broad array of  multimedia  content  developed  by the Company and third
parties for subscribers in Malaysia and beyond.  Such multimedia content will be
hosted at the Company's portal, www.visionet.com.my.

                                       3

<PAGE>

     In connection with the build out of VISIONET,  the Company had formalized a
long-term  strategic  business  relationship  with Siemens  Malaysia.  Under the
Agreement,  Siemens  will  extend  preferred  payment  terms to the  Company for
equipment used in the build out of VISIONET and extend its best effort to assist
the  Company  to obtain  applications  and  multimedia  content  from its global
partners that will  contribute to the revenue of VISIONET.  Siemens will also be
responsible  for  overall  network  design,  the  supply of  equipment,  systems
integration,  build out services and  maintenance of a best of breed  end-to-end
solution for the  deployment  of VISIONET.  The Company has committed an initial
purchase of hardware valued at $250,000 from Siemens for the limited commercial
rollout of  VISIONET.  Following  the  countrywide  deployment  of  VISIONET  in
Malaysia,  the Company  hopes to work with Siemens to tap  opportunities  in the
operation of broadband networks in the Asian regional markets.

     To complement  its business in operating a broadband  network,  the Company
has  also  entered  into  a  business   relationship  with  Computer  Associates
International,   Inc.  ("CA"),  in  July  2001,  to  tap  the  mobile  eBusiness
opportunities in Malaysia and the Asian regional market. Under the relationship,
CA will be appointed as a technology provider for the IT infrastructure and data
management  of  VISIONET.  In addition to  providing  the  eBusiness  management
software, CA will be extending its industry-leading infrastructure,  information
and process  management  solutions  to  VISIONET  to ensure  that the  Company's
customers can realize the full potential  business value of mobile  applications
and services.  As a  demonstration  of its confidence in the Company,  a company
associated  with CA will  also  acquire  a  significant  minority  stake  in the
Company's Malaysian  subsidiary,  subject to the approval of relevant regulatory
authorities.  The Company's subsidiary, PTSB, will also act as a facilitator and
partner in Malaysian and Asian projects jointly identified with CA.

     In September 2001, the Company announced its strategic  collaboration  with
Aptilo Networks, Sweden, to deploy local mobile networks ("LMN") in Malaysia and
the Asian  regional  market.  The  integration of LMNs with VISIONET will enable
VISIONET's subscribers to receive live video streams from their handheld devices
and laptops, and to access the Internet and their corporate intranets at near T1
speeds  remotely  from public  locations in the "travel  ribbon" such as hotels,
airports, restaurants,  conference centers, shopping malls and coffeehouses. The
first LMN cell was  deployed  during  the  fourth  quarter  of 2001 to connect a
number of access points to Bluetooth and wireless LAN 802.11  standard  devices.
The mobile network  features  Aptilo's latest billing  solution that will enable
the Company to offer value-added  applications and services to users without the
need  for any  prior  registration  as a  subscriber.  Any  user can now pay for
instant network access to surf the Internet or purchase value-added applications
on the spot by using their credit  card.  This  flexible  method of payment from
Aptilo will not only attract  more users to  VISIONET,  but will also reduce the
Company's  capital  expenditure  and  recurring  monthly  operating  costs.  The
integrated  network will enable the Company to expand its broadband network from
fixed wireless into the mobile broadband market. The Company has committed to an
initial  purchase of software and hardware  from Aptilo  valued at $50,000.  The
Company  hopes that this will broaden  VISIONET's  subscriber  base and generate
additional  revenue  stream that should  contribute  positively to the Company's
cash flow. The successful implementation of the integrated network will pave the
way for the  collaboration  with  Aptilo  to be  extended  to  countries  beyond
Malaysia.

     In January 2002, the Company signed a Sales and Distribution Agreement with
Cirronet  Incorporated,  GA to bundle Cirronet's  wireless subscriber modem with
the Company's Eystar SmartHome/Office  Console for distribution  worldwide.  The
agreement  is  for  an  initial  period  of  5  years  and  will  thereafter  be
automatically renewed for one-year term on each anniversary.  Under the terms of
the agreement,  the Company has committed to purchase  approximately $19 million
of equipment over the next five years. These equipment  purchases are subject to
inspection  and  acceptance by the Company  depending  upon certain  performance
standards  being  satisfactorily  met.  As of March 27,  2002,  the  Company has
received  approximately $5,000 in equipment from Cirronet.  However, the Company
has not yet accepted the  equipment due to  performance  problems that have been
discovered.  The  Company is  currently  working  with  Cirronet  to correct the
problem.  If such  problems  are  corrected,  the Company  estimates  that total
purchases to be made in 2002 will be approximately $3.8 million. Concurrent with
the Sales and Distribution Agreement, the Company has also entered into a 5-year
Technical  Support  and  Supply  of Spares  Agreement  with  Cirronet  to insure
uninterrupted supply of Cirronet's product.

     The Company has appointed  marketing agents to promote  VISIONET  broadband
services to real estate developers and owners of  multi-tenanted  commercial and
residential  properties  in the central  region of Malaysia  where the country's
capital, Kuala Lumpur, is located.

                                       4

<PAGE>


VISIONET - THE BROADBAND NETWORK

     The Company expects to focus on deploying its network infrastructure for
its wireless digital broadband network in the Central Region of Malaysia.

     The Company intends to utilize a combination of the Local Multipoint
Distribution Service ("LMDS") and fixed wireless access technologies in the 24.0
- 29.0 GHz and 2.4 GHz frequency bands to provide a cost effective and fast
deployment of its network. LMDS is a point-to-multipoint broadband technology
utilizing the super-high "millimeter" portion of the airwaves for integrated
communications services. Due to the relatively large bandwidth of the LMDS
signal, LMDS systems have the capacity to provide interactive voice, video and
data services.

     The Company successfully completed a "link budget" test in the first
quarter of 2000. The test was designed to determine the optimum transmission
range under adverse weather conditions and the subscriber capacity per cell. The
test results were utilized in developing VISIONET's network architecture and
locations for radio base station in the Central Region.

     The Company established its first VISIONET cell in December 2001 and hopes
to commence full commercial operation sometime in the first half of 2002 but
cannot provide assurance that any target launch date will be met. The Company is
currently negotiating with application service providers to host and deliver
their content via VISIONET.

SERVICES

     The Company hopes that its broadband network will allow the Company to
offer the following wireless communications and information services:

-    high speed Internet access
-    local mobile Internet access
-    virtual private networks
-    wide area networks
-    voice over IP
-    video-conferencing over IP
-    remote video surveillance
-    production, hosting and distribution of multimedia content
-    training and adult education programs
-    interactive online games

RISK FACTORS

     To the  Company's  knowledge,  no company  has ever  attempted  to create a
wireless  broadband  network  in  Malaysia.  As a result,  the  Company  faces a
significant  number of risks and  uncertainties  associated  with  executing its
business plan,  only some of which the Company can currently  anticipate.  These
risks and uncertainties may impair the Company's progress and profitability. The
risks  described  below are intended to highlight risks that are specific to the
implementation and operation of a wireless  broadband  network,  but are not the
only risks that the Company faces. Additional risks and uncertainties, including
those generally affecting the global economy, the political and economic climate
in Malaysia and the rest of Asia,  the  industry in which the Company  operates,
the  public  securities  market,  and risks  that the  Company  currently  deems
immaterial may ultimately impair its business and results of operations.

     This report includes  forward-looking  statements,  which involve risks and
uncertainties.  The Company's actual results could differ  materially from those
anticipated in these forward-looking statements as a result of numerous factors,
including   those  described  below  and  elsewhere  in  this  Item  1,  Item  6
"Management's  Discussion  and  Analysis" and in other portions of this report.

                                       5

<PAGE>


IF THE COMPANY'S LICENSE IS ALTERED OR REVOKED, THE COMPANY WOULD BE UNABLE TO
IMPLEMENT ITS BUSINESS PLAN.

     The Company believes that the wireless broadband license the Company has
obtained from the Government of Malaysia is material to the Company's business.
Any material alteration or revocation of the license would have a material
adverse effect on the Company and would prevent the Company from implementing
its business plan. As described earlier, the Government of Malaysia has the
unilateral right to revoke the Company's license upon thirty days' notice. In
addition, while the Company currently believes that it has the only license
granted by the Government of Malaysia, the Government may issue additional
licenses to the Company's competitors, which could also have a material adverse
effect on the Company.

THE COMPANY EXPECTS TO INCUR NET LOSSES IN THE NEAR FUTURE.

      The Company's consolidated financial statements for the year ended
December 31, 2001, have been prepared on a going concern basis, which
contemplates the realization of assets and the settlement of liabilities and
commitments in the normal course of business. The Company suffered losses from
operations of $92,585 in 2001 and $1,152,072 in 2000, had negative cash flows
from operating activities of $296,297 and $516,334 in 2001 and 2000,
respectively, and has an accumulated deficit of $1,232,977 at December 31, 2001.
The Company may incur continued cash outflows, which may result in a working
capital deficiency again next year. As a result, the Company may experience
difficulty and uncertainty in meeting its liquidity needs during the next fiscal
year.

      These factors raise substantial doubt about the Company's ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of
assets or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern.

      The Company recorded operating losses and negative operating cash flows in
each of the past three years. These losses and negative operating cash flows are
attributable to the start-up costs and expenses incurred in connection with the
commercial rollout of VISIONET. The Company's ability to stem its losses and
achieve profitability is dependent on many factors, including:

-    the Company's ability to execute its business plans over an extended period
     of time;
-    the general state of the communications markets;
-    competition in the Company's target markets; and
-    the general state of the financial markets.

IF THE COMPANY IS UNABLE TO SUCCESSFULLY IMPLEMENT ITS BUSINESS PLAN, THE
COMPANY'S FINANCIAL CONDITION WOULD BE IMPAIRED.

     If the Company is unable to successfully implement its business plan, the
Company's financial condition and performance would be impaired. The Company's
business plan and strategy include numerous elements that may be difficult or
costly to execute, and the Company may not be successful in implementing these
elements. For example, the Company's success is dependent on its ability to
successfully build and operate its VISIONET system, and the Company can provide
no assurances that it can successfully do so. Even if the Company is able to
successfully build and operate its VISIONET system, there may be insufficient
demand for the Company's services, in which event the Company will not generate
sufficient revenues to offset the Company's planned expenditures, thereby having
an adverse effect on the Company's business operations and financial condition.

                                       6

<PAGE>


THE FAILURE OF THIRD PARTIES WITH WHOM THE COMPANY DOES BUSINESS TO MEET THE
COMPANY'S REQUIREMENTS COULD ADVERSELY AFFECT THE COMPANY'S BUSINESS.

     The Company's business plan and operations rely on the Company's ability to
obtain services provided by other third party providers. For example, the
Company relies on a third party provider for Internet connection and
international gateway. The failure of one or more of these companies to meet the
Company's needs could adversely affect the Company's business and results of
operations. Some of these companies may also be the Company's competitors and,
accordingly, in the future, they may be unwilling to provide the Company with
the services it requires. These companies may also decide to dedicate their
resources and networks to other communications companies or to facilitate their
own growth and, as a result, elect to scale back or terminate the services they
provide to the Company. The failure of any of these third parties to perform
could prevent or delay the creation and implementation of the Company's VISIONET
network, limit the types of services the Company can provide to its customers
and potential customers and adversely impact the Company's relationship with its
customers. Any of these occurrences could have an adverse effect on the
Company's business, results of operations and financial condition.

DEPENDENCE UPON LIMITED SUPPLIERS OF FIXED WIRELESS ACCESS EQUIPMENT.

     Currently, there are only a few Fixed Wireless Access equipment suppliers
that produce network infrastructure and customer premises equipment. The Company
may be unable to obtain fixed wireless access equipment at a cost-effective
price. In addition, the Company may not be able to obtain reasonable
alternatives to fixed wireless access equipment. Changing technologies may also
result in lack of proper equipment support by manufacturers. A delay in
obtaining necessary equipment and/or unreasonably high equipment prices would
negatively impact the Company's ability to implement its business plan and
provide its service to subscribers. Higher equipment prices would adversely
affect the Company's operating results and could damage future marketing
efforts.

FAILURE TO OBTAIN ACCESS RIGHTS TO BUILD THE COMPANY'S NETWORK WOULD ADVERSELY
AFFECT THE COMPANY'S ABILITY TO IMPLEMENT ITS BUSINESS PLAN.

     The Company may not be able to obtain access rights to the number or type
of buildings that are required to deploy the Company's broadband network. In
order to build a network and reach customers, the Company needs access to
buildings where the Company's antennas will be placed. Failure to secure access
rights on a timely basis would prevent the Company from implementing its
business plan and could have an adverse effect on the Company's business and
financial condition. In addition, the Company needs certain governmental
approvals prior to building certain critical facilities, including repeater
stations, and placing the Company's antennas on high-rise buildings.

ABILITY TO RAISE CAPITAL IN THE FUTURE ON A TIMELY BASIS MAY ADVERSELY AFFECT
OUR ABILITY TO FUND OUR OPERATIONS.

     The Company will require substantial capital to fund its planned capital
expenditures and operations. The Company does not expect to be able to generate
sufficient cash from operations to provide the necessary capital to execute the
Company's business plan. If the Company is unable to generate sufficient cash
from its operations or raise capital as needed, the Company will be unable to
pursue or execute its current business plan and fund its operations.

THE COMPANY'S BUSINESS AND INDUSTRY ARE SUBJECT TO EXTENSIVE REGULATIONS THAT
COULD CHANGE AT ANY TIME AND RESTRICT THE COMPANY'S ABILITY TO COMPETE WITH ITS
COMPETITORS.

     The Malaysian communications industry (including spectrum allocation and
usage) is highly regulated by the Malaysian government. Regulations that govern
the Company's business could change at any time, which could adversely affect
the way the Company conducts its business and its ability to continue to conduct
its business in the manner it has planned. The Company may incur substantial
costs in complying with these regulations, and failure to comply with applicable
rules and regulations could result in the Company having to pay penalties or its
license being revoked by the government. In addition, changes in regulations
could also increase competition, which may have an adverse effect on the
Company's business and results of operations.

                                       7

<PAGE>


FAILURE TO HIRE OR RETAIN QUALIFIED PERSONNEL COULD HURT THE COMPANY'S BUSINESS.

