U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-KSB

(Mark One)

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

     For the fiscal year ended October 31, 2001

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

     For the transition period from _______________ to ________________

Commission file no.: 000-28907

                                ImagineNet Corp.
                  --------------------------------------------
                 (Name of small business issuer in its charter)

Nevada                                                          65-0878035
-------------------------------                             -------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                               Identification No.)

222 Lakeview Ave., PMB 160
West Palm Beach, FL                                               33401
- ---------------------------------------                   -------------------
(Address of principal executive offices)                        (Zip Code)

Issuer's telephone number: (561) 832-5696

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

                                                       Name of each exchange on
 Title of each class                                     which registered
   None
--------------------------                             -------------------------

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

                         Common Stock, $0.001 par value
                         ------------------------------
                                (Title of class)

Copies of Communications Sent to:
                                     Mintmire & Associates
                                     265 Sunrise Avenue, Suite 204
                                     Palm Beach, FL 33480
                                     Tel: (561) 832-5696 - Fax: (561) 659-5371


<PAGE>



     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 such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                    Yes X     No
                       ---      ---

     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  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 issuer's revenues for its most recent fiscal year. $0.00

     Of the  7,240,000  shares  of voting  stock of the  registrant  issued  and
outstanding as of October 31, 2001, 1,240,000 shares are held by non-affiliates.
Because of the absence of an  established  trading  market for the voting stock,
the  registrant is unable to calculate the aggregate  market value of the voting
stock held by non-affiliates as of a specified date within the past 60 days.

PART I

Item 1. Description of Business.

     (a) Business Development.

     IMAGINENET CORP.  (hereinafter  referred to as the "Company" or "IMAG") was
organized  under  the laws of the  State of Nevada on  November  24,  1998.  The
Company is a developmental  stage company organized by William H. Ragsdale,  the
President  and Director and sole  executive of the Company  whose aim is to sell
and distribute  musical and related  instruments and devices via the Internet to
the general public.  The Company's offices are presently located at 222 Lakeview
Avenue,  PMB 160, West Palm Beach,  FL 33401 and its  telephone  number is (561)
832-5696.

     The Company is filing this Form 10-KSB in compliance with the effectiveness
of its filing on Form 10-SB. The Company will file periodic reports in the event
its  obligation  to file such  reports is  suspended  under the  Securities  and
Exchange Act of 1934 (the "Exchange Act".)

     (b) Business of Registrant.

General

     ImagineNet  Corp.  was  organized  under the laws of Nevada on November 24,
1998. We are a developmental  stage company founded by William H. Ragsdale,  our
sole executive.  We have no business operations or revenues to date. There is no
guarantee  that  we will be able to  conduct  business  operations  or  generate
revenues in the  future.  At  present,  our company  offices are located at: 222
Lakeview Avenue - PMB 160, West Palm Beach,  Florida 33401. Our telephone number
is (561) 832-5696.

                                        2

<PAGE>



     Since  incorporating  our company in late 1998, we have  conducted  initial
research   into   distribution   opportunities   available   to   manufacturers'
representatives in general and to startup  Internet-based  entities with a focus
on distribution of musical instruments in particular. This research entailed the
extensive  study of specific  musical  instrument  manufacturers  and  accessory
device  manufacturers and their present  distribution  methods and outlets.  The
results of our research have given us an understanding  of the  expansiveness of
these  manufacturers  and  their  existing  distribution  relationships.   Other
research has included the study of an Internet-based  distribution and marketing
medium.  This study involved an analysis of existing  Internet  distribution  of
musical  instruments  and related  devices.  Our research has been our a primary
focus in addition to our organizational  activities.  These research efforts and
organizational efforts have to date consumed our total company efforts.

     Mr.  Ragsdale,  an  accomplished  musician,  does  not  currently  have any
experience  marketing musical  instruments.  In fact, Mr.  Ragsdale's  principal
experience in the music  industry is as a member of various bands in the Atlanta
area.  Especially among fellow musicians,  he is well-known in the Atlanta area.
Mr. Ragsdale possesses the proper musical  credibility in the marketplace and is
a gregarious  and outgoing  personality  who is well received by his musical and
business acquaintances. His specific knowledge of music, business and experience
in playing in various  bands and venues in the Atlanta  region  leads us to feel
confident in his ability to leverage his network of contacts  into an attractive
business  opportunity.  Nonetheless,  we will be, at least initially,  dependent
upon  him and  his  unique  musical  perspective  and  outgoing  personality  to
establish  strategic  alliances  with  musical  instrument  suppliers as well as
assist us in the  development of a website that will be unique in its ability to
capture individual customers, musical institutions and educational institutions.

     We will  endeavor to  provide,  through the  burgeoning  global  e-commerce
distribution  network,  a unique  alternative to musical  instrument  purchasers
which would  enable  customers to make very  specific  and  personal  purchasing
decisions at an attractive price point. However, we have generally been inactive
to  date,  having  conducted  no  business  operations  except   organizational,
fund-raising and market research activities since inception.

Timeline of Company Efforts

     The  Company  has  filed a  prospectus  on Form  SB-1  for the  purpose  of
registering  between  100,000 and 1,000,000  shares for sale (the  "Registration
Statement").  The  Registration  Statement was declared  effective by the SEC on
February  11,  2002.  It is essential  that we  successfully  raise a minimum of
$100,000 within 12-15 months to fund operations. We expect to be able to utilize
this offering as the primary focus to achieve the raising of such capital.

     During this  process,  we will  refine our market  research  and  establish
preliminary  letters of agreement with various musical  instrument and accessory
manufacturers to assure us of an adequate  offering of choices of product to our
customers.  Mr.  Ragsdale's  primary focus will be the initial  establishment of
these  relationships.  We believe his musical  experience as a member of various
bands  in the  local  Atlanta  region  as  well  as his  strong  and  gregarious
personality will prove very successful in establishing these preliminary letters
of agreement.


                                        3

<PAGE>



     In  order  to  become  fully-operational  and  profitable,  we  must  first
successfully  raise a minimum of $100,000 in the present offering.  Once we have
raised these funds,  we will be able to (1) develop our website;  (2)  establish
our "drop shipment" arrangement;  (3) obtain contractual supply commitments with
music product  manufacturers;  and (4) launch our website.  The fourth and final
stage will also  entail  advertising  our company and our new website on various
popular  websites,  such as Amazon.com,  Yahoo and AOL via links which will gain
the attention of our targeted market and allow them to "click through"  directly
to our website. We are currently in the process of pursuing the above milestones
which we  anticipate  will take from twelve (12) to fifteen (15) months from the
effective date of the prospectus to complete. Funds generated from this offering
will be used at each step of the  above-described  milestones.  We have  already
begun  researching  the musical  industry and Mr. Ragsdale has expended costs of
approximately  $25,100  towards the purchase of equipment,  printing,  legal and
accounting expenses and is committed to the success of our business plan.

     Immediately  upon  the  successful  completion  of  at  least  the  minimum
offering,  we expect the preliminary letters of agreement will be converted into
firm  contracts.  We  anticipate  that this process will require no more than 18
months from the effective date of the prospectus.

     In  conjunction  with  the  establishment  of the  preliminary  letters  of
agreement,  we will establish a "drop  shipment"  arrangement  with each musical
instrument  and accessory  supplier.  The carrier of choice by a majority of our
projected  suppliers is United  Parcel  Service  ("UPS").  This "drop  shipment"
arrangement  will also become a firm contractual  commitment  between us and our
suppliers  no later than 18 months  from the  effective  date of the  prospectus
provided we successfully complete the $100,000 minimum offering.

