SECURITIES EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2001

                       Commission file number 333 - 72660


                                  ICONET, INC.
             (Exact name of registrant as specified in its Charter)

                                     Nevada
         (State of other jurisdiction of incorporation or organization)

                                   86-0891931

                      (I.R.S. Employer Identification No.)

                                 8 Gaucho Drive
                         Rolling Hills Estates, CA 90274

                    (Address of Principal Executive Offices)

       Registrant's telephone number, including area code: 416-682-9255

     Securities to be registered pursuant to Section 12(b) of the Act: None
 Securities to be registered pursuant to Section 12(g) of the Act: Common Stock

                                  Common Stock
                                (Title of Class)

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  Registrant  was  required to file such  reports),  and (2) has been
subject to such filing requirements for past 90 days. Yes [X]  No [ ]

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

There are 31,257,115 shares of common stock outstanding as of December 31, 2001.
The shares are traded on the OTC Bulletin Board.

Check if there is no disclosure of delinquent filers in response 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 issuer's revenues for its most recent fiscal year: $0

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. On April 11, 2002, the aggregate market
value of non-affiliate shares was $12,502,846.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 31,257,115 shares of which 30,150,000
were restricted shares. However, Registrant filed a Form SB-2 on November 1,
2001, seeking to register 30,150,000 shares of issued and outstanding shares of
Common Stock for selling shareholders. The Form SB-2 is still in the comment
period with the SEC and has not been declared effective.


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                                TABLE OF CONTENTS

PART I

Item 1   Description of Business

Item 2   Description of Property

Item 3   Legal Proceedings

Item 4   Submission of Matters to a Vote of Security Holders


PART II

Item 5   Market for Common Equity and Related Stockholder Matters

Item 6   Management's Discussion and Analysis of Plan of Operations.

Item 7   Financial Statements

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


PART III

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

Item 10    Executive Compensation

Item 11    Security Ownership of Certain Beneficial Owners and
           Management

Item 12    Certain Relationships and Related Transactions

Item 13    Exhibits, List and Reports on Form 8-K





<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

BACKGROUND  AND  REORGANIZATION

Iconet, Inc., formerly known as Digital Video Display Technology Corp. (the
"Company") was incorporated under the laws of the State of Nevada on August 1,
1997, under the name Meximed Industries. On January 27, 1999, we filed an
Amendment to our Articles of Incorporation changing our name to Digital Video
Display Technology Corp., and on July 12, 2001, filed an Amendment to our
Articles of Incorporation changing our name to Iconet, Inc.

We were initially formed to engage in the business of developing, producing and
distributing a non-reusable medical syringe. In July 1998, we raised a total of
$200,000 in a public offering pursuant to an exemption provided by Rule 504 of
Regulation D, promulgated under the Securities Act of 1933, as amended. The
offering was approved for sale by The New York State Department of Law. After
recognizing the syringe project was going to be far too expensive and difficult
to pursue, we began looking for another business to acquire.

In January 1999, we completed a reorganization and change in control and
acquired a License to a U.S. Patent for an audio video jukebox system from
Software Control Systems International Inc., a Canadian corporation and
unrelated third party (SCSI). As consideration for the License, we agreed to pay
SCSI the sum of $250,000 U.S. in cash and issued SCSI 2,000,000 shares of our
restricted common stock. The License was for a term of 15 years and granted us
an exclusive right to market and sell the SCSI proprietary technology and
products throughout Canada and the states of Oregon, Washington, Montana, Idaho
and Hawaii. Subsequently, on May 10, 1999, we entered into a Distributor
Agreement with SCSI granting SCSI the right to act as a distribution agent for
us. Pursuant to the Agreement, we were to supply SCSI a minimum of 500 jukebox
systems at a price of $7,500 which may be paid in full at the time of delivery
or at the rate of $150 per month for 60 months.

On September 1, 1999, the SCSI agreement was modified. The amendment stated that
we were obligated to pay the $250,000 in $20,000 installments, beginning
December 15, 1999, with a final payment of $10,000 due on December 15, 2000.
This amendment was never ratified by our Board. As of December 31, 1999, no
payment had been made to the third party. The 2,000,000 restricted shares were
to be held by SCSI for two years. SCSI had attempted to sell 230,000 shares of
the stock before the two years expired, so we stopped the sale, and canceled the
2,000,000 shares.

On May 5, 2000, we received a letter from the SCSI attorneys demanding that the
2,000,000 shares be reinstated, and that we pay the $250,000 that was originally
agreed upon. The letter also demanded a distributorship for two of the officers
of SCSI to distribute our video jukeboxes at 10% commission in Canada and the
Northwestern United States. Other settlement alternatives were also offered. We
subsequently settled this dispute without litigation, and we retained no rights
in or to the SCSI audio video juke system. The 2,000,000 shares remain cancelled
and the $250,000.000 debt was cancelled. In the fourth quarter of 2001, our
management had internal disagreements regarding the company's future course of
action in order to achieve its business goals of producing and distributing
video jukeboxes, and was experiencing financial difficulties. This caused the
company to lose momentum, put the line of credit at risk and eventually resulted
in new management being installed. In May 2001, Mr. Randy Miller was appointed
by the then-directors to serve as a Director and sole officer of the Company,
and the other directors resigned, leaving Mr. Miller as the sole director. Mr.
Dalmata, and his group of investors, were interested in protecting their line of
credit and repayment of monies drawn down on the line by the Company, and
approved the appointment of Mr. Miller, and Mr. Dalmata was given the
opportunity to be appointed as a director, if he chose to do so, during the
two-year period commencing May 30, 2001, for a Director term of one year. To
date, Mr. Dalmata has not requested that he be appointed as a director.


<PAGE>


Subsequently, in 2001, the technology relating to the audio video jukebox
industry changed significantly and we no longer require the patent held by SCSI
to conduct our proposed business. We have developed a proprietary system,
combining off-the-shelf components, which is not patented and may not be
patentable, as we have not consulted with a patent counsel about the system we
are using.

To date, we have not produced or sold any video jukeboxes, and currently have no
orders for the purchase of any jukeboxes.

In May 2001, we issued shares to Mr. Kurt Dalmata in exchange for his reduction
of monies we owed to him.

Subsequently, in July 2001, we effected a reverse stock split.

Subsequently, we issued an additional 30,000,000 shares in exchange for the
reduction of $637,925 in debt. These shares are the shares currently being
registered for resale in this registration statement.

PROPRIETARY TECHNOLOGY AND PRODUCTS

Our proprietary technology involves an audio video jukebox system, which we call
the "DVD Juke System". It creates an interactive, audio-visual jukebox linked to
a satellite server network (the "DVD Satellite System"). The DVD Juke System and
the DVD Satellite System are collectively referred to as the "DVD System". In
addition to our efforts to modify the operation of the conventional jukebox, the
DVD System was also intended to create a totally new marketing venue for the
music industry, as described below. We believe the advertising and marketing
aspects of our system are proprietary.

THE DVD JUKE SYSTEM

Our main proposed product is the DVD Juke System, which is an interactive
audio/video entertainment kiosk. We have completed a functioning prototype of
the system and it has been demonstrated to selected individuals in New York, NY,
where it is currently being held in safe-keeping in the office of one of our
attorneys. We anticipate having a trial roll-out in August 2002. Based on the
current state of development of our system, and existing technology, we believe
we have determined our system has the features and capabilities set forth below.

Based on our work to date, and existing technology, we believe the DVD Juke
System will have significant flexibility and content and will be capable of
playing individual musical selections similar to a standard jukebox; however,
the DVD Juke System also will have several additional revenue generating
capabilities. A standard jukebox is able to store approximately 100 CD's,
whereas the DVD Juke System is currently capable of storing, on the internal
hard drive, 1,000 songs and 250 music videos. The Company expects to install
improvements to the System such that, within several months, the DVD Juke System
will be capable of storing 4,500 audio tracks and 3,000 music videos. Unlike a
conventional jukebox, the DVD Juke System is capable of playing music videos, as
well as audio tracks. Any number of video terminals and TV's can be connected by
cable to the DVD Juke System and placed throughout each location. When a
customer chooses a video selection, the DVD Juke System displays the video on
the video terminals and TV's at the location and plays the audio track of the
song on the location's sound system. The DVD Juke System also contains a user
interface that enables a consumer to seek information about artists, receive
coupons providing discounts on merchandise, and provides e-commerce connectivity
to prime retail web sites that offer products. We believe this will provide
additional capabilities to generate revenues because we intend to offer a
greater selection of musical choices for the consumer.

<PAGE>

The DVD Juke System's audio and video capability is intended to allow it to run
the same full-fledged audio-visual advertisements as seen on television. The
system has approximately 12,000 minutes of available ad space per month. We will
be attempting to sell advertising time slots to national advertisers and we are
currently in discussions with several companies in this regard. The
advertisements will run for 15, 30 or 45 seconds. There are 16 advertising spots
per hour during prime time that will be interlaced between the music video
selections. In addition, the system will offer customized content, such as
concerts, chat groups, custom comedy selections, new artist previews,
infomercials, entertainment product marketing and merchandising video with
instant click-through e-commerce opportunities, as well as many other potential
programming highlights. This content is expected to create marketing
opportunities for marketers and enhance the DVD Juke System's unique features.

The DVD Juke System will also print discount and cross-promotional coupons.
Certain musical selections will trigger the DVD Juke System to print coupons
extending offers from various marketers. The Company expects to derive revenue
on a per-coupon-issued basis or by receiving a percentage of the sales generated
by redeemed coupons.

In addition, the DVD Juke System will be connected to the Internet via a virtual
private network, proprietary to us. Consumers will be automatically linked to
the web sites of the record companies whose songs have been selected, and will
be able to "click through" to additional web sites. Consumers will be able to
browse through these web sites and to purchase CD's and merchandise at the
sites.

The DVD Juke System's advertising, marketing and promotional capabilities are
expected to provide advertisers and marketers with a new avenue with which they
will be able to target a captive audience where they have chosen to sit and
relax and may be prone to impulse purchasing. We believe this aspect of the DVD
Juke System is unique to our system. The DVD Juke System is expected to
effectively create a new advertising and promotional channel for marketers.

Currently, conventional jukeboxes allow for payment in cash only. The DVD Juke
System will allow for payment by cash, credit card, debit cards and smart cards/
loyalty cards.

