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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-KSB

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

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000.

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

           FOR THE TRANSITION PERIOD FROM _________ TO ____________.

                         COMMISSION FILE NUMBER 0-27418

                                 ELINEAR, INC.
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

                 DELAWARE                                76-0478045

       (STATE OR OTHER JURISDICTION                     IRS EMPLOYER
    OF INCORPORATION OR ORGANIZATION)              IDENTIFICATION NUMBER

                  10055 WESTMOOR DRIVE, WESTMINSTER, CO 80021
              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

         ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 534-1408

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

       TITLE OF EACH CLASS                     NAME OF EACH EXCHANGE ON
                                                  WHICH REGISTERED

                NONE                                  NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                              TITLE OF EACH CLASS
                          $.001 PAR VALUE COMMON STOCK

         Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
shorter period that the issuer 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 disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this form 10-KSB. [X]

         State the issuer's revenues for its most recent year end: $1,667,547.



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As of March 20, 2001, the market value of the Registrant's $0.001 par value
common stock, excluding shares held by affiliates, was $ 1,362,845 based on a
closing bid price of $ 0.0781 per share on the OTC Bulletin Board. There were
17,500,000 shares of common stock outstanding as of March 20, 2001.

                           Forward-Looking Statements

In addition to historical information, this Annual Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and is thus prospective. The forward-looking
statements contained herein are subject to certain risks and uncertainties that
could cause actual results to differ materially from those reflected in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, competitive pressures, changing economic conditions,
those discussed in the Section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations," and other factors, some of
which will be outside the control of the Company. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. The Company undertakes no
obligation to publicly revise these forward-looking statements to reflect
events or circumstances that arise after the date hereof. Readers should refer
to and carefully review the information in future documents the Company files
with the Securities and Exchange Commission.

ITEM 1: DESCRIPTION OF BUSINESS

GENERAL

eLinear, Inc. (the "Company" or "eLinear") since December 1999 has operated an
Internet consulting business. The Company acquired its Internet consulting
business as a result of its merger with Imagenuity, Inc. ("Imagenuity") in late
1999. Immediately prior to acquiring the business of Imagenuity, the Company,
which at the time was named Kinetiks.com, Inc., did not engage in any business
activities except for negotiating and compromising debt and searching for
merger candidates. While Kinetiks.com, Inc. was the survivor in the merger,
from an accounting standpoint the transaction was accounted for as though it
was a recapitalization of Imagenuity and a sale of shares by Imagenuity in
exchange for the net assets of Kinetiks.com, Inc. On July 31, 2000, the Company
changed its name to eLinear, Inc.

The Company's current headquarters are located at 10055 Westmoor Drive,
Westminster, CO 80021 and the main telephone number is (303) 543-1408. Its
stock is traded on the OTC Bulletin Board under the symbol "ELNR."

INTERNET INDUSTRY

The Internet is changing the way consumers and organizations communicate, share
information and conduct business. Its initial use consisted of advertising and
promotional Websites that provided marketing material largely replicating
traditional paper-based marketing messages in a static Web page environment,
sometimes referred to as brochure-ware. Businesses often relied on in-house
personnel, Internet advertising firms, or Web design companies to develop and
deploy their Websites.

The Company believes a growing number of businesses are now realizing that the
Internet is transforming the way they compete, is forcing businesses to
reevaluate their Internet strategies and, most importantly, review their entire
operational models in order to integrate their business objectives more closely
with their business processes and systems. The Company further believes demand
for an integrated service offering has led to the emergence of a new breed of
third-party service providers that have the necessary expertise to integrate
strategy, marketing and technology into a single, unified Internet solution.
International Data Corp. estimates that the market for Internet professional
services will grow from approximately $7.8 billion in 1998 to $78.6 billion in
2003. These estimates will likely be estimated downward based on external
market conditions as of December 31, 2000.


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eLinear's Internet Business

eLinear sells Internet professional services to clients to align their
personnel, processes and systems in an electronic enterprise. An electronic
enterprise utilizes Internet-based technologies allowing clients to transact
business, communicate information and share knowledge among employees,
customers and suppliers.

eLinear delivers its services through a consulting model that it refers to as
ROII-Return on Internet Investment. This entails analysis, design and support.
During the analysis phase, eLinear develops strategic plans for using the
Internet and other technologies to address a client's business needs. eLinear
conducts interviews with a client's managers and users to understand a client's
business strategy, processes and expectations. Also included is an assessment
of the client's Web site. Current processes are mapped and alternatives are
identified for improvements through Web-based applications. At the end of the
analysis phase, eLinear develops a plan outlining an Internet strategy and
assists the client in the identification, evaluation and selection of hardware
and software to implement that strategy.

Design involves execution of plans developed in the analysis phase. If
requested by a client, eLinear will manage the implementation of all or
portions of a plan. As part of its ROII program, eLinear develops and monitors
controls to measure the impact of its plans on a client's operations.

The final phase, support, addresses an ongoing service relationship and the
level of support clients will require going forward.

In addition to providing complete customer Internet applications, eLinear also
markets services that solve specific business problems for clients. Those
services are based on the "develop once, sell many" template driven approach.
Typically, these services focus on the small to medium business market segment,
but they may be scaled to meet the requirements of most businesses. These
services include use of eLinear's proprietary "WebCAS" Website content
management service.

WebCAS is a Web application that allows non-technical personnel to develop and
maintain Web pages on one or more Websites through a Web browser. Product and
marketing managers and other non-technical personnel may send requests for
updates or new Web pages through an email implemented approval process. After
the document flows through the approval process, updates are electronically
published immediately on one or more corporate Websites. The WebCAS application
also permits third parties to author material and route it for approval. This
allows clients to engage third parties for such tasks as localizing the
application to support specific languages or adding graphics and/or
professional content authoring.

WebCAS is a customizable template. Approximately 80% of the application does
not require customization; 20% is programmed to meet specific client
requirements, depending on the client's budget and the requested applications.
eLinear also provides support services for WebCAS.

As a result of changing market conditions and the loss of its principal client,
the Company has changed its business and marketing model. This has resulted,
and is expected to continue to result in, a focus on expanding the Company's
client base and reducing overhead. The Company has already reduced its staff to
6 employees, closed its Florida offices and operations, closed its Houston
office, moved its remaining employees to a virtual office model and focused all
its efforts on marketing and sales in Colorado and Texas. The Company is also
currently looking to either terminate or sublease its Denver office. There can,
however, be no assurances that the Company will be able to continue to expand
its client base. See Management Analysis and Discussion.


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Competition

The market for Internet professional services is intensely competitive and
subject to rapid technological change. eLinear's competitors include without
limitation:

1.       other Internet professional service firms such as MarchFirst, Viant
         and Scient;

2.       information technology consulting and integration firms such as
         Accenture, IBM, Cambridge Technology Partners and Sapient; and

3.       in-house technology and marketing departments of its clients, such as
         IBM, and potential clients.

eLinear believes that the principal competitive factors in the industry are:

1.       integrated Internet strategy, marketing and technology capabilities;

2.       reliability;

3.       offering superior client service;

4.       technology expertise and client industry knowledge;

5.       cost management / operational efficiency; and

6.       predictable customer base

There are relatively low barriers to entry into the Internet professional
services business. eLinear expects that it will face additional competition
from new entrants that provide significant performance, price, creative or
other advantages over those offered by eLinear. Many of these competitors have
greater name recognition and resources than eLinear.

CUSTOMERS

In 2000, eLinear's largest customer, IBM, accounted for 53% of revenues. The
loss of any large client, in particular IBM, will, unless such loss is replaced
by another larger client, have an adverse material impact on the Company's
revenues and financial condition. In January 2001, eLinear completed all pending
IBM assignments, and currently eLinear has no pending projects for IBM. All
business development and business operations are currently devoted to replacing
the IBM revenue stream. It is eLinear's objective to diversify its customer
base.