     Once  we've  achieved  at  least  this  minimum,  we will  seek  to  employ
additional  key personnel.  We view the addition of a controller  with excellent
accounting skills to be an essential. It will be our controller's responsibility
to monitor the order flow from our future website, keeping accurate track of our
cash flow and net revenue. In addition,  as we progress into a fully operational
business entity, we will add to management an experienced  executive officer who
has Internet  marketing  experience.  We  anticipate  that this position will be
filled  within  20 days of  successfully  achieving  the  minimum  offering.  We
strongly believe that Mr. Ragsdale's initial  entrepreneurial vision will enable
us to successfully  launch our business model;  however, we believe that it will
take a seasoned  Internet  marketing  executive  to enable us to grow beyond the
start-up  stage and into a successful  and  profitable  business  entity.  It is
anticipated  that we will incur an annual  average salary expense of $75,000 per
executive.  In addition to their annual  salaries,  we will offer a stock option
plan and employee profit sharing plan. However, neither plan has been created as
of the date of this report.

     Within two months after we achieve the $100,000 minimum  offering,  it will
be our primary  focus to finalize the design of our company  website.  It is our
goal to partner with our musical  instrument and accessory  manufacturers in the
design and  expense of our  website.  It will  carry  video and audio  streaming
technology  and be  continually  upgraded as new technology is introduced to the
market.  We will retain a consultant  to assist in the design of our website and
have  budgeted an annualized  expense of $50,000 for the expense.  We anticipate
the  actual  cost of the  website  itself  will be  fully  subsidized  from  the
partnering  efforts  and  ongoing  arrangements  with  our  prospective  musical
instrument and accessory manufacturers.


                                        4

<PAGE>



     At this point,  we have not generated  any revenues due to the  preliminary
research and organizational  activities which have consumed our attention.  As a
result of this initial  limited focus, we have no current  business  operations.
There is no guarantee that we will be able to  successfully  establish  business
operations or revenues to a point where our business becomes viable.

Business Objective

     Our aim is to sell and  distribute  musical  and  related  instruments  and
devices via the Internet to the general public.  To achieve this  objective,  we
currently plan to establish a primary office and to purchase  additional  office
equipment,  including  additional  computers.  Our intent to establish a primary
office will be  accomplished  once we have been able to acquire  firm letters of
commitment from music instrument manufacturers.  Once firm letters of intent are
in hand, we will complete the design of our initial website which we expect will
become our primary  revenue  provider.  This musical  instrument and accessories
website will provide the primary  focus for our  customers for point of purchase
musical instrument and accessories transactions.  Once purchased at our website,
these  instruments  will be drop  shipped  directly  to the  purchaser  avoiding
unnecessary  inventory costs and lowering  company  employment  costs due to the
fact that their will be little need for inventory handlers.

Sales and Marketing Plans

     We anticipate that our initial sales and marketing  efforts will be focused
on  advertising  and  development  of   an-easy-to-use,   interactive   customer
service-oriented  website  from which to sell  musical  instruments  and related
musical devices through the Internet. We believe this website will be the source
of either our success or failure and it is for this reason  alone that we aim to
develop the most user friendly and interactive  cutting edge streaming video and
sound options for our prospective purchasers.  We believe that this website will
take  approximately  two months to complete once the present offering is closed,
escrow is broken and funds are  distributed.  Our present  discussions  with web
designers and  prospective  musical  instrument  and accessory  partners give us
confidence  that such a cutting  edge  website can be developed at no cost to us
due to our partnering and sharing of the expense.  In the event we are unable to
obtain  the  deferment  of  these  costs  through  our  partnering  efforts,  we
anticipate  that our  website  development  costs  will  still  only cost  about
$40,000.

     Notwithstanding the recent collapse of the retail segment of the e-commerce
industry  over  the  past 18  months,  our  initial  marketing  plan  will be to
establish  prominent links on high traffic  commercial  websites and educational
websites.  We believe such efforts will be  successful  since we intend to bring
Mr. Ragsdale's  musician contacts together with established  "bricks and mortar"
musical instrument suppliers to form joint venture partnerships. Moreover, while
other  e-commerce  sites may be better  funded,  our overhead  will be extremely
limited.  In fact, we do not expect to incur  significant costs unless sales, in
fact,  do occur.  In effect,  we will act as a broker in the market  between the
manufacturer or distributor of musical instruments and an interested purchaser.

     Even in the event we are  unable  to obtain  the  deferment  of most  costs
through our partnering efforts, these links will cost an anticipated $15,950 for
the first three  months and are  expected to  increase as  prospective  customer
traffic increases. We also believe that new links will be necessary

                                        5

<PAGE>



as we learn of high prospective customer traffic at other websites unanticipated
by us and  which  exhibit  a  direct  correlation  to our  initial  fill  rates.
Specifically,  we will be  tracking  closely  how our  customers  click  through
various web page links  directly to our website and place their orders.  We will
be able to track each click through and be able to determine  each link's direct
correlation to our specific  website's  fill rates.  This will cause a continual
adjustment by us of our web page links in order to maximize prospective customer
visits and potential orders.

     The website approach in our business model has been specifically  chosen as
our sole  marketing  strategy  because of the  presence of numerous  "bricks and
mortar"  musical  instrument  and  accessory  providers in the  marketplace.  We
believe the technology of the Internet brings within reach to a start up company
like us the ability to have an  immediate  shopping  window for the world to see
through.  This  immediate  world wide  shopping  window to our  website  and its
planned design utilizing  streaming video and audio technology causes us to have
confidence  in our ability to quickly  penetrate  the market.  Furthermore,  Mr.
Ragsdale's  musical  experience in many bands in the Atlanta region gives us the
ability to have him exhibit and  demonstrate  the sound and  characteristics  of
musical  instruments  from the perspective of a professional  musician.  We feel
this musical perspective combined with Mr. Ragsdale's  experience in running his
other  businesses  will be of tremendous  value to our future  website's  unique
design characteristics.

     In addition,  there are a number of musical instrument  manufacturers which
we  will  approach  to  supply  product  to  our  clients  (including,  but  not
exclusively limited to, the following):

        Yamaha Corporation of America
        Harman International (Professional Division)
        Steinway Musical Instruments
        Fender Musical Instruments
        Peavey Electronics
        Baldwin Piano & Organ
        Akai Musical Instrument Corporation
        Martin Guitar Company
        Midco International
        Paiste Cymbals

     Since  these  discussions  with  musical  instruments  suppliers  have  not
occurred  to  date,  there  is no  guarantee  we  will be  able  to  enter  into
satisfactory agreements with them. Once the present offering is finalized and we
successfully  raise  the  minimum  of  $100,000,  we  believe  we will  have the
financial  resources to commence website  development which will provide us with
not only  business  operating  viability  but also the  credibility  required to
obtain firm contractual  supply commitments and potential  advertising  revenues
from many of the above musical instrument and accessory suppliers



                                        6

<PAGE>



Advertising.

     It is our  belief  that  the  musical  instrument  industry  has not  fully
utilized the distribution  opportunities offered by the Internet.  Our objective
is to provide an e-commerce option to retail and wholesale purchasers of musical
instruments.  Accordingly,  our primary  focus is to develop an Internet site as
our principal point of contact with clients and, as a result of this commitment,
we will not focus on developing conventional advertising, stores or outlets.

 e-Commerce  Strategy.