The DVD Juke System will also be capable of collecting, storing and
disseminating data, including play lists and personal information input by its
customers. The play lists generated by the DVD Juke System are flexible and are
capable of providing the total number of plays of a given song, record company
totals and location-specific information, depending on the desired output. We
intend to market this information to record companies and brand advertisers.

The conventional jukebox is different from ours, in that it holds complete CD's.
Because of this, several songs take up space in the jukebox that would otherwise
not have been chosen by the jukebox owner. That is, in order to stock the one or
two popular songs of a given artist on a given CD, the jukebox owner has no
choice but to stock the rest of the songs on that artist's CD. With DVD Juke
System technology, each song is copied in digital format onto the hard drive of
the DVD Juke System, just as files are copied onto a computer's hard drive,
allowing the location owner to stock only the specific tracks he/she wishes to
stock. In this way, only the most popular songs by any given artist will be
loaded onto the DVD Juke System's hard drive without any extraneous, unwanted
songs taking up potential revenue-generating space.

<PAGE>

An important and unique programming feature of the DVD Juke System is that the
content can be customized for each location, and may be updated as frequently as
a location owner desires. The location owner may order the DVD Juke System pre-
programmed with standard combinations of rock and pop standards, jazz, country
and western, and recent hits, or can order programming specifically tailored to
their geographic area and/or their customers' demographics. Company will provide
content and updating of content for $100.00 per month, providing an additional
source of income to Company.

We anticipate it will cost approximately $200,000 to roll out our first
products. This consists wages or salaries for 6 employees for 4 months
($150,000); and $50,000 for parts and equipment. Roll-out is expected in August
2002. We intend to use our monies from our $1.5 Million line of credit to pay
these expenses.

THE DVD SATELLITE SYSTEM

The DVD Satellite System is a proprietary satellite server network which we
anticipate will provide content and updated content to DVD Juke Systems
throughout North America. The content will be transmitted, or "uplinked," from
our central server to satellites, and then "downlinked" from the satellites to
satellite dishes stationed at each location. The content will be stored in
digital format on the DVD Juke Systems' high capacity hard drives. The Satellite
System will also create a private network, which will be capable of collecting
data and remotely managing the stand-alone DVD Juke Systems.

The DVD Satellite System technology is expected to significantly reduce the time
and cost involved in providing content and updated content to sites once several
locations have been installed. The DVD Satellite System technology will also
allow for the easy and flexible loading and re-loading of content by providing
updates by satellite, obviating the need to send service technicians to
individual locations to update each DVD Juke System's content.

We do not intend to perform any additional work on the DVD Satellite System
until we have rolled out our DVD Juke System, now anticipated in August 2002. We
anticipate it will take an additional 3 months to complete development of our
DVD Satellite System, and cost approximately $100,000 in parts and labor. We
currently anticipate that we will have to use monies from our line of credit to
pay these expenses.

SERVICE  AND  SUPPORT

We expect that the DVD Juke System will be sold with a content, service,
maintenance, and management contract, which will be subcontracted to an
independent third party. We have been verbally negotiating with several large,
well-established independent service organizations which offer seven-day a week,
24-hour a day maintenance and service, but do not yet have any arrangements or
agreements with anyone. We feel service will be a primary concern to location
owners who have installed or are contemplating installing a DVD Juke System.

INDUSTRY  BACKGROUND

Currently, the conventional jukebox industry generates over $2.5 billion per
year in coin drop revenues in the United States alone. (Vending Times, 1998.)
There are approximately 350,000 jukeboxes operating in the United States. The
average jukebox generates revenues of approximately $600 per month based on
1,800 selections played. Currently there are approximately 50 large distributors
and 7,500 operators managing this business. (Vending Times, 1998.)

<PAGE>

The business model for the jukebox industry has been under tremendous pressure
over the past five years due to the emergence of broadcast music video, video
game narrowcast networks, and other media competing for the attention of
consumers. In addition, certain basic economic factors must be considered in
evaluating any entry into the jukebox industry, which are set forth below:

-     The cost for audio plays has remained static at three plays for a $1.00.
      (This number is trending downward to as low as 5 plays for $1.00.)
-     The average play time of a jukebox is 7,200 minutes per month, based on
      1,800 plays within a 13 hour day, six days a week. The total playtime
      possible within this timeframe is 20,280 minutes.
-     A  cost  efficient  video  jukebox  does  not  exist  in the market today.
-     Service,  maintenance,  and  content-update  costs  continue  to  rise.
-     Theft,  and  pilferage  continue  to  be  on  the  rise.
-     Intense  competition  for  prime  locations  continue  to  erode operating
      margins.

Any entrant into the jukebox industry must be prepared to operate within these
parameters and to cooperate with the current distributors, while at the same
time introducing cutting edge technology into the industry to obviate potential
competitive technologies. Today, in this industry, jukebox manufacturers all
suffer from technological obsolescence.

COMPETITION

Our primary competitors are manufacturers of conventional jukeboxes.

However, we have not been able to identify any competitors with technology
comparable or similar to the DVD Juke System . However, all of our primary
competitors in the conventional jukebox industry are substantially larger and
have significantly greater financial resources than we do. In addition, their
distribution channels are fully established and their brand names are
well-known.

In 1997, manufacturers sold approximately 22,000 jukebox units for a total
retail value of $132 million. The average retail price of a jukebox, loaded with
content, was $6,000 per unit.

We have identified other competition for the DVD Juke System, primarily from
audio music private networks, cable and satellite. Examples are MTV, MuchMusic,
and VH1. Because these companies have entirely different distribution and
pricing models than the conventional electro-mechanical jukebox companies,
direct comparisons cannot be made.

However, many of these companies discussed above may have better marketing and
distribution channels, and greater financial and other resources than us. There
can be no assurance that we will be able to compete effectively in this highly
competitive industry, which could have a material adverse impact upon market
acceptance of our products and services.

<PAGE>

MARKETING PLAN- NORTH AMERICA

We intend to aggressively market the superior technology of the DVD Juke System.
Our initial goal is to seek to replace many of the conventional jukeboxes
located primarily in bars and restaurants with the DVD Juke System , as more
fully described below. We believe we can accomplish this goal by forming
business relationships with the top distributors in the conventional jukebox
industry by offering a unique split of the coin drop revenues generated by the
DVD Juke System, thereby enhancing the total revenue generated by its partners
within the industry. However, we have not yet formed any such business
relationships. We will also attempt to expand the market for the DVD Juke System
beyond bars and restaurants to fast food restaurants, colleges, shopping
centers, etc.

The feel the incentives provided to distributors for forging such relationships
will be (i) significant new revenue potential from their distribution network,
(ii) exclusive territorial boundaries granted by Company, thereby ensuring
maximum penetration of the new product, (iii) long-term access to new video
products and (iv) access to the entertainment, e-commerce business. In addition,
we have addressed what we believe the industry's current problems, as follows:

-  By providing video, the cost per play can be increased to two selections for
   $1.00, thereby increasing the pay-for-play revenue;

-  Because the DVD Juke System includes video, it can offer 600 minutes per
   month of prime time consumer and brand advertising;

-  We can offer off-peak customized content of 12,480 minutes at Internet prices
   ($15.00 per hour) representing a minimum;

-  The DVD Juke system will retail at comparable prices to the standard jukebox;

-  The entire system is networked for cost effective remote diagnostics and
   satellite downloading of content, reducing infrastructure;

-  The distributors and operators will be able to remotely access each DVD Juke
   System, ensuring security and optimum management;

-  The industry will have a state-of-the-art product for their locations that is
   revenue generating, versus subscription or cost; and

-  The distributors will have a product that they can expand into many new
   channels of distribution, such as hotels, malls and fast food restaurants.

We intend to work closely with our distributors in marketing the DVD Juke System
to the bars and restaurants that commonly have jukeboxes.

We are in the process of introducing the DVD Juke System to several national
brand name advertisers, most of which have requested a demonstration.

To date, presentations have been made to several potential advertisers. However,
no such advertisers have entered into agreements to date.

<PAGE>

Our marketing plan also includes the following marketing and promotional
activities, which we anticipate will create further interest in the DVD Juke
System:

(a) Test Marketing: We expect the DVD Juke System to be fully operational by
    mid-April 2002 and we intend to perform a 20-unit trial in the New York
    metropolitan area between May and July of 2002. Certain test locations will
    be chosen to market the DVD Juke System to the Hispanic and African American
    communities. We expect to fully launch the Juke System to the public in
    August 2002.

(b) Trade Shows: We will participate as an exhibitor to demonstrate the DVD Juke
    System and issue new product releases at selected national and international
    trade shows sponsored by the Amusement and Music Operators Association
    (AMOA) and Amusement Showcase International (ASI). We consider the following
    Year 2002 trade shows to be excellent venues in which to demonstrate our DVD
    Juke System: the Point-of-Purchase Advertising Institute Show, the Annual
    Nightclub and Bar Show, the Family Entertainment Centers Show, and the
    International Amusement Parks and Attractions Show. Other possible venues
    will include the National Restaurant Show, the Convenience Store Show, the
    American Hotel and Motel Show, and the International Shopping Center Show.

(c) Trade Publications: A number of print media opportunities exist for
    promoting the DVD Juke System in order to communicate the superiority of the
    DVD Juke System compared to conventional jukeboxes. These publications
    include Replay Magazine, Playmeter Magazine, Vending Times, Street Beat
    Magazine, Nightclub and Bar Magazine and Fun World Magazine. We intend to
    advertise its DVD Juke System in some or all of these publications to
    promote the product.

(d) Promotional Video and Informational Kit: We intend to produce a
    promotional/informational video describing the DVD Juke System and its
    features, benefits and values. A brochure and informational kit will also be
    created summarizing the features of the DVD Juke System. The materials will
    differentiate the product from its competitors' products outlining the
    advantages and superiority of the DVD Juke System over conventional
    jukeboxes.

MARKETING PLAN- EUROPE

On February 8, 2002, we announced the rollout and deployment of our new
marketing program in Europe. We intend to market in Europe by forming strategic
alliances with several existing companies that have in excess of 1,000 operating
locations. Our strategy for execution of our marketing plan is to acquire
existing companies that meet our criteria. We expect to finance through equity
using Investment Bankers in Europe, and by allowing the acquired companies to
participate on an equity level. The company feels this gives great incentive to
all parties involved in the transaction, and anticipates this to maximize value
for the shareholders.