PROPRIETARY RIGHTS

eLinear' success depends entirely on its methodologies and software
applications. eLinear does not have any patents or registered copyrights or
registered trademarks. It relies, instead, on laws protecting trade secrets,
common law rights with respect to copyrights and marks, as well as
non-disclosure and other contractual agreements to protect proprietary rights.
There can be no guarantee that those laws, and the procedures initiated to
protect its business, will prevent misappropriation of its proprietary software
and Web-site applications. In addition, those protections do not preclude
competitors from developing products with similar features as those of eLinear.

Although eLinear believes its products and services are unique and do not
infringe upon the proprietary rights of others, there can be no assurance that
infringement claims will not be brought against eLinear in the future. Any such
claims could result in costly litigation or have a material adverse effect on
eLinear's business, operating results and financial condition.

EMPLOYEES

As of December 31, 2000, eLinear had 15 full-time employees and 1 part-time
employee. Of those employees, 10 full-time employees were in consulting and
development, 4 full-time employees were in sales and marketing, and 1 full-time



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employee and 1 part-time employee were in administration. Since December 31,
2000, the Company has further reduced its employees to a total of 6. In
addition, in order to simplify payroll management and accounting all six
employees of eLinear became co-employees of Administaff Companies, Inc. as of
March 5, 2001. Administaff is a Professional Employer Organization, serving as
an offsite, full service human resource department. See Management's Discussion
and Analysis. None of eLinear's employees are covered by any collective
bargaining agreements. Management believes that its relations with its
employees are good and eLinear has not experienced any work stoppages
attributable to employee disagreements.

ITEM 2: PROPERTIES

eLinear's principal offices are located in approximately 2,774 square feet of
leased office space in Westminster, Colorado. This space is leased at a rate of
$4,737 per month. This lease expires January 31, 2002. While eLinear previously
had other offices, beginning in the third quarter 2000, eLinear began to
downsize its operations. In September 2000, the Tampa office was closed. By
October 2000, the Fort Lauderdale office startup was abandoned. By December
2000, the Houston office lease was terminated with the staff maintaining
networked home offices ("virtual offices"). As a result of the success of its
Houston virtual office model, eLinear is now attempting to either terminate or
sublease the Westminster/ Denver office space and allow its Denver employees to
work out of virtual offices. The Westminster/Denver office had been primarily
used to service the IBM account with as many as eleven employees working on
that engagement during the fiscal year. As stated above, by January 2001, all
work assignments for IBM were successfully completed.

ITEM 3: LEGAL PROCEEDINGS

         From time to time, the Company may become involved in litigation
arising in the ordinary course of its business. The Company is not presently
subject to any material legal proceedings outside of the ordinary course of
business except as set forth below:

         1. On December 16, 1999, eLinear and Imagenuity were served with a
complaint captioned Chris Sweeney v. Kinetiks.com, Inc. and Imagenuity, Inc.,
Circuit Court, Duval County, Florida, Civil Case Number 1999-7252-CA. The
Complaint alleged a breach of an alleged oral modification of a written
employment agreement between the Plaintiff, Chris Sweeney, and Imagenuity and
alleged breaches by eLinear and Imagenuity of fiduciary obligations which the
Plaintiff claims were owed to him. Plaintiff is seeking as damages twenty
percent of eLinear's common stock received by the sole shareholder of
Imagenuity in connection with the merger of Imagenuity with and into the
Subsidiary. After the filing of the Complaint, eLinear's subsidiary, Elinear
Corporation,was added as a Defendant. In addition, the Defendants filed motions
to dismiss the litigation based upon lack of personal jurisdiction over eLinear
and improper venue, which motions were denied. The Companies are currently
appealing the trial court's denial of this motion to dismiss for lack of venue
before the First District Court of Appeal for the State of Florida, Appeal No.
ID00-5015. Management intends to vigorously contest the case. While the Company
believes the case to have no merit, at this stage it is impossible to predict
the amount or range of potential loss.

         2. In December of 1999, eLinear counter-sued Chris Sweeney in a
lawsuit captioned Elinear Corporation v. Chris Sweeney, United States District
Court, District of Colorado, Case Number 99-WM-2434. The Complaint sought a
determination of the rights of the parties with respect to the termination of
Chris Sweeney's employment agreement with Imagenuity. This lawsuit was
indefinitely stayed pending resolution of the Florida litigation discussed
above.

         3. In December of 2000, eLinear filed a civil complaint in the Circuit
Court of the Thirteenth Judicial Circuit in Hillsborough County, Florida Case
No.: 2000-23452-CC-J, to collect the final payment due from
ClearedForLanding.com, Inc. ("CFL"), relating to Web site development services.
eLinear is seeking to recover $10,000.00 from CFL. Thereafter, CFL filed a
civil complaint in the United States District Court for the Southern District



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of California, Case No. 01-CV-00184 against eLinear and two of eLinear's
officers based upon alleged delays in getting CFL's Web site constructed and
alleged deficiencies in the Web site product eLinear delivered. CFL's Complaint
alleges breach of contract, fraud, conspiracy, interference with prospective
economic advantage, gross negligence, negligence and conversion, and will
attempt to recover various types of damages, including lost profits, which are
allegedly far in excess of the amount eLinear is attempting to collect.
Management of eLinear believes that many of the "delays" were in fact caused by
CFL to put off or avoid responsibility for final payment in accordance with the
Web site development services agreement. Furthermore, eLinear's management is
of the opinion that the components of the project which were delivered (certain
components were not delivered because of CFL's failure to tender the final
payment) met or exceeded the requirements of the agreement.  Accordingly,
eLinear's management intends to vigorously pursue collection of the final
payment, consolidate the Federal claims with the ongoing collections
case in Florida and contest any counterclaim raised by CFL. Given the
complexities and technical nature of the claims and the uncertain ability of
CFL to finance any litigation, it is not possible at this time to determine
whether CFL's counterclaims have any merit and it is currently impossible to
predict the amount or range of any potential loss or recovery.

         4. On September 12, 2000, eLinear terminated its Chief Financial
Officer, Paul Thomas. eLinear considered the termination to be "for cause."
Because the termination was considered to be "for cause," eLinear concluded
that no severance payments were due and payable under Mr. Thomas' employment
agreement with the company. Pursuant to the employment agreement, Mr. Thomas
would have been entitled to receive a severance payment equal to one year's
salary (i.e., $75,000.00) if the termination was not "for cause." Mr. Thomas
filed a lawsuit on February 28, 2001 seeking his one-year severance payment and
attorney's fees. The Company believes that Mr. Thomas' claims have no merit,
but at this stage it is impossible to predict the amount or range of potential
loss.

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

None.

ITEM 5: MARKET OF COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

eLinear's common stock trades on the electronic bulletin board of the OTC
market under the symbol "ELNR". The following table summarizes the reported
high and low bid prices for eLinear's common stock for each quarter within the
last two years. Such information reflects inter dealer prices without retail
mark-up, mark-down or commissions and may not represent actual transactions.

                             Bid
                         ----------
Sales Price:             High   Low
                         ----   ---

          1999Q1         0.16   0.11
          1999Q2         0.94   0.14
          1999Q3         1.09   0.27
          1999Q4         5.00   1.00
          2000Q1         9.00   2.84
          2000Q2         2.88   0.78
          2000Q3         0.88   0.19
          2000Q4         0.25   0.11


As of March 16, 2001, based on information received from eLinear's transfer
agent, the number of shareholders of record were 119, which figure does not
take into account those shareholders whose certificates are held in the name of
broker-dealers.

On or about October 1999, in connection with the merger of Imagenuity with and
into the Company, the Company sold, in a private placement, 2,500,000 shares of
its common stock for a total consideration of $1,000,000. Also in connection
with this merger, the Company was obligated to issue to the sole shareholder of


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Imagenuity 22,500,000 shares of its common stock. Because the authorized number
of common shares of the Company was insufficient to satisfy the number of
shares to be issued to the sole shareholder of Imagenuity, the Company issued
10,000,000 shares of its common stock and 250,000 shares of its preferred stock
to this sole shareholder. The preferred stock was convertible into 12,500,000
shares of the Company's common stock. Subsequently, the sole shareholder agreed
to the cancellation of all of his preferred stock in exchange for the
termination of his commitment to indemnify the Company with respect to all
claims and expenses relating to the pending litigation brought by Chris
Sweeney. See Legal Proceedings.