     The development of a user-friendly,  uniquely  designed website to showcase
our products and services is essential to the success of our business endeavors.
We intend to  develop a premium  website  to be viewed by retail  and  wholesale
consumers  worldwide as the primary source for  information  on various  musical
instrument products  accompanied by the best possible pricing alternatives which
the market can  support.  This  website is presently  under  development  and is
anticipated  to be ready for launch  within  three  months after the breaking of
escrow on the current offering and the distribution of funds.  Once constructed,
our home page will contain graphics  designed to accommodate quick launching and
display  of the  entire  page  even  in a  dial-up  56K  modem  environment.  To
accomplish  this quick  launching  and  display,  our page will be designed as a
small-sized  HTML file; it will have minimum JPEG graphics and won't use any GIF
or related moving graphics. Our objective is simple: permit retail and wholesale
business  viewers  to  quickly  open the home  page,  get down to  business  and
initiate navigation of the website with minimum wait for page loading.

     EASY  HOME  PAGE  TOPIC  FINDER.  We will  design  the home  page with user
friendly simplicity,  without the busy clutter found in many retail and business
focused websites,  to facilitate  navigation by both retail and corporate users.
The  link  selections  on the  home  page  will be  limited  to only  few  major
categories  such as  Company  Information  and  Product  Information.  With  the
movement  of the mouse  prompter to a listed  category,  a window will appear to
reveal the sub- categories,  much like the features found in the menu of current
Window-based  software. In this manner, the sub-categories are hidden within the
home page which can be easily altered,  without any modification required on the
HTML file of the home page. This function allows  additional  product page links
to be added onto the website with ease and speed in the future.  A random search
feature  will also be  available  to visitors to search the website  "link tree"
based on a given key word.  This  feature is  essential  to the  operation  of a
marketing website,  since each page is too limited in space to provide a list of
all potential search topics without  obstructing the actual intended subjects of
the page.

     PRODUCT INFORMATION LINKS. Each product  information  subcategory link will
be designed  with an intuitive  repeatable  protocol for easy  navigation by end
users and also for easy modification.  For example,  the percussion  instruments
page  will  include  product  history  and   description,   brand  name  product
availability (and associated  links),  current customer comments (link),  sample
request form (link), visitor information questionnaire form to determine product
applicability  (link),  product  information  on-demand  download link and email
feedback  (link).   In  addition  to  these  features,   the  product  page  for
conventional  products  will also include,  for a given item,  direct quotes and
order form links.  We intend to design our website link features with the state-
of-the art interactivity and fast retrieval of information on demand.


                                        7

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     STREAMING   VIDEO  AND  AUDIO.   Initially,   the  streaming  video  to  be
incorporated  into our website  will be limited to the  illustration  of product
performance.  The  duration  of the  video  will be  short.  We  have  initiated
discussions  with local  streaming  video resellers but have not established any
firm  arrangements  to date.  We  intend to  provide  video  packages  for large
capacity simultaneous visitors, utilizing a new JAVA technology requiring no end
user viewer  installation.  We may select streaming audio along with audio slide
show  presentations  to provide a  multimedia  presentation  of our products and
products  of  advertisers.  Due  to  the  smaller  file  size,  streaming  audio
presentation  loads  faster and  streams  smoother.  It also allows a visitor to
listen to a musical instrument's sound.

     WEBSITE HOSTING. We will seek a hosting agent for the website which has the
ability to provide  expandable  band-width to accommodate any large simultaneous
visitor load. In addition,  the hosting agent must also provide  adequate  "fire
wall"  protection  against  potential  hackers  which will  become an  essential
component  intrinsic to any client  information  transmission and client payment
transaction conducted over the website.  Otherwise, any successful hacking which
results in  shutting  down our  website  will have a  detrimental  effect on our
business.

     SEARCH  ENGINE  LISTING.  We intend to list our  website on the ten largest
search  engines,   including  excite@home,   yahoo,  infoseek,  America  Online,
LookSmart, About, Alta Vista, Google, DirectHit, Yep and NorthernLight, of which
the latter five search engines use computer algorithms to predict relevance.  To
assure  accessibility  and  visibility  in the search engine  listings,  we will
employ available  services to manually submit the listing on the search engines,
wherever  possible  once a month,  and to enter  the  submission  under  several
relevant key categories to enhance hits.

Website Improvement.

     We also expect to budget some of the funds,  if $550,000 to  $1,000,000  in
shares is sold, for improvement of our website once it has been developed.  Some
of these improvements may include:

     WEBSITE  HOSTING  ENHANCEMENT.  We will seek to enhance the capacity of the
web  hosting  service to  accommodate  increased  file  storage  capability  and
increased visitor capacity.  In addition,  we will seek to enhance the frequency
and spectrum of the visitor  profile  feedback report from the hosting agent, of
which the data is proprietary and resalable in the information  market.  Lastly,
we will  seek to  improve  the  security  of the  website  against  hackers  and
unsolicited information gathering of our visitors.

     STREAMING  VIDEO  ENHANCEMENT.  The product  demonstration  streaming video
available for many musical  instruments will be expanded to include  testimonies
from current  users.  Over time, we expect to increase the video  length,  along
with better quality video scripting and productions.

     INITIAL REVENUE SOURCES.  Upon completion and the successful closing of the
offering as well as the associated  successful launch of our website,  we expect
to derive our company's core revenues from musical  instrument  sales.  Provided
such success is achieved,  we would then consider  seeking to generate  revenues
from  advertisement of our services and products from various additional musical
industry related service and product providers. There can be no assurance of our
ability to generate income in this manner.


                                        8

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     CORPORATE ADVERTISEMENT SALE. Launch of our website is completely dependent
upon the success of the offering since, at present, we do not have a website nor
have we generated  funds for completion of a website.  However,  if we raise the
minimum  $100,000  necessary  for us to launch our website,  we intend to try to
generate  additional  income by  selling  a  limited  number of ad spaces on our
website to musical instrument financing firms and to manufacturers.  Advertisers
will pay us an agreed upon amount in order to solicit  customers for  themselves
by  advertising  on our  website.  There can be no  assurance  of our ability to
generate income in this manner.

Financial Services Offered

     At  present,  we  plan to  provide  our  prospective  retail  and  business
purchasers  with  Visa and  MasterCard  credit  card  point of  purchase  on our
website.  However,  we will also  allow  for  financing  companies  such as well
recognized  financial  institutions  to advertise  their  options on our website
which may also provide prospective purchasers an alternative financing option.

     We intend to arrange a drop shipping program wherein customers will be able
to access our website to purchase a musical  instrument  with their  credit card
and place their  purchase in a shopping  cart where the order will be  approved,
forwarded to the  manufacturer,  processed and shipped directly to the consumer.
Based on  preliminary  discussions  with  industry  representatives  and  retail
outlets but not musical instrument manufacturers and/or distributors, we believe
we will retain a  percentage  of each sale that  originates  through us (ranging
from 25% to 50% of the item's final purchase price).

     On an end of the month basis, we would then remit to the musical instrument
manufacturer  an accounting of sales of its products and accessories and forward
a wire of net proceeds into the manufacturer's  designated bank account. Returns
of products will be handled  directly with the  manufacturers  which will either
repair a defective  instrument and/or provide a cash refund to the consumer less
any shipping and handling  costs.  Each customer will have their own  individual
account and a unique password which will keep a history of each consumer's visit
to our  website,  payment  history and a complete  profile of  consumer  product
preferences.