Management has been in discussions with several privately held companies that
have expressed strong indications of interest to form a strategic alliance. The
Company expects to commence negotiations and anticipates signing contracts in
the near future. If we are successful in forming an alliance, we believe the
venture would yield a revenue stream in excess of $18,000,000.00 on an
annualized basis, or approx. $.60 EPS for each strategic alliance.

The primary purpose of the company's European marketing plan is to manufacture
and market an Internet Connection Kiosk, which can be described simply as a
net-enabled equivalent of a public payphone offering Internet access for
everything from email, music, advertisement, video-conferencing and the World
Wide Web.

<PAGE>

We currently have no agreements for implementation of our European marketing
plan and have formed no strategic alliances with any third parties. The forgoing
is simply our intent and plan for marketing in Europe.

MANUFACTURING  AND  DISTRIBUTION

We do not yet have any written or verbal contracts with anyone for manufacturing
or distribution of our DVD Juke System.

PATENTS  AND  COPYRIGHT  PROTECTION

We do not have any patent or copyright protection for any of our products or
services.

However, we have developed proprietary technology which is utilized in the DVD
Juke System, and we continue to develop technology to further enhance the DVD
Juke System. We believe the advertising and marketing aspects of our system are
proprietary. The software comprising the DVD Juke System is anticipated to be
covered by appropriate patent protection and copyright registration, which we
intend to file when our attorneys advise us to do so. There is no assurance we
will receive any patent protection for our technology, or if we do, that it will
not infringe on an existing patent or technology. Also, even if we receive a
patent, there is no assurance we will have the resources to defend it against
claims by third parties.

LICENSES

We are actively pursuing license agreements with several record companies for
the right to display music videos. We do not expect to incur a cost for such
rights, but rather, in exchange for the right to display their videos, we are
offering record companies programming information, such as play lists compiled
by the DVD Juke System and cross-promotions. As an example of the proposed
cross-promotions, every time a certain music video by a well-known artist is
selected by a customer, we will program the DVD Juke System to also play, at no
additional cost, a music video by an unknown artist that the record company is
attempting to promote. Additionally, since music videos are primarily considered
promotional materials by the record companies, as opposed to revenue
generating assets, we will attempt to obtain the rights to display music videos
on theDVD Juke System at no cost to us. However, we have not entered into any
negotiations or agreements with record companies to provide recorded material at
no cost.

We also intend to attempt to generate revenue from e-commerce, specifically by
automatically linking consumers to the web sites of the record companies whose
songs have been selected. The consumers will then be able to "click through" to
additional web sites to browse, as well as to purchase CD's and merchandise. We
intend to obtain licenses from web sites such as Amazon.com and CD Now to allow
consumers to click through to such sites and purchase CD's and merchandise, but
there is no assurance we will be able to obtain such licenses.

In accordance with The Copyright Act of 1976, as amended, we are not required to
obtain licenses to stock the audio content of the DVD Juke System. Payment of a
performance royalty is required for the songs played over the DVD Juke System;
however, this fee is the responsibility of the location owner and we have no
responsibility for this fee or for obtaining performance licenses for the
locations.

We also intend to expand the scope of our content licenses and obtain licenses
that will enable us to display sports highlight films, comedy clips and
pay-per-view events on the DVD Juke System, but we do not yet have any
agreements or arrangements to do so.

<PAGE>

RELATIONSHIPS WITH THIRD-PARTIES

We currently have no relationships with any third parties, except for a $1.5
Million line of credit from 22 separate, unrelated individuals, all of whom
reside in Europe. None of the 22 individuals are affiliated with Iconet or each
other, either directly or indirectly.

During the year ended December 31, 1999, unrelated third parties issued the
Company an unsecured $1,500,000 line of credit. The line of credit carries
interest at 12% per annum and is due on demand. The balance at December 31,
2000, and 1999, was $704,581 and $290,700, respectively.

As of May 2001, we had drawn down a total of $847,925.00 on the line of credit.
In May 2001, we repaid $210,000.00 of that total sum by issuing 30,000,000
restricted shares of our Common Stock (150,000 post-split) to Mr. Kurt Dalmata,
a resident of Switzerland. Subsequently, in July 2001, we repaid the balance of
$637,925.00 of that sum by issuing 30,000,000 restricted shares of our Common
Stock to 21 separate, unrelated individuals. All of these 30,150,000 shares are
now being registered in this registration statement, pursuant to the terms of a
letter agreement whereby we agreed that, if the debt holders would accept
restricted shares as full consideration for their debt, we would file a
registration statement to register the shares issued to retire our debt. That is
the purpose of this registration statement.

FUTURE  PROJECTS  IN  DEVELOPMENT

All of the projects discussed below are in development. However, we do have an
operational prototype of our proposed DVD Juke System. We anticipate our
prototype will be available for roll-out in July 2002.

We intend to attempt to generate additional future revenues by pressing, or
"burning," CD's at each DVD Juke System. "Burning" a CD means copying a song or
songs onto a blank CD.

We project the DVD Juke System to be able to burn CD's by the third quarter of
2002. When this process is fully operational, consumers will be able to copy
onto a CD a song or songs they have selected on a fee-per-song basis. Company
expects to generate revenue by retaining a percentage of the cost per song
charged to the consumer. We intend to offer the record companies a percentage of
the income generated by each burned CD in exchange for the right to reproduce
their songs, while retaining a five to ten percent (5-10%) royalty for each song
copied onto a CD by the DVD Juke System.

We are also developing technology which will allow the DVD Juke System to be
capable of video-conferencing and dispensing cash as an automatic teller machine
("ATM"). These additional uses of the DVD Juke System involve only minor
modifications to the our current technology. For example, the DVD Juke System
technology is already capable of accepting and calculating the amounts of
currency input into the unit; dispensing cash will involve only minor
adjustments to already existing technology. Therefore, we expect to be able to
implement these additional uses of the DVD Juke System in the third quarter of
2002.

In addition, with only minor additions to our content, the DVD Juke System will
be capable of playing sports highlight films, comedy clips and pay-per-view
events. These additional content categories do not involve technological
advances, but merely expanding our content licenses and marketing these
additional uses of the DVD Juke System to distributors, location owners and
ultimate consumers. We intend to launch these efforts in the fourth quarter
2002.

<PAGE>

We are also developing an independent audio and video network designed to
provide background video and advertising for hospitality and retail locations.
The system is designed to replace the VCR and Laser Disc players used by tens of
thousands of hospitality and retail locations. The product is intended to
provide interactive commercial support at the point of sale, creating a new
media channel for locations to assist consumer brand companies in enhancing
their visibility on the sites where their products are sold.

NEW PRODUCTS OR SERVICES.

We currently have no new products or services announced or planned to be
announced to the public, except those discussed above. All of our proposed
products and services are new and, as yet, have not reached the production
stage. The financial information concerning these two segments of our business
is set forth in our Financial Statements.

SOURCES AND AVAILABILITY OF RAW MATERIALS.

As of the date of this prospectus, we have no need for raw materials or
suppliers.

CUSTOMER BASE.

As of the date of this prospectus, we have no customers. If we are able to
establish a customer base in the future, we do not anticipate we will depend on
one or a few major customers. There can be no assurance that this assumption is
correct.

INTELLECTUAL PROPERTY.

We do not have any trademarks, patents, licenses, royalty agreements, or other
proprietary interests, except those proprietary rights related to our software
system for our DVD Juke System.

GOVERNMENTAL REGULATION ISSUES.

We are not now affected by direct government regulation. However, we are
affected by laws, rules and regulations directly applicable to operation of our
business, generally. However, due to increasing technology in the music
industry, a number of laws and regulations may be adopted relating to the use of
music and videos, covering user privacy, pricing, and characteristics and
quality of products and services. Furthermore, the growth and development of
music technology may prompt more stringent consumer protection laws imposing
additional burdens on those companies conducting business relating to music and
music videos. The adoption of any additional laws or regulations may decrease
the growth of the industry, which, in turn, could decrease the demand for our
products and services, and increase the cost of doing business in the music
industry. These factors may have an adverse effect on our business, results of
operations and financial condition.

Moreover, the interpretation of sales tax, libel and personal privacy laws
applied to music and music videos is uncertain and unresolved. We may be
required to qualify to do business as a foreign corporation in each state or
foreign country. Our failure to qualify as a foreign corporation in a
jurisdiction where we are required to do so could subject us to taxes and
penalties. Any existing or new legislation or regulation, including state sales
tax, or the application of laws or regulations from jurisdictions whose laws do
not currently apply to our business, could have a material adverse effect on our
business, results of operations and financial condition.

<PAGE>

RESEARCH AND DEVELOPMENT.

To date, we have not undergone any research and development, except that
required to develop our DVD Juke System. We intend to commence research and
development of our DVD Juke System in the 2nd quarter 2002. During the past two
fiscal years, we have expended the sum of $50,000, in 2000 and $50,000, in 2001,
for research and development.

ENVIRONMENTAL LAW COMPLIANCE.

To the extent which environmental compliance may be necessary, we do not
anticipate any significant compliance expense.

EMPLOYEES.

We currently have one employee, Randy Miller, our president and a director, who
works for our corporation part-time. We have no employment contracts and our
employee is not a union member or affected by labor contracts. Since our one
employee, Mr. Miller, is not skilled or experienced in the technical aspects of
our business, we will need to hire technically suitable and experienced
employees in the next few months to assist in execution of our business plans.
We have not yet identified or contacted any such employees and there is no
assurance we will be able to do so, as and when they are required, or on terms
favorable to us. We will have to use monies from our $1.5 Million line of credit
to fund the hiring of our proposed employees and their wages or salaries. We
anticipate that we will need 6 skilled employees and expect to pay approximately
$75,000 per year for each employee to assist us in the further development and
roll-out of our products.

REPORTS TO SECURITY HOLDERS.

We are a reporting company under the requirements of the Exchange Act and file
quarterly, annual and other reports with the Securities and Exchange Commission.
Our annual report contains the required audited financial statements. We are not
required to deliver an annual report to security holders and will not
voluntarily deliver a copy of the annual report to the security holders. The
reports and other information filed by us will be available for inspection and
copying at the public reference facilities of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549.

Copies of the material may be obtained by mail from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Information on the operation of the Public Reference Room may
be obtained by calling the SEC at 1-800-SEC-0330. In addition, the Commission
maintains a World Wide Website on the Internet at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.