Dividend Policy

The Company has not declared or paid cash dividends or made distributions in
the past on its common stock, and the Company does not anticipate that it will
pay cash dividends or make distributions in the foreseeable future. The Company
currently intends to retain and invest future earnings to finance its
operations.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS

Overview

Merger Agreement

         In October 1999, the Company, which was then named Kinetiks.com, Inc.,
entered into an Agreement and Plan of Merger (the "Plan") with Imagenuity, Inc.
("Imagenuity"), pursuant to which Imagenuity was to be merged with and into the
Company. Immediately prior to acquiring the business of Imagenuity, the Company
did not engage in any business activities except for negotiating and
compromising debt and searching for merger candidates. The requirements of the
Plan were satisfied on December 9, 1999 and the two companies were merged. On
July 31, 2000, the Company changed its name to its present name, eLinear, Inc.

         While the Company was the survivor in the merger, from an accounting
standpoint the transaction was accounted for as though it was a
recapitalization of Imagenuity and a sale of shares by Imagenuity in exchange
for the net assets of Company (formerly known as Kinetiks.com, Inc.)
Accordingly, the financial information contained herein for fiscal year 1999 is
derived from the financial information of Imagenuity and not the company
formerly known as Kinetiks.com.

         The Plan also provided that since Imagenuity was an S corporation for
income tax purposes, the sole shareholder of Imagenuity was entitled to receive
distributions of approximately $315,000 to satisfy the income taxes that would
be allocated to this shareholder. Imagenuity paid this shareholder
approximately $144,000 in October 1999, and paid the remaining portion in the
amount of approximately $171,000 in February 2000. Upon the completion of the
merger, Imagenuity terminated its S corporation status for income tax purposes.
The accompanying 1999 financial statements include proforma income tax expense
in the statement of operations which presents the income tax expense that would
have been recorded had Imagenuity not been a pass through entity for income tax
purposes.

Management Discussions

Macroanalysis:

The Company believed that prospects for Internet technology companies were
favorable for the first quarter of 2000. Accordingly, During the first six
months of fiscal 2000, the Company's business model was based on the assumption
that there would be affordable access to equity and capital to sustain an
accelerated growth and expansion model.

However, by the second quarter of 2000 much uncertainty for Internet companies
had developed. By the fourth quarter of 2000 the financial market had fully
established traditional economy requirements for Internet companies: positive
cash flow, profits and sustainable debt levels. As a result, the Company
believes that most smaller Internet companies such as eLinear are now required



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to operate within traditional financial guidelines. Thus, the Company believe
that its ability to attract investment capital will depend, in part, on the
Company's ability to develop and maintain positive cash flows and positive
profit levels before and after taxes. There can be no assurances that the
Company will be successful in this regard.

Restructuring Activities

Accordingly, management now believes that the Company's earlier rapid expansion
model is no longer realistic as it cannot be sustained based on currently
available working capital and current revenue streams. Furthermore, the Company
believes that its ability to continue operations is dependent upon internally
generated cash flows. Consequently, the Company has been required to undertake
rapid and deep financial and organizational restructuring.

As a result, beginning in the third quarter 2000, eLinear began to downsize its
operations. In September 2000, the Tampa office was closed. By October 2000,
the Fort Lauderdale office startup was abandoned. By December 2000, the Houston
office lease was terminated with the staff maintaining networked home offices
("virtual offices"). In February of 2001, the Denver office space was put on
the market with a listing agreement signed during March 2001. The Denver office
had been used to service the IBM account with as many as eleven employees
working on that engagement during the fiscal year. By January 2001, all work
assignments for IBM were successfully completed. Following the success of the
Houston virtual office model, all of the Company's operations will now be
operated on a virtual office basis. In addition, the Company intends to place
for sale excess furniture, fixtures and computers not required for 2001
operations. However, the Company cannot assure that it will be able to sell
these assets or that it will receive a fair price.

In addition, from a peak of 31 employees in July 2000, the Company reduced its
staff to 15 employees by December 31, 2000. By February 2001, the staff was
reduced to six full time employees. Furthermore, in order to simplify payroll
management and accounting all six employees of eLinear became co-employees of
Administaff Companies, Inc. as of March 5, 2001. Administaff is a professional
employer organization, serving as an offsite, full service human resource
department. Through an employment agreement, Administaff establishes a
co-employment relationship with all employees, thereby turning a two-party
employment relationship into a three-party employment relationship. This allows
Administaff to provide a full range of services, and also transfer or share
many employer liabilities. It also enables temporary and project based
employees to be placed on and off the payroll on a project-by-project basis.

This reduction in employees included certain senior management members. In
order to accommodate the senior management employees affected by the
restructuring, the Company entered into a series of settlement agreements with
senior management to avoid litigation. The separation agreements relating to
the departure of the senior officers required the use of Company stock options,
founder stock and the limited transfer of certain furniture, fixtures and
computers. For example, in connection with the Company's closure of its Florida
operations in or about August 2000, the Company's Chief Operating Officer's
employment was terminated. In connection with these transactions, the Company
reacquired 933,000 of the Company's fully vested common stock options from the
former COO in consideration for the transfer to a company controlled by the
former COO of all the assets associated with the Company's Florida operations
and the rights to use its proprietary WebCAS software. The charges to earnings
relating to such transaction resulted in significant losses for the fiscal year
2000. In addition, one senior officer was terminated for what management
believes to be cause. See Legal Proceedings. Management does not believe that
the departure of certain board members and senior officers adversely affected
the Company's commitment to concentrate its resources in its two principal
locations: Denver and Houston.

Despite its costs reduction efforts, eLinear is still faced with the
accounting, legal and reporting requirements of a public company.



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Market Opportunities and Market Diversification

IBM was the dominant customer for fiscal 2000 representing 53% of the gross
revenues for the year 2000. All expected work with IBM was completed by January
2001. After the major corporate restructuring was completed during the third
quarter of 2000, substantially all marketing and sales efforts were devoted to
new business development in Denver and Houston. Because of declining IBM revenue
and increasing revenue with several new clients, by December 31, 2000, IBM
represented only 33% of sales for the fourth quarter. Since the first quarter of
2001, substantially all business development and business operations have been
devoted to replacing the IBM revenue stream. Management believes that the new
business developed during the first quarter of 2001 should approximately equal
the IBM revenues for the fourth quarter of 2000. This new business is expected
to be comprised of five customers with projects costs ranging from $6,000 to
$44,250.

Because of the relative size and weakening of the technology market in Denver,
concentration has been on the development of Internet consulting contracts
there. Houston, being a much larger, less impacted market than Denver, has
yielded various software development projects as well as various Internet
consulting contracts. eLinear's WebCAS content management product has been
favorably received by the Houston market driven by a product
demonstration-based sales and marketing model.

However, no expansion beyond Denver and Houston can be undertaken without
additional capitalization. The Company intends to seek new capital as soon as
the external market conditions permit and as soon as the Company's revenue and
profit performance warrant consideration by debt and/or equity providers. There
can, however, be no assurance that such sources of capital will be available to
the Company or, if available, that they will be available upon terms and
conditions acceptable to the Company.

As a result of the internal consulting operations in Denver, eLinear has been
or is in the process of being licensed and/or certified to sell a number of
Website development and content management software products and operating
systems, in addition to its own WebCAS. The Company can make no assurances that
such licenses will be secured or that it will be successful in selling any of
the products or systems.

The Management Team

eLinear now consists of six full time employees - corporate officers and two
key employees. As a team their time is allocated according to the following
schedule:

         Technology development and product licensing                   7%
         Marketing, Sales and Business Development                     33%
         Software Development and Product Servicing                    33%
         Project Management                                            10%
         Internet Consulting                                           10%
         Corporate Operations                                           7%
                                                                       ---
                                                                      100%

The goal of the management team is to at least equal the one major customer
revenue stream of 2000 by attracting and maintaining a variety of new customers
with diversified requirements. The Company can make no assurance that it will
be successful at this objective.

The Company intends to hire new employees on a project-by-project basis. The
Company intends, where applicable, to contract out certain work, such as high
skill level technical programming. Hourly and temporary employees will be
utilized wherever possible in a weakened technology labor market. The Company


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can make no assurances that it will be successful with this objective or assure
that resources will be available where or when required.