     Good quality  presentations and professional  follow-up with customers will
also be critical to our success.  We believe  providing a secure,  user-friendly
and entertaining  website with streaming video musical instrument  presentations
and user feedback will, in many cases,  provide a unique and comfortable  option
by which a client can utilize our various musical product  offerings and thereby
close the sale, especially where financing alternatives are provided.

Expenditures

     Our primary direct costs will be as follows:

     Salaries to Mr.  Ragsdale and other  employees,  as needed  (payroll  cost,
actual or deferred);  Marketing  and sales  related  costs ; Employment  related
taxes; and Health benefits.



                                        9

<PAGE>



Facilities

     Initially,  we will operate out of the Lakeview avenue offices  provided by
Mr.  Ragsdale  without  cost to us.  However,  once  revenues  warrant,  we will
determine an appropriate site to locate future facilities.

Debt Financing

     We have not yet sought any debt financing  since we do not believe we would
qualify for such a loan until we have completed at least two years of profitable
operations.  Once we have met this  criteria,  we intend to seek out funds  from
venture capital firms or other funding sources. Since we will not seek financing
until we are operating successfully,  we believe we will be in a better position
to  negotiate  appropriate  placement  and  repayment  terms for any such loans.
However,  in the event we do receive  financing  but  default in  payments,  the
financing  would result in  foreclosure  upon our assets to the detriment of our
shareholders.

     Although we are presently  authorized to borrow funds,  we do not intend to
do so until after the two year time-period.  When we do seek to borrow funds, we
do not intend to use the proceeds to make payments to our management  (except as
salaries, benefits and out-of-pocket expenses).

Reporting

     As a  reporting  company,  we are  required  to  file  quarterly  unaudited
financial  reports on Form 10-QSB and annual audited  financial  reports on Form
10-KSB.  In  addition,  we would be required  to file on Form 8-K under  certain
specified conditions or those deemed material in character.

Industry Regulation

     We are not subject to industry specific regulation. However, we are subject
to usury and other standards relating to permitted maximum rates of interest and
related consumer fraud regulations.

Current Employees and Proposed Staffing

     Currently Minimal Employees; No Monetary Compensation

     Although Mr.  Ragsdale does not  currently  have any  experience  marketing
musical  instruments,  he is an  accomplished  and  well-known  musician  in the
Atlanta  area.   Consequently,   we  believe  Mr.   Ragsdale's   creativity  and
salesmanship,   when  combined  with  an  Internet   e-commerce   marketing  and
distribution  alternative  using  established  "bricks and mortar" joint venture
partners, make for an attractive business model. Moreover, we believe this model
will be further  enhanced by the advantages of greater  availability  of capital
and  potential  for growth by being a public,  as compared to a  privately-held,
company.  The time  required  to be devoted by Mr.  Ragsdale  to our  day-to-day
affairs is presently  estimated to be approximately  five to ten hours per week.
Mr.  Ragsdale's  time  commitment  will  substantially  increase  once we obtain
sufficient  funding with which to commence our Internet-based  operations,  hire
employees and search for an appropriate site where our executive  offices can be
located.


                                       10

<PAGE>



Proposed Additional Personnel

     At present, Mr. Ragsdale, is our sole executive officer and employee. It is
expected that additional  personnel will be employed to assist in operations and
financial  management,  such as a controller  and chief  executive  officer.  In
addition, we intend to continue to expand our business and finance advisors.

     It is generally anticipated that any future employees will devote full time
to our operations.  The Board of Directors may then, in its discretion,  approve
the  payment  of cash or  non-cash  compensation  to these  employees  for their
services.

Government Regulation

Overview

     As an  employer,  the  Company is subject to all  federal,  state and local
statutes and  regulations  governing  its  relationship  with its  employees and
affecting businesses generally.


Item 2. Description of Property.

     The Company's  executive  offices are located at 222 Lakeview  Avenue,  PMB
160, West Palm Beach, Florida 33401. Its telephone number is (561) 832-5696. The
Company  pays no rent for  this  space.  The  Company  owns no real or  personal
property.

Item 3. Legal Proceedings.

     The  Company  knows  of no legal  proceedings  to which it is a party or to
which any of its  property  is the  subject  which are  pending,  threatened  or
contemplated or any unsatisfied judgments against the Company.

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

     No matter was  submitted to a vote of the Company's  shareholders,  through
the  solicitation  of proxies or otherwise  during the fiscal year ended October
31, 2001, covered by this report.

Part II

Item 5. Market for Common Equity and Related Stockholder Matters.

     (a) Market Information.

     There has been no  established  public  trading market for the common stock
since the Company's inception on November 24,1998.




                                       11

<PAGE>


     (b) Holders.

     As of October 31, 2001,  the Company had 28  shareholders  of record of its
7,240,000 outstanding shares of common stock.

     (c) Dividends.

     The Company has never paid or declared  any  dividends  on its common stock
and does not anticipate paying cash dividends in the foreseeable future.

Transfer Agent

     The Company is serving as its own  transfer  agent  until its common  stock
becomes eligible for quotation with NASD.

Item 6. Management's Discussion and Analysis or Plan of Operation.

     Since  inception,  we have  conducted  no  business  operations  except for
organizational,  capital- raising and market research activities. For the period
from inception  through October 31, 2001, we have had no revenue from operations
and accumulated operating expenses amounted to $26,000. These operating expenses
are related to start up, legal and organizational  expenses.  We propose to sell
musical instruments and related devices to the public via the Internet.

     We have  approximately  $1,400 in cash  currently  in the bank and a demand
loan  receivable  of  $42,100  and feel that this  will meet our  specific  cash
requirements  for the next 3 to 12 months.  In  addition,  we have  completed  a
majority of the start-up  organizational,  fund-raising and research  activities
necessary  to  position  us to start the next level of our  business.  We do not
foresee the  incurring  of  additional  losses at this point.  However,  we must
successfully  complete  the  offering  (at  least  the  $100,000  minimum),  the
finalization of the design and implementation of our website,  the establishment
of binding agreements with musical instrument and accessory  providers and their
drop shipment partners culminating with the hiring of our controller followed by
the hiring of an  Internet-experienced  chief executive  officer.  We anticipate
that these efforts can be undertaken with the raising of the minimum of $100,000
from the  offering.  If we are unable to generate  sufficient  capital  from our
offering or revenue from  operations to implement our business  plans, we intend
to explore all available  alternatives for debt and equity financing,  including
private and public  securities  offerings.  If those bootstrap  efforts fail, we
will have no choice but to close down.

     Initially,  Mr.  Ragsdale will be solely  responsible  for  developing  our
business.  However,  when  sufficient  capital becomes  available,  we expect to
employ a controller  and a CEO. In addition,  we expect to engage in  continuing
market  research to monitor  new market  trends and other  critical  information
deemed relevant to our business.  This continuous research will take the form of
electronic and market  reports from our Internet  hosting  providers  which will
show the history of visits by customers to our various  links on other  websites
as well as our own website.

     These  electronic  reports  will be  supplemented  by the  review of market
literature, comparison shopping surveys and investigative surveys. This research
will be provided  as part of the web hosting  costs which will be covered by our
partnering   relationships   with   our   musical   instrument   and   accessory
manufacturers.  If such  arrangements  can not be  established,  we expect  such
research to

                                       12

<PAGE>



cost not more than $5,000 on an annualized  basis.  In any event,  based on this
market research,  we expect to be able to assess existing and prospective trends
and adjust our business plan accordingly.

Financial Condition, Capital Resources and Liquidity

General

     At October 31,  2001,  we had $43,500 in assets and 11,000 in  liabilities.
Since inception, we have received $50,000 in cash as payment for the issuance of
shares.  Our working capital is presently  minimal and there can be no assurance
that our financial  condition  will improve.  Management  expects to continue to
have minimal working capital or a working capital deficit as a result of current
liabilities.