In May 2001, we issued 30,000,000 shares of our restricted Common Stock to an
unrelated third party as consideration for reduction of $210,000.00 in principal
on a line of credit. This transaction involved 1 foreign purchaser and was
exempt from registration pursuant to Regulation S of the Securities Act of 1933,
based on offshore transactions involving a non-U.S. person in a sale that took
place entirely outside the U.S.

On July 12, 2001, we effected a reverse split of our total outstanding shares on
the basis of 1 for 200, leaving a total of 257, 115 shares of our Common Stock
outstanding.

<PAGE>

In July 2001, we issued 30,000,000 shares of our common stock as consideration
for repayment of $637,925.00 in principal on the line of credit issued to us by
unrelated third party in 1999. This retired the entire balance due on the line
of credit. This transaction involved 21 foreign purchasers and was exempt from
registration pursuant to Regulation S of the Securities Act of 1933, based on
offshore transactions involving all non-U.S. persons in sales that took place
entirely outside the U.S.

The debts referenced above were not related in any way, except that all of the
$837,925.00 was part of the $1.5 Million line of credit. All 22 persons to whom
shares were issued were lenders under the line of credit. At the time the
respective debts were exchanged for shares, the Company verbally agreed, as soon
as possible, to register all of the shares under an SB-2 registration statement.


ITEM 2.   DESCRIPTION OF PROPERTY

The property held by Registrant consist of the following:

Our executive offices are located at 6 Adelaide Street East, #300, Toronto,
Ontario, Canada M5C 1H6, where we share space in the offices our President,
Randy Miller. The space is approximately 400 square feet total, of which we
occupy a small portion without charge. We feel that this space is adequate for
our needs at this time, and we feel that we will be able to locate adequate
space in the future, if needed, on commercially reasonable terms.


ITEM 3.   LEGAL PROCEEDINGS

Merrill Lynch Canada Inc., filed suit against us on June 26, 2001, seeking
damages regarding an alleged dispute related to the sale of our restricted
common stock to Merrill Lynch by an unrelated third-party stockholder. The case
is styled "Merrill Lynch vs. Digital Video Display Technology, and others",
Action No. S-004012, in the Vancouver Law Court, Supreme Court of British
Columbia. The case is still in its early stages and we are trying to reach a
settlement with Merrill Lynch. At this time, we do not know if we will sustain a
loss, or the amount of the loss. There has been no discovery in the case.

The Company was a defendant in an action by a former employee regarding his
employment contract. The Company settled the case recently for $55,000.00.


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

During the fourth quarter of the fiscal year covered by the report, no matters
were submitted to a vote of security holders.


                                     PART II


ITEM 5.   MARKET FOR COMMON EQUITY STOCK AND OTHER SHAREHOLDER MATTERS

COMMON STOCK TRADING INFORMATION

The following table sets forth the high and low bid quotations for the Common
Stock for the periods indicated. These quotations reflect prices between
dealers, do not include retail mark-ups, mark-downs or commissions and may not
necessarily represent actual transactions. The Company's shares of Common Stock
are traded on the OTC Bulletin Board, under the symbol "ICON". The High/Low bid
quotations for each quarter during the past two fiscal years are as follows:

<PAGE>


Quarter Ended             High Bid        Low Bid

March 31, 2000              $1.78          $1.50

June 30, 2000               $ .635         $ .50

September 30, 2000          $ .31          $ .31

December 31, 2000           $ .03          $ .03

March 31, 2001              $ .01          $ .01

June 30, 2001               $ .005         $ .005

September 30, 2001          $ .56          $ .51


December 31, 2001           $1.45          $1.45


There are currently a total of approximately 48 shareholders of record, as of
February 28, 2002.

Registrant filed a Form SB-2 on November 1, 2001, seeking to register 30,150,000
shares of issued and outstanding shares of Common Stock for selling
shareholders. The Form SB-2 is still in the comment period with the SEC and has
not been declared effective.

MARKET INFORMATION.

There is limited trading activity in our securities, and there can be no
assurance that a regular trading market for our common stock will ever be
developed or maintained.

The OTCBB securities are not listed and traded on the floor of an organized
national or regional stock exchanges. Instead, OTCBB securities transactions are
conducted through a telephone and computer network connecting dealers in stocks.
Over-the-counter stocks are traditionally smaller companies that do not meet the
financial and other listing requirements of a regional or national stock
exchange.

However, broker-dealers may be discouraged from effecting transactions in our
securities because they will be considered penny stocks and will be subject to
the penny stock rules.

Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934,
as amended, impose sales practice and disclosure requirements on NASD
brokers-dealers who make a market in a "penny stock." A penny stock generally
includes any non-NASDAQ equity security that has a market price of less than
$5.00 per share. Assuming we get our shares listed for trading, purchases and
sales of our shares are expected to be generally facilitated by NASD
broker-dealers who will act as market makers for our shares. The additional
sales practice and disclosure requirements imposed upon brokers-dealers may
discourage broker-dealers from effecting transactions in our shares, which could
severely limit the market liquidity of the shares and impede the sale of our
shares in the secondary market, assuming one develops.

<PAGE>

Under the penny stock regulations, a broker-dealer selling penny stock to anyone
other than an established customer or "accredited investor" (generally, an
individual with net worth in excess of $1,000,000 or an annual income exceeding
$200,000, or $300,000 together with his or her spouse) must make a special
suitability determination for the purchaser and must receive the purchaser's
written consent to the transaction prior to sale, unless the broker-dealer or
the transactions is otherwise exempt.

In addition, the penny stock regulations require the broker-dealer to deliver,
prior to any transaction involving a penny stock, a disclosure schedule prepared
by the Commission relating to the penny stock market, unless the broker-dealer
or the transaction is otherwise exempt. A broker-dealer is also required to
disclose commissions payable to the broker-dealer and the registered
representative and current quotations for the securities. Finally, a
broker-dealer is required to send monthly statements disclosing recent price
information with respect to the penny stock held in a customer's account and
information with respect to the limited market in penny stocks.

As of December 31, 2001, there were approximately 60 holders of record of our
common stock.

STOCK TRANSFER AGENT

Transfer Online, 227 S.W. Pine Street, Suite 300, Portland, Oregon 97204,
telephone number (503) 227-2950, serves as Registrant's stock transfer agent for
its securities.

DIVIDENDS

Registrant has not paid any cash dividends to any of its shareholders. The
declaration of any future cash dividends will be at the sole discretion of the
Board of Directors and will depend upon the earnings, if any, the capital
requirements and financial position of Registrant, general economic conditions
and other pertinent conditions. Unless otherwise determined by the Board of
Directors, no dividends shall be paid on any share which has been purchased or
redeemed by Registrant while the shares are held by Registrant. Pursuant to
Registrant's Articles of Incorporation (attached hereto as Exhibit 3(I) and
incorporated herein by reference), the Directors may, from time to time,
capitalize any undistributed surplus on hand of Registrant and may from time to
time issue shares, bonds, debentures or debt obligations of Registrant as a
dividend representing such undistributed surplus on hand, or any part thereof.
It is the present intention of Registrant not to pay any cash dividends in the
foreseeable future, but rather to reinvest any earnings into its business
operations.

The Securities and Exchange Commission has adopted regulations which generally
define "penny stock" to be any equity security that has a market price of less
than $5.00 per share, subject to certain exceptions. Registrant's Common Stock
may be deemed to be a penny stock and thus will become subject to rules that
impose additional sales practice requirements on broker/dealers who sell such
securities to persons other than established customers and accredited investors,
unless the Common Stock is listed on The Nasdaq Small Cap Market. Consequently,
the penny stock rules may restrict the ability of broker/ dealers to sell
Registrant's securities and may adversely affect the ability of holders of
Registrant's Common Stock to resell their shares in the secondary market.

<PAGE>


ITEM 6.   PLAN OF OPERATION

The discussion contained in this prospectus contains "FORWARD-LOOKING
STATEMENTS" that involve risk and uncertainties. These statements may be
identified by the use of terminology such as "BELIEVES," "EXPECTS," "MAY,"
"WILL," "SHOULD" or "ANTICIPATES" or expressing this terminology negatively or
similar expressions or by discussions of strategy. The cautionary statements
made in this prospectus are applicable to all related forward-looking statements
wherever they appear in this prospectus. Our actual results could differ
materially from those discussed in this prospectus. Important factors that could
cause or contribute to these differences include those discussed under the
caption entitled "RISK FACTORS," as well as those discussed elsewhere in this
registration statement.

We intend to continue development of our DVD Juke System, using independent
contractors to perform all development functions, under the supervision of Mr.
Randy Miller, our President.

There can be no assurance that funding will be available to pay for our
development efforts on favorable terms to permit successful completion of our
DVD Juke System product and services, or be successful in our business
operations.

However, we do have our line of credit for $1,500,000.00 available, as we
retired the last amount due on the line in July 2001. Nevertheless, if our
current capital resources are insufficient to meet our future capital
requirements, we may have to raise additional funds to continue development of
our business. There can be no assurance that the funds will be available on
favorable terms, if at all.

We currently intend to draw on the line of credit, as required, to fund our
operations for the next 12 months, and assuming we receive no revenues, expect
to spend the funds as follows:


                  Salaries                        $ 12,000
                  Independent Contractors         $250,000
                  Computers and Equipment         $ 50,000
                  Administrative Expenses         $ 24,000
                  Working Capital                 $ 50,000
                                                  --------

                                            Total $386,000


To the extent that we may need to raise additional capital through the sale of
equity and/or convertible debt securities, the issuance of the securities will
likely result in dilution to our shareholders.

Until such time as our DVD Juke System products and services are fully
developed, or we enter into the internet service business, we do not expect to
have any revenues from our operations. We anticipate that if our products and
services become fully operational, we will generate revenues from the sale of
products and services. There is no assurance that we will be successful in
selling products or services. We have no other sources of revenue. Therefore, if
we are not successful in this regard, we will be unable to achieve revenues
under our current business plan.

If our company or its management receives proceeds from the sales of the
securities by the selling security shareholders, which neither the company nor
its management has any intent to do, those persons may be deemed underwriters.
Accordingly, they will have liability for any material misrepresentations or
omissions in this document and otherwise in the offer and sale of securities.