In order to retain and provide incentive to current officers and directors, the
Board of Directors granted additional stock options during the fourth quarter
2000. At this time, the Company cannot pay market rates to qualified proven
performers for compensation and benefits. Nor does the Company have the means
to rely on cash performance bonuses even where justified.

Risk Factors

As set forth above, the Company's new business model calls for internal growth
based on the expansion and diversification of its customer base, coupled with a
reduction in overhead expenses. While the Company has been successful in
reducing certain overhead costs, there can be no assurances that the Company
will be able to expand and diversify its client base. The Company cannot expand
into new markets based on currently available capital. No assurance can be made
that the Company will be able to attract either equity or debt financing in the
future or that, if available, it will be able to secure such financing upon
terms and conditions acceptable to the Company. In addition, the Company is
operating under a new business model. The likelihood of success of this
business model should be considered in light of the problems, expenses and
delays that are frequently encountered by companies in the early stages of
their businesses and the competitive and economic environment in which the
Company will operate. Furthermore, the Company is subject to certain litigation
and ongoing public company compliance expenses. See Legal Matters.

Results of Operations

Year ended December 31, 1999 compared to 1998

Total revenue increased $318,060 or 72%, to $761,300 from $443,240 in 1998. The
Company's revenues were comprised of Internet Web based consulting fees of
approximately $593,000(78%) and technical training fees of approximately
$168,000 (22%). The revenue percentages reflect the Company's change in focus
to Internet Web based consulting that was initiated during the latter part of
1998. The Company's revenues during 1999 were again primarily derived from one
customer.

Operating expenses increased by $262,622 or 119% from 1998. The increase was
largely comprised of wages and benefits ($184,443, an increase of 152% from
1998), sales and marketing ($30,548, and increase of 1,518% from 1998), rent
($18,016, an increase of 77% from 1998) and telephone ($8,064, an increase of
55% from 1998). The increase in operating expenses reflects increased costs
necessary to sustain the increase in revenues.

Income from operations increased $55,438 or 25% to $278,793 from $223,355 in
1998. Income from operations as a percentage of revenue decreased to 37% in
1999 from 50% in 1998. This decrease in profit margin is primarily due to
increased expenses associated with the Company change in revenue mix from
technical training to Internet Web based consulting. Operating profits also
were impacted by additional employees that the Company added to enable the
Company to deliver its consulting services.

Proforma income tax expense was $102,454 in 1998 compared to $77,223 in 1997.
Since the Company was an S corporation for income tax purposes, no income tax
expense was recorded on the Company's financial statements. However, proforma
income tax expense is presented in the consolidated financial statements in
order to display the amount of income tax expense that the Company would have
recorded had it been a tax paying entity instead of a pass through entity for
income tax purposes.

Proforma net income was $179,390 in 1999 compared to $143,278 in 1998.



                                       9
<PAGE>   11


Year ended December 31, 2000 compared to 1999

Total revenue increased $906,247 or 119% to $1,667,547 from $761,300 in 2000.
This increase reflects increases in both the size and number of client
projects. However, the majority of the revenues came from one client.

Total operating expenses increased $2,030,308 or 421% to $2,512,815 from $
482,507 for 2000. Cost of goods sold increased $656,412 or 249% from $263,445
to $919,857 for 2000. Sales, marketing, and administration expenses increased
$1,373,896 or 627% from $219,062 to $1,592,958 for 2000. Compared to 1999,
expenses for 2000 represented costs of developing sales and marketing programs
to sustain the Company's accelerated growth model and merger and acquisition
model, which were abandoned in mid-September, 2000 due to a lack of working
capital and an inability to attract outside working capital because of external
market conditions. By December 31, 2000, headcount was reduced to 15 compared
to a high of 31 during the year.

Other expenses for 2000 include $37,339 of costs associated with the loss on
disposal of fixed assets related to the contraction of the Denver office.

Total income from operations decreased $1,149,760 or 408% to ($867,916) from
$281,844 in 2000. Income from operations as a percentage of revenue decreased
to (52%) in 2000 from 37% in 1999. This decrease in profit margin is primarily
due to increased expenses associated with the costs of developing sales and
marketing programs to sustain the Company's growth model. Operating profits
also were impacted by additional employees that the Company added to enable the
Company to deliver its consulting services.

Management believes that inflation has not had a material impact on the
Company's results of operations.

Liquidity and Capital Resources

The Company has derived essentially the majority of its revenues from a single
client. The loss of this client has had an adverse material impact on the
financial condition of the Company. The Company is implementing strategies to
diversify its client base, both geographically and by industry, to minimize the
risks associated with the concentration of revenues with one client. While the
Company believes that revenues from new customers in the first quarter of 2001
should approximate the revenues derived from the Company's former major customer
in the last quarter of 2000, there can be no assurances that the Company will be
able to continue to diversify its customer base. Revenues and earnings may also
fluctuate based on the number and size of projects undertaken at the Company
during any period of time. Additionally, the Company is actively pursuing merger
candidates that can compliment the services presently provided by the Company.
The Company believes that it will need additional equity capital or debt
financing in order to complete any merger or acquisition. The Company has not
yet identified any realistic merger candidates and there can be no assurances
that any such mergers can be successfully implemented.

Cash and cash equivalents as of December 31, 2000 were $139,199 and $939,493 in
1999. In connection with the merger with Kinetiks in December 1999, the Company
received net proceeds from the private placement in the amount of $957,705. The
Company has funded its operations from the cash flows generated from operations
and the issuance of equity securities.

For the year ended December 31, 1999, cash provided by operating activities was
$360,551. The Company purchased property and equipment and other assets in the
amount of $41,193, repurchased 625 shares of its common stock in the amount of
$38,279, and made distributions to S corporation stockholders in the amount of
$335,560.

For the year ended December 31, 2000, cash used in operating activities was
$504,609. The Company purchased property and equipment and other assets in the
amount of $124,685, and made distributions to S corporation stockholders in the
amount of $171,000.

As set forth above, the Company's new business model calls for internal growth
based on the expansion and diversification of its customer base, coupled with a
reduction in overhead expenses. While the Company has been successful in
reducing certain overhead costs, there can be no assurances that the Company
will be able to expand and diversify its client base. The Company cannot expand



                                      10
<PAGE>   12

into new markets based on currently available capital. No assurance can be made
that the Company will be able to attract either equity or debt financing in the
future or that, if available, it will be able to secure such financing upon
terms and conditions acceptable to the Company. In addition, the Company is
operating under a new business model. The likelihood of success of this
business model should be considered in light of the problems, expenses and
delays that are frequently encountered by companies in the early stages of
their businesses and the competitive and economic environment in which the
Company will operate. Furthermore, the Company is subject to certain litigation
and ongoing public company compliance expenses. See Legal Matters.

New Accounting Pronouncements

In fiscal year 2001, the Company plans to adopt SFAS No. 133, Accounting for
Derivative Instruments in Hedging Activities. Management of the Company
believes that the adoption of SFAS 133 will not have a material impact on the
Company's financial position or results of operations.



                                      11



<PAGE>   13


ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS


         On May 5, 2000, the registrant dismissed Gerald R. Hendricks &
Company, P.C. as its principal auditors.

         The reports of Gerald R. Hendricks & Company, P.C. on the financial
statements for the past two years did not contain a disclaimer of opinion or an
opinion that was adverse or was qualified or modified for uncertainty, audit
scope, or accounting principle.

         The decision to change auditors was recommended and approved by the
board of directors.

         During the two most recent fiscal years and the subsequent interim
period to May 4, 2000, there were no disagreements with Gerald R. Hendricks &
Company, P.C. on matters of accounting principle or practice, financial
statement disclosure, or audit scope or procedure that, if not resolved to
their satisfaction, would have caused Gerald R. Hendricks & Company, P.C. to
refer to the subject matter of the disagreements in their report.

         During the two most recent fiscal years and through May 4, 2000, there
have been no reportable events (as defined in Item 304(a)(1)(v) of Regulation
S-K).

