`FORM 10-KSB/A2

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



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

                       Commission File Number: 33-12029-D

                      for the year ended December 31, 2000


                              IDIAL NETWORKS, INC.

                                    formerly
                        Desert Springs Acquisitions, Inc.

                    Nevada                          75-2863583
      (Jurisdiction of Incorporation)   (I.R.S. Employer  Identification No.)

1211 S. Park Road, Suite 215, Denver, CO                     80231
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code:      (954) 351-9860

Securities  registered  pursuant  to  Section  12(b)  of  the  Act:    None

Securities  registered  pursuant  to  Section  12(g)  of  the  Act:   None

Yes[X] No[]  (Indicate  by check mark whether the  Registrant  (1) has filed all
reports  required to be filed by Section 13 or 15(d) of the Securities  Exchange
Act of 1934 during the preceding 12 months (or for such shorter  period that the
Registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.)

Not[]  (Indicate  by check  mark  whether if  disclosure  of  delinquent  filers
('229.405)  is not  and  will  not to the  best  of  Registrant's  knowledge  be
contained  herein,  in definitive proxy or information  statements  incorporated
herein by reference or any amendment hereto.)

As of December 31, 2000, Due to the limited  market for the Company  securities,
no estimate is being supplied herewith of the market value for such securities.

As  of  December  31,  2000:

the  number  of  shares  outstanding  of  the  Registrant's   Common  Stock  was
87,144,454.

the  aggregate  number  of  shares  held  by  non-affiliates  was  approximately
50,966,652.

                       Exhibit Index is found on page 35.



Introduction

PART I

Item  1.  Description of Business.
      (a)  Historical  Information
      (b)  Our Business

Item  2.  Description  of  Property

Item  3.  Legal  Proceedings

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

Item  5.  Market  for  Common  Equity  and  Stockholder  Matters
      (a)  Market  Information
      (b)  Holders
      (c)  Dividends
      (d)  Sales  of  Unregistered  Common  Stock  2000

Item  6.  Managements  Discussion  and  Analysis  or  Plan of Operation

Item  7.  Financial  Statements

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

Item  9.  Security  Ownership  of  Officers and Directors and 5% Owners

Item  10.  Directors  and  Executive  Officers,  Promoters  and Control
           Persons; Compliance with Section 16(a) of the Exchange Act.

Item  11.  Executive  Compensation

Item  12.  Certain  Relationships  and  Related  Transactions

Item  13.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K
      (a)  Financial  Statements
      (b)  Form  8-K  Reports










                                     PART I


                         ITEM 1. DESCRIPTION OF BUSINESS


(A)  HISTORICAL  INFORMATION.  We were  incorporated  in May  1997,  as a Nevada
Limited Liability  Corporation as WoodComm LLC. In April 1999,  WoodComm LLC was
reorganized from an LLC to a Nevada  Corporation  WoodComm  International,  Inc.
(WCI). In December 1999, Desert Springs Acquisition Corporation (Desert Springs)
acquired all of the issued and outstanding  common shares of WCI in exchange for
30,903,000  shares of common stock of Desert  Springs.  For financial  reporting
purposes,   the  business   combination  was  accounted  for  as  an  additional
capitalization of the Company (a reverse  acquisition with WCI as the acquirer).
WCI is considered  the surviving  entity.  The historical  financial  statements
prior to the merger are those of WCI. Desert Springs only assets and liabilities
consisted of a liability for $80,346.  The  liabilities  were not assumed in the
merger.

     In January  2000,  Desert  Springs  moved its state of  incorporation  to
Nevada  by  merger  of  the   Colorado   Corporation   with  and  into   iDial
Networks,  Inc.  (a  Nevada  corporation).   Our  administrative  offices  are
     located at 7771 W. Oakland Park Blvd, Suite 217, Sunrise, and FL 33351. Our
telephone number is (954) 578-5333 and our website can be found at
www.idialnetworks.com.   The  information  on  our  website  is  not  part  of
this  Form  10-KSB.

     We provide  Internet-based voice  telecommunication to customers around the
world. We operate  selected  communication  services,  including phone cards and
Internet enabled telephony. The Internet triggered calls combine the flexibility
of a computer  (on-line  billing and call  records)  with the low tariffs of USA
based  carriers via calling  centers of direct from home  anywhere in the world.
During 2000 we decided to change our  business  model from a  telephony  service
provider only to that of a diversified  product  sales  company.  As part of our
change in business model, in August 2000, we company  acquired 100% of the stock
of  Whoofnet.com,   Inc.   (Whoofnet.com)   In  exchange  for  the  issuance  of
approximately  19.8 million new investment shares of common stock.  Whoofnet.com
is a next generation Internet Company designed for direct selling.  That company
was formed under the laws of Florida on March 6, 2000.  Its major  product is an
Internet  portal  for use by the  general  public.  That  Company  has  recently
completed its  field-testing and Management plans to begin sales within the next
several months.  All costs associated with the startup phase of the organization
have been expensed in the current period as per Statement of Position 98-5.

     Whoofnet.com  also formed 6 subsidiary  Delaware  Corporations  between the
months of March and May 2000,  and 2  foreign  subsidiary  corporations  for the
operations of various aspects of its business.

     1)  Whoofbiz,  Inc.  organized  in March 2000 is  planned to provide  small
business  services,  which includes a 24-hour customer  service center,  product
fulfillment,   merchant   account   fulfillment,   and  low  cost  high  quality
telecommunications services.

     2) Whoofhealth,  Inc. sells its own homeopathic  herbal branded products to
the general  public.  The product is market through  various media including TV,
Direct Sales and the Internet. It was organized April 28, 2000.

     3) Whoofmail, Inc. was organized to provide free multilingual email service
to be offered to the general  public in order to build the customer base. It was
organized April 28, 2000.

     4) Whoofmall,  Inc.  will provide a shopping mall on the Internet,  whereby
other vendors can advertise and sell their  products to the general  public.  It
will receive its revenue  through various  services  offered to the vendor s who
are participating in the mall. It was organized May 2000.

     5)  Whoofmusic.com,  Inc. was created to sell its own label specializing in
music from the 60 s, 70 s, 80 s and 90 s and related products. Marketing will be
done through TV Press media and the Internet. It was organized May 2000.

     6)  Whooftelco,  Inc.  will be a low cost high  quality  telecommunications
provider  to the  European  and  Asian  wireless  community  and to the low cost
domestic and international calls customer in the United States. It was organized
March 2000.

     7) Whoofnet.com AC is a Swedish corporation formed on January 16, 2001. The
purpose is to act as the European call center for Whoofnet.com.

     8)  Whoofstore.Co  AB formed on January 16,  2001,  which is also a Swedish
corporation  operating as a duty free sales center Management estimates that the
licensure  granting the Company a tax-free  status has a market value between $5
to 10 million US dollars.

As of the dated of our financial statements none of the subsidiaries were active
or funded.

     In November  2000,  we acquired 100% of the stock of  2sendit.com,  Inc. in
Exchange for the issuance of approximately  8.4 million new investment shares of
the common stock of the  Company.  2sendit.com  provides a marketing  service by
advertising the products and services  through a variety of media with a primary
focus on the use of fax mail, and email.  With fax and email servers  located in
Dallas, TX and Denver CO,  2sendit.com is able to offer high capacity,  low cost
services. In addition that company maintains a small company attitude,  allowing
it to assist other small companies in need of our services.

     On November 15, 2000 we declared a 2 for 1 forward split of the outstanding
shares of our common stock.


(B) OUR BUSINESS.  iDial Networks is an established Application Service Provider
(ASP) of Internet Protocol and Wireless Application Protocol  (WAP)technologies.
The  Internet  is an  increasingly  significant  interactive  global  medium for
communication,  information  and commerce.  International  Data  Corporation,  a
market research firm, estimates that the number of users who make purchases over
the  Internet  worldwide  will  grow  from 31  million  in 1998 to more than 183
million in 2003.

     Emergence of Internet  Telephony.  Internet  telephony has emerged as a low
cost  alternative to traditional  long distance  telephony.  Internet  telephone
calls are less  expensive  than  traditional  international  long distance calls
primarily  because  these  calls are routed over the  Internet  or through  data
networks.   The  use  of  the  Internet   bypasses  a  significant   portion  of
international  long distance  networks and the relevant tariffs.  Also,  routing
calls  over  the  Internet  is  more  cost-effective  than  routing  calls  over
traditional  circuit-switched networks, because the packet-switching  technology
that  enables   Internet   telephony   is  more   efficient   than   traditional
circuit-switched voice technology.  Packet-based networks,  unlike circuit-based
networks,  do not require a fixed  amount of  bandwidth  to be reserved for each
call.  This  allows  voice and data calls to be pooled,  which means that pocket
networks  can carry more calls with the same amount of  bandwidth.  This greater
efficiency creates network cost savings that can be passed on to the consumer in
the form of lower long distance rates.

     PREPAID  CALLING CARD  INDUSTRY.  The market for prepaid  calling cards has
grown  significantly  since 1993.  This  growth is  attributed  to three  trends
according to industry sources.  First, the larger  telecommunications  companies
have come to understand the strategic and financial  benefits of prepaid calling
cards.  Second,  consumers  are  becoming  more aware of various  advantages  of
prepaid cards.  Third,  businesses are beginning to purchase prepaids as a means
of controlling  telephony costs and simplifying record keeping.  We believe that
the affordable  pricing,  convenience  and enhanced  features of prepaid calling
cards has attracted price sensitive customers, business travelers, international
callers and other users of long distance  service.  Also,  while prepaid calling
cards are relatively new in the United States,  they have been a widely used and
accepted method of making telephone calls in Europe and Asia since the 1970 s.

     OUR TELEPHONE SERVICE PRODUCTS.  We sell virtual prepaid calling cards over
the Internet and physical prepaid cards through traditional retail outlets.  Our
Internet Phone Cards are virtual  because we do not issue a physical card.  Once
sold,  calling card can be used immediately to make  international  and domestic
long distance calls. Our web system functions as follows.  A potential  customer
accesses our website follows the prompt to enter the credit card  information to
purchase the virtual  calling card, we verify the credit card within seconds and
the  confidential  PIN and a toll free number is  displayed  for the customer to
record,  and the virtual  calling card can be used  immediately to place a call.
The customer information becomes part of our database for future reference.  Our
Internet  calling cards give us the  flexibility of promptly  changing the rates
and  features  to respond to  changing  consumer  demand,  rather than having an
inventory of physical  cards with set features  that cannot be changed until all
are recalled or used.  This also allows us to offer and test  several  different
types of virtual calling cards with varying pricing  features,  thus providing a
greater selection to our customers.  Our website is accessible 24 hours per day,
seven days a week,  so we are not  constrained  by the hours that a retail store
would be open for business.  Our website may also be reached from the customer's
home or office.  The  customer is not required to  physically  travel to another
location to make a purchase  and receive  delivery.  Our online  purchasing  and
delivery  also allows us to deliver a broad  selection  of products to customers
worldwide  in rural or other  locations  that do not have  convenient  access to
physical stores.