     The Company's future success and performance is dependent on its ability to
identify, hire, train and retain experienced technical and marketing personnel.
The Company faces significant competition for employees with the skills required
for its business. There can be no assurance that the Company will succeed in
attracting and retaining the services of qualified and experienced technical and
marketing personnel.

THE MARKETS IN WHICH THE COMPANY OPERATES ARE VERY COMPETITIVE AND INCREASED
COMPETITION COULD ADVERSELY AFFECT THE COMPANY.

     The market for high-speed Internet access and related broadband services is
highly competitive. The Company expects to encounter competition for its
high-speed Internet access and broadband services from domestic Internet Service
Providers, often referred to as ISPs. Currently, the Company is aware of 7 ISPs
in Malaysia and these include MIMOS, Telekom Malaysia, Maxis Communications,
Celcom, Time Dotcom and Digi Telecommunications. These ISPs are able to offer
high-speed Internet access utilizing Digital Subscriber Line (DSL) technology,
which increases the effective capacity of copper telephone cables. Many of the
competing ISPs have, or can be expected to have greater financial, marketing and
other resources than the Company. No assurance can be given that we will be able
to compete successfully with these entities.

THE INTERNATIONAL NATURE OF THE COMPANY'S OPERATIONS SUBJECT THE COMPANY TO
SPECIAL RISKS.

     The Company currently intends to operate primarily in Malaysia and perhaps
elsewhere in Asia. The Company therefore faces special risks related to
operating in international markets, which the Company may not be able to
overcome. The following are some of the risks inherent in doing business in
Malaysia and other non-U.S. markets:

-    unanticipated changes in regulatory requirements,  tariffs, customs, duties
     and other trade barriers;
-    limitations on the Company's flexibility in structuring foreign investments
     imposed by regulatory authorities;
-    longer payment cycles and problems in collecting accounts receivable;
-    political and economic risks;
-    translation and transaction exposure from fluctuations in exchange rates of
     other currencies; and
-    potentially adverse tax and cash flow consequences resulting from operating
     in multiple countries with different laws and regulations.

REGULATION

     The business operations of PTSB are regulated by both the Malaysian
Ministry of Energy Communications & Multimedia (MECM) (formerly known as the
Ministry of Energy Telecommunications & Post) and the Malaysian Communications
and Multimedia Commission ("CMC"). PTSB's WVCN license is governed by the
Malaysian Communications & Multimedia Act 1998 ("Act 588") which became
effective on April 1, 1999. This new Act, which has superseded the
Telecommunications Act of 1950 and the Broadcasting Act of 1988, is to provide
for and to regulate the converging communications and multimedia industries in
Malaysia.

     Under Malaysian law, PTSB has the option of registering its existing
wireless broadband license under Act 588 or maintaining the terms of the license
under the repealed Act. The Company believes that it would be more advantageous
to register its license under the new Act, and has on March 3, 2000 registered
with the CMC its intention to migrate to the new Act. The license was granted
for an initial period of 10 years commencing May 28, 1997.

     While the Company believes that Act 588 is the most significant
industry-specific governmental regulations that apply to the Company's business,
the Company is subject to a large number of other laws in different countries
and localities.

                                       8

<PAGE>

     The Company believes that it is presently the only company in Malaysia to
be granted a WVCN license to deliver interactive multimedia applications and
services.

     In September 2001, PTSB was awarded an ASP license by the CMC. The ASP
license will complement PTSB's wireless broadband license. As an ASP, PTSB could
offer enterprises access over the Internet to applications and related services
that would otherwise have to be located in their computers.

RESEARCH & DEVELOPMENT COSTS

     In the last two fiscal years, the Company has not spent any funds on
research and development activities.

ENVIRONMENTAL LAWS

     To date, the Company has not incurred any material costs for compliance
with any prevailing environmental laws of Malaysia or the United States.

PATENTS AND TRADEMARKS

         The Company has no patent. The Company's subsidiary, PTSB, has
registered the name "VISIONET" as its service tradename and trademark with the
Malaysian Registry of Trade Marks and Patents. No other intellectual property
registration is pending.

EMPLOYEES

     At December 31, 2001, the Company had 15 employees. In an effort to reduce
its operating costs, the Company has outsourced its labor intensive content
production works to third parties. However, the Company plans to recruit
additional employees to prepare for the full commercial operation of VISIONET in
2002.

ITEM 2. DESCRIPTION OF PROPERTIES.


     The  Company's  present  headquarters  is  located at Suite  11.02,  Menara
Merais, No. 1 Jalan 19/3, 46300 Petaling Jaya, Selangor,  Malaysia.  This office
space is leased from an unaffiliated  party.  The lease expires in February 2003
and provides for a 2-year  renewal  option.  The Company has also leased another
office in Petaling Jaya for content production,  engineering and warehouse space
from an unaffiliated party. This lease expires in August 2002 and provides for a
1-year renewal option.

     The Company believes that its existing and planned facilities are adequate
for its current requirements and that suitable additional space will be
available as needed to accommodate future expansion of its operations.

ITEM 3. LEGAL PROCEEDINGS.

     No legal proceedings of a material nature to which the Company is a party
is pending during the fourth quarter of the fiscal year covered by this report,
and the Company knows of no legal proceedings of a material nature pending or
threatened or judgments entered against any director or officer of the Company
in his capacity as such.


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

     The Company did not submit any matter to a vote of the  Company's  security
holders during the fourth quarter of the fiscal year covered by this report.

                                       9

<PAGE>


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Since January 1997, the Company's securities have traded on the
over-the-counter (OTC) "Bulletin Board" market under the symbol "KNGC". Prior to
this, the Company's securities had never been listed for trading on any market.
The trading symbol for the Company's securities was changed to "DBBN" on August
23, 2001, following the adoption of the Company's new name.

     The table below sets forth the range of high and low bid quotations of the
Company's common stock as publicly reported by Marketguide during the Company's
2001 and 2000 fiscal years. The following bid price market quotations represent
prices between dealers and do not include retail markup, markdown, or
commissions; hence, they may not represent actual transactions.


Year 2001              High        Low
                      ------      -----
First Quarter         $0.25       $0.05
Second Quarter        $0.35       $0.04
Third Quarter         $0.32       $0.09
Fourth Quarter        $0.28       $0.06


Year 2000              High        Low
                      -----       -----
First Quarter         $1.56       $0.23
Second Quarter        $1.28       $0.28
Third Quarter         $0.50       $0.19
Fourth Quarter        $0.30       $0.07


     As of March 27, 2002, 98,723,499 shares of the Company's common stock were
outstanding and the number of holders of record of the Company's common stock at
that date was approximately 120. However, the Company estimates that it has a
significantly greater number of shareholders because a substantial number of the
Company's shares are held in "street names" by the Company's market makers. On
March 27, 2002, the closing trade price for the Company's common stock was $0.10
per share.

     Under the Company's Articles of Incorporation, holders of common stock are
entitled to receive such dividends as may be declared by the Company's Board of
Directors. No dividends on the common stock were paid by the Company during the
periods reported herein.

RECENT SALE OF UNREGISTERED SECURITIES

     The following securities that were not registered under the Securities Act
of 1933, as amended, have been issued or sold by the Company during the past
three years:

(i)      On April 20, 1999, the Company issued an aggregate of 83,320,000 shares
         of common stock to stockholders of AEI and 3,680,000 shares of common
         stock to its financial advisor and former legal counsel in connection
         with the Reverse Acquisition.

(ii)     On February 24, 2000, the Company issued an aggregate of 2,300,000
         shares of common stock to Mr. Wan Malek Ibrahim in a private placement
         for cash consideration of $1,150,000 at $0.50 per share.

                                       10

<PAGE>

(iii)    In December 2000, the Company granted options to its directors and
         certain employees of the Company for 912,000 shares of common stock at
         $0.085 per share. The options are exercisable by the optionee only
         while the optionee is a director or employee of the Company and for
         certain limited time thereafter in the event of termination of
         employment. All of the options have a maximum term of 5 years, subject
         to earlier termination in the event of optionee's cessation of service
         with the Company. 50,400 options were canceled in 2001, while 720,000
         options were exercised on March 12, 2002. The balance of exercisable
         options as of March 26, 2002 was 141,600.

(iv)     On May 18, 2001, the Company issued an aggregate of 400,000 shares of
         its restricted common stock to a shareholder at $0.10 per share in a
         private placement for cash consideration of $40,000.

(v)      On November 1, 2001, the Company granted options to purchase 250,000
         shares of the Company's common stock at $0.12 per share to a consultant
         for services to be provided to the Company. These options are
         exercisable through October 2006, contingent upon continuous service by
         the consultant through specified dates.

(vi)     On December 20, 2001, the Company issued 62,500 shares of its
         restricted common stock to a consultant at $0.085 per share, in
         accordance with the terms of an option agreement executed in June 2001
         for cash consideration of $5,312.

(vii)    On February 16, 2002, the Company granted options to purchase 60,000
         shares of the Company's common stock at $0.12 per share to a consultant
         for services to be provided to the Company. These options are
         exercisable in August 2002, contingent upon continuous service by the
         consultant through specified dates.

(viii)   On March 12, 2002,  Mr. Lim, Mr. Muda and Ms. Looi exercised options to
         purchase 500,000, 100,000 and 120,000 shares, respectively, of the
         Company's restricted common stock at an exercise price of $0.085 per
         share, for total cash consideration of $61,200.

(ix)     On March 14, 2002, the Company sold an aggregate of 250,000 shares of
         its restricted common stock to a shareholder at $0.085 per share in a
         private placement for cash consideration of $21,250.


     The issuances of securities described above were made in reliance on the
exemption from registration provided by Section 4(2) of the Securities Act for
transactions not involving a public offering.

SAFE HARBOR STATEMENT

     This Form 10-KSB and other reports filed by the Company from time to time
with the Securities and Exchange Commission, as well as the Company's press
releases, contain or may contain forward-looking statements and information that
are based upon beliefs of, and information currently available to, the Company's
management, as well as estimates and assumptions made by the Company's
management. Forward-looking statements can be identified by the use of
forward-looking terminology such as "believes", "may", "should", "anticipates",
"estimates", expects", "future", "intends", "hopes", "plans" or the negative
thereof. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that could cause actual results of the Company
to vary materially from historical results or from any future results expressed
or implied in such forward-looking statements.

     Such factors include, among others, the following: revocation of the
Company's license, ability to successfully implement its business plans, ability
to obtain services provided by other communications companies, limited suppliers
of FWA equipment, failure to obtain roof access, the ability of the Company to
raise capital on a timely basis, the Company's business is subject to existing
and future government regulations, failure to retain qualified personnel,
competitive pressures and potentially adverse tax and cash flow consequences
resulting from operating in multiple countries with different laws and
regulations, ability to maintain profitability in the future and general
economic and business conditions in Malaysia. The Company does not undertake to
update, revise or correct any forward-looking statements.

                                       11

<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERVIEW

      During 2001, the Company achieved revenues of $4,958,421 compared to
$4,193,513 in 2000. These revenues were derived from the design, development and
production of interactive multimedia websites and content. Net loss for the year
ended December 31, 2001, was $79,105, compared to the year ended December 31,
2000 net loss of $254,219. The net loss in 2001 included reversal of previous
year's provision for doubtful receivable of $455,012 and reversal of accrued
legal fees of $150,000. The net loss in 2000 included a $489,251 gain on the
sale of a subsidiary and recognition of deferred gain of $416,411 related to the
sale of assets to a related company in 1998, which receivables were collected in
2000. The loss per share of common stock was less than $0.01 for each of the
years ended December 31, 2001 and 2000.

      The independent auditors' report on the Company's consolidated financial
statements as of December 31, 2001, and for each of the years in the two-year
period ended December 31, 2001 includes a "going concern" paragraph that
describes substantial doubt about the Company's ability to continue as a going
concern. (See Note 1 to the consolidated Financial Statements).

      At year end 2001, the Company had total current assets of $1,928,577,
furniture and equipment of $1,678,117 and net tangible assets of $1,815,705. The
Company's shareholders' equity at year end 2001 was $2,286,855. During 2001, the
Company was in the process of building the infrastructure for the commercial
roll out of VISIONET, a countrywide wireless broadband network undertaken by the
Company's subsidiary, PTSB, sometime in the first half of 2002. In September
2001, PTSB was awarded an Application Service Provider (ASP) license by the
Malaysian Communications and Multimedia Commission. The ASP license will
complement the wireless broadband license granted to the Company in June 1997.
As an ASP, PTSB could offer enterprise access over the Internet to applications
and related services that would otherwise have to be located in their computers.
The Company hopes that the ASP service will become an important alternative, not
only for small and medium enterprises with low budgets for information
technology, but also for larger companies as a form of outsourcing. After
conducting various feasibility studies to determine the most suitable customer
premises equipment and in-building distribution for single and multi-tenanted
buildings, negotiation with equipment vendors and further technical improvement
on the cell configuration, the Company established its first VISIONET cell in
December 2001 and hopes to commence full commercial operation sometime in the
first half of 2002.

      In connection with the build out of VISIONET, the Company has formalized a
long-term strategic business relationship with Siemens Malaysia. Under the
Agreement, Siemens will extend preferred payment terms to the Company for
equipment used in the build out of VISIONET and extend its best effort to assist
the Company to obtain applications and multimedia content from its global
partners that will contribute to the revenue of VISIONET. Siemens will also be
responsible for overall network design, the supply of equipment, systems
integration, build out services and maintenance of a best of breed end-to-end
solution for the deployment of VISIONET. The Company has committed an initial
purchase of hardware valued at $250,000 from Siemens for the limited commercial
rollout of VISIONET. Following the countrywide deployment of VISIONET in
Malaysia, the Company hopes to work with Siemens to tap opportunities in the
operation of broadband networks in the Asian regional markets.

      To complement its business in operating a broadband network, the Company
also entered into a business relationship with Computer Associates
International, Inc. ("CA"), in July 2001, to tap the mobile eBusiness
opportunities in Malaysia and the Asian regional markets. Under the
relationship, CA will be appointed as a technology provider for the IT
infrastructure and data management of VISIONET. In addition to providing the
eBusiness management software, CA will be extending its industry-leading
infrastructure, information and process management solutions to VISIONET to
ensure that the Company's customers can realize the full potential business
value of mobile applications and services. The Company's subsidiary, PTSB, will
also act as a facilitator and partner in Malaysian and Asian projects jointly
identified with CA. As a demonstration of its confidence in the Company, a
company associated with CA may acquire a significant minority stake in the
Company's Malaysian subsidiary. This potential acquisition is only in the early
discussion stage and would not be expected to occur, if at all, until some time
after the second quarter of 2002, and would also be subject to the approval of
relevant regulatory authorities.