         On May 8, 2000, the registrant engaged Aidman, Piser & Company, P.A.,
Certified Public Accountants, as its Independent Auditors of record.

ITEM 9: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this item is incorporated by reference to the
Company's definitive proxy statement to be filed by April 30, 2001.

ITEM 10: EXECUTIVE COMPENSATION

The information required by this item is incorporated by reference to the
Company's definitive proxy statement to be filed by April 30, 2001.

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this item is incorporated by reference to the
Company's definitive proxy statement to be filed by April 30, 2001.

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item is incorporated by reference to the
Company's definitive proxy statement to be filed by April 30, 2001.

ITEM 13: EXHIBITS

         (a) Exhibits:

         (2) Agreement and Plan of Merger, dated October 11, 1999, between the
Company, eLinear Corporation and Imagenuity, Inc. - incorporated herein by
reference from the Company's Current Report on Form 8-K filed with the
Commission on October 25, 1999.

         (3)(i) Certificate of Incorporation of Kinetiks.com, Inc. -
incorporated herein by reference from the Company's Form 10-KSB for the period
ending December 31, 1995.



                                       12
<PAGE>   14


         (3)(ii) By-laws of Kinetiks.com Inc. - incorporated herein by
reference from the Company's Form 10-KSB for the period ending December 31,
1995.

         (3)(iii) Amended and Restated Certificate of Incorporation of
Kinetiks.com, Inc. - incorporated herein by reference from the Company's Form
10-QSB for the period ending June 30, 2000.

         (10)(i) Employment Agreement between the Company and Jon Ludwig dated
December, 1999 - incorporated herein by reference from the Company's Form
10-KSB/A filed with the Commission on May 1, 2000.

         (10)(ii) Asset Purchase Agreement dated August 21, 2000 among eLinear,
Inc., eLinear Corporation, Innobbar, LLC, Jay Vickers and John Kaercher -
incorporated herein by reference from the Company's Form 10-Q filed with the
Commission on October 24, 2000.

         (10)(iii) Form of Indemnification Agreement for all officers and
directors -incorporated herein by reference from the Company's Form 10-Q filed
with the Commission on October 24, 2000.


(b) Reports on Form 8-K:

         The Company filed a Form 8-K with the Commission on January 19, 2001
in which the Company reported under Item 5 that, on November 13, 2000, the
Board of Directors appointed William Ivins and J. Leonard Ivins as replacement
provisional members of the Board of Directors to fill the positions vacated by
Paul Piciocchi and Paul Thomas. In addition, the Board of Directors elected the
following individuals to the positions set forth opposite their names:

Jon Ludwig                 Chief Executive Officer, President, Chief Technical
                           Officer and Chairman of the Board

William Ivins              Executive Vice President, Treasurer and Assistant

J. Leonard Ivins           Vice President - Corporate Policy & Finance and Vice
                           Chairman of the Board of Directors

                                       13

<PAGE>   15

                              SIGNATURES

              Pursuant to the requirements of Section 13 or 15(d) of the
Exchange, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized on March 27, 2001.

                           ELINEAR, INC.

                           By:   /s/ Jon Ludwig
                              ------------------------------------------------
                           Jon Ludwig,
                           Chief Executive Officer, President, Chief Technical
                           Officer and Chairman of the Board

         Pursuant to requirements of the Exchange Act, this Report has been
signed by the following persons on behalf of the Registrant and in the
capacities indicated on March 27, 2001.

/s/ Jon Ludwig              Chief Executive Officer, President, Chief Technical
------------------------    Officer and Chairman of the Board
Jon Ludwig


/s/ William Ivins           Executive Vice President, Treasurer (Principal
------------------------    Accounting Officer) and Director
William Ivins


/s/ J. Leonard Ivins        Vice President - Corporate Policy & Finance
------------------------    (Principal Financial Officer) and Vice Chairman of
J. Leonard Ivins            the Board of Directors
                            (Director)



                                       14
<PAGE>   16
ITEM 7: FINANCIAL STATEMENTS



                  INDEPENDENT AUDITORS' REPORT


To the Board of Directors
eLinear, Inc and Subsidiaries

We have audited the accompanying consolidated balance sheet of eLinear, Inc. and
Subsidiaries (formerly known as Imagenuity, Inc.) as of December 31, 2000, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for the year then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis
for our opinion.

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


                                          /s/ Aidman, Piser & Company, P.A.


March 10, 2001
Tampa, Florida



                                      F-1
<PAGE>   17
                         INDEPENDENT AUDITORS' REPORT



To the Board of Directors
eLinear, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheet of eLinear, Inc. as
of December 31, 1999, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
eLinear, Inc. as of December 31, 1999, and the results of their operations and
their cash flows for the year then ended in conformity with generally accepted
accounting principles.


                                        /s/ Gerald R. Hendricks & Company, P.C.

March 16, 2000
Westminster, Colorado



                                      F-2
<PAGE>   18



                                 ELINEAR, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31,2000
<TABLE>

<S>                                                                                       <C>
                                             ASSETS

Current assets:
  Cash and cash equivalents                                                               $   139,199
  Accounts receivable, net of $11,625 allowance for doubtful accounts                          85,682
  Unbilled receivables                                                                         51,572
  Other current assets                                                                         24,957
                                                                                          -----------

      Total current assets                                                                    301,410

Property and equipment, net                                                                    40,233
Assets held for sale                                                                           32,493
Other assets                                                                                    3,122
                                                                                          -----------

      Total assets                                                                        $   377,258
                                                                                          ===========

                              LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                                                             45,993
  Accrued expenses                                                                             33,593
  Deferred income                                                                              13,510
                                                                                          -----------

      Total current liabilities                                                                93,096
                                                                                          -----------

Commitments and contingencies                                                                      --

Stockholders' equity:
  Common stock; $.001 par value; 75,000,000 shares
    authorized; 17,500,000 shares issued and outstanding                                       17,500
    Preferred stock; $.001 par value; 500,000 shares authorized;
      0 shares issued and outstanding                                                              --
  Additional paid-in capital                                                                1,136,615
  Accumulated deficit                                                                        (869,953)
                                                                                          -----------

      Total stockholders' equity                                                              284,162
                                                                                          -----------

      Total liabilities and stockholders' equity                                          $   377,258
                                                                                          ===========
</TABLE>



                See notes to consolidated financial statements.



                                      F-3
<PAGE>   19



                                 ELINEAR, INC.
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                        2000               1999
                                                    ------------       ------------
<S>                                                 <C>                <C>
Consulting contract revenues                        $  1,667,547       $    761,300
Cost of consulting contract revenue                      919,857            263,445
                                                    ------------       ------------
Gross profit                                             747,690            497,855

Selling, general and administrative expenses           1,592,958            219,062
                                                    ------------       ------------
    Income (loss) from operations                       (845,268)           278,793
Other income (expense):
    Loss on disposal of property and equipment           (37,339)                --
    Interest income                                       13,936              5,259
    Other income (expense)                                   755             (2,208)
                                                    ------------       ------------
Income (loss) before income taxes or
    proforma income tax                                 (867,916)           281,844
Income taxes (proforma income tax expense)                    --           (102,454)
                                                    ------------       ------------
(Net loss) proforma net income                      $   (867,916)      $    179,390
                                                    ============       ============
Basic earnings (loss) per share (proforma
   for 1999)                                        $       (.05)      $        .01
                                                    ============       ============
Fully diluted earnings (loss) per share
   (proforma for 1999)                              $       (.05)      $        .01
                                                    ============       ============
Weighted average shares outstanding:
  Basic                                               17,500,000         26,774,013

  Diluted                                             17,500,000         28,715,263


</TABLE>
                See notes to consolidated financial statements.