     U.S.  ACCESS.  Our U.S.  Access calling cards provide access to our network
from the United States to more than 241 countries  and  territories.  When using
the U.S.  Access  calling  card for a call from the  United  States  to  another
country, the customer uses a touch tone telephone to dial a toll free number and
enters  the PIN and the  telephone  number  the  customer  seeks to  reach.  Our
enhanced services  platform  determines the calling card is valid and the number
of call minutes remaining on it, based on the rate for the country being called.
The platform then completes the call and reduces the available credit balance on
the calling card at the conclusion of the call.


     WORLD  ACCESS.  When using the World  Access  calling  card for a call from
another  country to the United  States or from  country to country  outside  the
United States, the customer initiates the call through the Internet by accessing
our website.  On our web page, a form is displayed  and the customer  enters the
telephone  number  where he or she is, the  telephone  number he or she wants to
call and his or her PIN and then clicks on the call button.  This information is
transmitted  over the  Internet to our  platform.  The platform  determines  the
virtual  calling  card is valid and has a  sufficient  balance and then routes a
call to the  customer  at the  number  where  he or she is.  When  the  customer
answers,  the  platform  completes  the call by  connecting  to the  number  the
customer  wanted to call.  From our website,  these features allow  customers to
make calls from  anywhere in the world at our  international  United States long
distance rates using the virtual calling card and Internet access to our website
and platform.

     We have integrated the economics of VoIP technology with the convenience of
conventional  telephony to enable web initiated  telephone  services.  With this
iDial  technology,  we are  able to offer  consumers  and  businesses  telephony
services at costs  approaching  the  wholesale  rates of  carriers.  Unlike some
competitors  who  offer PC to phone  services,  iDial s web based  services  are
provisioned via the Internet but all calls are currently made phone to phone.

The majority of PC owners do not have microphones and telephony services.  IDial
delivers  high-quality  traditional and VoIP telephony services to consumers and
businesses, with the following benefits:

     LOW COST.  Telephone  calls are a fraction of the cost of traditional  long
distance service.

     HIGH VOICE QUALITY. We offer high voice quality by integrating  traditional
telephony and packet-switching technologies.

     EASE OF USE AND ACCESS.  Designed for  convenience  and ease of access from
anywhere in the world, an Internet  connection and a standard  Internet  browser
such as Netscape or Microsoft Internet Explorer is all that is required. Lacking
an Internet connection, the customer may dial a toll free or local access number
from any telephone or fax machine in the US to access our network as well.

     ONE-CLICK ONLINE CALLING.  iDial services enable users to speak with anyone
worldwide  with a single  click of a button.  On-line  retailers  could use this
technology to connect customers to sales representatives when browsing their web
sites and increase the likelihood of consummating the on-line sale.

     RELIABLE/FLEXIBLE  SERVICE. The technologically  advanced design allows for
the expansion of the network  capacity by the simple  addition of switches,  and
the ability to seamlessly reroute traffic if problems arise.

     EASE OF PAYMENT AND ONLINE ACCOUNT ACCESS. iDial customers are able to make
calls by opening a prepaid account using credit cards, wire transfers or checks,
and can access  their  accounts  via the  Internet  to view their call  history,
account balances, or to increase their prepaid amounts.

     CUSTOMER SUPPORT. The Company offers real-time customer support in multiple
languages,  and the  integrated  billing  and call  management  system  provides
service representatives with immediate access to customer accounts.

     PRODUCT  DESCRIPTION.  iDial has  integrated  the economics of VoIP and WAP
technology  with  the  convenience  of  conventional  telephony  to  enable  web
initiated telephone services. With this iDial technology, the company is able to
offer  consumers and  businesses  telephone  services at costs  approaching  the
wholesale rates of carriers.

     IDIAL'S  WHOLLY OWNED  SUBSIDIARY  WHOOFNET.COM  will develop and implement
marketing  plans  to  incorporate  sales  of  the  entire  iDial  product  line.
Whoofnet.com will also design and develop the iDial web site allowing iDial

Networks to revert back to research and development of new and existing  product
lines. The company will continue to expand its profitable agent program, whereby
other websites and  independent  sales agent are paid a commission to sell iDial
products.  Additionally,  several business  products  developed by iDial will be
aggressively  marketed by  Whoofnet.com.  iDial,  through its  marketing  arm of
Whoofnet.com, will enter the European market with our VoIP and WAP applications.
In a joint venture with a Swedish  government  agency,  we are in the process of
building a customer services center in Bracke Kommun in Sweden.

     WIRELESS  APPLICATION PROTOCOL (WAP) is the de facto worldwide standard for
providing  Internet  communications  and advanced  telephony services on digital
mobile phones,  pagers,  personal digital  assistants (PDAs), and other wireless
terminals.  The exploding  wireless market is embracing WAP  technology,  with a
predicated  600 million WAP phones is use by the end of 2003.  Europe is leading
the way in WAP, and Forrester  Research predicts that 219 million Europeans will
be accessing the Internet on a daily basis by 2003.

     iDial has developed a plan to be first to market with WAP  connectivity  to
our iDial services. We believe that a tremendous opportunity exists to:

     Immediately  provide low cost  international  long distance services to WAP
enabled phones through our WAP enabled technology;

     Incorporate  WAP access  into the iDial  portal,  giving WAP users the same
carrier choices available to traditional  wireless users, and incorporate a free
concept  for WAP  enabled  long  distance  as a choice  through  our portal land
network.

     iDial has  developed  and applied for  patents for  applications  to enable
Personal  Digital  Appliances  (PDA)  such as the Palm  Pilot  VII to  instantly
connect with the iDial site and avail  themselves of the company s long distance
services.  A similar  application for the new Microsoft  Pocket PC has also been
completed.  iDial will continue to develop WAP enabled  products and services to
insure  that its core  products  will  always be easily  accessible  by wireless
devices.

     Additionally  we currently offer  traditional  prepaid phone cards and VoIP
services  based on iDial  technology  under the following  brand names for which
various trade and service marks are registered.

     NETPHONECARD  www.netphonecard.com Web initiated worldwide phone calls with
US dial tone and low tariffs.

     IDIALDIRECT  www.idialdirect.com A complete  communications portal offering
flat-rate US products and worldwide access products.

     PHONE-ME-NOW  www.phonemenow.com  An iDial  e-commerce tool. A Phone-Me-Now
button is places on a website  that  allows a customer to initiate a call to his
phone from a representative of the company that is hosting the site.

     SENDACALL  www.sendacall.com  Prepaid calls sent within a virtual  greeting
card by-mail to recipients  anywhere in the world,  allowing  recipient to place
free call to sender.

     WIRELESS SERVICES The Company will continue to expand wireless  development
to  include  areas  such  as  Wireless   Access  Protocol  (WAP)  and  Bluetooth
technologies.


OUR  INTERNATIONAL  NETWORKS

     OUR  ENHANCED  SERVICES  PLATFORM.  Our  enhanced  services  platform  is a
specialized  telephone  switch based on technologies  from Cisco,  Microsoft and
Dialogic (a wholly  owned  subsidiary  of Intel  Corp.).  It is connected to our
website and data base and to our network of outgoing and incoming telephone

lines and Internet  lines.  It sets up all customer  account and PIN information
when a calling card is purchased and  immediately  activates the calling card so
it can be used at the time of purchase.  The platform also accepts and evaluates
all calls  from  calling  card  holders  over the toll free  number and over the
Internet and confirms the validity of the calling card and remaining balance. We
have also programmed into the platform a lowest cost routing matrix. This matrix
automatically  routes each call over the route most economical to us. This means
it will select our international carrier with the lowest rate of the Internet if
we have a gateway in the call destination  country.  We believe our platform can
currently  support  approximately  288  simultaneous  calls and  process  over 4
million  minutes of traffic per month.  Our platform is expandable to carry more
traffic by adding  additional  telephone  trunks and equipment.  Focusing on the
international  market, the use of our platform is spread throughout the day as a
result of the different world time zones.

     We plan to develop and offer new products and  services,  which may require
modifications  and  enhancements  to our  platform.  For  any  modifications  or
enhancement,  we will  either  contract  with the  manufacturer  to develop  new
software or we may develop the software,  or a combination of both. In the past,
we have  experienced  delays when we have tried to upgrade our platform.  If the
software  cannot be developed  cost  effectively,  or there will be  significant
delays,  we may elect to abandon a potential  product or service in favor of one
that  can  be  timely  developed  on a cost  effective  basis.  There  can be no
assurances that we can  successfully  develop the software to enable us to offer
new products or services.

     OUR INTERNET GATEWAY NETWORK. As of December 31, 2000, we had international
gateways  operational in Sri Lanka, Laos, Thailand and Holland. As of such date,
we also had  domestic  gateways  operational  in Dallas and in Los  Angeles  and
Denver. We intend to place Internet gateways in various other countries.  Before
we place a gateway in another country,  we enter into contractual  relationships
with local  persons or entities to operate  them.  We typically own or lease the
gateway  or have the  right to  purchase  it and the  local  person or entity is
responsible for procuring local Internet provider connection and local telephone
lines and  complying  with local law.  Our  contracts  with the local  person or
entity are generally  for a one-year term and are renewable  unless either party
declines  to renew.  We pay the local  person  or entity a  negotiated  rate per
minute for terminating or originating calls through the gateway.

     Our gateways allow for voice quality transmission through the Internet. The
historical  poor sound  quality of  Internet  voice  transmission  is due to the
Internet not being created for simultaneous voice traffic.  Unlike  conventional
voice  communication  circuits,  in which the entire  circuit is reserved  for a
call, Internet telephony uses packet switching  technology,  in which voice data
is divided into discrete packets that are transmitted  over the Internet.  These
packets must travel through several routers in order to reach their destination,
which may cause  misrouting,  and  delays in  transmission  and  reception.  The
software in our gateways  connect the packet switched data  transmitted over the
Internet to circuit  switched  public  telephone  networks in such a manner that
virtually  eliminates the delay in  transmission  normally  involved in Internet
voice transmission and the resulting pause and echo effect.