Issuance of Stock

     At inception,  we issued 6,000,000 "founders" shares of common stock valued
at $6,000 to Mr.  William H.  Ragsdale for  services  rendered in setting up the
company.

     From November 1998 through April 1999, we sold a total of 1,240,000  shares
of common stock to Georgia and Florida residents for cash totaling  $50,000.  No
underwriter was employed in connection with the offering and sale of the shares.
The Company sold its stock in a self-underwritten offering conducted pursuant to
Section 3(b) of the Securities Act of 1933, as amended (the "Act"), and Rule 504
of  Regulation D promulgated  thereunder.  This offering was made in Georgia and
Florida.  We undertook the offering of shares of common stock on August 1, 1999,
and did not pay any underwriting discounts or commissions.

     Even though we believe with the successful minimal offering, we will obtain
sufficient capital with which to implement our business plan on a limited scale,
we do not expect to continue  operations on a larger scale without an additional
increase  in  revenue  from  the  eventual  launch  of our  website  and/or  and
additional  infusion of capital. In order to obtain additional equity financing,
management may be required to dilute the interest of existing shareholders.

Net Operating Losses

     We have net operating losses  carry-forwards of $23,568,  expiring $13,880,
$5,607 and $4,081 at October 31, 2019, 2020 and 2021.  These operating  expenses
are  related  to start up,  legal and  organizational  expenses.  We also have a
$3,500  deferred  tax asset  resulting  from the loss carry-  forwards.  We have
established  a 100%  valuation  allowance  for this  asset.  Until  our  current
operations   begin  to  produce   earnings,   our   ability  to  utilize   these
carry-forwards is unclear.

Going Concern

     We are the subject of a "going  concern" audit  opinion.  (See Appendix I.)
Such  qualification  was issued because we have incurred  losses from operations
since inception.  As of October 31, 2001, we had working capital of $32,400 that
raises  substantial  doubt about our ability to continue as a going concern.  We
had an overall net cash  outflow of $35,700 for the year ended  October  31,2001
and incurred a net loss of $4,100 for the year ended October 31, 2001.


                                       13

<PAGE>



     There are no assurances that we will be able to  successfully  complete the
offering of common stock or that the ultimate  amounts  raised will meet the our
cash flow  needs and be  sufficient  to fund our  operations  through  2002.  In
addition,  there is no assurance that we will be able to successfully  raise the
funds  necessary  through  alternative  channels,  should  the  offering  not be
successful.  Further, there is no assurance that we will be able to successfully
develop  planned  operations  even if it is  successful  in acquiring  the funds
necessary,  which may have a  material  impact  on our  financial  position  and
results of operations.  The accompanying financial statements do not include any
adjustments  relating to the recoverability and classification of asset carrying
amounts or the amount and classification of liabilities that might result should
we be unable to continue as a going concern.

     There are several mitigating factors to these going concern issues.  First,
the  purpose  of the  offering  is to  provide  us with  funds to carry  out our
business plan.  Second, Mr. Ragsdale intends to leverage his musical talents and
contacts  into joint  ventures  with  established  'bricks and mortars"  musical
instrument  firms.  He  believes  this is  possible  although he has not in fact
pursued alternative funding and distribution channels to date.

     If the offering fails to raise sufficient  capital,  we intend to seek such
funds through  alternative  channels,  for example through venture capital firms
and/or a joint  venture with an  established  retailer or  manufacturer.  We are
currently  not  able to  evaluate  the  potential  success  of such  alternative
financing, as it has not attempted to seek such financing.

Historical Fact Versus Projection and Expectation

     Statements  contained in this document  which are not  historical  fact are
forward-looking  statements based upon management's current expectations.  These
subjective  assessments are subject to risks and uncertainties  that could cause
actual  results  to  differ  materially  from  those  stated or  implied  by the
forward-looking statements.

Recent Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 133 "Accounting for Derivative  Instruments
and Hedging  Activities"  ("SFAS No. 133"). SFAS No. 133 establishes  accounting
and reporting standards for derivative instruments, including certain derivative
instruments  embedded  in  other  contracts,  and  for  hedging  activities.  In
accordance with SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities  - Deferral of the  Effective  Date of FASB  Statement  No.1 33," the
Company delayed the  implementation of SFAS No. 133, as amended by SFAS 138. The
standard  is  effective  January  1, 2001 and  management  does not  expect  the
adoption of the standard to have any impact on the financial position or results
of operations of the Company.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements"
summarizing the SEC's views in applying generally accepted accounting principles
to various  revenue  recognition  issues.  Management  believes that its revenue
recognition practices are in conformity with SAB No. 101.

                                       14

<PAGE>



     In April 2000, the FASB issued FASB  Interpretation  No. 44 ("FIN No. 44"),
"Accounting  for  Certain   Transactions   Involving  Stock   Compensation:   An
Interpretation of APB No. 25." We have adopted the provisions of FIN No. 44, and
such adoption did not impact our results of operations.

     In September  2000, the FASB issued SFAS No. 140  "Accounting for Transfers
and  Servicing  of  Financial  Asset  and  Extinguishment  of  Liabilities",   a
replacement  of SFAS No. 125. The  standard is effective in 2001 and  management
does not expect the  standard  to have any effect on our  financial  position or
results of operations.

     In July 2001, the FASB issued SFAS No. 141 "Business Combinations" and SFAS
No. 142 "Goodwill and Other Intangible Assets." These standards are effective in
2001 and  management  does not  expect the  standards  to have any effect on our
financial position or results of operations.

     In July  2001,  the  SEC  issued  SAB 102  "Selected  Loan  Loss  Allowance
Methodology  and  Documentation  Issues."  We do not expect this SAB to have any
effect on our financial position or results of operations.

     In  August  2001,  the FASB  issuer  SFAS No.  143  "Accounting  for  Asset
Retirement Obligations." We do not expect the standard to have any effect on our
financial position or results of operations.

     In October 2001 the FASB issued SFAS No. 144 "Accounting for the Impairment
of Disposal of  Long-lived  Assets." We do not expect this  standard to have any
effect on our financial position or results of operations.

Forward-Looking Statements

     This Form 10-KSB includes  "forward-looking  statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities  Exchange  Act of  1934,  as  amended.  All  statements,  other  than
statements of historical  facts,  included or  incorporated by reference in this
Form 10-KSB which address  activities,  events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof),  business
strategy,  expansion and growth of the Company's  business and  operations,  and
other such matters are forward-looking statements. These statements are based on
certain  assumptions and analyses made by the Company in light of its experience
and its perception of historical trends,  current conditions and expected future
developments  as well as  other  factors  it  believes  are  appropriate  in the
circumstances. However, whether actual results or developments will conform with
the Company's  expectations  and predictions is subject to a number of risks and
uncertainties,  general  economic market and business  conditions;  the business
opportunities  (or lack  thereof)  that may be  presented  to and pursued by the
Company;  changes in laws or regulation;  and other  factors,  most of which are
beyond the  control of the  Company.  Consequently,  all of the  forward-looking
statements made in this Form 10-KSB are qualified by these cautionary statements
and  there  can  be  no  assurance  that  the  actual  results  or  developments
anticipated by the Company will be realized or, even if substantially  realized,
that they will have the expected consequence to or effects on the Company or its
business


<PAGE>



or operations.