                                       12

<PAGE>

         In September  2001, the Company  announced its strategic  collaboration
with  Aptilo  Networks,  Sweden,  to deploy  local  mobile  networks  ("LMN") in
Malaysia and the Asian regional  markets.  The integration of LMNs with VISIONET
will enable  VISIONET's  subscribers  to receive  live video  streams from their
handheld  devices and laptops,  and to access the  Internet and their  corporate
intranets  at near T1 speeds  remotely  from  public  locations  in the  "travel
ribbon" such as hotels,  airports,  restaurants,  conference  centers,  shopping
malls and  coffeehouses.  The first  integrated  VISIONET-LMN  cell was deployed
during  the  fourth  quarter  of 2001 to  connect a number  of access  points to
Bluetooth and wireless LAN 802.11 standard devices.  The mobile network features
Aptilo's  latest  billing  solution  that  will  enable  the  Company  to  offer
value-added  applications  and services to users  without the need for any prior
registration as a subscriber. Any user can now pay for instant network access to
surf the  Internet or  purchase  value-added  applications  on the spot by using
their credit  card.  This  flexible  method of payment from Aptilo will not only
attract  more users to  VISIONET,  but will also  reduce the  Company's  capital
expenditure and recurring monthly  operating costs. The integrated  network will
enable the Company to expand its broadband  network from fixed wireless into the
mobile  broadband  market.  The Company has committed to an initial  purchase of
software and hardware from Aptilo valued at $50,000. The Company hopes that this
will broaden VISIONET's  subscriber base and generate  additional revenue stream
that should  contribute  positively to the Company's  cash flow.  The successful
implementation of the integrated network will pave the way for the collaboration
with Aptilo to be extended to countries beyond Malaysia.

         In January 2002, the Company signed a Sales and Distribution Agreement
with Cirronet Incorporated, GA to bundle Cirronet's wireless subscriber modem
with the Company's Eystar SmartHome/Office Console for distribution worldwide.
The agreement is for an initial period of 5 years and will thereafter be
automatically renewed for one-year term on each anniversary. Under the terms of
the agreement, the Company has committed to purchase approximately $19 million
of equipment over the next five years. These equipment purchases are subject to
inspection and acceptance by the Company depending upon certain performance
standards being satisfactorily met. As of March 27, 2002, the Company has
received approximately $5,000 in equipment from Cirronet. However, the Company
has not yet accepted the equipment due to performance problems that have been
discovered. The Company is currently working with Cirronet to correct the
problem. If such problems are corrected, the Company estimates that total
purchases to be made in 2002 will be approximately $3.8 million. Concurrent with
the Sales and Distribution Agreement, the Company has also entered into a 5-year
Technical Support and Supply of Spares Agreement with Cirronet to insure
uninterrupted supply of Cirronet's product.

         For the year 2002, the Company hopes to generate additional revenue
arising from the following contracts:

a)   In August 2001, the Company was awarded a consulting contract, estimated to
     generate revenue of $2.85 million, to carry out the planning, design,
     project execution (including contract and project management) of all
     broadband communications and networking systems/services for Pulau
     Indah-Marina Village, a water oriented luxury resort, residential, hotel
     and spa project. A progress payment of $30,000 was received in January
     2002.

b)   In December 2001, the Company entered into a marketing agreement with
     Worldlink Dotcom Sdn. Bhd. to distribute its service gateway for
     home/office automation in Malaysia, Singapore and Australia. This initial
     contract is estimated to generate revenue of $4.0 million for the Company.
     The gateway bridges the Internet with internal home and office networks
     while facilitating the delivery of home and office applications including,
     but not limited to, security surveillance and video conferencing.

     In January 2002, the Company appointed Mutual Base Equity Sdn. Bhd. (MBE)
     as one of its distributors in Malaysia and Singapore for sale of the Eystar
     SmartHome Console. Under the terms of the Distributor Agreement, MBE has
     been appointed for an initial duration of 3 years commencing January 4,
     2002. For fiscal year 2002, the Company hopes MBE could achieve a sales
     target of $17.5 million for the SmartHome Console.

c)   The Company hopes to secure contracts worth about $3.5 million from a local
     mobile network jointly deployed with Aptilo Networks.

                                       13
<PAGE>

d)   In January 2002, the Company's subsidiary, PTSB, was awarded a contract to
     carry out the planning, design, project execution of all broadband
     communications and networking systems/services for a commercial/housing
     project in Selangor, Malaysia. Under the contract, PTSB will receive a
     total contract sum of $550,000 over the next 36 months. The first payment
     of $15,000 was received in February 2002. The project, featuring 312
     serviced apartments, 62 units of retail shops/offices and 120 units of
     housing for a government agency, is expected to be completed by December
     2004. As a total solution provider, PTSB will also be responsible for the
     supply of its EyStar SmartHome Console as well as provide value-added
     broadband applications such as high speed Internet access, security
     surveillance, multimedia conferencing, home automation and video-on-
     demand.

Results of Operations

     The following  discussion  and analysis of our financial  condition and
results  of  operations  should  be read in  conjunction  with the  consolidated
financial statements and notes.

     The following table sets forth certain operating data for Digital Broadband
Networks and subsidiaries for the periods as indicated below.

                                           Year Ended December 31,
                                       --------------------------------
                                           2001             2000
                                       ------------       ------------

Revenues                           $     4,958,421      $   4,193,513
Gross profit                               259,054            571,717
Sales and marketing                        130,021             86,542
General and administrative                 221,438          1,637,247
Net loss                                   (79,105)          (254,219)

Year ended December 31, 2001 compared to year ended December 31, 2000.

     Total revenue increased by $764,908, or 18%, to $4,958,421 for the year
ended December 31, 2001, as compared to $4,193,513 for the year ended December
31, 2000. In the year ended December 31, 2001, $1,842,105 or 37% of the total
revenue was received from two customers. In the year ended December 31, 2000,
$504,941 or 12% of the total revenue was received from related parties for work
done in 1999, while no single customer accounted for more than 10% of revenue
received from unrelated parties. The increase in 2001 is due to increase in fees
earned from the production of multimedia programs. In tandem with Malaysia's
economic improvement during 2001, the Company managed to market its services in
the development and production of multimedia content to companies seeking to
establish interactive multimedia websites and/or multimedia content for their
websites.

Gross Profit

      Gross profit decreased to $259,054 for the year ended December 31, 2001,
compared to $571,717 in the year ended December 31, 2000, a decrease of $312,663
or 55%. The decrease in gross profit was due to higher cost of revenues incurred
in 2001. Cost of revenues increased by $1,077,571, or 30%, to $4,699,367 in 2001
from $3,621,796 in 2000. This increase was a result of the Company requiring
additional external resources in order to fulfill the higher demand for the
Company's services. The outsourcing of content production work enabled the
Company to develop a team of contractors that will assist the Company in
producing multimedia content and applications that are crucial to its future
business operation.

                                       14

<PAGE>

Sales and marketing expenses

      Sales and marketing expenses increased by $43,659, or 50%, to $130,201 for
the year ended December 31, 2001 from $86,542 for the year ended December 31,
2000. This increase was primarily due to higher marketing expenses incurred to
promote VISIONET and higher expenses incurred to promote the Company's business
of developing and producing multimedia programs and provision of design and
consulting services for interactive website development. Advertising and
promotion costs, which were approximately $113,391 and $47,229 for the years
ended December 31, 2001 and 2000, respectively, accounted for 87% and 55% of
sales and marketing expenses in 2001 and 2000.

General and administrative expenses

      General and administrative expenses decreased by $1,235,809 or 92% to
$101,438 for the year ended December 31, 2001, as compared to $1,337,247 for the
year ended December 31, 2000. The 92% decrease in general and administrative
expenses in 2001 was mainly due to a reversal of $455,012 for prior year's
allowance for doubtful receivables due to receipt of overdue receivables from
customers and a reversal of $150,000 for prior year's accrued legal fees as a
result of the creditor not pursuing its claim against the Company. The decrease
was also attributable to lower general and administrative expenses resulting
from outsourcing of multimedia content production to contractors, reduction in
allowance for doubtful receivables, legal fees and expenses relating to the
"soft launch" of VISIONET incurred in 2000. Out of the total general and
administrative expense for the year ended December 31, 2001, excluding the
reversal of allowance for doubtful receivables and accrued legal expenses,
nearly 35% was for depreciation of tangible assets. Another 4% was due to legal
fees and 17% was for amortization of goodwill. Approximately 44% was for
employees' payroll, rental, utilities, general office supplies, communications,
corporate insurance and fees for professional and auditing services. In the year
ended December 31, 2000, nearly 34% was attributable to allowance for doubtful
receivables, 21% was for legal fees and 17% for depreciation of tangible assets.
The remaining 28% was for employees payroll, rental, utilities, general office
supplies, communications, corporate insurance and fees for professional and
auditing services.

      General and administrative expenses for 2001 included amortization of
goodwill. Beginning January 1, 2002, pursuant to SFAS No. 142, goodwill will no
longer be amortized, but is subject to annual impairment tests in accordance
with the standard. Through December 31, 2001, management assessed the carrying
value of goodwill and other long-lived assets for impairment when circumstances
warranted such a review, pursuant to SFAS No. 121. Management does not believe
that any impairment has occurred as of December 31, 2001 or 2000. Beginning in
2002, the Company will apply newly adopted standards to test for impairment of
goodwill and long-lived assets. The Company will perform the first of the
required impairment tests of goodwill during the first quarter of 2002.
Application of the non-amortization provisions of the standard is expected to
result in an annual reduction in amortization expense of approximately $118,000.

      The Company also incurred management fees totaling $120,000 and $300,000,
respectively, for years ended December 31, 2001 and 2000, payable to a company
in which Mr. Patrick Lim, the President and Chief Executive Officer of the
Company, has a financial interest. The management fee was charged on the basis
of time spent for the administration and management services provided to the
Company.

Gain on disposal of assets - related parties

      For the year ended December 31, 2000, the Company recognized a deferred
gain on disposal of assets of $416,411. The gain was deferred from 1998 when the
Company sold a patent to a related party for $421,521, where the consideration
received consisted of an account receivable. The gain was recognized in 2000
after the Company received full payment from the related party.

Gain on disposal of subsidiary

      In September 2000, the Company sold its 51% equity interest in Vistel
(Malaysia) Sdn Bhd for a receivable of $13,418. At the date of the sale, the
Company's portion of the subsidiary's net liabilities over assets was $475,833.
As a result of the sale, the Company recognized a $489,251 gain on disposal of
subsidiary.

                                       15

<PAGE>

Liquidity and Capital Resources

     As of December 31, 2001, the Company had cash of $402. Operations were
primarily funded from internally generated funds and working capital advanced
from time to time by the principal shareholder, director and officer of the
Company. These advances bear no interest and have no fixed terms of repayment.

     As of December 31, 2001, the Company owed Mr. Lim, the Chief Executive
Officer, President and a Director of the Company, $255,349 for short-term cash
advances made to subsidiaries of the Company for working capital purposes from
time to time. Additionally, at December 31, 2001, the amount owed to a company
in which Mr. Lim has a financial interest amounted to $301,562. This amount was
for short-term cash advances made to the Company and its subsidiaries for
working capital purposes from time to time and for management fees. These
amounts are unsecured, bear no interest and have no fixed terms of repayment.

     For the years ended December 31, 2001 and 2000, net cash used in operating
activities was $296,297 and $516,334, respectively. Net cash used in operating
activities consists of cost of revenues, sales and marketing expenses and
general and administrative expenses. The decrease in net cash used in operating
activities in 2001 was mainly attributable to collection of overdue receivables,
lower general and administrative expenses resulting from outsourcing of
multimedia content production to contractors, reduced legal fees, and no expense
being incurred in 2001 for the "soft launch" of VISIONET since this activity
took place in 2000. Lower general and administrative expenses in 2001 were also
due to reduced management fees to a company in which the President and Chief
Executive Officer of the Company, has a financial interest.

     Cash used in investing activities of $43,245 in 2001 was mainly due to
acquisition of equipment. Cash used in investing activities of $649,978 in 2000
was mainly due to acquisition of communications equipment for the rollout of
VISIONET and increased investment in PTSB.

      Cash provided by financing activities of $335,873 in 2001 primarily
consisted of advances from a director and from an affiliated company. Cash
provided by financing activities of $1,166,424 in 2000 was primarily from the
issuance of an aggregate of 2,300,000 shares of common stock at 50 cents per
share in a private placement for cash consideration of $1,150,000.

     The Company believes that sufficient cash will be generated from the
following sources to fund its operations for the next twelve months:

--   Intensification of efforts to collect overdue receivables. The Company will
     maintain close contact with its debtors to keep updated on their liquidity
     status. The debtors will be persuaded to give priority to outstanding debts
     due to the Company whenever funds are available. Legal action will only be
     taken as a last resort.

--   Advances from director and major shareholder as and when required to
     finance the Company's working capital requirements. The Company's President
     and CEO, Mr. Patrick Lim, who is also the Company's major shareholder, has
     committed himself to advance funds to the Company for working capital. Such
     funds have been provided by Mr. Lim since the completion of the reverse
     acquisition of Kalan by AEI.

--   Additional revenue provided by: (i) a consulting contract, which is
     estimated to generate $2.85 million in revenue, to carry out the planning,
     design, project execution (including contract and project management) of
     all broadband communications and networking systems/services for Pulau
     Indah-Marina Village, (ii) a contract, which is estimated to generate
     $550,000 in revenue over a three-year period, to carry out the planning,
     design, project execution of all broadband communications and networking
     systems/services for a commercial/housing project in Selangor, Malaysia.

--   The Company may consider a private placement of its shares.

--   The Company may also seek to obtain equipment financing.

                                       16

<PAGE>


     The Company  also hopes that  additional  cash will be  generated  from the
marketing  agreement with  Worldlink  Dotcom Sdn. Bhd. to distribute its service
gateway for home/office automation in Malaysia, Singapore and Australia and from
the  distribution  agreement  with Mutual Base Equity Sdn.  Bhd. for sale of the
Eystar SmartHome Console in Malaysia and Singapore.