                                      F-4
<PAGE>   20



                                 ELINEAR, INC.
                                AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>

                                                                                    ADDITIONAL   RETAINED
                                  COMMON                 PREFERRED                    PAID-IN    EARNINGS
                                  SHARES     AMOUNT        SHARES       AMOUNT        CAPITAL    (DEFICIT)    TOTAL
                                  ------     ------      ----------     ------     ------------  ---------    -----


<S>                                 <C>         <C>      <C>         <C>               <C>        <C>            <C>
Balance,
  January 1, 1999                 1,000       1,000           --           --             --       89,333       90,333

Issuance of
   Common stock                     125         125           --           --          8,195           --        8,320

Purchase and retirement
  of common stock                  (625)       (625)          --           --             --      (37,654)     (38,279)

Issuance of stock in a
  Private placement, net
   Of offering costs of
   $42,294                    2,500,000       2,500           --           --        955,205           --      957,705

Shares issued for
  Reorganization             14,999,500      14,500      250,000          250        (14,750)          --           --

Distribution to "S"
  Corporation
  Stockholders                       --          --           --           --             --     (335,560)    (335,560)

Net income for the
  year                               --          --           --           --             --      281,844      281,844

Balance,
  January 1, 2000            17,500,000      17,500      250,000          250        948,650       (2,037)     964,363

Issuance of
   stock options                     --          --           --           --         15,185           --       15,185

Retirement of
  preferred shares                   --          --     (250,000)        (250)           250           --           --

Acquisition of fully
   vested common
   stock options                     --          --           --           --        172,530           --      172,530

Net loss for the
  year                               --          --           --           --             --     (867,916)    (867,916)

Balance,
  December 31,
   2000                      17,500,000      17,500           --           --      1,136,615     (869,953)     284,162

</TABLE>

                See notes to consolidated financial statements.





                                      F-5
<PAGE>   21



                                 ELINEAR, INC.
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                           2000          1999
                                                        ---------     ---------


CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                     $(867,916)    $ 281,844
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
      Reacquisition of common stock options               191,764            --
        Stock-based compensation                           15,185         8,230
        Depreciation                                       38,235         4,413
        Loss on disposal of property and equipment         37,339            --
        Changes in operating assets and liabilities:
        Accounts receivable                               117,807        34,816
        Other current assets                              (21,957)       (3,000)
        Unbilled receivables                              (51,572)           --
        Accounts payable                                    7,609        29,962
        Accrued expenses                                   24,637        (4,964)
        Deferred income                                     4,260         9,250
                                                        ---------     ---------

          Net cash provided by (used in) operating
            activities                                   (504,609)      360,551
                                                        ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                    (129,111)      (33,646)
   Change in other assets                                   4,426        (7,547)
                                                        ---------     ---------

          Net cash used in investing activities          (124,685)      (41,193)
                                                        ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distribution to "S" corporation stockholders                --      (335,560)
   Payment on due to stockholders                        (171,000)           --
   Sale of common stock, net of offering costs                 --       957,705
   Purchase and retirement of common stock                     --       (38,279)
                                                        ---------     ---------
          Net cash provided by (used in)
            financing activities                         (171,000)      583,866
                                                        ---------     ---------

Net increase (decrease) in cash and cash equivalents     (800,294)      903,224
Cash and cash equivalents at beginning of
  year                                                    939,493        36,269
                                                        ---------     ---------
Cash and cash equivalents at end of year                $ 139,199     $ 939,493
                                                        =========     =========


Non-cash investing and financing activities:

During 2000, all 250,000 preferred shares of the Company's $.001 par value
Series A Convertible Preferred Stock, owned by the primary stockholder, were
voluntarily surrendered for cancellation by the Company.



                See notes to consolidated financial statements.


                                      F-6
<PAGE>   22



                                 ELINEAR, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999


1.       Description of business and significant accounting policies:


         NATURE OF BUSINESS:

         eLinear, Inc. (the "Company") is an internet professional service firm
providing strategic creative design, technology services, and training to
companies seeking to capitalize on the internet. The current Company's
customers are based in the United States and Mexico.

         BACKGROUND OF THE COMPANY AND BASIS OF PRESENTATION:

         In October 1999, Imagenuity, Inc. ("Imagenuity") executed an Agreement
and Plan of Merger (the "Plan") with Kinetiks.com, Inc. ("Kinetiks") and
Kinetiks' wholly owned subsidiary, eLinear Corporation ("Subsidiary"). The Plan
was subject to (1) Kinetiks successfully completing a private placement in the
amount of $1,000,000 from the sale of 2,500,000 shares of Kinetiks common
stock, (2) the execution of an Inducements agreement whereby two shareholders
of Kinetiks were to deliver a written indemnity by which these two shareholders
assumed and agreed to hold Kinetiks, Subsidiary and Imagenuity and their
officers, directors and shareholders harmless from Kinetiks liabilities, and
(3) due diligence. Additionally, the Plan required that the sole shareholder of
Imagenuity indemnify Kinetiks and Subsidiary from and against any and all loss,
liability, damage and expense suffered or incurred by Kinetiks or Subsidiary
resulting from or arising out of the defense of the threatened action by a
former shareholder of Imagenuity. In satisfaction of the requirement, the sole
shareholder of Imagenuity delivered to Kinetiks and Subsidiary an
Indemnification and Pledge Agreement covering 4,500,000 shares of common stock.

         The requirements of the Plan were satisfied on December 9, 1999;
accordingly, the sole shareholder of Imagenuity was entitled to receive
22,500,000 shares of Kinetiks common stock. Because the authorized number of
common shares of Kinetiks was insufficient to satisfy the number of shares to
be issued to the sole shareholder of Imagenuity, Kinetiks issued 10,000,000
shares of its common stock and 250,000 shares of its preferred stock, that was
convertible into 12,500,000 shares of its common stock.

         The Plan also provided that since Imagenuity was an S corporation for
income tax purposes, the sole shareholder of Imagenuity was entitled to receive
distributions of approximately $315,000 to satisfy the income taxes that would
be allocated to this shareholder. Kinetiks paid this shareholder approximately
$144,000 in October 1999, and paid the remaining amount in February 2000.



                                      F-7
<PAGE>   23


1.       Description of business and significant accounting policies,
         (continued):

         This reorganization has been accounted for as though it were a
recapitalization of Imagenuity and a sale of shares by Imagenuity in exchange
for the net assets of Kinetiks.

          Upon the completion of the merger, Imagenuity terminated its S
corporation status for income tax purposes. The accompanying 1999 financial
statements include proforma income tax expense in the statement of operations
which presents the income tax expense that would have been recorded had
Imagenuity not been a pass through entity for income tax purposes.

         On July 31, 2000, Kinetiks changed its name to eLinear, Inc. (the
"Company").

         CASH AND CASH EQUIVALENTS:

         The Company considers all highly liquid instruments with an original
maturity of three months or less to be cash equivalents.

         CONCENTRATION OF CREDIT RISK:

         Financial instruments that potentially subject the Company to
concentrations of credit risk consist primarily of cash equivalents and
accounts receivable. All of the Company's cash equivalents are held at high
credit quality financial institutions. Accounts receivable are typically
unsecured and are derived from revenues earned primarily from clients located
in the United States. The Company performs ongoing credit evaluations of its
clients' financial condition and maintains reserves for potential credit losses
based upon the expected collectibility of total accounts receivable. To date,
losses resulting from uncollectible receivables have not exceeded management's
expectations.

         FAIR VALUE OF FINANCIAL INSTRUMENTS:

         Financial instruments that are subject to fair value disclosure
requirements are carried in the financial statements at amounts that
approximate fair value and include cash and cash equivalents, accounts
receivable and accounts payable. Fair values are based on assumptions
concerning the amount and timing of estimated future cash flows and assumed
discount rates reflecting varying degrees of perceived risk.

         PROPERTY AND EQUIPMENT:

         Property and equipment are stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of the assets,
generally between three and fifteen years.

         STOCK-BASED COMPENSATION:

           The Company accounts for compensation costs associated with stock
options and warrants issued to employees under the provisions of Accounting
Principles Board Opinion No. 25 ("APB 25") whereby compensation is recognized
to the extent the market price of the underlying stock exceeds the exercise
price of the option granted. The Company has adopted the disclosure provisions
of Financial Accounting Standard No. 123 - Accounting for


                                      F-8
<PAGE>   24


1.       Description of business and significant accounting policies,
         (continued):

         STOCK-BASED COMPENSATION (CONTINUED):

Stock-Based Compensation ("FAS 123"), which requires disclosure of compensation
expense that would have been recognized if the fair-value based method of
determining compensation had been used for all arrangements under which
employees receive shares of stock or equity instruments. Stock-based
compensation to non-employees is accounted for using the fair value based
method.