Item 7. Financial Statements

     The  Financial  Statements  of  ImagineNet  Corp.  and  Notes to  Financial
Statements  together  with the  Independent  Auditor's  Report  of  Durland  and
Company,  CPA's,  P.A.,  required by this Item 7 commence on page F-1 hereof and
are  incorporated  herein by this reference.  The Financial  Statements filed as
part of this  Report  on Form  10-KSB  are  listed  in the  Index  to  Financial
Statements below:

                          INDEX TO FINANCIAL STATEMENTS




Independent Auditors' Report...............................................F-2

Balance Sheet..............................................................F-3

Statements of Operations...................................................F-4

Statements of Stockholders' Equity.........................................F-5

Statements of Cash Flows...................................................F-6

Notes to Financial Statement...............................................F-7




















<PAGE>



                          INDEPENDENT AUDITORS' REPORT





The Board of Directors and Stockholders
ImagineNet Corp.
(A Development Stage Enterprise)
West Palm Beach, Florida

We  have  audited  the  accompanying   balance  sheet  of  ImagineNet  Corp.,  a
development stage enterprise, as of October 31, 2001, and the related statements
of operations,  stockholders' equity and cash flows for the two years then ended
and the period from  November  24, 1998  (Inception)  through  October 31, 2001.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our 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 financial  statements  referred to above present fairly, in
all material respects,  the financial position of ImagineNet Corp. as of October
31, 2001 and the results of its  operations and its cash flows for the two years
then ended and the period from November 24, 1998 (Inception) through October 31,
2001, in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 5 to the
financial  statements,  the Company has experienced a loss since inception.  The
Company's financial position and operating results raise substantial doubt about
its  ability to  continue as a going  concern.  Management's  plans in regard to
these  matters are also  described in Note 5. The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.




/s/ Durland & Company, CPAs, P.A.
Durland & Company, CPAs, P.A.
Palm Beach, Florida
January 3, 2002



                                       F-2

<PAGE>



<TABLE>
<CAPTION>
                                ImagineNet Corp.
                        (A Development Stage Enterprise)
                                  Balance Sheet




                                                                          October 31, 2001      October 31, 2000
                                                                        -------------------- ----------------------
<S>                                                                     <C>                  <C>
                                 ASSETS
CURRENT ASSETS
  Cash                                                                  $              1,369 $               37,085
  Loans to related parties                                                            42,091                      0
                                                                        -------------------- ----------------------

          Total current assets                                                        43,460                 37,085
                                                                        -------------------- ----------------------

Total Assets                                                            $             43,460 $               37,085
                                                                        ==================== ======================

                  LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable
     Trade                                                              $              1,360 $                  572
     Related party note payable                                                        9,668                      0
                                                                        -------------------- ----------------------

          Total current liabilities                                                   11,028                    572
                                                                        -------------------- ----------------------

Total Liabilities                                                                     11,028                    572
                                                                        -------------------- ----------------------

STOCKHOLDERS' EQUITY
  Preferred stock, $0.001 par value, authorized 10,000,000 shares;
      0 issued and outstanding                                                             0                      0
  Common stock, $0.001 par value, authorized 50,000,000 shares;
      7,240,000 issued and outstanding                                                 7,240                  7,240
  Additional paid-in capital                                                          48,760                 48,760
  Deficit accumulated during the development stage                                   (23,568)               (19,487)
                                                                        -------------------- ----------------------

          Total stockholders' equity                                                  32,432                 36,513
                                                                        -------------------- ----------------------

Total Liabilities and  Stockholders' Equity                             $             43,460 $               37,085
                                                                        ==================== ======================
</TABLE>













     The accompanying notes are an integral part of the financial statements


                                       F-3

<PAGE>





<TABLE>
<CAPTION>
                                ImagineNet Corp.
                        (A Development Stage Enterprise)
                            Statements of Operations




                                                                                                     From
                                                                                                November 24, 1998
                                                             Year Ended October 31,                (Inception)
                                                    ----------------------------------------        through
                                                           2001                 2000            October 31, 2001
                                                    ------------------- -------------------- ----------------------
<S>                                                 <C>                 <C>                  <C>
REVENUES                                            $                 0 $                  0 $                    0
                                                    ------------------- -------------------- ----------------------

OPERATING EXPENSES:
   General and administrative expenses                            6,504                4,372                 15,991
   Legal fees - related party                                         0                1,236                  4,000
   Services - related party                                           0                    0                  6,000
                                                    ------------------- -------------------- ----------------------

          Total expenses                                          6,504                5,608                 25,991
                                                    ------------------- -------------------- ----------------------

OTHER INCOME (EXPENSE):
   Interest income                                                3,091                    0                  3,091
   Interest expense                                                (668)                   0                   (668)
                                                    ------------------- -------------------- ----------------------

          Total other income (expense)                            2,423                    0                  2,423
                                                    ------------------- -------------------- ----------------------

Net loss                                            $            (4,081)$             (5,608)$              (23,568)
                                                    =================== ==================== ======================

Loss per weighted average common share              $             (0.01)$              (0.01)
                                                    =================== ====================

Number of weighted average common shares
outstanding                                                   7,240,000            7,240,000
                                                    =================== ====================
</TABLE>















     The accompanying notes are an integral part of the financial statements


                                       F-4

<PAGE>







<TABLE>
<CAPTION>
                                ImagineNet Corp.
                        (A Development Stage Enterprise)
                       Statements of Stockholders' Equity




                                                                                           Deficit
                                                                                          Accumulated
                                                                          Additional       During the         Total
                                            Number of        Common         Paid-In       Development     Stockholders'
                                              Shares         Stock          Capital          Stage           Equity
                                           ------------- -------------- --------------- ---------------- ---------------
<S>                                          <C>         <C>            <C>             <C>              <C>
BEGINNING BALANCE, November 24, 1998                   0 $            0 $             0 $              0 $             0

 11/98 - founders' shares ($0.001/sh.)         6,000,000          6,000               0                0           6,000
 11/98 - cash ($0.01/sh.)                         40,000             40             360                0             400
 12/98 - cash ($0.01/sh.)                        260,000            260           2,340                0           2,600
  4/99 - cash ($0.05/sh.)                        940,000            940          46,060                0          47,000

Net loss                                               0              0               0          (13,880)        (13,880)
                                           ------------- -------------- --------------- ---------------- ---------------

BALANCE, October 31, 1999                      7,240,000          7,240          48,760          (13,880)         42,120

Net loss                                               0              0               0           (5,607)         (5,607)
                                           ------------- -------------- --------------- ---------------- ---------------

BALANCE, October 31, 2000                      7,240,000          7,240          48,760          (19,487)         36,513

Net loss                                               0              0               0           (4,081)         (4,081)
                                           ------------- -------------- --------------- ---------------- ---------------

ENDING BALANCE, October 31, 2001               7,240,000 $        7,240 $        48,760 $        (23,568)$        32,432
                                           ============= ============== =============== ================ ===============
</TABLE>

















     The accompanying notes are an integral part of the financial statements


                                       F-5

<PAGE>








<TABLE>
<CAPTION>
                                 ImagineNet Corp
                        (A Development Stage Enterprise)
                            Statements of Cash Flows