<PAGE>

We do not anticipate significant research and development expenses over the next
twelve months. We do not expect to purchase or sell any plant and significant
equipment or make any significant changes in the number of employees over the
next twelve months.

We have also been researching the possibility of commencing a new business
involving internet services in Europe. Specifically, providing internet services
to consumers. However, we have not yet taken any steps to commence any business,
beyond our research and investigation into the opportunities available. We have
not commenced or entered into any arrangements or agreements with any party in
this regard.



ITEM 7.   FINANCIAL STATEMENTS AND EXHIBITS

<PAGE>


                                  ICONET, INC.

                          (A DEVELOPMENT STAGE COMPANY)

                              FINANCIAL STATEMENTS

                               FOR THE YEAR ENDED

                               DECEMBER 31, 2001,

                                       AND

                               DECEMBER 31, 2000,

                                      WITH

                                 AUDIT REPORT OF

                          CERTIFIED PUBLIC ACCOUNTANTS


<PAGE>




                                TABLE OF CONTENTS


Independent Auditors' Report.............................................2
Balance Sheet............................................................4
Statements of Operations.................................................5
Statements of Changes in Stockholders' Equity............................6
Statements of Cash Flows.................................................8
Notes to Financial Statements............................................9











<PAGE>


                             MARK BAILEY & CO. LTD.

                          Certified Public Accountants
                             Management Consultants


        OFFICE ADDRESS:                                      MAILING ADDRESS:
1495 Ridgeview Drive, Ste. 200      Phone: 775/332.4200       P.O. Box 6060
    Reno, Nevada 89509-6634          Fax: 775/332.4210      Reno, Nevada 89513



                          INDEPENDENT AUDITORS' REPORT



       April 11, 2002


       Board of Directors
       Iconet, Inc.

       We have audited the accompanying balance sheet of Iconet, Inc. (a Company
       in the  development  stage) as of  December  31,  2001,  and the  related
       statements of operations,  stockholders'  equity,  and cash flows for the
       years ended December 31, 2001, and 2000.  These financial  statements are
       the responsibility of the Company's management.  Our responsibility is to
       express an opinion on these financial statements based on our audits.

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

       In our  opinion,  the  financial  statements  referred  to above  present
       fairly, in all material  respects,  the financial position of Iconet, Inc
       (a Company in the  development  stage),  as of December 31, 2001, and the
       results of its operations and its cash flows for the years ended December
       31, 2001, and 2000, in conformity  with accounting  principles  generally
       accepted in the United States.




                                      -2-

<PAGE>



       The accompanying  financial  statements have been prepared  assuming that
       the Company will continue as a going  concern.  As described in Note 1 to
       the financial  statements,  the Company is in the development  stage, and
       existing cash and available credit are insufficient to fund the Company's
       cash flow needs for the next year.  These  conditions  raise  substantial
       doubt  about  the  Company's  ability  to  continue  as a going  concern.
       Management's  plans in regard to these matters are also described in Note
       1. The  financial  statements do not include any  adjustments  that might
       result from the outcome of this uncertainty.





       Mark Bailey & Co., Ltd.
       Reno, Nevada





                                      -3-


<PAGE>





                                  ICONET, INC.
                      (A Company in the Development Stage)
                                 BALANCE SHEET
                               December 31, 2001




                                     ASSETS

                                                              DECEMBER 31, 2001
CURRENT ASSETS
  Cash                                                        $           1,068
  Prepaid consulting expenses                                            81,250
                                                              ------------------
         Total current assets                                            82,318
                                                              ------------------
DEFERRED TAX ASSET (NET OF VALUATION
ALLOWANCE OF $1,025,175)                                                      -
                                                              ------------------

         Total assets                                         $          82,318
                                                              ==================

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                            $         363,679
  Bank overdraft payable                                                 30,519
  Related party payable                                                 522,164
  Line of credit                                                         22,574
  Interest payable                                                      143,644
  Accrued expenses                                                       57,132
  Wages payable                                                          68,327
  Payroll tax payable                                                    16,338
                                                              ------------------
         Total current and total liabilities                          1,224,377
                                                              ------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
  Common stock, $.001 par value, 100,000,000 shares
         authorized, 31,257,115 issued and outstanding                   31,257
  Additional paid-in-capital                                          2,221,906
  Deferred compensation expense                                        (380,000)
  Deficit accumulated during the development stage                   (3,015,222)
                                                              ------------------
         Total stockholders' equity                                  (1,142,059)
                                                              ------------------

         Total liabilities and stockholders' equity           $          82,318
                                                              ==================




   The Accompanying Notes are an Integral Part of These Financial Statements

                                      -4-

<PAGE>
<TABLE>
<CAPTION>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                            STATEMENTS OF OPERATIONS
                 For the Years Ended December 31, 2001, and 2000


                                                          CUMULATIVE
                                                             DURING
                                                          DEVELOPMENT            YEAR ENDED               YEAR ENDED
                                                             STAGE            DECEMBER 31, 2001         DECEMBER 31, 2000
                                                        -----------------  ----------------------  ----------------------
<S>                                                      <C>                    <C>                      <C>
REVENUE

OPERATING COSTS AND EXPENSES
    Operating and administrative expenses
        (including 1999 and 1998 as restated)            $    (2,874,855)       $       (755,949)        $    (1,316,383)
    Depreciation expense                                          (5,562)                      -                  (5,562)
    Amortization expense                                         (16,500)                      -                       -
                                                        -----------------  ----------------------  ----------------------

        Total operating costs and expenses                    (2,896,917)               (755,949)             (1,321,945)

NON-OPERATING INCOME
    Dividend income                                                1,212                       -                     951
    Gain on cancellation of contracts                             90,604                       -                  90,604
    Loss on disposal of assets                                   (59,641)                (59,641)                      -
                                                        -----------------  ----------------------  ----------------------

        Total non-operating income                                32,175                 (59,641)                 91,555

INTEREST EXPENSE (including 1999 as restated)                   (150,480)                (51,931)                (75,007)
                                                        -----------------  ----------------------  ----------------------

        Net loss before income taxes                          (3,015,222)               (867,521)             (1,305,397)
                                                        -----------------  ----------------------  ----------------------

    Provision for income taxes                                         -                       -                       -
                                                        -----------------  ----------------------  ----------------------

        Net loss                                         $    (3,015,222)       $       (867,521)        $    (1,305,397)
                                                        =================  ======================  ======================


        Loss per common share - basic                    $         (0.23)       $          (0.07)        $        (12.21)
                                                        =================  ======================  ======================

        Weighted average common shares -basic                 13,026,870              13,027,948                 106,880
                                                        =================  ======================  ======================

        Loss per common share - diluted                  $         (0.22)       $          (0.06)        $        (12.21)
                                                        =================  ======================  ======================

        Weighted average common shares- diluted               13,763,712              13,764,790                 106,880
                                                        =================  ======================  ======================
</TABLE>


   The Accompanying Notes are an Integral part of These Financial Statements


                                      -5-

<PAGE>

<TABLE>
<CAPTION>
                                  ICONET, INC.
                      (A Company in the Development Stage)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
      For the Period from Inception (August 1, 1997) to December 31, 2001


                                                                                                  ACCUMULATED
                                                                                    ADDITIONAL   DEFICIT DURING
                                                COMMON STOCK          DEFERRED      PAID-IN       DEVELOPMENT       TOTAL
                                               SHARES      AMOUNT    COMPENSATION    CAPITAL          STAGE         EQUITY
                                            -----------  ----------  ------------  ------------  ---------------  -----------
<S>                                         <C>          <C>         <C>           <C>           <C>              <C>
Issuance of shares to Company's officers
  and directors for cash in August 1997
  at $.01 per share                           1,000,000  $    1,000                $      9,000  $             -  $    10,000

Net loss                                              -           -                           -             (998)        (998)
                                            -----------  ----------  ------------  ------------  ---------------  -----------
Balance at December 31, 1997                  1,000,000       1,000                       9,000             (998)       9,002

Issuance of shares for cash from an offering
  in April 1998 at $.20 per share (less
  offering costs of $5,365)                   1,000,000       1,000                     193,635                -      194,635

Issuance of shares to a related company for
  distribution rights, valued at the fair
  market value of the shares issued, in May
  1998 at $.20 per share                        100,000         100                      19,900                -       20,000

Net loss (as restated )                               -           -                           -          (34,513)     (34,513)
                                            -----------  ----------  ------------  ------------  ---------------  -----------

Balance at December 31, 1998                  2,100,000       2,100                     222,535          (35,511)     189,124

Cancellation in January 1999 of the stock
  issued to the officers, directors, and
  the related company                        (1,100,000)     (1,100)                    (18,900)                      (20,000)

Stock split of 1:21 for the outstanding
  stock, retaining original par value, in
  January 1999                               20,000,000      20,000                     (20,000)               -            -

Issuance of shares for patent rights,
  valued at the fair market value of the
  shares issued, in February 1999 at $.01
  per share                                   2,000,000       2,000                      18,000                -       20,000

Issuance of shares for consulting services,
  valued at the fair market value of the
  services received, in July 1999 at $.01
  per share                                     250,000         250                       2,250                         2,500

Net loss  (as restated)                               -           -                           -         (806,793)    (806,793)
                                            -----------  ----------  ------------  ------------  ---------------  -----------

Balance at December 31, 1999 (as restated)   23,250,000      23,250                     203,885         (842,304)    (615,169)
</TABLE>





   The Accompanying Notes are an Integral Part of These Financial Statements

                                      -6-

<PAGE>

<TABLE>
<CAPTION>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
      For the Period from Inception (August 1, 1997) to December 31, 2001


                                                                                                  ACCUMULATED
                                                                                    ADDITIONAL   DEFICIT DURING
                                                COMMON STOCK          DEFERRED      PAID-IN       DEVELOPMENT       TOTAL
                                               SHARES      AMOUNT    COMPENSATION    CAPITAL          STAGE         EQUITY
                                            -----------  ----------  ------------  ------------  ---------------  -----------
<S>                                         <C>          <C>         <C>           <C>           <C>              <C>
Balance at December 31, 1999 (as restated)   23,250,000  $   23,250                $    203,885  $      (842,304) $  (615,169)

Issuance of shares for consulting services,
  valued at the fair market value of the
  services received in January 2000              75,000          75                      74,528                        74,603

Cancellation in February 2000 of shares
  issued for patent rights                   (2,000,000)     (2,000)                    (18,000)                      (20,000)