     Our Internet  gateways  enable us to route voice  quality calls through our
enhanced  services  platform to and from the country via the public  Internet or
private intranet networks such as a frame relay network. The cost of these calls
is based on the local  telephone  rates for the  country  where the  gateway  is
located. They are not based on internationally or local long distance rates.

     OUR LEASED LINES NETWORK.  We also lease  international  telephone lines to
transmit calls.  Our lease  agreements  obligate the carriers to terminate calls
routed by us to them at different rates for different countries and territories.

     With  these  agreements,  we have  access  to more than 241  countries  and
territories.  Leased  capacity is typically  obtained on a  per-minute  basis or
point-to-point   fiscal  cost  basis.  Our  agreements  are  typically  one-year
agreements with 30-day  cancellation  rights by either party. Rates are adjusted
approximately every 30 days, are based on volume and our rates generally decline
as volume increases.  We are dependent on these carriers to terminate our calls,
and the loss of one or more of them as a source for terminating calls could have
a  material  adverse  affect on us.  However,  we  believe  there  are  numerous
international  long distance  carriers that transport  calls to the countries we
desire to target and we believe we could replace any of the carriers we lost. If
the rates of any replacement  carrier are higher, or our existing carriers raise
their  rates,  our  profit  margins  would  decrease.  We may sell to other long
distance  carriers any excess line capacity we have. Excess line capacity is the
remaining  capacity on our  telephone  lines not used by us to terminate our own
calls during any given month.

     OUR THIRD PARTY CONTRACTS.  Our success depends, in part, on our ability to
continue  to lease  long  distance  telephone  capacity  from  third  parties at
economic  rates to serve the foreign  countries we target.  It also depends,  in
part,  on our  ability to  maintain  our  contractual  relationships  with local
terminating  parties in those countries where we have Internet  gateways.  If we
lose our leases or  contracts  or if these  parties are unable to provide  these
services, we believe we could replace them. However, it would cause a disruption
of our  business  until  they are  replaced.  Also,  any  replacement  leases or
contracts may not be at rates or on terms as favorable to us.

     CREDIT CARD PROCESSING ARRANGEMENTS. All sales of our virtual calling cards
are made over the Internet  through  credit card  purchases.  We use credit card
processing  companies to verify credit cards.  These  companies are connected to
our platform and database  and  verification  or denial is usually  accomplished
within seconds. We pay these processing companies a percentage of sales as their
fee.  We have  recently  increased  our  allowed  base for credit  card sales by
increasing the deposits we maintain with our processing companies.

     GROWTH STRATEGY. While a large number of VoIP companies have been formed in
recent years, most focus on the build out and development of international  VoIP
networks in the effort to capture an every  shrinking  high margin revenue base.
The company  believes  that in this very  competitive  landscape,  offering many
voice and data  transmission  options,  leasing time (or purchasing  minutes) on
VoIP  networks  will  quickly  become  a  commodity  business,  as  the  various
competitors whittle margins to gain growth and market share. It is imperative to
not  only  offer  a  quality  network  but to also  be an  aggressive  marketing
organization seeking to provide value added products and services.

The Company intends to leverage its position in the Internet telephony market to
make communications services readily available worldwide.  Its strategy includes
the following key elements:

     1) Drive Usage through Resellers and Strategic  Partners.  The Company will
promote  its  services   through   direct  sales  and   marketing   and  through
relationships with resellers and leading Internet hardware, software and content
companies.

     2) Pursue  Multiple  Sources  of  Revenue.  In  addition  to  minutes-based
revenue, the Company intends to pursue new web-based revenue  opportunities from
banner and audio advertising.

     3) Enhance Brand Recognition. The Company intends to strengthen and enhance
its brand recognition by cooperatively marketing its Internet telephony services
with leading companies in other market segments.

Many e-commerce sites have discovered the necessity of having a customer service
representative talk with potential buyers. However,  traditional 800 numbers are
still relatively expensive,  and require some effort on the part of the buyer to
initiate the call.  With iDial s  Phone-me-now  technology,  a simple click of a
button  will  connect  the buyer  with the seller s  representative  at very low
rates. To further lower operating costs, the Company is exploring joint ventures
with customer  service  centers in English  speaking  countries  where wages are
lower, and thus customer service becomes more affordable to e-commerce.

     SALES AND  MARKETING.  We have  developed  a  marketing  strategy  based on
increasing customer traffic to our website and strengthening our brand name.

     INTERNET ADVERTISING. We have taken a selective approach in our advertising
strategy.  We attempt to maximize the return from  promotional  expenditures  by
choosing advertising media based on the cost relative to the likely audience and
ability to generate increased traffic for our website. We identify a country and
customer group to whom we desire to market our virtual  calling cards.  We place
advertisements  on various websites and Internet portals  frequently  visited by
this  customer  group in the United  States  and  abroad.  These  advertisements
usually  take the form of banner ads that  encourage  readers  to click  through
directly to our website.  We believe that placing  banner  advertising  on these
websites  and  portals  may  significantly  increase  our  targeted  exposure to
prospective customers and increase our name identity.

     CUSTOMER  ELECTRONIC  MAIL  BROADCASTS.  We actively  market to our base of
customers through e-mail broadcasts. All new virtual calling card purchasers are
automatically  added to our  electronic  mailing list.  We e-mail  messages on a
periodic  basis to our  customers  announcing  new  rates,  new  countries,  new
products and new features.

     ELECTRONIC MAIL TO SELECT MAILING LISTS. We also deliver e-mail  broadcasts
to  certain  select  mailing  lists  from  time  to  time  announcing  pertinent
information, including the addition of a new country, new products and rates.

     OTHER METHODS.  We will continually  review other potential  cost-effective
methods of  advertising  and  marketing  our products  and services  through the
Internet.  Such methods may include the use of an affiliate program, chat rooms,
video e-mail and other methods.

     CUSTOMER SUPPORT AND SERVICE.  We believe that our ability to establish and
maintain  long-term  relationships  with  our  customers  and  encourage  repeat
purchases is  dependent,  in part,  on the strength of our customer  support and
service  operations and staff.  Our customer  support and service  personnel are
available from 8:00 a.m. to 10:00 p.m. Central Time, five days a week to provide
assistance  via  telephone.  We provide a 24 x 7, 7 days per week e-mail support
staff. They are responsible for handling all customer  inquires.  We provide pre
and post-sales  support via both e-mail and telephone  service  during  business
hours.  If a  customer  has  encountered  a  problem  in  ordering  or using our
products, our customer service department will take the call, or the e-mail, and
respond immediately.

     Our website has been designed around  industry  standard  architectures  to
reduce downtime in the event of outages or catastrophic occurrences. Our website
provides 24 hour a day, seven days a week  availability.  Our website operations
staff  consists of systems  administrators  who manage,  monitor and operate our
website.  The continued  uninterrupted  operation of our website is essential to
our business,  and it is the job of the site operations staff to ensure,  to the
greatest extend  possible,  the  reliability of our website.  We provide our own
connection to the Internet  through Global Crossing s backbone.  We believe that
these  telecommunications  and Internet service  facilities are essential to our
operation and we anticipate  upgrading these facilities as volume and demand for
our service grow.

     TECHNOLOGY.   We  use  a  combination  of  our  own  proprietary   software
applications  and  commercially  available  licensed  technology  to conduct our
Internet and telephone routing operations.

     PROPRIETARY  TECHNOLOGY.  We have developed  proprietary  customer software
which permits a customer to purchase a virtual calling card on our website using
a credit  card and to have  the  virtual  calling  card  delivered  while on our
website. We have also developed proprietary customer software to allow our world
access  virtual  calling cards and phone collect PINs to initiate  calls through
regular telephone lines using our website and enhanced services platform, and we
have developed  various  proprietary  credit and fraud  management  applications
which aid us in checking credit and limiting fraudulent transactions.

     Our  engineering  staff  consists of  software  development  engineers  and
consultants  based on our wholly owned  subsidiary in Sri Lanka. We historically
have  developed  and  expect  to  continue  to  develop   proprietary   software
internally.  Our engineering strategy focuses on the development of our website,
which  includes the  enhancement  of features and  functionally  of our existing
software components,  the development of additional new software components, and
the integration of off-the-shelf components into our systems.

     COMMERCIALLY  AVAILABLE LICENSED TECHNOLOGY.  Our strategy has also been to
license  commercially  available technology whenever possible rather than seek a
custom-made  or  internally-developed  solution.  We believe that this  strategy
enables us to reduce our operating costs and to respond to changing  demands due
to growth and  technological  shifts.  This strategy also allows us to focus our
development  efforts on creating  and  enhancing  the  specialized,  proprietary
software applications that are unique to our business.  Listed below are some of
our key architectural components:

     High speed links to the Internet through Global Crossing s backbones;

     Dell clustered Servers for web and data base  applications  running Windows
NT,

     Linux and Microsoft SQL Server 7.0;

     Microsoft  Internet  Information Server 4.0 has been chosen for its ability
to secure sensitive customer information through SSL encryption; and

     Microsoft SQL Server 7.0 is a relational  database.  All customer names and
addresses,  PINs,  number of purchases  and call records are stored  within this
database.

We depend on Internet  service provider to provide Internet access to us and our
customers. Our local terminating parties in foreign countries also rely on local
Internet service providers for access to the Internet in their countries.  If we
lost our connection with our Internet service  providers,  we could not sell our
virtual calling cards through our website,  and web initiated calls could not be
made by our  customers,  until  the  connection  was  reestablished.  If a local
terminating party in a foreign country loses its Internet  connection,  we could
not route calls over the Internet to that  destination  until the connection was
reestablished.  These  failures could cause us to lose customers and our ability
to sell virtual  calling cards and  telephone  services  would be affected.  Our
customers also rely on Internet service providers for access to the Internet. If
our customers cannot access Internet, they cannot access our website to purchase
virtual calling cards or make web initiated calls.

     GOVERNMENT  REGULATION OF THE INTERNET.  The United States Congress and the
Federal  courts  have taken  actions  that,  in some cases  impose some forms of
regulation  on the  Internet,  and in other  cases  protect  the  Internet  from
regulation. For example, Congress has adopted legislation that regulates certain
aspects of the Internet.  This includes  restrictions  on some forms of content.
These  regulations  have had mixed  success in the Federal  courts.  The Supreme
Court has struck  down some  restrictions  on indecent  content,  but has upheld
other restrictions on harassing Internet messages.  Conversely,  Congress passed
legislation  in 1998 that imposed a three-year  moratorium on the  imposition of
new taxes on Internet  transactions.  At the same time,  numerous new bills have
been proposed that would further regulate various aspects of Internet  commerce,
and ensure the continued deregulation of others. It is impossible to say at this
time whether and to what extent the Internet may  ultimately be regulated by the
United States government.