         REVENUE RECOGNITION:

Substantially all of the Company's revenues are derived from professional
services that are generally provided to clients on a fixed-price, fixed-time
basis. Revenues on fixed-price engagements are recognized using the percentage
of completion method (based on the ratio of costs incurred to the total
estimated project cost at completion). Unbilled receivables represent revenue
recognized in advance of amounts billed. Billings received in advance of
services performed are recorded as deferred revenues. Provisions for estimated
losses on contracts are made during the period in which such losses become
probable and can be reasonably estimated. The Company reports revenues net of
reimbursable expenses that are billed to and collected from clients.

         USE OF ESTIMATES:

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

         INCOME TAXES:

         Deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. No deferred tax assets
have been recorded because they have been offset by a valuation allowance.

         PER SHARE AMOUNTS:

         Earnings/loss per share represents the net income/loss available to
common stockholders divided by the weighted average number of common shares
outstanding during the year. Diluted earnings per share reflect the potential
dilution that could occur if common stock options or convertible preferred
stock were exercised or converted into common stock. Diluted net loss per share
is considered to be the same as basic net loss per share in 2000 since the
effect of the issuance of common stock options is anti-dilutive.


                                      F-9
<PAGE>   25


1.       Description of business and significant accounting policies,
         (continued):

         RECLASSIFICATIONS:

         Certain amounts as previously presented in the 1999 financial
statements have been reclassified to conform to the current year presentation.

         ADVERTISING:

         Advertising costs are charged to expense as incurred. The Company
incurred approximately $38,000 and $10,000 in advertising expense during 2000
and 1999, respectively.


2.       Operations and liquidity:

         Commencing in early 2000, the Company embarked on a rapid business
         expansion program, the success of which depended upon attracting
         investment capital in amounts sufficient to fund overhead costs
         associated with the expansion. The Company was not successful in
         raising any investment capital and has incurred net losses in 2000 of
         approximately $870,000 as a result of significant excess overhead
         costs relative to the Company's revenue levels. Accordingly, during
         the last half of 2000 and first quarter of 2001, the Company closed
         its Florida operations, reduced its occupancy costs in Denver and
         Houston and significantly reduced its labor force and other overhead
         costs. As a result, the Company returned to modest profitability
         during the two months ended February 2001 (unaudited).

         During 2000, the Company was dependent on one customer for
         approximately 53% of its revenues, but no contracts with this customer
         have been consummated in 2001. Management has begun to diversify its
         customer base and believes that revenues from these new customers in
         the first quarter of 2001 should approximate the revenues derived from
         the former major customer during the last quarter of 2000.

         The Company cannot expand beyond its current limited level of
         operations in Denver and Houston without additional capitalization.
         The Company intends to seek new capital as soon as the external market
         conditions permit and as soon as the Company's revenue and profit
         performance warrant consideration by debt and/or equity providers.
         There can, however, be no assurance that such sources of capital will
         be available to the Company or, if available, that they will be upon
         terms and conditions acceptable to the Company. Accordingly, the
         Company intends to continue to attempt to diversify and expand its
         customer base with its current limited resources and maintain overhead
         costs at low levels. While management believes these efforts should
         result in modest positive operating cash flows in 2001, there can be
         no assurance to that effect.


                                      F-10
<PAGE>   26




3.       Property and Equipment

         Property and equipment consist of the following at December 31, 2000:

    Leasehold improvements                           14,546
    Computer equipment                               37,285
    Equipment                                         5,714
                                                    -------
                                                     57,545
    Less:  accumulated depreciation                 (17,312)
                                                    -------
                                                     40,233
                                                    =======

Depreciation expense was $38,235 and $4,413 for the years ended December 31,
2000 and 1999, respectively.

4.       Assets held for sale:

         During 2000, the Company reduced its occupancy costs at its Denver,
Colorado office in connection with downsizing during the year. The Company has
subsequently classified certain furniture and computer and office equipment,
that are no longer in use, as assets held for sale. These assets are recorded at
the net realizable value expected from their disposal. The Company incurred
approximately $37,000 in losses in 2000 associated with the write-down of these
assets. The assets are expected to be sold during 2001.

5.       Stockholders' Equity:

         Common stock

         On March 1, 1999, the Company repurchased and retired 500 shares of
its common stock by paying cash in the amount of $33,279.

         In May 1999, the Company issued to an individual 125 shares of its
common stock in connection with an employment agreement. The Company received
no consideration for the issuance of these shares. The Board of Directors
determined that the value of these shares would be equivalent to the value of
the shares purchased by the Company in March 1999. Accordingly, the Company
recorded $8,320 as stock issuance expense and additional paid in capital. In
October 1999, Imagenuity and this employee severed their relationship and
Imagenuity purchased and retired these shares for $5,000.

         Stock Option Plans

         In August 1995, the Company approved a stock option plan under which
up to 1,000,000 shares of the Company's common stock could be issued. In June
1996, the stockholders approved an amendment to the plan increasing the
Company's total common stock shares available under the plan to 1,600,000.
Incentive and nonqualified stock options may be granted to employees,
directors, and consultants of the Company. Incentive stock options are granted
at an exercise price of not less than 100% (110% for individuals owning 10% or
more of the Company's common stock at the time of grant) of the stock's fair
market value at the time of grant. Nonqualified stock options may be granted at
an exercise price determined by the Company.



                                     F-11
<PAGE>   27


5.       Stockholders' Equity (continued):

         Stock Option Plans (continued):

         On March 31, 2000, the Company's board of directors approved the 2000
Stock Option Plan (the "Plan") under which up to 4,000,000 shares of eLinear,
Inc.'s common stock may be issued. Under the Plan, incentive and nonqualified
stock options may be granted to employees, directors, and consultants of the
Company. The term of options granted under the plan will be fixed by the
Company provided, however, that the maximum option term may not exceed 10 years
from the grant date (5 years for directors and individuals owning 10% or more
of the Company's common stock at the time of grant). Incentive stock options
are granted at an exercise price of not less than 100% (110% for individuals
owning 10% or more of the Company's common stock at the time of grant) of the
stock's fair market value at the time of grant. Nonqualified stock options may
be granted at an exercise price determined by the Company. Vesting rights will
be fixed by the Company provided, however, that an outside director not have
the right to exercise more than 50% of the shares granted until six months
after the grant date.



                                     F-12
<PAGE>   28


5.       Stockholders' Equity (continued):

         Stock Option Plans (continued):

Common stock options issued, redeemed and outstanding during the year ended
December 31, 1999 and 2000 under these plans and under no plan are as follows:
<TABLE>
<CAPTION>

                                                                                                 WEIGHTED AVG.
                                                                    NUMBER OF                      EXERCISE
                        DESCRIPTION                                  OPTIONS                      PRICE/SHARE
-------------------------------------------------------   ---------------------------     -------------------------
<S>                                                             <C>                           <C>
Issued and outstanding at January 1, 1999                             442,500                        3.50

Issued in 1999                                                         70,000                        1.00

Forfeited in 1999                                                    (151,250)                       3.50
                                                                 -------------

Issued and outstanding at December 31, 1999                           361,250                        3.50

Issued in 2000                                                     17,040,667                         .64

Reacquired in 2000                                                 (1,733,333) (a)                   1.97

Forfeited in 2000                                                  (3,072,584)                       2.17
                                                                 -------------                 -----------
Issued and outstanding at December 31, 2000                        12,596,000                  $      .17
                                                                 =============                 ===========
</TABLE>

         (a) On August 21, 2000, the Company ceased its operations in Florida.
         Simultaneously, the Company's then Chief Operating Officer's
         employment was terminated. In connection with these transactions, the
         Company reacquired 933,000 of the Company's fully vested common stock
         options from the former COO in consideration for the transfer to a
         company controlled by the former COO of all the assets associated with
         the Company's Florida operations and the rights to use its proprietary
         Web CAS software. The $19,234 cost of the stock option reacquisition
         has been recognized in the 2000 statement of operations based upon the
         net book value of the assets sold at the date of transfer.