     In addition to internally generated funds and financial support from a
director and major shareholder, the Company seeks to raise additional funds from
equity or debt financing for its future working capital requirements. As of
December 31, 2001, the Company has acquired assets of approximately $1.2
million, in preparing for the roll out of VISIONET. In addition, the Company has
committed to an initial purchase of hardware valued at $250,000 for the limited
commercial rollout of VISIONET in 2002. The Company estimates that additional
capital expenditures up to $5.0 million will be required for the countrywide
deployment of VISIONET. The Company has also committed to an initial purchase of
software and hardware valued at $50,000 in conjunction with its announced
strategic collaboration with Aptilo Networks, Sweden. There is, however, no
assurance that financing will be available or, if available, that it would be
offered to the Company on acceptable terms. The Company will continuously
evaluate its financing requirements and may decide to consider alternative modes
of financing.

     On November 28, 2001, the Company signed an agreement to purchase office
space in Australia for $1.8 million Australian dollars (approximately $920,000
USD at December 31, 2001). The Company intends to lease the space for rental
until it finalizes its plan to relocate its Asian headquarters to Australia.
Pursuant to the terms of the agreement, the Company has paid a sum of $5,200 as
deposit for the above property. The purchase is subject to the approvals of the
Australian Foreign Investment Review Board and a few other relevant statutory
approvals as necessary under applicable laws. The purchase has not been
completed as the Company has yet to receive approval from Australian Foreign
Investment Review Board to proceed with the purchase.

     No dividends on the common stock were paid by the Company for the two years
reported herein.

Critical Accounting Policies

Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. Note 2 to the Consolidated Financial Statements includes a
summary of the significant accounting policies and methods used in the
preparation of the Company's Consolidated Financial Statements. The following is
a brief discussion of the more significant accounting policies and methods used
by the Company.

Revenue Recognition

The Company recognizes revenue from the production of multimedia programs and
from Intranet and management and consulting services. The Company recognizes
revenue from the sales of goods in the period when significant risks and rewards
of ownership have transferred to its customers. The Company recognizes revenue
from the services provided in the period in which the services are performed and
when there is no significant uncertainty regarding the consideration to be
received and the associated costs to be incurred.

Accounts Receivable

The Company continuously monitors collections and payments from its customers
and maintains an allowance for estimated uncollectible accounts based upon
historical experience and specific customer collections issues that have been
identified. Since accounts receivable are concentrated in a relatively few
customers, a significant change in the liquidity or financial position of any
one of these customers could have a material adverse impact on the
collectibility or the Company's accounts receivable and future operating
results.

                                       17

<PAGE>

Valuation of Long-Lived Assets and Goodwill

The Company assesses the impairment of long-lived assets and related goodwill
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable. Factors the Company considers important which could trigger
an impairment review include negative operating performance by the Company and
significant negative industry or economic trends. Through December 31, 2001,
management assessed the carrying value of goodwill and other long-lived assets
for impairment when circumstances warranted such a review. The Company does not
believe that any impairment has occurred as of December 31, 2001 or 2000.

Beginning January 1, 2002, pursuant to Statement of Financial Accounting
Standard ("SFAS") No. 142, goodwill will no longer be amortized, but is subject
to annual impairment tests in accordance with the standard. Beginning in 2002,
the Company will apply newly adopted standards to test for impairment of
goodwill and long-lived assets.

Stock-Based Compensation

SFAS No. 123, Accounting for Stock Based Compensation, defines a
fair-value-based method of accounting for stock-based employee compensation
plans and transactions in which an entity issues its equity instruments to
acquire goods or services from non-employees, and encourages but does not
require companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account for employee
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25 (APB No. 25), Accounting for Stock
Issued to Employees, and related interpretations. Accordingly, employee
compensation cost for stock options is measured as the excess, if any, of the
estimated fair value of the Company's stock at the date of the grant over the
amount an employee must pay to acquire the stock.

ITEM 7. FINANCIAL STATEMENTS

         The audited financial statements of the Company being furnished in
response to this Item are contained in a separate section of this Report
following the signature page.

                                       18

<PAGE>

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

     There were no  disagreements  on accounting and financial  disclosures with
the  Company's  present  independent  accountants,   Horwath  Gelfond  Hochstadt
Pangburn, P.C., during the reporting period.

     On August 11, 2000, Arthur Andersen & Co, the Company's independent public
accountants for the Company's fiscal year ended December 31, 1999 and the first
quarter of 2000 resigned. On August 11, 2000, the Company engaged the accounting
firm of CH Yap & Co as the Company's independent public accountants to replace
the firm of Arthur Andersen & Co. This change of independent accountants was
approved by the Board of Directors of the Company.

       Arthur Andersen & Co's report dated June 28, 2000 on the Company's
financial statements for the year ended December 31, 1999 did not contain an
adverse opinion or a disclaimer of opinion and was not qualified or modified as
to uncertainty, audit scope or accounting principles, except that its report
included a paragraph relating to the Company's ability to continue as a going
concern. There were no disagreements with Arthur Andersen & Co. during such
fiscal year or the subsequent interim period on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, to the extent not resolved to the satisfaction of
Arthur Andersen & Co., would have caused that firm to make reference in
connection with its reports to the subject matter of the disagreement or any
reportable event. At the conclusion of its audit of the Company's financial
statements for the year ended December 31, 1999, Arthur Andersen & Co. provided
a letter to the Company that described a material weakness in the Company's
internal control structure. Specifically, Arthur Andersen & Co. recommended that
the Company acquire additional expertise with respect to generally accepted
accounting principles in the United States and the reporting requirements of the
United States Securities and Exchange Commission. Arthur Andersen & Co. further
informed the Company that this matter was considered by Arthur Andersen & Co.
during its audit and it does not modify the opinion expressed in Arthur Andersen
& Co.'s auditor's reports dated May 15, 2000 and June 28, 2000. There were no
other reportable events.

      On November 6, 2000, CH Yap & Co, the Company's independent accountants
for the second quarter of 2000, resigned. CH Yap & Co did not deliver an
accountant's report to the Company during the period they served as the
Company's independent accountants.

      On November 8, 2000, the Company engaged the accounting firm of Horwath
Gelfond Hochstadt Pangburn, P.C. as the Company's independent accountants to
audit the Company's financial statements for the fiscal year ending December 31,
2000, as well as future financial statements, and to review the Company's
quarterly financial statements. This change of independent accountants was
approved by the Board of Directors of the Company. There were no disagreements
with CH Yap & Co. during the interim period on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement if not resolved to the satisfaction of CH Yap &
Co. would have caused that firm to make reference in connection with its
reports, to the subject matter of the disagreement or any reportable event. The
Company requested that CH Yap & Co. furnish it with a letter addressed to the
Commission stating whether it agreed with the above statements. A copy of such
letter dated November 6, 2000, was filed as Exhibit 16 to the Form 8-K dated
November 6, 2000, as filed with the Commission on November 13, 2000. The Company
also provided Horwath Gelfond Hochstadt Pangburn P.C. with a copy of the Form
8-K dated November 6, 2000, prior to its filing with the Commission. Horwath
Gelfond Hochstadt Pangburn, P.C. had no additional information or comments to
address to the Commission.

                                       19

<PAGE>


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The Directors and Executive Officers of the Company, and their respective
ages and positions held in the Company, as of March 27, 2002 are as follows:-


NAME                       AGE    POSITION HELD
------                    ----  -----------------
Wan Abdul Razak bin Muda   65   Chairman and Director

Patrick Soon-Hock Lim      52   President, Chief Executive Officer and Director

Valerie Hoi-Fah Looi       43   Secretary and Director

Chee-Hong, Leong           36   Chief Financial Officer/Treasurer

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

(1) The directors of the Company will serve in such capacity until the next
annual meeting of the Company's shareholders or until their successors have been
elected and qualified. The officers serve at the discretion of the Company's
Directors. There are no family relationships among the Company's officers and
directors, nor are there any arrangements or understandings between any of the
directors or officers of the Company or any other person pursuant to which any
officer or director was or is to be selected as an officer or director.

     MR. WAN ABDUL RAZAK BIN MUDA,  65, has served as the  Chairman of the Board
of the Company since April 1999. In addition,  Mr. Muda has been the Chairman of
the Board of AEI and PTSB  since  February  1993.  Since  1992,  he has been the
Chairman and Director of Tiong Nam Transport  Holdings  Bhd, a Malaysian  public
land cargo  transportation and warehousing  company.  Prior to joining Tiong Nam
Transport  Holding Bhd, Mr. Muda had served in the Malaysian Police Force for 34
years. He joined the Malaysian  Police Force as a police cadet after  completing
senior  high  school.  As part of his  training,  he attended  numerous  courses
conducted by the Royal Malaysian  Police Training College and rose from the rank
and file to his last  position  as the  Chief  Police  Officer  of the  state of
Terengganu, Malaysia.

     MR. PATRICK  SOON-HOCK LIM, 52, has served as President and Chief Executive
Officer of the Company, positions he has held since April 1999. Mr. Lim has been
the Managing  Director at AEI since 1988 and has been involved in the multimedia
industry  for the past 11 years.  Mr.  Lim earned  his  Masters of Science  from
Reading University, United Kingdom in 1974.

     MS. VALERIE HOI-FAH LOOI, 43, has served as the Corporate  Secretary of the
Company since April 1999 and, in such position, she is responsible for corporate
affairs  and human  resources  of the  Company.  Ms. Looi has also served as the
Senior Vice President,  Corporate  Affairs at AEI, a position she has held since
joining AEI in 1990.  She has over 10 years of experience in corporate  affairs.
Ms. Looi  received her Diploma in  Management  from the  Malaysian  Institute of
Management, Malaysia.

     MR.  CHEE-HONG  LEONG,  36, has served as the Chief  Financial  Officer and
Treasurer of the Company since  February  2000. He is a Fellow of Association of
Chartered Certified  Accountants,  United Kingdom.  Mr. Leong is responsible for
the financial  and  administrative  functions of the Company.  Mr. Leong was the
Assistant  Accounts Manager at Industrial  Concrete  Products from April 1994 to
December  1999.  Mr. Leong earned his Bachelor of Arts in  Accounting  at Ulster
University in Northern  Ireland in 1989 and  qualified as a Chartered  Certified
Accountant with the Association of Chartered Certified Accountants in 1994.

     The  Company  does not pay fees to  members of the board of  directors  and
presently has no plans to pay directors' fees.  Presently,  Mr. Muda is the only
Outside Director of the Company.

                                       20

<PAGE>


COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934.

     Section 16(a) of the Securities Exchange Act of 1934, as amended, (the "34
Act"), requires the Company's officers and directors and persons who own
beneficially more than ten percent of the Company's Common Stock to file initial
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC"). Based solely on a review of copies of the Section 16(a)
reports furnished to the Company and written representations by certain
reporting persons, the Company believes that all of the Company's officers and
directors, and all persons owning more than ten percent of the Company's Common
Stock have filed the subject reports, if required, on a timely basis during and
with respect to the fiscal year ended December 31, 2001.


ITEM 10. EXECUTIVE COMPENSATION.

     The following table sets forth certain information concerning the
compensation earned by the Company's Chief Executive Officer and other executive
officers who were serving as executive officers at the end of the last completed
fiscal year and whose salary and bonus aggregated were in excess of $100,000. No
other compensation not covered in the following table was paid or distributed by
the Company to such persons during the period covered. Employee Directors
receive no additional compensation for service on the Board of Directors of the
Company. Outside Directors received no compensation from the Company as such
during this period, except as indicated below.

     In December  2000,  the Company  granted  stock  options to  directors  and
officers of the  Company.  Mr. Lim,  the current  President  and  Director,  was
granted an option for 500,000 common shares at $0.085 exercisable until December
5, 2005. Mr. Muda, the current Chairman and Director,  was granted an option for
100,000 common shares at $0.085  exercisable  until December 5, 2005. Miss Looi,
the current  Secretary  and Director,  was granted an option for 120,000  common
shares at $0.085  exercisable  until  December 5, 2005.  Mr. Leong,  the current
Chief Financial  Officer and Treasurer,  was granted an option for 78,000 common
shares at $0.085  exercisable  until  December 5, 2005. The closing price of the
common  stock on  December 6, 2000 was  $0.075.  Mr. Lim,  Mr. Muda and Ms. Looi
exercised  their options on March 12, 2002 to purchase a total of 720,000 shares
of restricted  common stock at $0.085 per share for total cash  consideration of
$61,200.

     The Company has no other retirement, pension, profit sharing, stock option,
insurance or other similar programs. There were no long-term compensation plans,
awards, options or any other compensation offered by the Company.


                           SUMMARY COMPENSATION TABLE

NAME AND PRINCIPAL POSITION                 YEAR        ANNUAL
---------------------------                 ----      COMPENSATION
                                                     --------------
                                                     SALARY            BONUS
                                                     ------            -----
Patrick Soon-Hock Lim                       2001      -
President, Chief Executive                  2000      -
Officer and Director                        1999      $7,895 (1)


(1) Amounts received in 1999 represent director's fee from AEI for the year
    ended December 31, 1999.

EMPLOYMENT AGREEMENTS

     The Company has no employment agreements with its Chief Executive Officer
and other executive officers. However, its wholly-owned subsidiary, AEI, and
Chee Hong Leong entered into a letter agreement, dated December 8, 1999, with
respect to Mr. Leong's appointment as Corporate Finance Manager of AEI. Under
the letter agreement, Mr. Leong will receive a basic salary of $18,947 per year
and be entitled to unspecified stock option grants to be awarded by Digital
Broadband Networks, Inc. in the future. Either party may terminate the letter
agreement by giving the other party one month's prior written notice.

     AEI and Ms. Valerie Hoi-Fah Looi entered into a letter agreement dated
January 1, 1999 with respect to Ms. Looi's redesignation as Senior Vice
President of Corporate Affairs at AEI. Under the letter agreement, Ms. Looi will
receive a basic salary of $13,578 per year subject to review by the Company from
time to time.

                                       21

<PAGE>


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

     The following sets forth the number of shares of the Company's common stock
beneficially owned by (i) each person who, as of March 27, 2002, was known by
the Company to own beneficially more than five percent (5%) of its common stock;
(ii) each of the Directors and Executive Officers of the Company and (iii) the
Directors and Executive Officers of the Company as a group. As of March 27,
2002, there were 98,723,499 common shares issued and outstanding.