     The European  Union has also  enacted  several  directives  relating to the
Internet,  including  one  permitting  European  consumers  to sue in their  own
country persons from another country  retailing goods over the Internet.  On the
other hand, the G8 countries have recommended that digital products (such as our
virtual calling cards) should be exempt from all import taxes and custom duties.

As with the United States  Congress,  the European Union, and the governments of
individual foreign countries,  are actively considering propose legislation that
could result in new  regulations  on the Internet.  Increased  regulation of the
Internet may decrease its growth,  which may negatively impact the cost of doing
business via the Internet or otherwise materially adversely affect our business,
results of operations and financial condition. In addition, applicability to the
Internet  of  existing  laws  governing  issues  such  as  property   ownership,
copyrights and other  intellectual  property issues,  taxation,  jurisdiction to
sue, libel,  obscenity and personal  privacy is uncertain.  The vast majority of
such laws were adopted prior to the advent of Internet and related technologies.
As a result,  these laws do not  contemplate or address the unique issues of the
Internet and related technologies.

     POTENTIAL  REGULATION OF INTERNET  TELEPHONY.  To our knowledge,  there are
currently no domestic and few  international  laws or regulations  that prohibit
the transmission of voice  communications  over the Internet.  If Congress,  the
FCC,  state  regulatory  agencies  or  governments  of  other  countries  impose
substantial  regulations  relating  to  Internet  telephony,  the  growth of our
business could be adversely affected. In the United States, several efforts have
been made to enact federal legislation that would either regulate or exempt from
regulation  telecommunication  services provided over the Internet. State public
utility  commissions  may also attempt to regulate the  provision of  intrastate
Internet  telephony  services.  In late 1998 and early  1999,  however,  the FCC
issued two decisions that suggest that all  transmissions  over the Internet may
be jurisdictionally  interstate, and these decisions may restrict the ability of
state public  utility  commissions  to regulate  Internet  telephony.  Recently,
however,  a Colorado  court ruled that  Internet  telephony  companies  would be
subject  to  payment  of  originating  and  terminating  access  charges  to the
incumbent  provider.  Imposition of such charges on our services  would increase
our  costs.  Internationally,  a number of  countries  that  currently  prohibit
competition in the provision of voice  telephony have also  prohibited  Internet
telephony. Other countries permit but regulate Internet telephony.

     On April 10,  1998,  the FCC  issued a Report to  Congress  concerning  its
implementation  of the universal  service  provisions of the  Telecommunications
Act. In the Report,  the FCC  indicated  that it would  examine the  question of
whether any forms of phone-to-phone  Internet Protocol telephony are information
services, which are unregulated, or telecommunications services, which are fully
regulated.  The Report  noted  that the FCC did not have,  as of the date of the
Report, an adequate record on which to make any definitive  pronouncements.  The
FCC did,  however,  note that the record before it suggested  that some forms of
phone-to-phone  Internet  telephony  appear  to have  the same  functionally  as
non-Internet Protocol  telecommunications  services. While the FCC found that it
needed a more complete record to establish new rules,  it tentatively  concluded
that providers of phone-to-phone  Internet  telephony services should be treated
like other  providers  of  telephone  service.  This  means that they  should be
required to make payments into Federal universal  service subsidy  programs.  To
date, the FCC has taken no further  action,  and has not imposed this obligation
on  Internet  telephony  providers.  It may do so at some  time  in the  future,
however,  and such a  decision  could  have a  material  adverse  effect  on our
business, increasing our costs, and the price at which we can offer our Internet
telephony services.

     REGULATION  OF  LEASED  LINES AND  CARRIERS.  When we lease  long  distance
telephone  capacity  from  third-party  carrier,  we rely on them to comply with
local laws and  regulations.  We have no control  over the manner in which these
companies operate in these countries. Foreign regulatory,  judicial, legislative
or  political  entities  may raise  issues  regarding  the  compliance  of these
companies  with local laws or  regulations,  or limit their ability to carry our
calls.

     STATE LAWS. Several states have also proposed  legislation that would limit
the uses of personal user information gathered online or require online services
to establish  privacy  policies.  Changes to existing laws or the passage of new
laws  intended to address  these issues could reduce  demand for our services or
increase  the cost of doing  business.  In  addition,  because our  services are
accessible  worldwide,  and we facilitate the sale of goods to users  worldwide,
other jurisdictions may claim that we are required to comply with their laws. We
are qualified to do business in Nevada, Florida, Colorado,  California and Texas
only,  the failure by us to qualify as a foreign  corporation  in a jurisdiction
where we are required to do so could  subject us to taxes and  penalties for the
failure to qualify and could  result in our  inability  to enforce  contracts in
such jurisdictions.  Any such new legislation or regulation,  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,  financial
condition and operating results.

     SALES TAXES.  We do not currently  collect sales or other similar taxes for
virtual calling cards or other services sold through our website, other than for
virtual calling sold to Texas residents. However, one or more states may seek to
impose sales tax or similar  collection  obligations on out-of-state  companies,
such as ours, which engage in Internet commerce. A number of proposals have been
made at the state and local level that would impose additional taxes on the sale
of goods and services through the Internet.  Such proposals,  if adopted,  could
substantially  impair the growth of online commerce,  and could adversely affect
our opportunity to derive financial  benefit from such activities.  Moreover,  a
successful assertion by one or more states or any foreign country that we should
collect sales or other taxes on the sale of virtual calling cards or services on
our system could have a material adverse effect on our operations.

     Legislation  imposing a  moratorium  on the ability of states to impose new
taxes on Internet-based transactions was passed by the United States Congress in
1998.  The  tax  moratorium  will be in  effort  only  until  October  2001  but
moratorium  expires at the end of its three-year term, there can be no assurance
that  the  moratorium  could  allow  various  states  to  impose  new  taxes  on
Internet-based  commerce.  The  imposition  of such taxes  could have a material
adverse effect on our business,  financial condition and operating results.  The
same  legislation  that  imposed the  moratorium  also  established  an Advisory
Commission  to consider  methods by which  states  could  impose  sales taxes on
Internet transactions.

     COMPETITION. With respect to prepaid calling cards, we compete with many of
the largest telecommunications providers,  including AT&T, MCI WorldCom, Cable &
Wireless and Sprint.  These companies are substantially  larger and have greater
financial,  technical,  engineering,  personnel and marketing resources,  longer
operating histories,  greater name recognition and larger customer bases than we
do. We also compete with smaller,  emerging carriers in the prepaid calling card
market, including Ursus Telecom Corporation,  RSL Communications,  IDT Corp. and
ValuComm  Communications Corp. We may also compete with large operators in other
countries.  These companies may have larger, more established customer bases and
other competitive advantages.  Deregulation in other countries could also result
in significant rate reductions.  We believe that additional  competitors will be
attracted to the prepaid card market.  These competitors include  Internet-based
service  providers  and other  telecommunications  companies.  Competition  from
existing or new  competitors  could  substantially  reduce our revenues from the
sale of these cards. A general  decrease in  telecommunication  rates charged by
international  long distance  carriers could also have a negative  effect on our
operations.

     An increasing number of large,  well-capitalized companies are entering the
market for Internet telephony products and services.  As a result, we may not be
able to compete  effectively with our competitors in this market, or to increase
our customer base. Various major long distance  providers,  including AT&T, Bell
Atlantic  Corporation and Deutsche Telekom AG, as well as other major companies,
including Motorola,  Inc., Intel Corporation and AOL-Time Warner, Inc., have all
entered  or plan to  enter  the  Internet  telephony  market,  in some  cases by
investing  in  companies  engaged  in  the  development  of  Internet  telephony
products.  Our  competitors  also  include  a  number  of  companies  that  have
introduced   services  that  make  Internet  telephony  solutions  available  to
businesses and consumers.  Net2Phone, Delta Three, ITXC Corp., iBasis, Inc., and
MCI WorldCom  provide a range of Internet  telephony  services to consumers  and
businesses  that are  similar  to the ones we offer.  Several  other  companies,
including AT&T, Sprint and Qwest Communications,  have announced their intention
to  offer  these  services  on a wider  bases  in both  the  United  States  and
internationally.

     In addition,  we compete in the market for Internet telephony services with
companies  that  produce  software  and  other  computer  equipment  that may be
installed on a user s computer to permit voice communications over the Internet.
Current Internet  telephony  products include  VocalTec  Communications,  Ltd. s
Internet Phone,  QuarterDeck  Corporation s WebPhone and Microsoft s NetMeeting.
Also,  a number  of large  companies,  including  Cisco  Systems,  Inc.,  Lucent
Technologies,  Inc.,  Northern Telecom Limited,  Neura  Communications,  Clarent
Communications and Dialogic Corp. offer or plan to offer  server-based  Internet
telephony products. These products are expected to allow communications over the
Internet  between  parties using a multimedia PC and a telephone and between two
parties using telephones.

     We believe that the principal  competitive  factors affecting our market in
no particular order are;

     price  and  rates;

     quality  of  transmission;

     product  accessibility  and  ease  of  use;

     customer  service;

     brand  recognition;

     website  convenience  and  accessibility;

     targeted  marketing  directly  to  probable  users  of  the  services;

     quality  of  search  tools;  and

     system  reliability.


     Increased  competition  may result in reduced  operation  margins,  loss of
market share and  diminished  value in our brand.  We cannot  assure you that we
will be able to compete successfully against current and future competitors.  As
a strategic  response to changes in the  competitive  environment,  we may, from
time to time,  make certain  prices,  service or marketing  decisions that could
have  a  material  adverse  effect  on our  business,  financial  condition  and
operating results.

     New  technologies  and the expansion of existing  technologies may increase
competitive  pressures by enabling our competitors to offer lower-cost services.
Certain web based  applications  that direct Internet  traffic to other websites
may channel users to services that compete with us. In addition,  companies that
control  access to  transactions  through  network  access or web browsers could
promote  our  competitors  or  charge us  substantial  fees for  inclusion.  The
occurrence  of any of these events could have a material  adverse  effect on our
business, financial condition and operating results.