         On September 14, 2000 the Company's principal stockholder and Chairman
         of the Board conveyed 710,000 shares of the Company's common stock to
         a former officer of the Company in consideration of the surrender and
         cancellation by that officer of 800,000 of the Company's fully vested
         common stock options. The $172,530 estimated fair value of the common
         stock conveyed by the principal stockholder for the benefit of the
         Company was recognized as an increase in paid-in capital compensation
         expense in the 2000 statement of operations.

Stock options that remain outstanding at December 31, 2000, none of which are
exercisable, are as follows:
<TABLE>
<CAPTION>

                       VESTING
                       PERIOD      EXERCISE      EXPIRATION        REMAINING        NUMBER
   ISSUE DATE            YRS         PRICE          DATE             LIFE         OUTSTANDING
------------------  -----------  -----------   ---------------  -------------   ---------------
<S>                      <C>     <C>                 <C>            <C>                 <C>
   April 2000            4       $    1.968    April 2004           3.25 Yrs            421,000

   April 2000            4       $    1.156    April 2004           3.25 Yrs             25,000

   April 2000            4       $    1.031    April 2004           3.25 Yrs              2,500

   May 2000              4       $    1.250    May 2004             3.25 Yrs              7,500

   December 2000         .25     $     .105    December 2004        4   Yrs             250,000

   December 2000         4       $     .105    December 2004        4   Yrs             790,000

   December 2000         .5      $     .105    December 2004        4   Yrs          11,100,000
                                                                                  -------------
                                                                                     12,596,000
                                                                                  =============
</TABLE>

                                     F-13
<PAGE>   29


5.       Stockholders' Equity (continued):

         Stock Option Plans (continued):

         The Company recognized compensation expense to non-employee directors
of approximately $15,000 in 2000 associated with the issuance of 600,000 of
these options. Had the accounting provisions of FAS 123 been adopted for
options issued to employees, compensation expense of approximately $705,000
would have been recorded during the year ended December 31, 2000 based on the
Black-Scholes option pricing model, and net loss and net loss per share for the
year ended December 31, 2000 would have been approximately ($1,573,000) and
($.09), respectively.

The "Black-Scholes" option-pricing model assumptions are as follows:

       Underlying stock price at grant
         Date $.105 - 1.968
       Exercise price                                $.105 -1.968
       Dividend yield                                       0%
       Risk free interest rate                              6%
       Volatility                                           40%

         Surrender of Preferred Stock

         On June 15, 2000, all 250,000 preferred shares of the Company's $.001
par value Series A Convertible Preferred Stock, owned by the primary
stockholder, were voluntarily surrendered for cancellation by the Company.
These shares were convertible into 12,500,000 shares of common stock and had
voting rights equal to 12,500,000 shares of common stock. The effect of this
transaction increased additional paid-in capital by the book value of the
preferred stock and eliminated the dilutive effect on the Company's common
stock.

         Common stock warrants

         In connection with various consulting and financing arrangements, the
Company has issued warrants to purchase the Company's common stock at prices
that range from $.25 per share to the lesser of $1.25 per share or a 15%
discount to the closing bid price of the Company's stock price on the date of
exercise. The warrants are generally exercisable for a ten-year period and
provide for "piggy-back" registration rights for the underlying shares at the
request of the majority of the warrant holders. Outstanding warrants were
1,895,000 at December 31, 2000.

6.       Major customer information:

During the year ended December 31, 2000, the Company generated revenues from
one customer that represented 53% of total revenues (no new contracts have been
entered into with this customer from January 1, 2001 through March 20, 2001).
During the year ended December 31, 1999, the Company generated revenues from
two customers that represented 58% and 31% of total revenues, respectively.



                                     F-14
<PAGE>   30


7. Income taxes:

     Deferred tax assets consist of the following at December 31, 2000:

         Net operating loss carryover                           $  316,000
         Other                                                      13,000
         Valuation allowance                                      (329,000)
                                                                -----------
                                                                $       --
                                                                ===========

     Income tax (expense) benefit consists of the following:

                                                      2000           1999
                                                  ------------   ------------
         Current:
           Federal (Proforma in 1999)             $        --    $    102,454
                                                  ------------   ------------

         Deferred:
           Deferred                                    13,000             --
           Benefit of net operating loss carryover    316,000             --
           Change in valuation allowance             (329,000)            --
                                                  ------------   ------------
                                                           --             --
                                                  ------------   ------------
                                                  $        --    $    102,454
                                                  ============   ============

     The expected income tax benefit at the statutory tax rate differed from
     income taxes in the accompanying statements of operations as follows:

                                           PERCENTAGE OF INCOME (LOSS) BEFORE
                                                      INCOME TAXES
                                          -----------------------------------
                                               2000                1999
                                          ----------------    -------------
         Statutory tax rate                        (34.0%)           34.0%
         State tax                                  (3.5%)            3.5%
         Other                                         --            (1.2%)
         Change in deferred tax asset
           valuation allowance                      37.5%               --
                                          ----------------    -------------

         Effective tax rate in
           accompanying statement
           of operations                                0%           36.3%
                                          ================    =============

8.       Fourth quarter adjustment:

         During the fourth quarter of 2000, the Company adjusted the amount at
which it recognized the sale of certain assets in consideration for the
reacquisition of 933,000 common stock options (see Note 4). This adjustment had
the effect of decreasing the fourth quarter net loss by $250,000. Net loss and
net loss per share as previously reported for the nine months ended September
30, 2000 would have decreased by $250,000 and $.01 per share, respectively, had
the effect of this fourth quarter adjustment been made in the third quarter
2000.

9.       Commitments and contingencies:

         Lease Commitment:

         The Company leases office facilities for its corporate operations
conducted in Colorado under an operating lease that expires in January 2002.
The Company is required to make monthly payments of $4,737, which includes the
Company's proportionate share of operating expenses. Additionally, during the
year ended December 31, 2000, the Company leased temporary office space on a
month-to-month basis. Rent expense was approximately $115,000 and $23,000 for
the years ended December 31, 2000 and 1999, respectively.



                                     F-15
<PAGE>   31


9.       Commitments and contingencies (continued):

         Minimum future lease commitments under the noncancelable operating
lease are as follows:

         YEAR ENDING DECEMBER 31,
         ------------------------
                       2001                          $        56,844
                       2002                                    4,737
                                                     ---------------
         Total                                       $        61,581
                                                     ===============

         Litigation:

         A former employee of Imagenuity filed a lawsuit against Imagenuity
alleging breach of his employment agreement and filed suit against Kinetiks
alleging breach of its fiduciary obligation to deliver the proportionate number
of shares that the former employee claims is due to him pursuant to the merger
with Kinetiks. The lawsuit demands judgment against Imagenuity and Kinetiks
that would require Imagenuity and Kinetiks to deliver to the former employee
20% of the issued and outstanding shares of stock of Imagenuity or its
equivalent in shares of Kinetiks. The Company has filed an action against the
former employee requesting a declaratory judgment that the former employee's
interest in Imagenuity was terminated effective October 4, 1999. Management
believes that the former employee's action is without merit and plans to
vigorously defend itself. Management believes that should it be unsuccessful in
defending itself, an unfavorable outcome would not have a material impact on
the financial statements taken as a whole.

         On September 12, 2000, eLinear terminated its Chief Financial Officer,
Paul Thomas. eLinear considered the termination to be "for cause." Because the
termination was considered to be "for cause," eLinear concluded that no
severance payments were due and payable under Mr. Thomas' employment agreement
with the company. Pursuant to the employment agreement, Mr. Thomas would have
been entitled to receive a severance payment equal to one year's salary (i.e.,
$75,000.00) if the termination was not "for cause." Mr. Thomas filed a lawsuit
on February 28, 2001 seeking his one-year severance payment and attorney's fees.
The Company believes that Mr. Thomas' claims have no merit, but at this stage it
is impossible to predict the amount or range of potential loss.

         The Company is involved in other routine litigation incident to its
business. In management's opinion, none of these proceedings will have a
material adverse effect on the Company's financial position or results of
operations.



                                     F-16