NAME AND ADDRESS                 NUMBER OF SHARES OF             PERCENT OF
OF BENEFICIAL OWNER(1)           BENEFICIAL OWNER (2)                CLASS
-------------------------------------------------------------------------------

Patrick Soon-Hock Lim              50,995,000 (3)                   51.65

Wan Abdul Razak bin Muda              400,000 (4)                       *

Valerie Hoi-Fah Looi                4,820,000                        4.88

Chee-Hong Leong                             -                           -

                                 ------------                    --------
All Officers and Directors as
a Group (4 persons)                56,215,000                       56.53

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


* Less than 1%.


(1)  The address for each beneficial  owner is c/o Digital  Broadband  Networks,
     Inc.,  Suite 11.02,  Menara Merais,  No. 1 Jalan 19/3, 46300 Petaling Jaya,
     Selangor, Malaysia.

(2)  The inclusion  herein of any shares of common stock as  beneficially  owned
     does not  constitute an admission of beneficial  ownership of those shares.
     Unless  otherwise  indicated,  each person listed above has sole investment
     and voting power with respect to the shares listed.

(3)  Includes  (a)  8,000,000  shares  directly  owned by Mr.  Lim's  wife,  (b)
     8,000,000 shares directly owned by Mr. Lim's son and (c) 25,245,000  shares
     owned by LSH Asset  Holdings Sdn Bhd, a  corporation  controlled by Mr. Lim
     and his wife.

(4)  Of such shares (i) 60,000 are  beneficially  owned by Mr. Muda's spouse and
     (ii) 60,000 are held by each of Mr. Muda's three daughters.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the year ended December 31, 2001, the Company had related transactions
with the following parties:

LSH ASSET HOLDINGS SDN BHD ("LSH"):

LSH is a company wholly-owned by the Company's Chief Executive Officer and his
wife. During the years ended December 31, 2001 and 2000, LSH billed the Company
$120,000 and $300,000, respectively, for management fees. LSH also made short
term advances to the Company from time to time for working capital purposes. As
of December 31, 2001, the amount due to LSH was $301,562. This amount is
unsecured, bears no interest, has no fixed terms of repayment, and is recorded
in the financial statements as "Amount due to an affiliated company".

                                       22

<PAGE>


VISIONEWS ASIA SDN BHD ("VASB"):

The Company's Chief Executive Officer is a director of VASB and owns a 40%
equity interest in VASB. A director of PTSB is also a director of VASB and owns
a 20% equity interest in VASB. As of December 31, 2001, $81,560 of receivables
from 1999 was not recognized as revenue due to the uncertainty of collection.
During the year ended December 31, 2000, the Company received $21,027 from VASB
for an administration fee and sub-letting a portion of the Company's premises to
VASB. The Company also received $5,288 from VASB in respect of revenue deferred
from 1999. The terms of repayment for the amount due from VASB is similar to
terms accorded to the Company's other existing customers.

SYNERVEST SDN BHD ("SSB"):

A director of PTSB is a director of SSB and holds a 60% equity interest in SSB.
As of December 31, 2001, $92,105 of receivables from 1999 was not recognized as
revenue due to the uncertainty of collection. The terms of repayment for the
amount due from SSB are similar to terms accorded to the Company's other
existing customers. In May 2000, the Company sold a patent for digital image
display technology, acquired from SSB for $448,567 as consideration for
settlement of an amount owed to the Company, to a third party for cash of
$492,105.

As of December 31, 2001, long-term receivables, related parties, consisted of an
overdue amount of $770,605 from SSB. This amount primarily arose in the year
ended December 31, 1998 when the Company sold to SSB assets used in the
operations of a subsidiary. These assets, comprising analog video hardware and
peripherals and a patent for image display, were sold to SSB for a total sum of
$1,661,175. Due to the uncertainty of collection of the related receivable, the
gain has been deferred and will be recognized only after all costs have been
recovered. During the years ended December 31, 2001 and 2000, the Company
received payment of $18,869 and $601,533, respectively. A gain on sale of assets
of $416,411 was recognized in 2000. The deferred gain on sale of assets totaled
$729,395 at December 31, 2001.

KHIDMAT MAKMUR SDN BHD ("KMSB"):

A director of PTSB is a director of KMSB and holds a 30% equity interest in
KMSB. As of December 31, 2001, $155,382 of receivables from 1999 was not
recognized as revenue due to the uncertainty of collection. During the year
ended December 31, 2000, the Company received $300,000 from KMSB, in respect of
revenue deferred from 1999. The terms of repayment for the amount due from KMSB
are similar to terms accorded to the Company's other existing customers.

MY ARCHITECT ("MYA") AND MY DRAUGHTING SERVICES ("MDS"):

A director of PTSB is a principal partner of MYA and MDS. As of December 31,
2001, $139,474 and $104,447 of 1999 receivables from MYA and MDS, respectively,
were not recognized as revenue due to the uncertainty of collection. During the
year ended December 31, 2000, the Company received $149,771 from MYA and $49,882
from MDS, in respect of revenue deferred from 1999. During the year ended
December 31, 2000, the Company also received $130,610 from MYA in respect of
sale of assets in 1999. The terms of repayment for the amount due from MYA and
MDS are similar to terms accorded to the Company's other existing customers.

CHIEF EXECUTIVE OFFICER:

As of December 31, 2001, the Company owed the Chief Executive Officer of the
Company $255,349 for short-term cash advances made to the Company for working
capital purpose from time to time. The amount owing to the Chief Executive
Officer is unsecured, bears no interest, has no fixed terms of repayment and is
recorded in the financial statements as "Amount due to a director".

                                       23

<PAGE>


ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.


(a)  Exhibits.

3.1  Articles of  Incorporation  (Incorporated by reference to Exhibit 3A to the
     Company's Form 10-SB filed with the SEC on March 6, 1995.)

3.2  Articles  of  Amendment  (Incorporated  by  reference  to Exhibit 3B to the
     Company's Form 10-SB filed with the SEC on March 6, 1995.)

3.3  Bylaws (Incorporated by reference to Exhibit 3C to the Company's Form 10-SB
     filed with the SEC on March 6, 1995.)

3.4  Articles Of Amendment to change name from Knight  Natural Gas to Kalan Gold
     Corporation.  (Incorporated  by reference  to Exhibit 3.4 to the  Company's
     Form 10-KSB filed with the SEC on April 14, 2000.)

3.5  Articles of Amendment to change name from Kalan Gold Corporation to Digital
     Broadband Networks, Inc.

10.1 Amended  Settlement  Memorandum,  dated  December 14, 1999, as confirmed by
     Judge  Jim  R.   Carrigan  of  the  Judicial   Arbiter   Group  in  Denver.
     (Incorporated  by reference to Exhibit  10.1 to the  Company's  Form 10-KSB
     filed with the SEC on April 14, 2000.)

10.2 Agreement and Plan of  Reorganization,  dated April 20, 1999, between Kalan
     Gold Corporation and Animated Electronic Industries Sdn. Bhd. (Incorporated
     by reference to Exhibit 2.1 to the Company's  Current  Report on Form 8-K/A
     dated April 20, 1999, as filed with the SEC on July 2, 1999.)

10.3 Employment  Letter Agreement,  dated January 1, 1999,  between Valerie Looi
     and Animated Electronic Industries Sdn. Bhd.  (Incorporated by reference to
     Exhibit 10.3 to the  Company's  Form 10-KSB filed with the SEC on April 14,
     2000.)

10.4 Employment  Letter  Agreement,  dated December 8, 1999,  between Leong Chee
     Hong  and  Animated  Electronic  Industries  Sdn.  Bhd.   (Incorporated  by
     reference to Exhibit 10.4 to the  Company's  Form 10-KSB filed with the SEC
     on April 14, 2000.)

21.1 List of Subsidiaries

99.1 Letter from Arthur  Andersen & Co.  dated April 14, 2000  (Incorporated  by
     reference to Exhibit 10.1 to the  Company's  Form 10-KSB filed with the SEC
     on April 14, 2000).

(b)  Reports on Form 8-K.

     The Company  filed a Current  Report on Form 8-K for a event  specified  in
Item 5 of such report on December 12, 2001.

                                       24

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                Digital Broadband Networks, Inc.

Dated: March 28, 2002           By:      /s/ Patrick Soon-Hock Lim
                                         --------------------------------------
                                           Patrick Soon-Hock Lim
                                           President and Chief Executive Officer



     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.


          SIGNATURE                         TITLE                    DATE
          ---------                         -----                    ----


/s/ Patrick Soon-Hock Lim        President, Chief Executive      March 28, 2002
-----------------------------    Officer and Director
Patrick Soon-Hock Lim           (Principal Executive Officer)



/s/ Chee-Hong Leong              Chief Financial Officer         March 28, 2002
-----------------------------   (Financial Officer and
Chee Hong Leong                  Principal Accounting Officer)



/s/ Wan Abdul Razak bin Muda     Chairman and Director           March 28, 2002
-----------------------------
Wan Abdul Razak bin Muda



/s/ Valerie Hoi-Fah Looi         Secretary and Director          March 28, 2002
-----------------------------
Valerie Hoi-Fah Looi


                                       25

<PAGE>


                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
                     YEARS ENDED DECEMBER 31, 2001 AND 2000
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Independent auditors' report                                            F1
Consolidated financial statements:
         Balance sheet                                                  F2
         Statements of operations                                       F3
         Statements of changes in shareholders'
           equity and comprehensive loss                                F4
         Statements of cash flows                                       F5
         Notes to consolidated financial statements                     F6-F19

<PAGE>


                          INDEPENDENT AUDITORS' REPORT

Board of Directors
Digital Broadband Networks, Inc.

We have audited the accompanying consolidated balance sheet of Digital Broadband
Networks, Inc. and subsidiaries as of December 31, 2001, and the related
consolidated statements of operations, changes in shareholders' equity and
comprehensive loss and cash flows for each of the years in the two-year period
ended December 31, 2001. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Digital Broadband
Networks, Inc. and subsidiaries as of December 31, 2001, and the results of
their operations and their cash flows for each of the years in the two-year
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company suffered losses from operations
of $92,585 in 2001 and $1,152,072 in 2000, had negative cash flows from
operating activities of $296,297 and $516,334 in 2001 and 2000, respectively,
and has an accumulated deficit of $1,232,977 at December 31, 2001. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regards to these matters are also described in
Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.


HORWATH GELFOND HOCHSTADT PANGBURN, P.C.

Denver, Colorado
March 25, 2002


                                       F-1
<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2001




                                     ASSETS
Current assets:

     Cash                                                   $           402
     Accounts receivable, less allowance for doubtful
       accounts of $324,167 (Note 10)                             1,881,579
     Prepaid expenses                                                45,348
     Inventories (Note 2)                                             1,248
                                                            ---------------
              Total current assets                                1,928,577
Furniture and equipment, net (Notes 5 and 6)                      1,678,117
Goodwill, net (Note 2)                                              471,150
Long-term receivables, related parties (Note 3)                     770,605
                                                            ---------------
                                                            $     4,848,449
                                                            ===============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

     Current portion of capital lease obligations (Note 6)  $        44,989
     Accounts payable                                               846,497
     Accrued expenses                                               140,841
     Amount due to an affiliated company (Note 3)                   301,562
     Amount due to a director (Note 3)                              255,349
                                                            ---------------
              Total current liabilities                           1,589,238
                                                            ---------------
     Capital lease obligations, net of current
       portion (Note 6)                                             114,643
     Deferred gain (Note 3)                                         729,395
                                                            ---------------
              Total liabilities                                   2,433,276
                                                            ---------------
Minority interest                                                   128,318
                                                            ---------------
Commitments and contingencies (Notes 1 and 11)

Shareholders' equity (Note 7):
     Preferred stock, $0.10 par value; 1,000,000
      shares authorized; no shares issued
      and outstanding
     Common stock, $.00001 par value; 100,000,000
      shares authorized; 97,753,499 shares issued
      and outstanding                                                   977
     Additional paid-in capital                                   3,457,723
     Options (Note 7)                                                20,125
     Deferred compensation cost (Note 7)                            (15,562)
     Accumulated deficit                                         (1,232,977)
     Accumulated other comprehensive income                          56,569
                                                            ---------------
              Total shareholders' equity                          2,286,855
                                                            ---------------
                                                            $     4,848,449
                                                            ===============

                 See notes to consolidated financial statements

                                      F-2

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

                                              2001                  2000
                                             ------                -------
Revenues:
     Related parties (Note 3)           $         --        $      504,941
     Others                                4,958,421             3,688,572
                                        ------------        --------------
                                           4,958,421             4,193,513
Cost of revenues                           4,699,367             3,621,796
                                        ------------        --------------
Gross profit                                 259,054               571,717
                                        ------------        --------------
Operating expenses:
     Sales and marketing                     130,201                86,542
     General and administrative:
       Related parties (Note 3)              120,000               300,000
       Others (Note 2)                       101,438             1,337,247
                                        ------------        --------------
Total operating expenses                     351,639             1,723,789
                                        ------------        --------------
Loss from operations                         (92,585)           (1,152,072)
                                        ------------        --------------
Other income (expense):
     Interest expense                        (19,143)              (25,800)
     Gain on sale of subsidiaries (Note 9)        --               489,251
     Gain on disposal of assets:
       Related parties (Note 3)                   --               416,411
       Others (Note 4)                           526                43,538
     Other income:
       Related parties (Note 3)                   --                21,027
       Others                                    182                   250
                                        ------------        --------------
                                             (18,435)              944,677
                                        ------------        --------------
Loss before minority interest               (111,020)             (207,395)

Minority interest                             31,915               (46,824)
                                        ------------        --------------
Net loss                                $    (79,105)       $     (254,219)
                                        ============        ==============
Basic and diluted loss per common share $          *        $            *
                                        ============        ==============
Weighted average number of common
  shares outstanding                      97,513,944            96,951,655
                                        ============        ==============

* Less than $0.01 per share

                 See notes to consolidated financial statements

                                      F-3

<PAGE>

<TABLE>
<CAPTION>


                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                             AND COMPREHENSIVE LOSS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000



                              Common stock
                         -------------------
                                                                                                         Accumulated
                                               Additional                Deferred                          other
                                      Par       paid-in                 compensation    Accumulated    comprehensive
                        Shares       value      capital       Options       cost          deficit          income        Total
                      ---------     ------      ---------     -------   -------------    -----------    ----------      ------
Balances,
<S>      <C>           <C>         <C>      <C>              <C>        <C>            <C>              <C>         <C>
 January 1, 2000       94,990,999  $  950   $   2,262,438    $    --    $        --    $    (899,653)   $  56,347   $  1,420,082