     WHOOFNET.COM  iDial  Networks'  wholly owned  subsidiary  holds  offices in
Florida,  London  and  Sweden.  Whoofnet.Com,  Inc.,  a network  of  interactive
services,  web brands and e-commerce services,  Whoofnet.Com provides aggregated
third  party  content,   Web  search  and  directory  services,   community  and
personalization  features,   personal  Web  publishing,   and  online  shopping.
Whoofnet.Com  seeks  to draw a large  number  of  viewers  to its web  sites  by
providing a one-stop  destination for  information,  communication  and shopping
services on the Web.  The company  will  generate  revenue  through a variety of
sources  including,  but not limited to, selling  advertising and  sponsorships,
electronic  commerce and by licensing its products and technology.  Whoofnet.Com
is an ASP with several Internet brands including Whoofnet.Com portal,  WhoofBiz,
WhoofTelCo and WhoofMail. Through its strategic alliances, Whoofnet will develop
and  offer  easy  to  deploy,  end-to-end  e-commerce  solutions  for  companies
operating in the Net Economy.  Whoofnet is marketing and  technology  driven and
has recruited talented,  experienced professionals within the Florida offices as
well as internationally  who generate  enthusiasm and energy for the company and
its strategy.  The Whoofnet  strategy is to market goods and services for itself
and others with  emphasis on the European  market.  This  strategy  will produce
income from actual sales made by Whoofnet or those with whom we are allied.

     WHOOFNET.COM OVERVIEW. Convergence today means many things, the Cell or PCS
telephone can be an Internet Terminal,  the Computer can become your TV, your TV
can become your  Computer,  and your Video game station can access the Internet,
Video is being  delivered on phone lines,  Phone  Service is being  delivered by
Wireless  Technology.  All these things are changing the way people communicate,
educate and entertain themselves. iDial Networks, Inc. intends to implement this
philosophy into their sales and advertising campaigns, using television to drive
using  customers to the  Internet  and the Internet to drive  customers to their
phones.

     iDial Networks' wholly owned subsidiary  Whoofnet.com  host the portal site
www.whoofnet.com  providing  the  user  with  access  to all of  iDial  Networks
services and  products.  In addition,  Whoofnet.com  highlight  the latest iDial
Networks news and developments,  keeping our shareholders and investors informed
on what is happening within the company. The acquisition of Whoofnet.Com and its
subsidiaries  affords iDial  Networks the  opportunity  to market a long line of
products and services to targeted audiences within the United States and Europe.
As a company with unique  marketing  resources and innovative  vision,  Whoofnet
delivers the two things that matter most: Reach and Revenue.

     Whoofnet  will drive sales of the products and services by utilizing  media
including TV, Radio, Print and Internet. The company will continually expand and
grow the current,  existing  product base using media as a source of support for
the teams of distributors working independently out in the field.

     WhoofTelco will create and implement all marketing and  distribution  plans
for the  iDial  product  line  with the main  strategy  being  the  focus on the
specialized business market. WhoofTelco will market the iDialDirect products and
services  offering  new  subscribers  free  Internet  access  and  free  E-mail.
WhoofTelco  will  utilize  TV,  print,  Internet  and  radio  to  promote  these
offerings.

     WhoofMusic will seek to joint venture with  established  vendors within the
music and video  industry.  We will expand this service to deliver  customizable
compilations  of  music  to  incorporate  hard-to-find  artists  and  previously
released  albums.  The company will drive  traffic to this site by utilizing the
Internet,  TV,  radio,  print and TV.  WhoofMusic  will offer its  visitors  the
opportunity to sign up for free Internet access and free E-mail.

     WhoofHealth  will focus on the increasing  market for alternative  remedies
and  homeopathic  medicine  providing  the customer will  information,  updates,
product lines and services as well as links to affiliated sites of interest. The
company will promote the  WhoofHealth  product  lines to our database of members
and reach out to new customers by utilizing  the Internet,  TV, print and radio.
The marketing plans for WhoofHealth  will include  offering free Internet access
and free E-mail.

     WhoofBiz  has the ability to provide each small  business  owner with a web
presence,  handling  all back  end  administration  while  providing  the  small
business owner with merchant services and shopping cart capability.

     Whoofnet s principals  have sold millions of dollars worth of goods through
global  channels  of   distribution,   including   direct  response   television
programming,  retail outlets and international  independent  representatives and
affinity  marketing  groups.  Their  success is directly  attributable  to their
skills  in  assessing  the  market  viability  of a  product,  leveraging  media
resources to maximize  that  product's  exposure to consumers  and  establishing
retail distribution channels that build back-end revenue.

     The infomercial industry is a predictable,  financially sound business that
provides  clues  to  emerging  trends  in  global  consumer  marketing  and  the
burgeoning electronic retailing industry. Whoofnet.com will utilize DRTV (Direct
Response Transactional Television) to market consumer products both domestically
and  internationally.  By combining television s proven ability to drive product
sales with the global informational and access capabilities of the Internet, the
company will  benefit  from a true  multi-media  sales and  marketing  division.
Print,  radio and  direct  mail are the other key  components  of the  marketing
strategy. We will choose products that offer sales continuity and will determine
the  product  base and  target  markets  within  the  United  States  and Europe
accordingly.  Given the current growth projections for web based e-commerce with
a global reach and the positive economic  environment existing within the United
States, iDial Networks predicts strong profitability with this venture.

     Whoofnet  will  leverage  its long track  record in both DRTV and  Affinity
Sales/Marketing  Programs to take  products  overseas.  Tapping into its contact
base of international independent  distributors,  Whoofnet will enlist their aid
in  promoting  and selling its  products to a true global  clientele.  Currently
Whoofnet  has  established  promotional  and  distribution   relationships  with
companies on three continents.

     The first  product to launch is our iDial Gold  Advantage  Card.  The iDial
Gold  Advantage  Card is an  ATM/Debit  Card that offers an  extensive  Consumer
Benefits  Package.  It is an inexpensive,  fast and secure way to transfer funds
domestically &  internationally.  It is a reloadable debit card that can be used
at ATM's all  around the world.  It can be used to buy gas,  groceries  or other
items from  merchants with debit card  capability and has an extensive  Consumer
Benefits Package offering savings on pharmacy,  vision, dental, hearing, travel,
gifts,  vitamins,  and more. iDial Gold Advantage Card comes with a primary card
and a family card enabling them to save up to 75% on National and  International
money transfers.  By purchasing the package and loading funds onto the card, the
customer  has opened an FDIC  INSURED  account with Goleta  National  Bank.  The
account can accept Direct Deposit. Employees can have their wages electronically
deposited to a secure  account and can then access their wages  anytime from ATM
or point-of-sale retail locations.

     The customer  receives TWO (2) identical  cards when they join the program.
The second card can be used to transfer money  domestically or  internationally,
just by forwarding the second card to a family member or friend  anywhere in the
world. This enables the second cardholder to withdraw funds from any ATM machine
worldwide.

     WHOOFSWEDEN.  Whoofnet.com,  Inc.,  has entered into a Letter of Commitment
dated April 7, 2000, with the regional government of central Sweden known as the
Br cke Kommun to develop a state of the art  e-commerce  business  center.  This
Letter of Commitment was transferred to the wholly owned subsidiary  WhoofSweden
on January 16, 2001. The highlights of this arrangement are as follows:

          Facilitate  Internet  e-commerce,

          Build  a  mirrored  redundant  e-commerce  computer  center,

          Operate  a  customer  service  &  product  reload  center,  and

          Develop  a  product  fulfillment  house  for  shipping.

WhoofSweden  has entered  into a very  favorable  government  financial  support
package, the highlights of which are as follows:

     The Br cke  Kommun  government  will  underwrite  35% of the  cost  for the
equipment, office furniture,  computers,  hardware, software and 35% of the cost
of all  advertising  that  WhoofSweden  expends  worldwide for the first year of
operations up to US $2.9 million in funding,

     The Br cke Kommun government will underwrite the salary/employee  costs for
the  first  28  weeks  for  every  employee  up to  150,000  skr/employee  or US
$17,200/employee/28 week period for 300 employees totaling $5,160,000,

     The Br  cke  Kommun  government  will  provide  WhoofSweden  with  a  total
financial support package for this project in the amount of $8,060,000,

     The Br cke Kommun  government in conjunction  with  WhoofSweden is actively
seeking further  financial  support and government  assistance from the national
Swedish   government.   We  reasonably  expect  additional  forms  of  financial
assistance to be forthcoming within months following commencing operations,

     WhoofSweden  shall  enjoy  a full  rent  abatement  for the  first  year of
operations and  thereafter  for the next 4 years rent shall step-up  increase to
market  levels.  The Br cke Kommun  has also  pledged to build to our needs when
required, and

     WhoofSweden  expects  to  employ  up to 300  people  at the  height  of the
project.


     SWEDEN,  A LEADING  IT  NATION.  Sweden is one of the world s  foremost  IT
countries.  The IDC/World Times Information Society Index for 1999 places Sweden
in the global top 2 positions, just behind the U.S., Sweden s telecommunications
and  data  infrastructure  is  highly  advanced,  extensive  and  reliable.  Few
countries  invest  as much in IT as  Sweden in  relation  to GNP.  Sophisticated
Swedish industrial buyers like AstraZeneca,  Atlas Copco, Electrolux,  Ericsson,
SKF,  Saab,  Scania  and  Volvo  have  encouraged  the  advanced  usage of IT in
logistics  solutions and have fostered the creation of a number of today s large
Swedish software companies and IT-consultants.  Intentia,  IFS, WM-data, IBS and
IMI are leading solutions and software providers for the support of supply chain
management   implementations.   EDI  is  commonly  used  in   company-to-company
communications.

     BUSINESS OPPORTUNITIES. The widespread use of IT throughout society creates
vast  business  opportunities  for  foreign  companies  wishing to benefit  from
operating in a  sophisticated  environment  with  excellent  R&D  resources  and
demanding  customers.  Meanwhile,  Sweden  is  committed  to  strengthening  its
position as a leading IT nation.  Only the United States invests more per capita
in new  information  and  communications  technology,  according to the European
Information Technology Observatory. Foreign investors in Sweden meet an open and
honest  society,  characterized  by trust and  cooperation.  According to annual
surveys by Transparency International, Sweden is the third least corrupt nation,
after  neighbors  Denmark  and  Finland.  This is one reason why it s easy to do
business  in Sweden.  Many of the  stresses  and strains of modern life are less
acute in Sweden  than  elsewhere.  Crime rates are low and there are few natural
disasters.  Sweden is recognized for its attention to the  environment,  both at
the corporate and private  levels.  Residents and visitors  admire Sweden s open
spaces and  unpolluted  cities and  countryside.  Only two  nations  (the US and
Germany) are considered to have more companies than Sweden that actively pioneer
new  products  and  processes,  according  to the World  Economic  Forum  Global
Competitiveness Report 1998. And only three nations (Japan,  Switzerland and the
US) offer a more  competitive  innovation  climate than  Sweden,  according to a
recent  study  for the  American  Competitiveness  Council.  Many  international
companies have recognized Sweden s strong technological and innovative position.
Foreign-owned  companies  now account  for almost 20 percent of Swedish  private
business R&D expenditures. Almost 70 percent of the Japanese-owned manufacturing
companies in Sweden perform local R&D.