                                                                                                     From
                                                                                                November 24, 1998
                                                                  Year Ended October 31,         (Inception)
                                                              ------------------------------        through
                                                                   2001            2000          October 31, 2001
                                                              --------------- ---------------  ---------------------
<S>                                                           <C>             <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                      $        (4,081)$        (5,608) $             (23,568)
Adjustments to reconcile net loss to net cash used by
operating activities:
        Stock issued for services                                           0               0                  6,000
Changes in operating assets and liabilities
        (Increase) decrease in interest receivable                     (3,091)              0                 (3,091)
        Increase (decrease) in accounts payable - trade                   788          (4,239)                 1,360
        Increase (decrease) in accounts payable - related party             0          (2,764)                     0
        Increase (decrease) in interest payable                           668               0                    668
                                                              --------------- ---------------  ---------------------

Net cash used by operating activities                                  (5,716)        (12,611)               (18,631)
                                                              --------------- ---------------  ---------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
        Loans to related parties                                      (39,000)              0                (39,000)
                                                              --------------- ---------------  ---------------------

Net cash used by investing activities                                 (39,000)              0                (39,000)
                                                              --------------- ---------------  ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
        Proceeds from issuance of common stock                              0               0                 50,000
        Proceeds of loan from related party                             9,000               0                  9,000
                                                              --------------- ---------------  ---------------------

Net cash provided by financing activities                               9,000               0                 59,000
                                                              --------------- ---------------  ---------------------

Net increase (decrease) in cash                                       (35,716)        (12,611)                 1,369
                                                              --------------- ---------------  ---------------------

CASH, beginning of period                                              37,085          49,696                      0
                                                              --------------- ---------------  ---------------------

CASH, end of period                                           $         1,369 $        37,085  $               1,369
                                                              =============== ===============  =====================
</TABLE>






     The accompanying notes are an integral part of the financial statements

                                       F-6

<PAGE>



                                ImagineNet Corp.
                        (A Development Stage Enterprise)
                          Notes to Financial Statements


(1) The Company ImagineNet Corp. (the Company) is a Nevada chartered development
     stage  corporation  which conducts  business from its  headquarters in West
     Palm Beach, Florida. The Company was incorporated on November 24, 1998.

     The Company has not yet engaged in its expected  operations.  The Company's
     future operations  include plans to sell and distribute musical and related
     instruments  and  devices  via the  Internet.  Current  activities  include
     raising additional capital and negotiating with potential key personnel and
     facilities.  There is no  assurance  that any benefit will result from such
     activities.  The Company will not receive any operating  revenues until the
     commencement  of  operations,  but  will  nevertheless  continue  to  incur
     expenses until then.

     The  following  summarize  the more  significant  accounting  and reporting
policies and practices of the Company:

     a)  Use of  estimates  The  financial  statements  have  been  prepared  in
     conformity with generally accepted accounting principles.  In preparing the
     financial  statements,   management  is  required  to  make  estimates  and
     assumptions  that affect the reported  amounts of assets and liabilities as
     of the date of the  statements  of  financial  condition  and  revenues and
     expenses for the year then ended.  Actual results may differ  significantly
     from those estimates.

     b)  Start-Up  costs Costs of start-up  activities,  including  organization
     costs,  are expensed as incurred,  in accordance with Statement of Position
     (SOP) 98-5.

     c) Net loss per share Basic and diluted  loss per weighted  average  common
     share is computed by dividing the net loss by the weighted  average  number
     of common shares outstanding during the period. The Company has no dilutive
     or anti-dilutive securities outstanding.

     d) Stock  compensation  for services  rendered The Company issues shares of
     common stock in exchange for services  rendered.  The costs of the services
     are valued according to generally accepted  accounting  principles and have
     been charged to operations.

     e) Impact of recently issued  accounting  pronouncements No recently issued
     accounting  pronouncements  have any  effect  on the  historical  financial
     statements  nor  any  currently   expected   effects  on  future  financial
     statements of the Company.

(2)  Stockholders' Equity The Company has authorized 50,000,000 shares of $0.001
     par value common stock, and 10,000,000 shares of $0.001 par value preferred
     stock. Rights and privileges of the preferred stock are to be determined by
     the Board of Directors prior to issuance.  The Company had 7,240,000 shares
     of common stock issued and outstanding at October 31, 2001. The Company had
     issued  none of its shares of  preferred  stock at  October  31,  2001.  On
     November 24, 1998, the Company issued  6,000,000  shares of common stock to
     its founder and  President  for services  rendered in  connection  with the
     organization of the Company. During the period ended July 1999, the Company
     issued 1,240,000 shares of common stock for $50,000 in cash.

(3)  Income  Taxes  Deferred  income taxes  (benefits)  are provided for certain
     income and expenses which are  recognized in different  periods for tax and
     financial  reporting  purposes.  The Company had net operating  loss carry-
     forwards  for income  tax  purposes  of  approximately  $4,100,  $5,600 and
     $13,900  expiring at October 31,  2021,  2020 and 2019,  respectively.  The
     amount   recorded  as  deferred  tax  asset  as  of  October  31,  2001  is
     approximately  $3,500,  which  represents  the amount of tax benefit of the
     loss carry-forward.  The Company has established a 100% valuation allowance
     against  this  deferred  tax  asset,  as  the  Company  has no  history  of
     profitable operations.

                                       F-7

<PAGE>


                                ImagineNet Corp.
                        (A Development Stage Enterprise)
                          Notes to Financial Statements


(4)  Loans  Receivable  from Related  Parties In December 2000, the Company made
     two demand  loans to related  parties  amounting  to  $35,000  and  $4,000.
     Accrued  interest  amounted to $2,774 and $317 at October 31, 2001.  At the
     time these loans were made, the Company did not  immediately  need the cash
     and the  Company  could  earn a  significantly  higher  return  than a bank
     deposit with a low level of risk.

(5)  Loan Payable to Related Party In December  2000 and June 2001,  the Company
     borrowed  $8,000 and $1,000 as a demand loan from a related party.  Accrued
     interest amounted to $668 at October 31, 2001.

(6)  Related Parties See Note (2) for shares issued for services.  See Notes (4)
     and (5) for loans to and from related parties.

     During the period ended October 31, 1999, a shareholder and general counsel
     for the Company  performed legal services in the amount of $2,764 on behalf
     of the Company. This amount was paid in the first quarter of fiscal 2000.

(7)  Going  Concern The  accompanying  financial  statements  have been prepared
     assuming that the Company will continue as a going  concern.  The Company's
     financial  position and operating results raise substantial doubt about the
     Company's  ability to continue as a going concern,  as reflected by the net
     loss of $23,600  accumulated  from  November 24, 1998  (Inception)  through
     October 31, 2001. The ability of the Company to continue as a going concern
     is dependent upon  commencing  operations,  developing  sales and obtaining
     additional capital and financing.  The financial  statements do not include
     any  adjustments  that  might be  necessary  if the  Company  is  unable to
     continue as a going concern.  The Company is currently  seeking  additional
     capital to allow it to begin its planned operations. If this initial public
     offering  on Form  SB-1 as  filed  with the U.S.  Securities  and  Exchange
     Commission fails to raise sufficient  capital,  the Company intends to seek
     such funds through alternative channels,  for example - venture capital, or
     a joint venture with an established  retailer or manufacturer.  The Company
     is currently not able to evaluate the potential success of such alternative
     financing, as it has not attempted to seek such financing.  If, in fact, no
     such alternative financing is available,  the principals of the Company may
     invest  additional cash personally in order to develop the business plan of
     the  Company.  If,  in fact,  this is the  only  funding  available  to the
     Company,  it is expected that the plan of operations  development will take
     substantially longer to develop.


                                       F-8

<PAGE>



Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosure.

     None.