Issuance of
 common shares          2,300,000      23       1,149,977         --             --               --           --      1,150,000

Comprehensive loss:

 Net loss for
  the year ended
  December 31, 2000            --      --              --         --             --         (254,219)          --       (254,219)

 Foreign currency
  translation
  adjustment                   --      --              --         --             --               --          292            292

 Comprehensive loss                                                                                                     (253,927)
                      -----------  ------     -----------    -------    -----------    -------------    ---------   ------------
Balances,
 December 31, 2000     97,290,999  $  973   $   3,412,415  $      --  $          --  $    (1,153,872) $    56,639  $   2,316,155

Issuance of
 common shares            462,500       4          45,308         --             --               --           --         45,312

Issuance of
 stock options to
 a consultant                  --      --              --     20,125        (20,125)              --           --             --

Amortization of
 deferred
compensation
 for the year ended
 December 31, 2001             --      --              --         --          4,563               --           --          4,563

Comprehensive loss:

 Net loss for
  the year ended
  December 31, 2001            --      --              --         --             --          (79,105)          --        (79,105)

 Foreign currency
  translation
  adjustment                   --      --              --         --             --               --         (70)            (70)

 Comprehensive loss                                                                                                      (79,175)
                    -----------    ------   ------------   --------   ------------   -------------    ----------  --------------
Balances,
 December 31, 2001   97,753,499    $  977   $  3,457,723   $ 20,125   $    (15,562)  $  (1,232,977)   $   56,569  $    2,286,855
                    ===========    ======   ===========   =========   ============   =============    ==========  ================


</TABLE>

                 See notes to consolidated financial statements

                                      F-4

<PAGE>

<TABLE>
<CAPTION>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


                                                                                      2001                    2000
                                                                                   --------                --------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                        <C>                       <C>
     Net loss                                                              $          (79,105)       $     (254,219)
     Adjustments to reconcile net loss to net cash used
       in operating activities:

     Minority interest                                                                (31,915)               46,824
     Depreciation and amortization                                                    366,211               227,588
     Deferred compensation amortization                                                 4,563                    --
     Reserve for bad debts                                                           (455,012)              455,012
     Gain on disposal of assets                                                          (526)             (459,949)
     Gain on disposal of subsidiary                                                        --              (489,251)
     Changes in operating assets and liabilities:
       Increase in receivables                                                       (525,067)             (173,008)
       Increase in prepaid expenses                                                   (15,023)              (26,053)
       (Increase) decrease in inventories                                              (1,248)                6,786
       Increase in payables and accrued expenses                                      440,825               149,936
                                                                            ------------------       --------------
           Net cash used in operating activities                                     (296,297)             (516,334)
                                                                            ------------------       --------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from sale of furniture and equipment                                        526               130,610
     Purchase of furniture and equipment                                              (57,192)             (412,788)
     Proceeds from disposal of investment in subsidiaries                              13,421                    --
     Purchase of investment in subsidiary                                                  --              (859,905)
     Proceeds from sale of assets                                                          --               492,105
                                                                            ------------------      ---------------
           Net cash used in investing activities                                      (43,245)             (649,978)
                                                                            ------------------      ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from issue of shares of common stock                                     45,312             1,150,000
     Net proceeds from affiliated company                                             155,633               108,563
     Net proceeds from (payments to) a director                                       134,928               (46,900)
     Payment of obligation under capital leases                                            --               (45,239)
                                                                            ------------------      ---------------
           Net cash provided by financing activities                                  335,873             1,166,424
                                                                            ------------------      ---------------

Net decrease in cash                                                                   (3,669)                  112
Cash, beginning of year                                                                 4,071                 3,959
                                                                            ------------------      ---------------
Cash, end of year                                                                         402                 4,071
                                                                            ==================      ===============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Cash paid for interest during the period                               $              22       $        38,860
                                                                            ==================      ===============

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
  ACTIVITIES:
     Subsidiary sold in exchange for accounts receivable                                            $        13,418
                                                                                                    ===============
    The Company purchased additional common stock of a subsidiary for $859,905.
       In conjunction with the acquisition, liabilities were assumed as follows:

       Fair value of assets acquired                                                                $     1,154,374
       Cash paid                                                                                           (859,905)
                                                                                                    ---------------
       Liabilities assumed                                                                          $       294,469
                                                                                                    ===============

                 See notes to consolidated financial statements
</TABLE>

                                      F-5

<PAGE>


                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 1: ORGANIZATION, BASIS OF PRESENTATION, GOING CONCERN AND MANGEMENT'S
        PLANS:

ORGANIZATION AND BASIS OF PRESENTATION:

Digital Broadband Networks, Inc. and subsidiaries (the "Company") provides
network facilities and services for two-way wireless broadband applications that
include distance learning, live news coverage, remote video surveillance,
emergency field services (including tele-medicine) and on site progress
monitoring. The Company's revenues for 2001 and 2000 were primarily derived from
the design, development and production of interactive multimedia websites and
content.

The Company, formerly known as Kalan Gold Corporation and Knight Natural
Gas,  Inc.,  changed its name to Digital  Broadband  Networks,  Inc.,  after its
shareholders  approved the change of name in a Special  Shareholders  Meeting on
August 17, 2001.

The accompanying consolidated financial statements include the accounts of
Digital Broadband Networks, Inc. and its wholly-owned subsidiary, Animated
Electronic Industries Sdn Bhd ("AEI"), as well as AEI's 86% owned subsidiary,
Perwimas Telecommunications Sdn Bhd ("PTSB"), a company incorporated in
Malaysia. In December 2000, AEI increased its investment in PTSB from 51% to 86%
after acquiring 4,328,000 shares of PTSB's common stock for cash of $859,905.
During 2000, AEI sold its entire 51% interest in Vistel (Malaysia) Sdn Bhd
("VMSB"), an investment holding company incorporated in Malaysia, for accounts
receivable of $13,421 (received in 2001). The accounts of VMSB were included in
the consolidated statement of operations up to the effective date of disposal.

GOING CONCERN AND MANAGEMENT'S PLANS:

The Company's consolidated financial statements for the year ended December 31,
2001, have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the
normal course of business. The Company suffered losses from operations of
$92,585 in 2001 and $1,152,072 in 2000, had negative cash flows from operating
activities of $296,297 and $516,334 in 2001 and 2000, respectively, and has an
accumulated deficit of $1,232,977 at December 31, 2001. The Company may incur
continued cash outflows, which may result in a working capital deficiency again
next year. As a result, the Company may experience difficulty and uncertainty in
meeting its liquidity needs during the next fiscal year.

These factors raise substantial doubt about the Company's ability to continue as
a going concern. The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of assets or the
amounts and classification of liabilities that might be necessary should the
Company be unable to continue as a going concern.

The Company is developing a wireless broadband network, "VISIONET", in Malaysia
and intends to acquire additional licenses and spectrum rights in other Asian
markets. In November 2000, PTSB entered into a strategic alliance with a
Malaysian Internet service provider. In September 2001, PTSB was awarded an
Application Service Provider (ASP) license by the Malaysian Communications and
Multimedia Commission. Management believes the ASP license will complement the
wireless broadband license previously granted to the Company in 1997. The
Company has now developed a revised business model based on the operations of an
integrated national broadband network. The Company expects to generate revenues
by providing other broadband communication services that include:

1.   operation of VISIONET;
2.   construction of owned and operated networks for third parties;
3.   development  and  operation of local mobile  networks  that provide  mobile
     Internet access through handheld devices; and
4.   production and delivery of training and adult education programs.

                                      F-6

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 1: ORGANIZATION, BASIS OF PRESENTATION, GOING CONCERN AND MANAGEMENT'S
        PLANS (CONTINUED):

GOING CONCERN AND MANAGEMENT'S PLANS (CONTINUED):

As in the establishment of many other new businesses, there are various risk
factors including competition, technology availability and market acceptance
risks. The Company requires substantial amounts of capital to establish its
business and expects to incur substantial losses over the next few years.

The Company's plan to overcome its financial difficulties and return to
profitability centers on expanding its business in multimedia content production
and the roll out of VISIONET. To cope with its expansion in the multimedia
content production business, the Company had, since April 2000, sub-contracted
production work to contractors to focus on marketing its content production
services to gain a larger market share. The Company established its first
VISIONET cell in December 2001 and hopes to commence commercial operation
sometime in the first half of 2002 but cannot provide assurance that any target
launch date will be met. The Company is currently negotiating with application
service providers to host and deliver their content via VISIONET.

The Company believes that sufficient cash will be generated from the following
sources to fund its operations for the next twelve months:

--   Intensification  of efforts to collect  overdue  receivables.  The  Company
     intends to keep close  contact  with its  debtors to keep  updated on their
     liquidity status. Legal action will only be taken as a last resort.

--   Advances  from a  director/officer  who  is  also a  major  shareholder  as
     required to finance the Company's working capital requirements.

--   Additional  revenue  provided  by:  (i) a  consulting  contract,  which  is
     estimated to generate $2.85 million in revenue,  to carry out the planning,
     design,  project execution  (including  contract and project management) of
     all broadband  communications  and  networking  systems/services  for Pulau
     Indah-Marina  Village,  (ii) a  contract,  which is  estimated  to generate
     $550,000 in revenue over a three-year  period,  to carry out the  planning,
     design,  project execution of all broadband  communications  and networking
     systems/services for a commercial/housing project in Selangor, Malaysia.

--   The Company may consider a private placement of its shares.

--   The Company may also seek to obtain equipment financing.

The Company also hopes that additional cash will be generated from the
marketing  agreement with  Worldlink  Dotcom Sdn. Bhd. to distribute its service
gateway for home/office automation in Malaysia, Singapore and Australia and from
the  distribution  agreement  with Mutual Base Equity Sdn.  Bhd. for sale of the
Eystar SmartHome Console in Malaysia and Singapore.

With the above plans and barring any unforeseen circumstances, Management
believes the Company will be able to continue as a going concern.

                                      F-7

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES:

FINANCIAL STATEMENTS:

The consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America.

The Company's consolidated financial statements include the results of
operations of the subsidiaries' business from the date of acquisition. Net
assets of the subsidiaries are recorded at their fair value at the date of
acquisition. All significant inter-company accounts and transactions have been
eliminated on consolidation.

COMPREHENSIVE INCOME:

The Company reports comprehensive income in accordance with Statement of
Financial Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive
Income," which establishes standards for the reporting and display of
comprehensive income and defines comprehensive income to include all changes in
equity except those resulting from investments by owners and distributions to
owners. Among other disclosures, SFAS No. 130 requires that all items that are
required to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that is presented with
the same prominence as other financial statements. The Company's only current
component of comprehensive income are foreign currency translation adjustments.

The functional currency of the Company's subsidiaries is the Malaysian Ringgit.
The financial statements of these subsidiaries are translated into United States
dollars using year-end rates of exchange for assets and liabilities, and average
rates of exchange for the year for revenues, costs, and expenses. Translation
gains and losses are treated as a component of shareholders' equity. The
reporting currency used in the financial statements is USD unless otherwise
stated.

REVENUE RECOGNITION:

Revenue represents the net invoiced value of goods sold or fees earned from the
production of multimedia programs and Intranet and management and consulting
services. The Company recognizes revenue from the sales of goods in the period
when significant risks and rewards of ownership have transferred to its
customers. The Company recognizes revenue from the services provided in the
period in which the services are performed and when there is no significant
uncertainty regarding the consideration to be received and the associated costs
to be incurred.

NET LOSS PER COMMON SHARE:

Loss per common share is determined in accordance with SFAS No. 128, "Earnings
Per Share" (EPS). SFAS No. 128 requires the presentation of two EPS amounts,
basic and diluted. Basic EPS is calculated by dividing net income by the
weighted average number of common shares outstanding for the period. Diluted EPS
includes the dilution that would occur if outstanding stock options and other
dilutive securities were exercised, unless the effect is to reduce a loss per
share.

INCOME TAXES:

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.

                                      F-8

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

FURNITURE, EQUIPMENT AND DEPRECIATION:

Furniture and equipment are stated at cost less depreciation. Depreciation is
calculated on the straight-line method over the expected useful lives of the
assets. The principal annual rates of depreciation are:

     Office Equipment, furniture and fittings,
       computer software                                             20%
     Tools and equipment, video communication hardware and
       peripherals, office renovation                                10%

Routine expenses for maintenance and repair are expensed as incurred.
Expenditures that result in enhancement of the value or in extension of the
useful life of fixed assets are capitalized.

LONG-LIVED ASSETS:

Long-lived assets to be held and used are reviewed for impairment whenever
events or changes in circumstances indicate that the related carrying amount may
not be recoverable. When required, impairment losses on assets to be held and
used are recognized based on the fair value of the asset and long-lived assets
to be disposed of are reported at the lower of carrying amount or fair value
less cost to sell.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

The Company's on-balance sheet financial instruments consist of cash, accounts
receivable, capital lease obligations, accounts payable, and other accrued
liabilities. The carrying amounts of such financial instruments approximate fair
value due to their short maturities. The fair values of amounts due to and from
related parties are not practicable to estimate, due to the related party nature
of the underlying transactions. The Company has no material off-balance sheet
financial instruments.

ASSETS UNDER CAPITAL LEASES:

The Company records assets acquired under capital leases as fixed assets and the
corresponding obligation under capital leases as a liability. The initial
recording value of assets under a capital lease is the lesser of the fair value
of the leased assets or the present value of the minimum lease payments,
excluding any portion representing executory costs and profit thereon. The
assets recorded under capital leases are depreciated over the shorter of the
lease term or estimated useful life of the assets.

GOODWILL:

In December 2000, the Company purchased an additional 35% interest in PTSB
(increasing the Company's ownership interest from 51% to 86%) through the
acquisition of 4,328,000 shares of PTSB's common stock from a non-related
minority shareholder of PTSB for cash of $859,905, resulting in goodwill of
$588,938, which is being amortized on the straight-line method over five years.
Amortization expense for the year ended December 31, 2001 was $117,788. The
Company accounted for this transaction under the purchase method of accounting
based upon the market value of the common stock issued by the Company.