     FACILITATING  GLOBAL  EXPANSION.  The  presence  of many  leading  original
equipment  manufacturers has fostered  internationally  oriented management,  an
excellent  command of foreign  languages  and an open  attitude  toward  foreign
companies.  Sweden has a limited  domestic  market.  This has forced the Swedish
corporations  to bridge the gaps in time and space to  international  markets by
development of efficient logistics and communications systems. Swedish companies
were among the first to apply the  integrated  logistics  concept and today lead
the development of e-logistics.  By expanding into Sweden, foreign companies can
take  advantage of this  competitive  and diverse base for future  international
success.

     PROJECT BENEFITS FOR  WHOOFSWEDEN.  The following is a list of the benefits
WhoofSweden project will have for the shareholders and the corporation:

     Br cke  Kommun  investment  may exceed US  $10,000,000  for the life of the
project.  This will result in a direct savings for WhoofSweden,  thus bolstering
profits and shareholder value,

     WhoofSweden will further expand its global operations,  position and market
share, thus enhancing value for its shareholders,

     WhoofSweden will more effectively penetrate into European and Asian markets
from the Swedish operation,

     WhoofSweden  will  build  a  redundant  e-commerce  computer  network  as a
mirrored  back up to the  American  network,  thus  significantly  lowering  any
possibility of down time or a loss of revenue,

     WhoofSweden  will  utilize the  sophisticated  and computer  savvy  Swedish
workforce to support e-commerce initiatives and customer service demands,

     WhoofSweden will be able to remove all net profits from the Swedish project
without tax or foreign exchange controls,

     WhoofSweden  will  develop  a link  into  the  Swedish  Internet  backbone,
telecommunications and fiber optics network to reach global markets, and

     WhoofSweden  will diversify its  operations,  thus becoming more attractive
for acquisitions or takeovers.


     2SENDIT.COM  INC.  is  an  established   fax-messaging   provider  for  the
information  dissemination  market. Due to today s desire for immediate delivery
of information,  fax messaging has become a popular means to deliver information
quickly.

     FAX  MESSAGING.  Fax  Messaging  has  emerged  as  a  low  cost  source  of
communication  for  companies to get a message out,  where  messages  range from
newsletters  to restaurant  menus.  Fax messaging has proven to a less expensive
than traditional mail.  Traditional mail remains as a popular choice for getting
a message out, however, with costs of postage, envelope and printed material all
necessary pieces,  today s budget constraints find that these expenses limit the
number of recipients.  Fax messaging  provides a low cost, high volume method of
getting the same material out of the recipients.  An underlying  benefit is that
the results are almost immediate.  While a traditional mail piece may take up to
a week to deliver,  fax  messaging  usually takes less than an hour to reach the
same audience. Fax messaging also has a cost related only to completed messages.

With  traditional  mail,  the cost is paid up front and there are no refunds for
lost mail, unused postage, or damaged material.

     PRODUCTS.  Fax  messaging  is simply  the  ability  to send a  message  via
facsimile to an intended recipient.  Customer normally provide a recipient list,
however, we do provide lists for some customers. We do offer additional services
such as database management, fax removal, and limited email messaging.

     GROWTH STRATEGY.  While several fax messaging companies have emerged in the
recent  years,  many  others  have  been  unable  to  sustain  volume  and  have
subsequently  merged with competitors.  We have chosen to maintain a slow growth
cycle by adding customers through new advertising and marketing. We offer highly
competitive  rates along with the capacity to complete jobs in a timely  manner.
We use the following websites as a primarily method of advertising:

     a)     www.2sendit.com

     b)     www.2faxit.net

     c)     www.2faxitnow.com

     d)     www.mailing-solutions.com

2sendit.com is also researching the possibility of merging with competitors as a
method of growing the business.

     TECHNOLOGY. 2sendit.com uses licensed software along with both Dialogic and
Brooktrout  fax cards.  These cards are  connected to third party high  capacity
digital lines.  This  technology  allows the mass  transmission of faxes through
each fax server.


     GOVERNING LAWS.  While the laws of each state are changing  daily,  most of
the governing laws are federal. 2sendit.com works with each municipality to make
sure that it is in full compliance with these changing laws.  2sendit.com  makes
sure that each  transmission has the required pieces of information on it before
sending.  The federal laws require that each fax have the sender  information as
well a method for removal.

     PROPRIETARY  TECHNOLOGY.  We  use a  combination  of  our  own  proprietary
software applications and commercially  available licensed technology to conduct
Internet  and  telephone  routing  operations.  We  have  developed  proprietary
software  which  permits a customer  to purchase a virtual  calling  card on the
website  using a credit  card  and to have  the  virtual  calling  card  account
activated  while on the website.  Also  proprietary are various credit and fraud
management  applications,  which aid in checking credit and limiting  fraudulent
transactions.  Additionally,  we have developed proprietary software that allows
for the real-time provisions of customers on the network using a credit card and
have immediate access to multiple accounts and services serving the wireless and
residential/soho markets.

     FINANCING PLANS. For information, please see Item 6 of Part II Management s
Discussion and Analysis.

     POSSIBLE  GROWTH  THROUGH  ACQUISITIONS.  We will seek to grow our business
through  acquisitions of other companies in our business or a rebated  business.
We review  acquisition  candidates  from time to time. If a candidate  meets our
criteria, we may elect to acquire it using cash, Common Stock, or combination of
both.

     EMPLOYEES.  As of December 31, 2000,  we had 18 full-time  and 10 part-time
employees.  None of our employees are  represented by a labor union. We have not
experienced any work stoppages and consider our employees relations to be good.

     OUR FUTURE  PERFORMANCE  depends  in  significant  part upon the  continued
service of our key technical and senior management  personnel,  none of whom are
bound by an employee agreement requiring service for any defined period of time.
The loss of services of one or more of our key  employees  could have a material
adverse effect on our business,  financial condition and operating results.  Our
future success also depends in part upon our continued ability to attract, hire,
train  and  retain  highly   qualified   technical  and  managerial   personnel.
Competition  for such personnel is intense and there can be no assurance that we
can retain our key personnel in the future.

     YEAR 2000/2001.  We have not experienced any "Year 2000/2001"  technical or
computer  deficiencies or compliance issues to date,  including  problems of our
vendors or suppliers that might indirectly have effected the productivity of our
Company.



                        ITEM 2. DESCRIPTION OF PROPERTY.

     We maintain our administrative  offices at 10800 E Bethany Drive, Suite 380
Denver,  CO.  80014.  The  facilities  are used by our wholly  owned  subsidiary
Whoofnet.com  2Sendit.com.  The office site is  approximately  1,500 square feet
where the rental is  approximately  $1,340 per month. The facility is leased for
two years ending  September  30, 2003.  We maintain a facility of  approximately
1,000 square feet at 5825 Sunset Blvd., Suite 116, Hollywood, CA 90028. The rent
for  this  facility  is  approximately  $925  per  month  and  is  leased  on  a
month-by-month  basis. We maintain a facility at 1211 S. Parker Road, Suite 203,
Denver,  CO  80231  for use by our  wholly  owned  subsidiary  2sendit.com.  The
facility is approximately  2,300 square feet. The rent is  approximately  $2,500
per month.  The lease expires in August 2001. We maintain a facility in Colombo,
Sri Lanka of approximately  2,500 square feet. The rent is approximately  $1,500
per month  and is used as a  customer  service  and R&D  staff  facility.  As of
December 31, 2000, we maintained an office at 16990 Dallas  Parkway,  Suite 106,
Dallas,  TX 75248.  This office was closed in February  2001 and all  operations
were  consolidated  to the other offices.  We believe that our space is adequate
for our current needs. As we expand,  we expect that suitable  additional  space
will be available on commercially reasonable terms, although no assurance can be
made in this  regard.  We also  believe our  property is  adequately  covered by
insurance.


                           ITEM 3. LEGAL PROCEEDINGS.

     We  occasionally  become  involve in  litigation  arising out of the normal
course of business. There are no legal proceedings against us at this time.


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

     None.

     ITEM 5. MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS.


(A) MARKET INFORMATION.  The Company has one class of securities,  Common Voting
Equity  Shares (  Common  Stock ). As of the  date of this  Annual  Report,  the
securities  of the  Company may be traded  over the  counter,  but the market is
young and sporadic. Quotations for, and transactions in the Securities so traded
are capable of rapid  fluctuations,  resulting  from the influence of supply and
demand on relatively  thin volume.  There may be buyers at a time when there are
no  sellers,  and sellers  when there are no buyers,  resulting  in  significant
variations of bid and ask  quotations by  market-making  dealers,  attempting to
adjust  changes  in demand  and  supply.  A young  market  is also  particularly
vulnerable to short selling , sell orders by persons  owning no shares of stock,
but  intending to drive down the market price so as to purchase the shares to be
delivered at a price below the price at which the shares were sold short .

     Of the Company s issued and outstanding  87,144,454  shares of Common Stock
as of  December  31,  1999 2000,  all shares,  subject to an  exception  for the
28,186,994 shares owned by affiliates of the Company, might be presently sold in
compliance with Rule 144, in brokerage  transactions,  at such time as there may
be trading in the common stock of this  Company.  Rule 144 provides  among other
things and  subject  to certain  limitations  that a person  holding  Restricted
Securities  for a period of two years,  who is not an  affiliate of the Company,
may sell  those  securities,  free of  restriction  in  brokerage  transactions.
Further,  shares  issued  pursuant to 1933 Act  Registration,  again  subject to
exceptions for affiliate ownership, are not Restricted Securities and are freely
tradable in brokerage transaction.  Affiliates are permitted by Rule 144 to sell
affiliate-owned securities (Restricted Securities held for more than on year and
Registered  Affiliate Control  Securities however long held) in limited amounts.
Possible  or  actual  sales of the  Company  s Common  Stock  under  Rule 144 or
otherwise might have a depressive  effect upon the price of the Company s Common
Stock,  at such time,  if and when the  common  stock of this  Company  might be
tradable in brokerage transactions.

     Our Common Stock is quoted  Over-The-Counter on the Bulletin Board (OTCBB).
The Company's trading symbol is IDNW.