Issuance of shares for consulting services,
  valued at the fair market value of the
  services received in July 2000                 98,000          98                      73,402                        73,500

Net loss                                                                                              (1,305,397)  (1,305,397)
                                            -----------  ----------  -----------   ------------  ---------------  -----------

Balance at December 31, 2000 (as restated)   21,423,000      21,423                     333,815       (2,147,701)  (1,792,463)

Issuance of shares to retire $210,000
  from the line of credit in May 2001        30,000,000      30,000                     180,000                       210,000

Reverse stock split of 2001 for the
  outstanding stock, retaining original par
  value, in July 2001                       (51,165,885)    (51,166)                     51,166                             -
                                            -----------  ----------  -----------   ------------  ---------------  -----------

Balance after stock split                       257,115         257                     564,981       (2,147,701)  (1,582,463)

Issuance of shares to retire $637,925
  from the line of credit in July 2001       30,000,000      30,000                     607,925                       637,925

Issuance of shares for consulting & legal
  services with a fair value of $650,000 in
  July 2001                                   1,000,000       1,000                     649,000                       650,000

Deferred compensation cost for issuance of
  an option for 1,000,000 shares in
  September 2001                                                        (400,000)      400,000                             -

Deferred compensation expense                                             20,000                                      20,000

Net loss                                                                                               (867,521)    (867,521)
                                            -----------  ----------  -----------   ------------  ---------------  -----------
Balance at December 31, 2001                 31,257,115  $   31,257  $  (380,000)  $  2,221,906  $    (3,015,222) $(1,142,059)
                                            ===========  ==========  ===========   ============  ===============  ===========
</TABLE>


   The Accompanying Notes are an Integral Part of These Financial Statements

                                      -7-

<PAGE>

<TABLE>
<CAPTION>
                                  ICONET, INC.
                      (A Company in the Development Stage)
                            STATEMENTS OF CASH FLOWS
                For the Years Ended December 31, 2001, and 2000


                                              CUMULATIVE DURING      YEAR ENDED          YEAR ENDED
                                              DEVELOPMENT STAGE   DECEMBER 31, 2001   DECEMBER 31, 2000
                                            ---------------------------------------   -----------------
<S>                                              <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                       $    (3,015,222)    $     (867,521)     $   (1,305,397)

  Adjustments to reconcile net loss to net
    cash used in operating activities

    Amortization and depreciation expense                 22,062                  -               5,562
    Deferred compensation expense                         20,000             20,000                   -
    Gain on cancellation of amortization                 (16,500)                 -             (16,500)
    Loss on disposal of assets                            59,641             59,641                   -
    Decrease in interest receivable                            -                  -                  11
    Decrease in deposits                                  14,925                600                   -
    Increase in deferred tax asset                    (1,052,800)          (325,982)           (470,927)
    Increase (decrease) in accounts payable              427,654           (120,795)            333,638
    Increase in related party payable                    522,164            140,099             274,565
    Increase (decrease) in wages payable                  68,327            (13,344)             81,671
    Increase in interest payable                         143,644             51,931              75,007
    Increase in deferred tax valuation allowance       1,052,800            325,982             470,927
    Increase in accrued expenses                          73,470             57,132              16,338
    Expenses paid by issuance of
      common stock                                       655,378            504,775             148,103
                                            --------------------  -----------------   -----------------

    Net cash used in operating activities             (1,024,457)          (167,482)           (387,002)
                                            --------------------  -----------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Deposits paid                                        (14,925)                 -             (14,325)
    Purchase of capital assets                           (65,203)                 -             (65,203)
                                            --------------------  -----------------   -----------------

    Net cash used in investing activities                (80,128)                 -             (79,528)
                                            --------------------  -----------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds received from issuance of stock               204,635                  -                   -
  Proceeds received from shareholder advances              5,474              5,474                   -
  Proceeds received from bank overdraft                   30,519              2,632              27,887
  Payment of shareholder advances                         (5,474)            (5,474)                  -
  Proceeds received from line of credit                  870,499            165,918             413,881
                                            --------------------  -----------------   -----------------

    Net cash provided by financing activities          1,105,653            168,550             441,768
                                            --------------------  -----------------   -----------------


    Net increase (decrease) in cash                        1,068              1,068             (24,762)

    Cash and cash equivalents at
      December 31, 2000, and 1999                              -                  -               2,079
                                            --------------------  -----------------   -----------------

    Cash and cash equivalents at
    December 31, 2001, and 2000                  $         1,068     $        1,068      $      (22,683)
                                            ====================  =================   =================
</TABLE>

SUPPLEMENTARY INFORMATION AND NON CASH TRANSACTIONS

During the years ended December 31, 2001, and 2000, no amounts were actually
paid for either interest or income taxes.

In May 2001 the Company issued 30,000,000 shares of its common stock to retire
$21,000 of the line of credit

In July 2001 the Company issued 30,000,000 shares of its common stock to retire
$637,925 of the line of credit

In July 2001 the Company issued 1,000,000 shares of its common stock for
consulting and legal services valued at $650,000

In September 2001 the Company issued an option to purchase 1,000,000 shares of
common stock at $0.10 per share to a Director


   The Accompanying Notes are an Integral Part of These Financial Statements

                                      -8-

<PAGE>




                                 ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
         Iconet, Inc. (the "Company") was incorporated in the State of Nevada in
         August 1997, under the name Meximed Industries,  Inc. The Company is in
         the development  stage as its operations  principally  involve research
         and  development,   market  analysis,   and  other  business   planning
         activities,  and no  revenue  has  been  generated  from  its  business
         activities.  In January  1999 the  Company  changed its name to Digital
         Video Display Technology Corporation.  The Company intended to create a
         Digital Video Display jukebox system for distribution in Canada and the
         United  States.  In July 2001 the  Company  changed its name to Iconet,
         Inc., and is planning to expand its activities to Europe.

         These financial statements have been prepared assuming that the Company
         will  continue  as a going  concern.  The Company is  currently  in the
         development   stage  and  existing  cash  and   available   credit  are
         insufficient  to fund the Company's  cash flow needs for the next year.
         In October 2001 a related  party  extended the company a line of credit
         for  $100,000  (see  Note 3).  The  Company  plans to raise  additional
         capital  through  private   placements,   ranging  from  $6,000,000  to
         $8,000,000.

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and assumptions  that affect certain  reported amounts and disclosures.
         Accordingly, actual results could differ from those estimates.

         CASH AND CASH EQUIVALENTS
         For purposes of the statement of cash flows, the Company  considers all
         highly  liquid  debt  instruments  purchased  with a maturity  of three
         months or less to be cash  equivalents.  As of December 31,  2001,  and
         2000, the Company held no cash equivalents.

                                      -9-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         FIXED ASSETS
         Depreciation  expense is provided for on a straight-line basis over the
         estimated  useful lives of owned assets  ranging from 3 to 5 years.  In
         May 2001 all assets were abandoned and a loss was recorded.

         OPERATING AND ADMINISTRATIVE EXPENSES
         The major components of the operating and  administrative  expenses for
         the years ending December 31, 2001, and 2000 are:

                                                          2001           2000
                                                          ----           ----

            Consulting                                  $504,073       $740,205
            Salaries and wages and benefits               20,000        125,260
            Marketing and investor relations              20,000        140,174
            Legal and accounting                         198,424        126,159
            Rent expense                                     -0-         78,035
            Other expenses                                13,452        106,550
                                                        --------    -----------
                Total operating and administrative      $755,949    $ 1,316,383
                                                        ========    ===========

         RENT EXPENSE
         For the years ended December 31, 2001, and 2000, the total rent expense
         was $-0- and $78,035, respectively.

         RESEARCH AND DEVELOPMENT COSTS
         Research and  development  costs are  expensed as incurred.  Such costs
         were $-0- and $20,000 at December 31, 2001, and 2000, respectively.

         PRIOR PERIOD ADJUSTMENT
         The accompanying  financial statements have been restated to correct an
         error made in 1999.  The  adjustment  decreased  earnings and increased
         additional  paid in  capital.  The  effect  of the  restatement  was to
         increase the net loss and the  retained  deficit for December 31, 1999,
         by $10,000 ($0 per share), net of income tax of $0.


                                      -10-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         PRIOR PERIOD ADJUSTMENT (CONTINUED)

<TABLE>
<CAPTION>
                                                                                           ACCUMULATED DEFICIT
                                                                     ADDITIONAL             DURING DEVELOPMENT
                                                                   PAID-IN CAPITAL                 STAGE
         <S>                                                           <C>                       <C>
         Balances at December 31, 2000, as previously
         reported                                                      $ 323,815                 $ (2,137,701)

         Changes due to error corrected in 1999 financial
         statements                                                       10,000                      (10,000)
                                                                       ---------                 -------------

         Restated balances at December 31, 2000                        $ 333,815                 $ (2,147,701)
                                                                       =========                 =============

</TABLE>


         LOSS PER SHARE
         Net  loss  per  share is  provided  in  accordance  with  Statement  of
         Financial  Accounting  Standards  (SFAS) No. 128  "Earnings Per Share".
         Basic loss per share for each period is  computed by dividing  net loss
         by the weighted  average  number of shares of common stock  outstanding
         during  the  period.  Diluted  loss per share is  computed  in a manner
         consistent with that of basic loss per share while giving effect to all
         potentially  dilutive  common shares that were  outstanding  during the
         period.  The number of additional shares is calculated by assuming that
         outstanding  stock  options were  exercised  and that the proceeds from
         such  exercises  were used to  acquire  shares  of common  stock at the
         average market price during the reporting period. The weighted averages
         for the years ended  December 31, 2001,  and 2000,  and from  inception
         reflect the reverse stock split of 200:1 that was approved by the board
         of directors in July 2001.

         REVENUE RECOGNITION
         In 2000  the SEC  issued  Staff  Accounting  Bulletin  (SAB)  No.  101,
         "Revenue Recognition in Financial  Statements." Pursuant to SAB No. 101
         and the relevant generally accepted accounting principles,  the Company
         will  recognize  revenue upon the passage of title,  ownership  and the
         risk  of loss to the  customer.  For  service  agreements  the  Company
         recognizes  revenue on a straight-line  basis over the contract period.
         During the years  ending  December  31,  2001,  and 2000,  there was no
         revenue.