Beginning January 1, 2002, pursuant to SFAS No. 142, goodwill will no longer be
amortized, but is subject to annual impairment tests in accordance with the
standard. Through December 31, 2001, management assessed the carrying value of
goodwill and other long-lived assets for impairment when circumstances warranted
such a review,pursuant to SFAS No. 121. Management does not believe that any
impairment has occurred as of December 31, 2001 or 2000. Beginning in 2002, the
Company will apply newly adopted standards to test for impairment of goodwill
and long-lived assets.

INVENTORIES:

Inventories, which are comprised of peripherals for surveillance and wireless
communication, are stated at the lower of cost or net realizable value. Cost is
determined on a first-in-first-out basis.

                                      F-9

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

ADVERTISING:

Costs related to advertising and promotion of products are charged to sales and
marketing expense as incurred. Advertising and promotion costs were $113,391 and
$47,229 in 2001 and 2000, respectively.

OPERATING LEASES:

The Company leases its primary office facility under a three-year,
non-cancelable operating lease, which expires in February 2003 and provides for
a 2-year renewal option. The Company also leases another office for content
production, engineering and warehouse space. This lease expires in August 2002
and provides for a one-year renewal option. The lease require the Company to pay
rent of $1,844 per month up to August 2002 and $1,634 per month thereafter, as
well as taxes, maintenance, insurance and certain other operating costs of the
leased property. The Company also leases an Internet line and related Internet
access gateway under a one-year, non-cancelable operating lease, which expires
September 2002. The lease requires the Company to pay $2,763 per month. Future
minimum lease payments under these lease agreements total $46,155 for the year
ending December 31, 2002 and $3,268 for the year ending December 31, 2003. Rent
expense was $31,389 and $23,988 for the years ended December 31, 2001 and 2000,
respectively.

SEGMENT REPORTING:

The Company does not include segment reporting in the financial statements as
the Company functioned as a single operating unit in 2001 and 2000. The
Company's revenue is derived primarily from operations in Malaysia and
substantially all of the Company's assets are located in Malaysia.

STOCK-BASED COMPENSATION:

SFAS No. 123, Accounting for Stock Based Compensation, defines a
fair-value-based method of accounting for stock-based employee compensation
plans and transactions in which an entity issues its equity instruments to
acquire goods or services from non-employees, and encourages but does not
require companies to record compensation cost for stock-based employee
compensation plans at fair value. The Company has chosen to account for employee
stock-based compensation using the intrinsic value method prescribed in
Accounting Principles Board Opinion No. 25 (APB No. 25), Accounting for Stock
Issued to Employees, and related interpretations. Accordingly, employee
compensation cost for stock options is measured as the excess, if any, of the
estimated fair value of the Company's stock at the date of the grant over the
amount an employee must pay to acquire the stock.

BUSINESS RISK:

The Company is subject to risks and uncertainties common to technology-based
companies, including rapid technological change, dependence on principal
products and third-party technology, new product introductions and other
activities of competitors, dependence on key personnel, and limited operating
history.

ESTIMATES:

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

                                      F-10

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):

RECENTLY ISSUED ACCOUNTING STANDARDS:

In 2001, the Company adopted SFAS No. 133, Accounting for Derivative Instruments
and Hedging Activities. This statement, as amended, establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging activities. Currently,
the Company does not have any derivative financial instruments and does not
participate in hedging activities; therefore, this statement had no impact on
the Company's consolidated financial statements.

In July 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141,  Accounting for Business  Combinations,  and SFAS No. 142, Goodwill and
Other  Intangible  Assets.  SFAS No. 141 requires  that the  purchase  method of
accounting be used for all business combinations  initiated after June 30, 2001.
Use of the  pooling-of-interests  method is prohibited after that date. SFAS No.
141 also establishes specific criteria for the recognition of intangible assets.
This  pronouncement  did  not  have  an  impact  on the  Company's  consolidated
financial statements.

SFAS No. 142, effective for fiscal years beginning after December 15, 2001,
establishes accounting and reporting standards for goodwill and other intangible
assets. Under SFAS No. 142, goodwill and intangible assets deemed to have
indefinite lives will no longer be amortized, but will be subject to annual
impairment tests in accordance with the standard. Other intangible assets will
continue to be amortized over their useful lives. The Company will apply the new
standard on accounting for goodwill beginning in 2002. Application of the
non-amortization provisions of the standard is expected to result in an annual
reduction in amortization expense of approximately $118,000. The Company will
perform the first of the required impairment tests of goodwill under SFAS No.
142 during the first quarter of 2002.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses accounting and financial
reporting for the impairment or disposal of long-lived assets. This statement is
effective for fiscal years beginning after December 15, 2001. The Company is
currently assessing the impact, if any, that SFAS No. 144 may have on its
financial condition and results of operations.

RECLASSIFICATION:

Certain amounts reported in the prior year financial statements have been
reclassified for comparative purposes to conform to the presentation in the
current year financial statements.

                                      F-11

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 3: RELATED PARTY TRANSACTIONS:

During the years ended December 31, 2001 and 2000, the Company had related party
transactions with the following entities:

LSH ASSET HOLDINGS SDN BHD ("LSH"):

LSH is a company wholly-owned by the Company's Chief Executive Officer and his
wife. During the year ended December 31, 2001 and 2000, LSH billed the Company
$120,000 and $300,000, respectively, for management fees. LSH also made short
term advances to the Company from time to time for working capital purposes. As
of December 31, 2001, the amount due to LSH was $301,562. This amount is
unsecured, bears no interest, has no fixed terms of repayment, and is recorded
in the financial statements as "Amount due to an affiliated company".

VISIONEWS ASIA SDN BHD ("VASB"):

The Company's Chief Executive Officer is a director of VASB and owns a 40%
equity interest in VASB. A director of PTSB is also a director of VASB and owns
a 20% equity interest in VASB. As of December 31, 2001, $81,560 of receivables
from 1999 was not recognized as revenue due to the uncertainty of collection.
During the year ended December 31, 2000, the Company received $21,027 from VASB
for an administration fee and sub-letting a portion of the Company's premises to
VASB. The Company also received $5,288 from VASB in respect of revenue deferred
from 1999. The terms of repayment for the amount due from VASB is similar to
terms accorded to the Company's other existing customers.

SYNERVEST SDN BHD ("SSB"):

A director of PTSB is a director of SSB and holds a 60% equity interest in SSB.
As of December 31, 2001, $92,105 of receivables from 1999 was not recognized as
revenue due to the uncertainty of collection. The terms of repayment for the
amount due from SSB are similar to terms accorded to the Company's other
existing customers. In May 2000, the Company sold a patent for digital image
display technology, acquired from SSB for $448,567 as consideration for
settlement of an amount owed to the Company, to a third party for cash of
$492,105.

As of December 31, 2001, long-term receivables, related parties, consisted of an
overdue amount of $770,605 from SSB. This amount primarily arose in the year
ended December 31, 1998 when the Company sold to SSB assets used in the
operations of a subsidiary. These assets, comprising analog video hardware and
peripherals and a patent for image display, were sold to SSB for a total sum of
$1,661,175. Due to the uncertainty of collection of the related receivable, the
gain has been deferred and will be recognized only after all costs have been
recovered. During the years ended December 31, 2001 and 2000, the Company
received payment of $18,869 and $601,533, respectively. A gain on sale of assets
of $416,411 was recognized in 2000. The deferred gain on sale of assets totaled
$729,395 at December 31, 2001.

KHIDMAT MAKMUR SDN BHD ("KMSB"):

A director of PTSB is a director of KMSB and holds a 30% equity interest in
KMSB. As of December 31, 2001, $155,382 of receivables from 1999 was not
recognized as revenue due to the uncertainty of collection. During the year
ended December 31, 2000, the Company received $300,000 from KMSB, in respect of
revenue deferred from 1999. The terms of repayment for the amount due from KMSB
are similar to terms accorded to the Company's other existing customers.

MY ARCHITECT ("MYA") AND MY DRAUGHTING SERVICES ("MDS"):

A director of PTSB is a principal partner of MYA and MDS. As of December 31,
2001, $139,474 and $104,447 of 1999 receivables from MYA and MDS, respectively,
were not recognized as revenue due to the uncertainty of collection. During the
year ended December 31, 2000, the Company received $149,771 from MYA and $49,882
from MDS, in respect of revenue deferred from 1999. During the year ended
December 31, 2000, the Company also received $130,610 from MYA in respect of
sale of assets in 1999. The terms of repayment for the amount due from MYA and
MDS are similar to terms accorded to the Company's other existing customers.

                                      F-12

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 3: RELATED PARTY TRANSACTIONS (CONTINUED):

CHIEF EXECUTIVE OFFICER:

As of December 31, 2001, the Company owed the Chief Executive Officer of the
Company $255,349 for short-term cash advances made to the Company for working
capital purpose from time to time. The amount owing to the Chief Executive
Officer is unsecured, bears no interest, has no fixed terms of repayment and is
recorded in the financial statements as "Amount due to a director".

NOTE 4: GAIN ON SALE OF ASSETS:

Gain on disposal of assets relates to the sale of a patent for digital image
display technology, previously acquired from SSB in 1999 as disclosed in Note 3,
Related Party Transactions. In May 2000, the Company entered into an agreement
with an unrelated third party to sell a patent for digital image display
technology, previously acquired from SSB in 1999 for cash of $492,105 (RM
1,870,000). The sale was completed in June 2000 when the Company received the
cash and recognized a gain of $43,538.

NOTE 5: FURNITURE AND EQUIPMENT:

     Furniture and equipment consists of the following at December 31, 2001:

     Office equipment                               $           87,060
     Furniture and fittings                                     27,780
     Tools and equipment                                       153,708
     Video Communication hardware and peripherals            2,199,218
     Computer software                                         165,124
     Office renovation                                          11,010
                                                    ------------------
                                                             2,643,900
      Less accumulated depreciation                           (965,783)
                                                    ------------------
                                                    $        1,678,117
                                                    ==================

Depreciation expense for the years ended December 31, 2001 and 2000 was $248,423
and $227,588, respectively.

                                      F-13

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE 6: CAPITAL LEASE OBLIGATIONS:

Certain telecommunications and other assets are leased from a lessor under
various equipment lease financing facilities. Such leases have been accounted
for as capital leases. At the Company's request, the lessor agreed to an
extension on the repayment period in 1998 to enable the Company to secure
additional working capital financing. The rescheduled lease terms for all
capital leases commenced on December 1998 and are payable on a monthly basis
with the final payment due November 2006. The Company will acquire title to all
assets under capital leases, upon payment of the final lease payment in November
2006.

As of December 31, 2001 the future minimum lease payments on capital leases are
as follows:

           Year ending
           December 31:
           ------------
           2002                                             $           60,604
           2003                                                         36,284
           2004                                                         36,284
           2005                                                         36,284
           2006                                                         33,233
                                                            ------------------
           Total payments                                              202,689
           Less:  Amount representing interest                         (43,057)
                                                            ------------------
           Present value of minimum capital lease payments             159,632
           Less:  Current maturities of capital lease
             obligations                                               (44,989)
                                                            ------------------
                                                            $          114,643
                                                            ==================

Assets under these capital leases, which are included in property and equipment
at December 31, 2001, are as follows:


         Video communication hardware and peripherals       $          408,896
         Less accumulated depreciation                                (238,295)
                                                            ------------------
                                                            $          170,601
                                                            ==================

The Company has not made principal and interest payments due under these capital
lease agreements since July 2000. The total overdue amount as of December 31,
2001 is $59,528, which includes unpaid principal of $24,320 and unpaid interest
of $35,208. Unpaid principal is included in current portion of capital lease
obligations on the balance sheet. Unpaid interest is included in accrued
expenses on the balance sheet. The Company's Chief Executive Officer (CEO), who
is also a shareholder, has personally guaranteed payment under these capital
lease agreements. Pursuant to the terms of the guarantee agreement dated
December 3, 1998, the CEO has guaranteed to pay all amounts which become due
under the terms of the capital lease agreements. Subsequent to December 31, 2001
and through the date of this report, the Company has made payments to the lessor
totaling $6,050.

                                      F-14

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 7: SHAREHOLDERS' EQUITY:

PREFERRED STOCK:

The Company is authorized to issue one million shares of preferred stock, par
value $0.10 per share, which may be issued in series with such designations,
preferences, stated values, rights, qualifications or limitations as determined
by the Board of Directors. As of December 31, 2001, no preferred stock has been
issued.

On December 20, 2001, the Company signed two separate definitive agreements with
two unrelated parties for the purchase of convertible preferred stock with
attached warrants to raise a total of $2.5 million. Under the agreements, the
preferred stockholders will receive non-cumulative dividends at the rate of
$0.08 per share per annum when and if declared by the Company's Board of
Directors. The Company has authorized the sale and issuance of 500,000 shares of
its Series A Preferred Stock at a purchase price of $5.00 per share. Each
preferred stockholder shall be entitled to convert the preferred stock into
common stock at a ratio of 1 share of preferred stock to 2 shares of common
stock. This right may be exercised by the stockholders at any time. The purchase
was expected to be completed on or before February 28, 2002. On March 12, 2002,
the Company and the purchasers mutually agreed to extend the closing date for
the purchase to June 30, 2002. On March 25, 2002, the Company and the purchasers
executed an addendum to the definitive agreements to: (i) cancel the warrants
attached to the preferred stock and (ii) amend the conversion ratio to 1 share
of preferred stock to 1.6 shares of common stock.

ISSUANCE OF COMMON STOCK:

On May 18, 2001, the Company sold 400,000 shares of its restricted common stock
to a shareholder at $0.10 per share. The shares were sold in reliance upon the
exemption provided by Regulation S under the Securities Act of 1933, as amended.

On December 20, 2001, the Company issued 62,500 shares of its restricted common
stock to a consultant at $0.085 per share in accordance with the terms of an
option agreement, which was granted in June 2001 and subsequently terminated on
September 30, 2001.

STOCK OPTIONS:

In December 2000, the Company granted certain officers and employees of the
Company options to purchase up to 912,000 shares of the Company's common stock
at $0.085 per share (which was greater than the market price of the Company's
common stock at the date of grant). The options are exercisable through December
2005, contingent upon continuous service by the officers/employees through
specified dates. 50,400 options were cancelled during 2001 due to termination of
services of an employee. As of December 31, 2001, 861,600 options were
exercisable. 720,000 options were subsequently exercised on March 12, 2002.