     Period     High  bid     Low  bid
     ------     ---------     --------
     1st  2000     3.50          0.76
     2nd  2000     2.03          0.53
     3rd  2000     0.94          0.34
     4th  2000     0.44          0.05

The foregoing price information is based upon inter-dealer prices without retail
mark-up,  markdown or commissions and may not reflect actual transactions and is
adjusted for 2-to-1 split effective in November 2000.

     (B) HOLDERS.  Management  calculates that the approximate number of holders
the Company s Common Stock, as of December 31, 2000 was 2,723.

     (C)  DIVIDENDS.  No cash  dividends  have been paid by the  Company  on its
Common Stock and no such payment is anticipated in the foreseeable future.

     (D) SALES OF UNREGISTERED COMMON STOCK 2000. None.

     ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

     We were incorporated in May 1997 as a Nevada Limited Liability  Corporation
as WoodComm  LLC. In April 1999  WoodComm LLC was  reorganized  from an LLC to a
Nevada Corporation WoodComm International, Inc. (WCI).

     In December 1999, Desert Springs  Acquisition  Corporation (Desert Springs)
acquired all of the issued and outstanding  common shares of WCI in exchange for
30,930,000  shares of common stock of Desert  Springs.  For financial  reporting
purposes,   the  business   combination  was  accounted  for  as  an  additional
capitalization of the Company (a reverse  acquisition with WCI as the acquirer).
WCI is considered  the surviving  entity.  The historical  financial  statements
prior to the merger are those of WCI. Desert Springs only assets and liabilities
consisted of a liability for $80,346.  The  liabilities  were not assumed in the
merger.

     In  January  2000,  Desert  Springs  Acquisition  Corp  moved  its state of
incorporation  to Nevada by merger  of the  Colorado  Corporation  with and into
iDial Networks, Inc. (a Nevada corporation).

     We   developed   an   international   Voice-Over-Internet-Protocol   (VoIP)
telecommunications  service  business.  In August  2000 we began to  expand  and
change over business  model.  In August 2000, the company  purchased an Internet
portal  and  marketing  company  Whoofnet.com.  In  November  2000  the  company
purchased   2sentit.com,   an  enhanced  service  provider   providing  enhanced
communications services. The Company owns 100% interest in both acquisitions and
has  consolidated  the  financial  position  and  results of  operations  in the
accompanying financial statements.

     GENERATION OF REVENUES:

We derive our revenues from two different  sources,  through the direct sales of
our  products  over the  Internet  and  through  our own direct  sales force and
secondly through the wholesale of our products and services through  independent
retail and  wholesale  channels of  distribution.  Revenues from the sale of our
phone card  products,  whether  sold  directly by us or through our  independent
retail and wholesale  channel,  are deferred and recognized as calling  services
are used.  All other  products  revenues  are  recognized  as the  product  upon
shipment and invoicing of the product to the customer.

All Internet sales of our products are made over the Internet  primarily through
credit card purchases.  We use credit card processing companies to verify credit
cards.

     Accounts  receivable  consists of amounts owed by our retail and  wholesale
channel  relating  to  product  sales.  At  December  31,  2000 and 1999,  three
companies  accounted for 46% and less than 1% of total accounts  receivable.  At
December 31, 2000, two companies accounted for 36% of total accounts receivable,
while one  receivable  accounted for 72% of accounts  receivable on December 31,
1999.  Customers  purchase our Internet  products  primarily  using major credit
cards, which are reimbursed by credit card processing companies. Accordingly, we
do not routinely perform on-going credit evaluations of our Internet  customers,
but do perform  evaluations of our credit card  processors.  Our receivables are
generally  unsecured.  During 1999, one customer  accounted for more than 50% of
total sales.  During 2000, no one customer  accounted for more than 10% of total
sales.

Expenses

      Selling,  general and  administrative  expenses  consist of advertising and
promotional  expenditures,   payroll  and  related  expenses  for  executive  and
administrative  personnel,  facilities expenses,  professional services expenses,
travel and other general corporate expenses.  Selling, general and administrative
expenses  increased  to  $8,686,191  for  2000  from  $543,896  for  1999.  These
expenses  for 2000  included a  non-cash  charge of  $6,293,205  for the value of
stock  issued at fair market  value to officers and  directors  for  compensation
($1,754,884 ) and to various  consultants for services  ($4,538,321 ) (see Note 8
to  Notes  To  Consolidated  Financial  Statements).  During  2000,  our  capital
expenditures   and   payments  on  capital   leases   totaled   $200,074.   These
expenditures  and  payments on  expenditures  were  $26,561  during  1999.  As we
continue  to grow,  we expect to expand  our  infrastructure  by  increasing  our
capital  expenditures and leases.  We expect these  expenditures will represent a
smaller percentage of sales as our sales volume grows.

     Since inception,  we have incurred  significant  losses and, as of December
31, 2000, had an accumulated  deficit of $9,970,307.  We expect operating losses
and negative cash flow to continue  through at least the second quarter of 2001.
We expect to incur additional costs and expenses related to:

     - marketing and advertising related to product sales and brand development;

     - purchases of equipment for our operations and network infrastructure;

     - the expansion of our telecommunications network into other countries;

     - the  continued  development  of our website  transaction  processing  and
network infrastructure;

     - development and improvement of additional products and services;

     - the hiring of additional personnel; and

     - the payment of  commissions to various  Internet  companies for marketing
products to their customers.

     We have a limited  operating  history on which to base an evaluation of our
business and  prospects.  You must also  consider our  prospects in light of the
risks,  expense and  difficulties  frequently  encountered by companies in their
early stage of development,  particularly  companies in new and rapidly evolving
markets such as e-commerce.  Such risks for us include,  but are not limited to,
an evolving  and  unpredictable  business  model and  management  of growth.  To
address  these  risks,  we must,  among other  things,  maintain  and expand our
customer  case,  implement and  successfully  execute our business and marketing
strategy, continue to develop and upgrade our technology and systems that we use
to  process  customers'  orders  and  payments,  improve  our Web site,  provide
superior  customer  service,  respond to competitive  developments  and attract,
retain and motivate qualified  personnel.  We cannot assure stockholders that we
will be successful in addressing such risks, and our failure to do so could have
a material adverse effect on our business,  prospects,  financial  condition and
results of operations.

     RESULTS  OF  OPERATIONS.  The  following  table  sets  forth  statement  of
operations data as a percentage of revenues for the periods indicated:

                                           Year ended
                                          December  31,
                                         --------------
                                          2000     1999
                                         -----     ----
Total revenue. . . . . . . . . . . .     100.0%   100.0%
Cost of sales. . . . . . . . . . . .     115.2     95.3
                                         -----     ----

Gross margin . . . . . . . . . . . .     (15.2)     4.7
Selling, general and administrative.     483.4     34.5
                                         -----     ----

Operating loss . . . . . . . . . . .    (498.6)   (29.8)
Interest income (expense). . . . . .    (  8.7)   ( 5.8)
                                        -------   ------

Net loss before extraordinary loss .    (507.3)   (35.6)
Other Comprehensive Loss                (  2.6)      -
                                        ------    -----

Comprehensive Loss . . . . . . . . .    (509.9)%  (35.6)%
                                        ======    =====



Year  Ended  December  31,  2000  Compared  to  Year  Ended  December  31, 1999.

     REVENUE.  Revenue  increased to $1,796,897  for the year ended December 31,
2000 from  $1,575,826  million for 1999 as a result of the growth of our network
and retail  customer base.  This represents a 14% increase over 1999 as a result
of this growth.

COST OF SALES. Cost of Sales.  Cost of sales consists  primarily of the costs of
termination of long distance traffic over our networks and the wholesale cost of
products  purchased  for resale by us.  Cost of sales  increased  to  $2,069,574
(including  $461,743 of depreciation)  for the year ended December 31, 2000 from
$1,502,036 (including $113,333 of depreciation) for 1999. This $567,538 increase
was  primarily  attributable  to our  increased  sales volume in both retail and
wholesale.  Gross  profit was (15%) in 2000  compared to a gross profit of 5% in
1999.   This  20%  decrease  was  primarily   attributable  to  an  increase  of
depreciation  due to the  expansion  of our VoIP  network.  We expect the dollar
amount of cost of sales to  increase  in future  periods to the extent  that our
sales volume increases.

Selling,  General  and  Administrative.   Selling,  general  and  administrative
expenses  consist of  advertising  and  promotional  expenditures,  payroll  and
related  expenses  for  executive  and  administrative   personnel,   facilities
expenses,  professional  services  expenses,  travel and other general corporate
expenses.  Selling, general and administrative expenses increased to $ 8,686,191
for 2000 from  $543,896 for 1999.  These  expenses for 2000  included a non-cash
charge of $  6,293,205  for the value of stock  issued at fair  market  value to
officers and directors for compensation ($ 1,754,884) and to various consultants
for  services  ($4,538,321)  (see  Note 8 to  Notes  To  Consolidated  Financial
Statements).   Non-cash  depreciation  and  amortization  expense  increased  to
$1,212,867 from $113,333in 1999 as a result of the  Whoofnet.com and 2Sendit.com
acquisitions.   Excluding   these   non-cash   items,   selling,   general   and
administrative  expenses increased to $1,180,119 in 2000, from $543,896 in 1999.
This  increase is  attributable  to  including  Whoofnet.com  and  2Sendit.com's
selling,  general  and  administrative  expenses  from the date of  acquisition.
Selling,  general  and  administrative  expenses  are  expected to decrease as a
percentage  of  revenue  in  future   periods   because  our  existing   company
infrastructure  will allow increases in revenues without having to incrementally
add overhead.  However, we expect these expenses to increase in absolute dollars
as we continue to pursue advertising and marketing  efforts,  expand our network
termination  locations  worldwide,  expand our staff and incur  additional costs
related to the growth of our business and being a public company.

Other Expenses. Other expenses consist of a $156,630 of interest expense in 2000
from $90,654 in 1999. The increase is primarily due to additional  capital lease
obligations.

     Net Loss. We incurred a net loss of $9,115,498  for the year ended December
31, 2000 as compared to $560,760 for 1999. The net loss for 2000 was affected by
non-cash charges of $ 6,293,205,  non-cash depreciation and amortization charges
of $1,212,867 and interest expense of $156,630, as described above.