Item 9. Directors, Executive Officers, Promoters and Control Persons

William H. Ragsdale, President and Director

     William H. Ragsdale is a graduate of Oxford University,  Atlanta,  Georgia,
in May 1990 with an  Associate of Arts Degree and from Emory  University  with a
Bachelor of Arts Degree in May, 1992. Mr.  Ragsdale was employed as an assistant
manager during 1992 and 1993 for The Bread Garden, a landscaping  company.  From
1993 to the present, Mr. Ragsdale has owned and operated Russell Landscaping and
Maintenance.  In addition,  Mr. Ragsdale plays musical  instruments with various
bands in the Atlanta,  Georgia area. Mr. Ragsdale believes this familiarity with
musicians  and musical  instruments  and the training and  experience is what he
brings  to the  business.  Although  he does  not have  any  Internet  marketing
experience  with  musical  instruments,  we  believe  Mr.  Ragsdale's  practical
business  salesmanship  skills  as the  owner  of his own  landscaping  business
combined with his special appreciation of music and extensive networking ability
in the music  field  through his  numerous  working  engagements  as a member of
various   bands  in  the  Atlanta   region  will  expose  us  to  many  business
opportunities and sales.

     Management  is unable at this time to forecast with any degree of certainty
the  acceptance  of the  Company's  funding  programs  or the  expenses of doing
business;  however,  IMAG  intends to market its programs  competitively  in the
Company's target markets.

Executive Officers and Directors

     Set  forth  below are the  names,  ages,  positions  with the  Company  and
business experiences of the executive officers and directors of the Company.

Name                        Age      Position(s) with Company
----                        --       ------------------
Mr. William H. Ragsdale(4)  31       President, Secretary, Chief Executive
1506 Briarhill Lane NE               Officer &  Director
Atlanta, GA 30324

     (1) The  above-named  person  may be  deemed  to be a  "promoter"  and/or a
"parent"  of the  Company,  as those  terms  are  defined  under  the  Rules and
Regulations promulgated under the Act.

     All  directors  hold office until the next annual  meeting of the Company's
shareholders and until their successors have been elected and qualify.  Officers
serve at the pleasure of the Board of Director.  Mr.  Ragsdale  will devote such
time and effort to the  business  and affairs of the Company as may be necessary
to perform his  responsibilities  as the Company's  sole  executive  officer and
director.


                                       24

<PAGE>



     Aside from Mr.  Ragsdale,  there are no other persons whose activities will
be material to the operations of the Company at this time.  Mr.  Ragsdale is the
sole "promoter" of the Company as such term is defined under the Act.

Family Relationships

     There are no family  relationships  between or among the executive officers
and director of the Company.

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

     Section 16(a) of the Securities Exchange Act of 1934, as amended,  requires
the Company's executive officers and directors and persons who own more than 10%
of a  registered  class of the  Company's  equity  securities,  to file with the
Securities and Exchange Commission (hereinafter referred to as the "Commission")
initial statements of beneficial ownership,  reports of changes in ownership and
annual  reports  concerning  their  ownership,  of common stock and other equity
securities of the Company on Forms 3, 4 and 5, respectively. Executive officers,
directors  and  greater  than  10%   shareholders  are  required  by  Commission
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's  knowledge,  Mr. Ragsdale  comprises all of the Company's
executive  officers,  directors  and greater than 10%  beneficial  owners of its
common Stock, and has complied with Section 16(a) filing requirements applicable
to him during the Company's fiscal year ended October 31, 2000.

Item 10.  Executive Compensation:

     The  Company,  in  consideration  for  founders  services,  issued  to  Mr.
Ragsdale, the Company's sole executive officer and/or director, 6,000,000 shares
of restricted common stock. Except for the above-described  compensation,  it is
not anticipated that any executive  officer of the Company will receive any cash
or  non-cash  compensation  for his or her  services  in all  capacities  to the
Company until such time as the Company commences  business  operations.  At such
time as IMAG  commences  operations,  it is expected that the Board of Directors
will  approve  the payment of  salaries  in a  reasonable  amount to each of its
officers  for  their  services  in the  positions.  At such  time,  the Board of
Directors  may, in its  discretion,  approve the payment of  additional  cash or
non-cash compensation to the foregoing for their services to the Company.

     The Company does not provide  officers  with  pension,  stock  appreciation
rights, long-term incentive or other plans but has the intention of implementing
such plans in the future.

Compensation of Directors

     The Company has no standard  arrangements for compensating the directors of
the Company for their attendance at meetings of the Board of Directors.

Item 11. Security Ownership of Certain Beneficial Owners and Managers

     The following table sets forth information as of October 31, 2001 regarding
the ownership

                                       25

<PAGE>



of the Company's common stock by each shareholder known by the Company to be the
beneficial  owner of more than five percent of its outstanding  shares of common
stock, each director and all executive officers and directors as a group. Except
as otherwise indicated,  each of the shareholders has sole voting and investment
power with respect to the shares of common stock beneficially owned.

<TABLE>
<CAPTION>
                                            Amount
Name and Address of                       Beneficially          Percent of
Beneficial Owner                            Owned               Class (1)
 ----------------                           -----                --------
<S>                                       <C>                     <C>
Mr. William H. Ragsdale(2)(3)             6,000,000               82.9%
1506 Briarhill Lane NE
Atlanta, GA

All Executive Officers and Directors      6,000,000               82.9%
as a Group (one person)
-------------------
</TABLE>

(1)  Based  upon  7,240,000  shares of the  Company's  Common  Stock  issued and
     outstanding as of October 31, 2001.
(2)  Sole Executive officer of the Company.
(3)  Sole Member of the Board of Directors of the Company.

Item 12.  Certain Relationships and Related Transactions:

     None.




                                       26

<PAGE>

<TABLE>
<CAPTION>
Part III

Item 1.           Index to Exhibits
<S>      <C>      <C>
3(i).1   [1]      Articles of Incorporation of ImagineNet Corp.  filed November 24, 1998.

3(ii).1  [1]      Bylaws.

3.3      [2]      Form of Stock Certificate.

3.4      [2]      Subscription Agreement and Power of Attorney (attached to the Prospectus as
                  Exhibit A).

5.1      [2]      Opinion of Counsel as to the legality of the Shares.

10.1     [3]      Escrow Agreement between the Company and Duncan, Blum & Associates.

23.1     [2]      Consent of Counsel (Duncan, Blum & Associates).

23.2     [2]      Independent Auditors Consent to the incorporation by reference of financial
                  statements of the company as of September 30, 2000 in Form SB-1.
---------------------------------
</TABLE>

[1]  Previously  filed with the  Company's  Registration  Statement on Form 10SB
     filed January 14, 2000.
[2]  Previously  filed with the  Company's  Registration  Statement on Form SB-1
     filed November 21, 2000.
[3]  Previously filed with the Company's amended Registration  Statement on Form
     SB-1 filed October 11, 2001.

     (b) No Reports on Form 8-K were filed during the fiscal year ended  October
31, 2001, covered by this Annual Report on Form 10-KSB.



                                       27

<PAGE>


                                   SIGNATURES
                                   ----------

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

                                ImagineNet Corp.
                                  (Registrant)

Date: February 13, 2002      By: /s/ William H. Ragsdale
                              --------------------------------------------------
                              William H. Ragsdale,  President, Secretary,
                              Chief Executive Officer and Director

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the dates indicated.

    Date                   Signature                     Title
     ----                    ---------                   -----

February 12, 2002          By:/s/William H. Ragsdale
                           ---------------------------
                           William H. Ragsdale           President, Secretary,
                                                         Chief Executive Officer
                                                         & Director






                                       28