If the Company had accounted for the 861,600 options issued to employees and
officers in accordance with FASB statement No. 123, the Company's net loss and
net loss per share would approximate the pro forma disclosure below:
<TABLE>
<CAPTION>

                                                Year ended December 31, 2001                Year ended December 31, 2000
                                                As reported        Pro forma                As reported        Pro forma
                                              --------------     -------------            ---------------  ---------------
<S>                                              <C>               <C>                       <C>               <C>
     Net loss                                    (79,105)          (84,950)                  (254,219)         (299,769)
     Basic and diluted loss per share                *                 *                         *                 *

     * Less than $0.01 per share
</TABLE>

The value of the exercisable options during the years ended December 31, 2001
and 2000 is calculated using the Black-Scholes methodology as prescribed by SFAS
No. 123. The Company utilized an expected dividend yield of 0, expected stock
price volatility of 104%, a risk free interest rate of 6%, and an expected life
of the option of 3 years.

                                      F-15

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 7: SHAREHOLDERS' EQUITY (CONTINUED):

STOCK OPTIONS (CONTINUED):

In June 2001, the Company granted options to purchase 750,000 shares of the
Company's common stock at $0.085 per share to a consultant for services to be
provided to the Company. These options were to be exercisable through May 2006,
contingent upon continuous service by the consultant through specified dates. On
September 30, 2001, the Option Agreement between the Company and the consultant
was terminated. Under the terms of the agreement, 62,500 options were
exercisable by the consultant through December 31, 2001. The remaining balance
of 687,500 options was canceled following termination of the agreement. These
options were valued at $0.057 per share based upon the Black-Scholes option
pricing model, resulting in recognition of compensation expense of $3,563 during
the year ended December 31, 2001. On December 20, 2001, the consultant exercised
62,500 options pursuant to the terms of the agreement.

On November 1, 2001, the Company granted options to purchase 250,000 shares of
the Company's common stock at $.12 per share to a consultant for services to be
provided to the Company. These options are exercisable through October 2006,
contingent upon continuous service by the consultant through specified dates.
125,000 of the options, which vest April 30, 2002, were valued at $0.06 per
share, and the remaining 125,000 options, which vest October 31, 2002, were
valued at $0.10 per share, based upon the Black-Sholes option pricing model,
resulting in recognition of compensation expense of $4,563 during the year ended
December 31, 2001.

A summary of the status of the Company's stock options as of December 31, 2001
and 2000, and changes during 2001 and 2000, is presented below:

<TABLE>
<CAPTION>

                Options Outstanding                             2001                                2000
             ------------------------             ------------------------------------      ---------------------------------
                                                         Shares        Exercise Price         Shares         Exercise Price
                                                        --------      ----------------      ---------       ----------------
   For officers and employees:
<S>                                                      <C>                 <C>                 <C>                 <C>
   Beginning of the year                                 912,000             $0.085                -                   -
   Granted                                                     -                  -          912,000              $0.085
   Exercised                                                   -                  -                -                   -
   Forfeited                                            (50,400)                  -                -                   -
                                                        ---------                           --------
   End of the year                                       861,600             $0.085          912,000              $0.085
                                                        ========                            ========
   Options exercisable at year end                       861,600             $0.085          720,000              $0.085

   For consultants:
   Beginning of the year                                       -                  -                -                   -
   Granted
     In June 2001                                        750,000             $0.085                -                   -
     In November 2001                                    250,000             $0.120                -                   -
   Exercised                                            (62,500)             $0.085                -                   -
   Forfeited                                           (687,500)             $0.085                -                   -
                                                       ----------                          ----------
   End of the year                                       250,000             $0.120                -                   -
                                                       =========                           =========
   Options exercisable at year end                             -                  -                -                   -
</TABLE>

                                      F-16

<PAGE>

                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE 7: SHAREHOLDERS' EQUITY (CONTINUED):

STOCK OPTIONS (CONTINUED):

         The following table summarizes information about options outstanding at
December 31, 2001 and 2000.

<TABLE>
<CAPTION>
                                                                              Options Outstanding
                                                           ---------------------------------------------------------
                                                             Number          Weighted Average        Weighted Average
                                                          Outstanding     Remaining Contractual          Exercise
                                                                                   Life                   Price
                                                        ---------------    --------------------     -----------------
          As of December 31, 2001:
<S>                                                              <C>               <C>                    <C>
           For officers and employees                            861,600           3.90                   $0.085
           For consultants                                       250,000           4.80                   $0.120
                                                               ---------
          Total                                                1,111,600           4.10                   $0.093
                                                               =========

          As of December 31, 2000:
           For officers and employees                            912,000           4.90                   $0.085

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

NOTE 8: INCOME TAXES:

Temporary differences and carry forwards that give rise to deferred tax assets
and liabilities as of December 31, 2001 are as follows:

DEFERRED TAX ASSETS
       Net operating loss carry forward         $          996,658
       Unutilized tax allowable depreciation               136,842
                                                --------------------
                                                         1,133,500
       Less: Valuation allowance                        (1,116,132)
                                                --------------------
       Deferred tax asset net of allowance                  17,368
DEFERRED TAX LIABILITIES
       Depreciation                                        (17,368)
                                                --------------------
NET DEFERRED TAX LIABILITY                                      --
                                                ====================

For 2001 and 2000, all income/(loss) of the Company was derived from its
activities in Malaysia and the United States. The Company has no current
provision for income taxes for 2001 or 2000 due to the Company's net operating
losses incurred in both locations in those years. Based on statutory rates, the
Company's expected tax benefit arising from the 2001 and 2000 net losses would
be approximately $65,000 and $71,000, respectively. The difference between the
expected tax benefit and non-recognition of a tax benefit in 2001 and 2000 is
the result of a valuation allowance applied to deferred tax assets in excess of
deferred tax liabilities

The valuation allowance offsets the net deferred tax assets for which there is
no assurance of recovery. The valuation allowance is evaluated considering
positive and negative evidence about whether the deferred tax assets will be
realized. At that time of evaluation, the allowance is either increased or
reduced; reduction could result in the complete elimination of the allowance if
positive evidence indicates that the value of the deferred tax assets is no
longer impaired and the allowance is no longer required. The Company's total net
operating loss carry forward is approximately $3.2 million, of which $2.4
million relates to the Company's activities in Malaysia and $800,000 relates to
the Company's activities in the United States. The net operating loss carry
forward that relates to activities in Malaysia can be carried forward
indefinitely while the net operating loss carry forward that relates to the
Company's activities in the United States expires through the year 2021.

                                      F-17

<PAGE>
                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000


NOTE 9: SALE OF SUBSIDIARY:

During the year ended December 31, 2000, the Company sold its 51% owned
subsidiary, Vistel (Malaysia) Sdn Bhd for accounts receivable of $13,421. At the
date of sale, the Company's portion of the subsidiary's excess net liabilities
over assets was $475,830. As a result, the Company recognized a $489,251 gain on
the sale.

NOTE 10: SIGNIFICANT CONCENTRATIONS OF CREDIT RISK:

The Company grants credit, generally without collateral, to its customers. Two
customers each accounted for approximately 19% of net revenues during the year
ended December 31, 2001 and accounted for substantially all revenue earned
during the last three months of the year. During 2000, no one customer accounted
for greater than 10% of net revenues. Allowance for doubtful accounts receivable
was $324,167 and $779,179 at December 31, 2001 and 2000, respectively. The
Company will continue to pursue vigorously the collection of all its outstanding
accounts receivable.

One supplier accounted for approximately 39% of cost of revenue for the year
ended December 31, 2001 and accounted for substantially all cost of revenue
during the last three months of the year. The Company is not dependent upon one
supplier to provide the services that it requires. During the fourth quarter of
2001, the Company made a strategic decision to engage the services of one sole
supplier after taking into consideration the quality of service and competitive
pricing being offered. Should the need arise, the Company could utilize
alternative suppliers for the services that it requires. For the year ended
December 31, 2000, two suppliers accounted for 23% of cost of revenue.

NOTE 11: COMMITMENTS AND CONTINGENCIES:

As of December 31, 2001, the Company has committed to purchase equipment valued
at $300,000 in 2002 for the commercial rollout of VISIONET. The purchase is
conditional upon completion of successful trial of the equipment by the Company.

On November 28, 2001, the Company signed an agreement to purchase office space
in Australia for $1.8 million Australian dollars (approximately $920,000 USD at
December 31, 2001). The Company intends to lease the space for rental until it
finalizes its plan to relocate its Asian headquarters to Australia. Pursuant to
the terms of the agreement, the Company has paid a sum of $5,200 as deposit for
the above property. The purchase is subject to the approvals of the Australian
Foreign Investment Review Board and a few other relevant statutory approvals as
necessary under applicable laws. The purchase has not been completed as the
Company has yet to receive approval from Australian Foreign Investment Review
Board to proceed with the purchase.

In January 2002, the Company signed an agreement to purchase approximately $19
million of equipment over the next five years. These equipment purchases are
subject to inspection and acceptance by the Company depending upon certain
performance standards being satisfactorily met.

NOTE 12: PENDING LITIGATION:

Following the April 1999 AEI merger, certain disputes arose between the Company
and the Company's former President, Treasurer and legal counsel, each of whom
either directly and/or indirectly beneficially own common stock of the Company.
Those disputes involved, among other things, the issuance of 1,840,000 shares of
the Company's common stock to an entity controlled by the former legal counsel
(the "Disputed Shares") at the time of the merger, bills for pre-acquisition
legal services, recovery of the Company's historical corporate records, and
various claims of alleged misrepresentations in connection with the merger.

On January 26, 2000, the Company filed a complaint with the Colorado Supreme
Court Office of Attorney Regulation Counsel against David Wagner, who was the
Company's former corporate counsel and who acted in that capacity until July
1999. The Company made 5 general complaints in connection with Mr. Wagner's
actions and omissions taking place while he acted as its corporate counsel.

                                      F-18

<PAGE>
                DIGITAL BROADBAND NETWORKS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     YEARS ENDED DECEMBER 31, 2001 AND 2000

NOTE 12: PENDING LITIGATION (CONTINUED):

In March 2000, the former legal counsel and certain parties (the "Defendants")
filed two counterclaims against the Company. The first counterclaim seeks
approximately $193,000 in attorneys' fees that the former legal counsel alleges
the Company owes for legal services, the major portion of which were rendered
prior to the merger. The second counterclaim seeks a declaration removing a stop
transfer order the Company issued to its stock transfer agent with respect to
shares of common stock held in the names of the Defendants.

Following an investigation, including taking statements from the Company and Mr.
Wagner, the Office of Attorney Regulation Counsel informed the Company in
writing of its decision on April 27, 2001. The Attorney Regulation Counsel
determined that the interests of the public will be best protected by requiring
Mr. Wagner to sign a diversion agreement and comply with certain rules and
conditions for one year in order to maintain his license to practice law.

On June 20, 2001, in connection with a suit the Company instituted against
Sanford Altberger, Michael Raisch, David J. Wagner, David Wagner & Associates,
P.C, David Wagner & Associates Defined Benefits Plan, Marion Limited Liability
Company and Veronica Brownell, Case no. 00CV0172, the Arapahoe County District
Court entered its Order directing the Company to set the case for trial or
suffer a dismissal without prejudice. The Order further directed that the
Company file a statement showing good cause in order to avoid dismissal within
30 days from date of the Order.

After considering the action taken by the Attorney Regulation Counsel against
Mr. Wagner, the Company elected not to set a trial date nor file a statement
showing good cause to avoid dismissal. On August 1, 2001, the Arapahoe County
District Court dismissed the case, without prejudice to the Company's rights to
re-file the suit, which rights are subject only to the bars of the applicable
statutes of limitation. Consequently, the Company reversed $150,000 that was
accrued as management's estimate of Mr. Wagner's claim for fees due to him for
services rendered prior to the April 1999 AEI merger.

No legal proceedings of a material nature to which the Company is a party are
pending as of December 31, 2001, and the Company knows of no legal proceedings
of a material nature pending or threatened or judgments entered against any
director or officer of the Company in his capacity as such.

NOTE 13: SUBSEQUENT EVENTS:

On February 16, 2002, the Company granted options to purchase 60,000 shares of
the Company's common stock at $0.12 per share to a consultant for services to be
provided to the Company. These options are exercisable in August 2002,
contingent upon continuous service by the consultant through specified dates,
through February 2007.

On March 12, 2002, three officers and directors of the Company exercised options
to purchase 720,000 shares of the Company's restricted common stock at an
exercise price of $0.085 per share, for a total cash consideration of $61,200.

On March 14, 2002, the Company sold 250,000 shares of restricted common stock at
$0.085 per share to a shareholder in a private placement for cash consideration
of $21,250.

                                      F-19

<PAGE>

                                   Exhibit 3.5


                              ARTICLES OF AMENDMENT
                                     TO THE
                            ARTICLES OF INCORPORATION


Pursuant to the provision of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation :

FIRST : The name of the corporation is Kalan Gold Corporation.

SECOND : The following amendment to the Articles of Incorporation was adopted on
August 17, 2001 as prescribed by the Colorado Business Corporation Act, in the
manner marked with an X below :

_______      No shares have been issued or Directors Elected - Action by
             Incorporators.
_______      No shares have been issued but Directors Elected - Action
             by Directors
_______      Such amendment was adopted by the board of directors where
             shares have been issued and shareholder action was not required.
__X____      Such amendment was adopted by a vote of the shareholders. The
             number of shares voted for the amendment was
             sufficient for approval.

THIRD : If changing corporate name, the new name of the corporation is Digital
Broadband Networks, Inc.

FOURTH : The manner, if not set forth in such amendment, in which any exchange,
reclassification, or cancellation of issued shares provided for in the amendment
shall be affected, is as follows :

If these amendments are to have a delayed effective date, please list that
date: ________________ (Not to exceed ninety (90) days from the date
of filing).



                               KALAN GOLD CORPORATION





                               By: /s/ Patrick Lim
                                   ----------------------------------------
                                    President
                                    Title
<PAGE>


                                  Exhibit 21.1


LIST OF SUBSIDIARIES

The following is a list of all subsidiaries of Digital Broadband Networks, Inc.
as of December 31, 2001.


Name of Subsidiary                                Jurisdiction of Incorporation
                                                         or Organization
--------------------------------------------------------------------------------

Animated Electronic Industries Sdn Bhd ("AEI"),               Malaysia
a wholly owned subsidiary of the Company


Perwimas Telecommunications Sdn Bhd, a                        Malaysia
86.4% owned subsidiary of AEI