                                      -11-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         NEW ACCOUNTING PRONOUNCEMENTS
         In June 2001 the  Financial  Accounting  Standards  Board (FASB) issued
         SFAS No. 141, "Business  Combinations" which requires that the purchase
         method of  accounting be used for all business  combinations  initiated
         after June 30, 2001,  establishes specific criteria for the recognition
         of  intangible  assets  separately  from  goodwill,  and requires  that
         unallocated   negative  goodwill  be  written  off  immediately  as  an
         extraordinary gain instead of being deferred and amortized. The Company
         will account for business  combinations in accordance with the guidance
         in SFAS No. 141 as of December 31, 2001.

         In June  2001 the  FASB  issued  SFAS  No.  142,  "Goodwill  and  Other
         Intangible Assets". This statement establishes accounting and reporting
         standards  for  goodwill and  intangibles  for years  commencing  after
         December 15, 2001.  Whether already  acquired or subsequently  acquired
         after  the   effective   date,   companies  are  required  to  identify
         intangibles  with finite lives and those with indefinite  lives.  Those
         intangibles  with finite lives are to be amortized  over the  estimated
         useful lives of the assets while those with indefinite lives are not to
         be amortized.  Each  intangible or goodwill asset should be analyzed at
         least annually for impairment  where the carrying value is in excess of
         the fair value of the intangibles.  The asset's carrying value is to be
         reduced  by a charge  to  income  if the fair  value is lower  than the
         carrying  value.  As of December 31, 2001, and 2000, the Company has no
         intangibles  or  goodwill.  The Company has adopted  SFAS No. 142 as of
         December 31, 2001.

         In  August  2001 the FASB  issued  SFAS No.  144,  "Accounting  for the
         Impairment of Disposal of Long-Lived Assets." SFAS No. 144 modifies the
         rules for  accounting  for the  impairment  or disposal  of  long-lived
         assets. The new rules become effective for fiscal years beginning after
         December 15, 2001, with earlier application encouraged. Management does
         not feel that this standard will materially affect the Company.


                                      -12-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


1.       ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
         STATEMENT PRESENTATION
         The December 31, 2000,  Financial  Statements have been reclassified to
         conform to the December 31, 2001, presentation.  Related party payables
         have been stated separately from other accounts payable.  Wages payable
         have been stated separately from accrued expenses.

2.       FEDERAL INCOME TAXES
         The Company  recognizes  deferred tax  liabilities and benefits for the
         expected future tax impact of transactions that have been accounted for
         differently  for book  and tax  purposes.  Deferred  tax  benefits  and
         liabilities  are  calculated  using enacted tax rates in effect for the
         year in which the  differences  are  expected to  reverse.  A valuation
         allowance  has been  provided  to reduce the asset to the amount of tax
         benefit management believes it will most likely realize.  The following
         is a schedule of the composition of the provision for income taxes:

                                                      2001        2000
                                                      ----        ----
            Current tax provision                    $ -0-       $ -0-
            Deferred tax provision                     -0-         -0-
                                                     -----       -----

            Total provision for income taxes         $ -0-       $ -0-
                                                     =====       =====

         Deferred tax assets consisted of the following:

                                                        2001          2000
                                                        ----          ----
            Deferred noncurrent tax asset           $ 1,025,175     $ 726,818
            Valuation allowance                      (1,025,175)     (726,818)
                                                    ------------    ---------

            Net deferred noncurrent tax asset       $    -0-        $    -0-
                                                    ============    =========

         The net change in the  valuation  account was $ 298,357 and $470,927 in
         2001 and 2000,  respectively.  Deferred  federal and state income taxes
         consist of future tax benefits  attributed to loss  carryforwards.  The
         Company  has  available  net  operating  loss  carryforwards   totaling
         approximately $3,015,000, which expire in the years 2017 to 2021.

                                      -13-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


3.       LINE OF CREDIT
         During the year ended  December  31,  1999,  an  unrelated  third party
         issued the Company an unsecured  $1,500,000 line of credit. The line of
         credit carried interest at 12% per annum and was due on demand.  In May
         2001 the company  issued  150,000  shares of its common stock to retire
         $210,000 of the line of credit,  for a value of approximately  $.01 per
         share. In July the company issued 30,000,000 shares of its common stock
         to retire $637,925 of the line of credit,  for a value of approximately
         $.02 per share.  The average  market  price of the stock per the OTC in
         May and July 2001 was $1.70 and $1.00,  respectively.  The  balances of
         the  line of  credit  at  December  31,  2001,  and  2000,  were $0 and
         $704,581, respectively.

         In October  2001 the Company  obtained a new  unsecured  line of credit
         from a shareholder for $100,000 at 12% per annum. The line of credit is
         due on demand. At December 31, 2001, the balance on this line of credit
         was $ 22,574.

4.       RELATED PARTY TRANSACTIONS
         During the years ended December 31, 2001, and 2000, the Company charged
         approximately  $  444,250  and  $155,000,  respectively  to  consulting
         expense,  and $187,271  and  $100,000,  respectively  to legal fees for
         services  rendered by directors of the  Company.  Outstanding  balances
         payable for  consulting  and legal fees to these  related  parties were
         $522,164 and $382,065 at December 31, 2001, and 2000, respectively.

         In September  2001 the Company  issued an option to purchase  1,000,000
         shares of common stock at $0.10 per share to an Officer and Director of
         the Company (see Note 8). The option expires in September 2006.

         In  October  2001 a related  party  issued  the  company  an  unsecured
         $100,000 line of credit.  The balance at December 31, 2001, was $22,574
         (see Note 3).

                                      -14-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


5.       FAIR VALUE OF FINANCIAL INSTRUMENTS
         Financial  Accounting  Standards Board SFAS No. 107,  "Disclosure About
         Fair Value of Financial Instruments" is part of a continuing process by
         the FASB to improve information on financial statements.  The following
         methods and assumptions were used by the Company in estimating its fair
         value  disclosures  for such  financial  instruments  as defined by the
         Statement.

         The  carrying  amounts  reported  in the  balance  sheets for  accounts
         payable and bank overdraft approximate fair value at December 31, 2001,
         and 2000, as the payables mature in less than one year.

         The  estimated  fair  value of the  line of  credit  is not  materially
         different from the carrying values for financial  statement purposes at
         December 31, 2001, and 2000.

6.       STOCKHOLDERS' EQUITY
         In August 1997 the Company issued  1,000,000  shares of common stock to
         its officers and  directors at $0.01 per share,  for a total of $10,000
         in cash.

         In April 1998, the Company issued  1,000,000  shares of common stock as
         part of an  offering  memorandum  at $0.20  per  share,  for a total of
         $200,000  in  cash,  less  offering  costs of  $5,365.  In May 1998 the
         Company issued 100,000 shares of common stock, with a fair market value
         of  $20,000,  to a related  company  for the  distribution  rights to a
         non-reusable medical syringe.

         In January  1999 the Company  canceled the  1,100,000  shares of common
         stock  previously  issued to the officers,  directors,  and the related
         company.  Also in January  1999,  the Company  declared a forward stock
         split  of 1:21 for the  remaining  1,000,000  shares  of  common  stock
         outstanding, retaining the $0.001 par value.



                                      -15-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



6.       STOCKHOLDERS' EQUITY (CONTINUED)
         In February 1999 the Company issued  2,000,000  shares of common stock,
         with a fair market value of $20,000, for the patent rights to a jukebox
         entertainment system.

         The Company also issued 250,000 shares of its common stock to unrelated
         third  parties at $.01 per share for a total of $2,500  for  consulting
         services provided. These shares were issued at the fair market value of
         the consulting services.

         In January 2000 the Company  issued 75,000 shares of restricted  common
         stock to an  unrelated  third  party for  consulting.  The value of the
         consulting received was $74,603.

         In February 2000 the Company  cancelled the 2,000,000 shares issued for
         the patent rights.

         In July 2000 the Company  issued  98,000  shares of its common stock in
         connection  with a consulting  agreement.  The fair market value of the
         stock was $73,500.

         In May 2001 the company issued 30,000,000 shares of its common stock to
         retire $210,000 from the line of credit.

         In July 2001 the  company  authorized  a reverse  stock  split of 200:1
         shares of its common stock. The company retained the authorized  number
         of shares  and the par value of the  common  stock.  The  company  also
         issued  30,000,000  shares of its common stock to retire  $637,925 from
         the line of  credit.  Also in July 2001 the  company  issued  1,000,000
         shares of its common stock to unrelated  third  parties in exchange for
         consulting and legal services with a fair value of $650,000.


                                      -16-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


7.       STOCK OPTIONS
         The  Company  uses the  intrinsic  value  method to account for options
         granted  to  employees  for the  purchase  of  common  stock.  Deferred
         compensation is recorded when the market price exceeds the option price
         at the grant date.  Compensation  is recorded  using the  straight-line
         method over the vesting period.

         In April 1999 the Company  issued an option to purchase 2,500 shares of
         common  stock  at $4.00 a share to a  Director.  The fair  value of the
         options was zero as the option  price  exceeded the market price at the
         grant date.  The option  reflects the reverse  stock split of July 2001
         (see Note 6). The Director  resigned from the Company in May 2001.  The
         options are still outstanding and will expire in April 2009.

         In September  2001 the Company  issued an option to purchase  1,000,000
         shares of common  stock at $0.10 per share to a Director of the Company
         (see Note 4). The Company  accrued  $400,000  in deferred  compensation
         costs,  as the option  price at the grant date was less than the market
         price. The option expires in September 2006. The compensation cost will
         be accrued over the vesting period.  Compensation  costs of $20,000 and
         $-0- were  included in the  statements of operation for the years ended
         December 31, 2001, and 2000,  respectively.  The Company has determined
         the pro-forma information as if the Company had accounted for the stock
         option  granted on September  30, 2001,  under the fair value method of
         SFAS 123. The Black Scholes  option-pricing  model was used with a risk
         free  interest  rate of 5.48%;  dividend  yield of 0.0%;  a  volatility
         factor of 100% and an expected  life of 5 years.  The fair value of the
         stock  options  granted in  September  2001 is $.42 per  share.  If the
         Company had  recognized  deferred  compensation  cost based on the fair
         value method, it would have decreased deferred compensation by $80,000.


                                      -17-

<PAGE>

                                  ICONET, INC.
                      (A Company in the Development Stage)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001


8.       COMMITMENTS AND CONTINGENCIES
         There are  various  claims and  lawsuits  pending  against  the Company
         arising in the normal  course of the Company's  business.  Although the
         amount of  liability  at  December  31,  2001,  cannot be  ascertained,
         management  is of the opinion  that any  resulting  liability  will not
         materially affect the Company's financial position.

         Merrill Lynch Canada Inc., has filed suit against the Company regarding
         a dispute  related  to the sale of its  restricted  common  stock by an
         unrelated third party to Merrill Lynch.  The case is still in its early
         stages and the  Company is trying to reach a  settlement  with  Merrill
         Lynch.  At this  time the  Company  does not know if it will  sustain a
         loss, or the amount of the loss.

         The  Company  is a  defendant  in an  action  by a  bank  regarding  an
         overdraft.  The bank is  seeking to recover  $30,  519,  which has been
         accrued by the Company.




                                      -18-


<PAGE>


ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

Registrant has no disagreement with the Independent Accountants since inception.


                                    PART III


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

Our Bylaws provide that we shall have a minimum of one director and a maximum of
nine directors on the board at any one time. Our current sole director and
executive officer is as follows:

  NAME AND ADDRESS                AGE               POSITIONS HELD
  ----------------                ---               --------------

  Randy Miller                    45        President, Secretary, Treasurer and
                                            Director


Each director of the Company is elected by the stockholders to a term of one
year and serves until his successor is elected and qualified. Each officer of
the Company is elected by the Board of Directors to a term of one year and
serves until his successor is duly elected and qualified, or until he is removed
from office. The Board of Directors has no nominating, auditing or compensation
committees.

Mr. Miller was appointed to the Board by the past Board of Directors, concurrent
with their respective resignations, in May 2001. For the past five years, and
since 1995, Mr. Miller has been sole officer, director and shareholder of Adrea
Capital Corporation, a Canadian corporation engaged in providing business and
financial consulting services for small companies in Europe and Canada.

(b)      Significant Employees.

Other than Randy Miller, there are no employees who are expected to make a
significant contribution to our corporation.

(c)      Family Relationships.

<PAGE>


There are no family relationships among our officers, directors, or persons
nominated for such positions.

EMPLOYMENT  AGREEMENTS

Mr. Randy Miller, the Company's sole officer and director,is not currently party
to any employment agreement with the Company, nor are there any plans to enter
into any agreements with Mr. Miller. However, it is currently contemplated that
he will receive an annual salary of $12,000, commencing at such time as the
Company's revenues can support the payment of this salary. No salaries will
accrue. The Company presently has no pension, health, annuity, bonus, insurance,
profit sharing or similar benefit plans; however, it may adopt such plans in the
future. There are presently no personal benefits available for directors,
officers or employees of the Company, except for options granted by the Board of
Directors to certain officers, directors and consultants to the Company.

There are no arrangements relating to a change in control of the Company.

(d)      Legal Proceedings.

No officer, director, or persons nominated for these positions, and no promoter
or significant employee of our corporation has been involved in legal
proceedings that would be material to an evaluation of our management.


ITEM 10.  EXECUTIVE COMPENSATION

The Company's officer and director currently does not receive a salary for his
services, and there is no plan to pay a salary unless the company has sufficient
net revenues to afford to pay him.

There are no employment contracts between the Company and its officer and
director.

The Company does not have any plan or arrangement with respect to compensation
to its executive officers which would result from the resignation, retirement or
any other termination of employment with the Company or from a change in control
of the Company, or a change in the executive officers' responsibilities
following any change in control, where in respect of an executive officer, the
value of such compensation exceeds $120,000. There is no arrangement relating to
a change in control of the Company.


               OPTION/SAR  GRANTS  IN  LAST  FISCAL  YEAR

In September, 2001, we granted the following stock option to the following
officer and director as compensation and incentives for services rendered to
theCompany:

                                     PERCENT
                                     OF TOTAL
                   NUMBER OF         OPTIONS/
                   SECURITIES        SARS
                   UNDERLYING        GRANTED         EXERCISE      DATE OF
NAME OF HOLDER     OPTIONS GRANTED   FISCAL YR       PRICE         EXERCISE
--------------     ---------------   ---------       --------      --------

Randy Miller         1,000,000        100%(1)       $.10/Share       9/15/06

Marilyn Haft             2,500        100%(2)       $4.00/Share      4/30/09


(1) This percentage is based on the total number of option shares granted during
    2001.

(2) This  percentage  is based on the total number of option  shares  granted
    during 1999. Ms. Haft is a former officer, director and counsel to the our
    company.

<PAGE>

Any shares acquired through exercise of this option shall be restricted shares
and may not, under any circumstances, be registered or in any way become free
trading until two years from the date the shares are acquired through exercise
of the option. The records of the stock transfer agency, as well as any
certificates issued upon exercise of these options shall contain said
restrictive legend.

There are no other bonus, pension, deferred compensation, long-term incentive
plans or awards, or any other similar plans for executive officers and/or
directors of the Company.

There are no employment contracts between Registrant and any of its officers or
directors.

Registrant does not have any plan or arrangement with respect to compensation to
its executive officers which would result from the resignation, retirement or
any other termination of employment with Registrant or from a change in control
of Registrant, or a change in the executive officers' responsibilities following
any change in control, where in respect of an executive officer, the value of
such compensation exceeds $120,000.

There are no other bonus, pension, deferred compensation, long-term incentive
plans or awards, or any other similar plans for executive officers and/or
directors of Registrant.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables set forth the ownership, as of December 31, 2001, of our
common stock (a) by each person known by us to be the beneficial owner of more
than 5% of our outstanding common stock, and (b) by each of our directors, by
all executive officers and by our directors as a group. To the best of our
knowledge, all persons named have sole voting and investment power with respect
to the shares, except as otherwise noted.

Security Ownership of Officers and Directors.



                                            AMOUNT OF   NATURE OF
TITLE OF                                   BENEFICIAL   BENEFICIAL  PERCENT OF
CLASS    NAME & ADDRESS                       OWNER       OWNER      CLASS
-----    --------------                     ----------  ---------    ------

Common   Randy Miller (1)                   1,000,000    Direct        3%(2)
         8 Gaucho Drive
         Rolling Hills Estates, CA 90274

All Officers and Directors as a Group       1,000,000    Direct        3%
      (1 Individual)

(1) Mr. Miller has an option to acquire 1,000,000 shares of our restricted
    Common Stock at an exercise price of $.10 per share. This option expires
    September 15, 2006, and no portion has yet been exercised by Mr. Miller.

(2) Assumes exercise of option to purchase 1,000,000 shares.

Changes in Control.

There are currently no arrangements, which would result in a change in control
of Iconet, Inc. However, Mr. Kurt Dalmata, a shareholder who owns 1,470,000
shares of Common Stock, has the right to be appointed as a director of our
company.

<PAGE>


FUTURE  SALES  BY  EXISTING  STOCKHOLDERS

All issued and outstanding shares of Common Stock of the Company are "restricted
securities", as that term is defined in Rule 144 of the Rules and Regulations of
the SEC promulgated under the Act ("Rule 144"), save and except the shares which
were issued under a public offering in the State of New York, pursuant to an
exemption provided by Rule 504 of Regulation D, promulgated under the Securities
Act of 1933, as amended, which are not "restricted securities" under Rule 144
and can be publicly sold, except for those Shares purchased by "affiliates" of
the Company, as that term is defined in Rule 144.

Under Rule 144, restricted shares can be publicly sold, subject to volume
restrictions and certain restrictions on the manner of sale, commencing one (1)
year after their acquisition. Sales of shares by "affiliates" are subject to
volume restrictions and certain other restrictions pertaining to the manner of
sale, all pursuant to Rule 144.

Registrant filed a Form SB-2 on November 1, 2001, seeking to register 30,150,000
shares of issued and outstanding shares of Common Stock for selling
shareholders. The Form SB-2 is still in the comment period with the SEC and has
not been declared effective.


ITEM 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Other than the sale of shares to our former officers and directors, we have not
entered into any transactions with our officers, directors, persons nominated
for these positions, beneficial owners of 5% or more of our common stock, or
family members of these persons, except for an option granted to Mr. Randy
Miller to acquire up to a total of 1,000,000 shares of our restricted Common
Stock, at $.10 per share, and a loan from Mr. Kurt Dalmata, and his related
ownership of 58% of our total outstanding shares during a portion of 2001.

Mr. Dalmata was issued 30,000,000 shares in May 2001 to retire $210,000 from the
line of credit. Subsequently, in July 2001, the Company authorized a stock split
of 200:1 for its total outstanding shares of common stock. This resulted in Mr.
Dalmata's shares being reduced to a total of 150,000, which are currently owned
by Mr. Dalmata.

We also had a related party payable during 2001, in the sum of $430,000.00, as
disclosed in our September 30, 2001 Form 10-QSB. This was owed to two directors
as salaries and one director as legal fees. The parties and amounts owed are as
follows:

a.  Marilyn Haft, Esq., a director, was owed $ 137,500 as and for legal services
    performed for the Company.

b.  Randy Moss, a director and officer of the Company, was owed $100,000 as and
    for salary.

c.  Lee Edmondson, a director and officer of the Company, was owed $182,500 as
    and for salary.


<PAGE>


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

EXHIBITS

a) All required exhibits, including the Company's Articles of Incorporation, and
   Bylaws, are attached to the Company's Form SB-2, filed on November 1, 2001.
   All previously filed exhibits are incorporated herein by reference.

b)  Reports on Form 8-K: No reports were on filed on Form 8-K during the quarter
    ended December 31, 2001.




<PAGE>



EXHIBIT NO.             DOCUMENT DESCRIPTION
-----------             ---------------------

3.1                     Articles of Incorporation and any Amendments-
                        Incorporated by reference to the Form SB-2, filed
                        November 1, 2001.

3.2                     Bylaws- Incorporated by reference to the Form SB-2,
                        filed November 1, 2001.
















<PAGE>



                                   SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934, Registrant
caused the registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized.


ICONET, INC., a
Nevada corporation


By: /s/ RANDY MILLER                            Dated: April 15, 2002
    -----------------------------------------
        Randy Miller
        Chief Executive Officer and President


By: /s/ RANDY MILLER                            Dated: April 15, 2002
    -----------------------------------------
        Randy Miller
        Chief Financial Officer