     Income Taxes. As of December 31, 2000, we had  approximately  $9,970,000 of
net operating loss carry forwards for federal income tax purposes,  which expire
beginning in 2011. We have provided a full  valuation  allowance on the deferred
tax asset, consisting primarily of net operating loss carry forwards, because of
uncertainty regarding its future reliability.  Limitations on the utilization of
these carry forwards may result if we experience a change of control, as defined
in the Internal Revenue Code of 1986, as amended,  as a result of changes in the
ownership or our common stock.

     RECENT DEVELOPMENTS.  As part of an ongoing Company restructuring  program,
the Company has merged its Dallas  operations with its operation in Denver,  Los
Angeles and Ft.  Lauderdale.  The Company  expects to save $250,000 in 2001 from
this merger. The Dallas facility was closed on February 28, 2001.

The Company has a dispute with one of its telecommunication carriers. During the
third quarter,  the Company entered into an initial  promissory note of $436,920
and through  December 31, 2000 had paid $109,230  against the note.  The carrier
was notified of a  discrepancy  in billed rates and that they were  overcharging
the  company.  In an effort to fixed this problem , payments  continued  through
December  2000,  but  with  no rate  remedy  in the  near  future,  the  company
discontinued payments in January 2001 and has since received a Letter of Default
for the remaining balance due. The Company is seeking legal advice on filing for
a legal  remedy  against  the  carrier to honor  contracted  rates.  The Company
believes  the rates were  between 20% and 30% too high.  The Company has taken a
conservative approach and has recorded the full liability in the books.

     Liquidity and Financial Position

As of  December  31,  2000,  we had  approximately  $67,410  of  cash  and  cash
equivalents. As of that date, our principal commitments consisted of obligations
under leases and contracts for long distance transmissions.

Net cash used in operating  activities  was $723,441 for the year ended December
31, 2000 and $31,246 in 1999. Net cash used in operating activities for 2000 and
1999 primarily  consisted of net operating  losses as well as increases in other
assets,  offset by depreciation  and  amortization,  non-cash  charges for stock
issued for services and  compensation,  increases in accounts  payable,  accrued
expenses and accrued interest.

Net cash from (used in) investing  activities  consists of additions to property
and  equipment,  including  computer  equipment,  cash  from  acquisitions,  fax
equipment and internet  gateways for voice over the Internet  transmission.  Net
cash  from  (used in)  investing  activities  was  $103,002  for the year  ended
December 31, 2000 and $(26,651) in 1999.

Net cash  provided by (used in) financing  activities  was $676,368 for the year
ended  December  31, 2000 and  $(49,115)  for 1999.  Net cash used in  financing
activities  for 2000 was  impacted  by an  increase  in  stockholder  loans  and
proceeds from the issuance of common stock.

iDial  currently  is in  the  process  of  raising  the  necessary  capital  for
continuing its growth through the following activities:

     1. Bank Loan - we expect to close on a facility that provides the necessary
capital for continuing  operations.  Negotiations  are currently taking place to
secure the loan.

     2. Acquisition - We will pursue acquisition opportunities to rapidly expand
its revenue and profits.  This will also  strengthen our cash flow and operating
position.

     3.  Financing - We continue to seek  additional  debt or equity  sales from
time to time.

In July  2001,  we  issued an 8%  convertible  note in the  principal  amount of
$750,000 to an unrelated  investor,  Laurus  Master  Fund,  Ltd. Net proceeds of
$610,750 (after legal fees of $61,500,  a fund managers fee of $75,000 and other
expenses of $3250) is being used to fund working capital and expansion.

The company  commenced a review of its operations in January 2001 and instituted
a program to consolidate  the  operations and reduce or eliminate  redundant and
certain other costs.  Included in such costs are the expenses  related to office
facilities  (approximately  $14,000 per month),  internet  charges and telephone
line expenses (approximately $4,000 per month), and the elimination of outsource
mail server costs  (approximately  $25,000 per month). In addition,  the company
reduced  payroll and related fringe  benefits costs  (approximately  $12,000 per
month) and renegotiated its carrier agreement in June 2001 to reduce the related
costs 14%.

The company  believes  that the current cash on hand is  sufficient to allow the
company to sustain its current operations.  However,  without additional funding
of $1,000,000,  the company believes that it will not generate net income during
fiscal year 2002. As described  above, the company is discussing the possibility
of  additional  financing.  The company also  anticipates  quarterly  revenue of
$1,300,000 or more on a going forward basis, which will allow the company's cash
flow to improve.

We do not have existing  capital  resources or credit lines  available  that are
sufficient to fund our operations and capital  requirements as presently planned
over the next twelve months. We are actively  pursuing  additional funds through
the issuance of debt and/or equity  instruments.  Currently,  we are  discussing
with Laurus  Master  Fund,  Ltd.  the  possibilities  of  additional  financing.
However,  no formal  agreements have been reached and no assurances can be given
that such financing will be forthcoming.

     Recently Issued Accounting Pronouncements

The Company  does not believe  that any  recently  issued but not yet  effective
accounting  standards,  have a  material  effect on the  Company's  consolidated
financial position, results of operations or cash flows except for the effect of
adoption of SFAS No. 142,  "Goodwill  and Other  Intangible  Assets"  ("SFAS No.
142")  which  effect has not yet been  determined.  SFAS No. 142  addresses  the
financial  accounting and reporting for acquired  goodwill and other  intangible
assets.  It addresses how intangible  assets that are acquired  individually  or
with a group of other assets (but not those acquired in a business  combination)
should be accounted for in financial statements upon their acquisition. SFAS 142
also addresses how goodwill and other intangible  assets should be accounted for
after they have been  initially  recognized  in the  financial  statements.  The
Company will be adopting the provisions of this new standard  beginning with the
first quarter of 2002.

During  June 2001 SFAS No. 141,  "Business  Combinations"  ("SFAS No.  141") was
released.  This  standard  addresses  financial  accounting  and  reporting  for
business  combinations.  All business  combinations within the scope of SFAS 141
are to be accounted for using one method - the purchase  method.  The provisions
of SFAS 141 apply to all business  combinations  initiated  after June 30, 2001.
Use of the pooling - of - interests  method for those business  combinations  is
prohibited. It also applies to all business combinations accounted for using the
purchase method for which the date of acquisition is July 1, 2001 or later.


                                  RISK FACTORS


     You  should  carefully  consider  the  following  factors  as well as other
information  contained in this prospectus before deciding to invest in shares of
our securities.

Risks Relating to our Business:

We have a history of losses, which may continue, requiring us to seek additional
sources of capital, which may not be available, requiring us to curtail or cease
operations.

     We incurred net losses from  operations of $9,115,498  and $560,760 for the
fiscal years ended December 31, 2000 and 1999, respectively.  For the six months
ended June 30, 2001, we incurred a net loss of $2,457,711.  We cannot assure you
that we can achieve or sustain  profitability  on a quarterly or annual basis in
the future.  If revenues  grow more slowly than we  anticipate,  or if operating
expenses  exceed our  expectations  or cannot be adjusted  accordingly,  we will
continue  to incur  losses.  In  addition,  we may require  additional  funds to
sustain and expand our sales and marketing activities, research and development,
and our strategic alliances,  particularly if a well-financed competitor emerges
or if there is a rapid technological shift in the  telecommunications  industry.
There can be no  assurance  that  financing  will be  available in amounts or on
terms acceptable to us, if at all. The inability to obtain sufficient funds from
operations or external sources would require us to curtail or cease operations.

The  Telecommunications  And Internet Telephony Markets Are Highly Competitive
And Our Failure To Compete Effectively Could Result in Additional Losses.

     With  respect  to  prepaid  calling  cards,  we  compete  with the  largest
telecommunications  providers in the United States, as well as smaller, emerging
carriers.  We may also  compete  with large  operators  in other  countries.  An
increasing number of large,  well-capitalized  companies are entering the market
for Internet telephony products and services. These competitors include a number
of  companies  that  have  introduced  services  that  make  Internet  telephony
solutions  available  to  businesses  and  consumers,   and  that  permit  voice
communications  over the Internet.  Many of our  competitors  are  substantially
larger  and  have  greater  financial,  technical,  engineering,  personnel  and
marketing resources,  longer operating  histories,  greater name recognition and
larger customer bases than we do.  Competition  from existing or new competitors
could reduce our revenues from the sale of our virtual prepaid calling cards and
other  services.  A general  decrease  in  telecommunication  rates  charged  by
international  long distance  carriers could also have a negative  effect on our
operations. Our ability to compete also depends on our ability to anticipate and
adapt   to   rapid   technological   and   other   changes   occurring   in  the
telecommunications  industry. We may not be able to compete successfully against
current or future  competitors,  and competitive  pressures could  significantly
harm us, resulting in more significant financial losses.

We Have  Experienced  Delays  In  Upgrading  Our  Platforms  In The Past And May
Experience Delays In The Future.

     In the past, we have  experienced  delays when we have tried to upgrade our
platform.  If there are  significant  delays when  upgrading our platform in the
future  with  respect  to  developing  new  products,  we may elect to abandon a
potential  product or service in favor of one that can be timely  developed on a
cost  effective  basis.  There  can be no  assurances  that we can  successfully
develop the software to enable us to offer new  products or  services.  This may
lead to losses  incurred  from  abandoning  a product  or  service  that we have
previously expended money to develop.

If we are not  able to  identify,  develop,  assemble,  market  or  support  our
products successfully or respond effectively to technological changes or product
announcements by competitors, we may not remain competitive.

     Rapidly changing technology and new product introductions  characterize the
markets for our products.  Accordingly,  we believe that our future success will
depend on our ability to enhance our existing products and to develop or procure
and introduce in a timely fashion new products that achieve  market  acceptance.
We  cannot  assure  you  that we will be  able to  identify,  develop,  procure,
assemble, market or support our products successfully or that we will be able to
respond  effectively  to  technological  changes  or  product  announcements  by
competitors.

We Rely On Third Party Contracts For Our Operations

     Our  success  depends,  in part,  on our  ability to continue to lease long
distance  telephone  capacity from third parties at economic  rates to serve the
foreign  countries  we  target.  It also  depends,  in part,  on our  ability to
maintain our contractual  relationships with local terminating  parties in those
countries where we have Internet gateways. If we lose our leases or contracts or
if these  parties  are unable to  provide  these  services,  we believe we could
replace them.  However,  it would cause a disruption of our business  until they
are replaced.  Also, any replacement  leases or contracts may not be at rates or
on terms as favorable to us.

     We depend on Internet  service  providers to provide  Internet access to us
and our customers.  Our local terminating parties in foreign countries also rely
on  local  Internet  service  providers  for  access  to the  Internet  in their
countries.  If we lost our connection with our Internet  service  providers,  we
could not sell our virtual calling cards through our website,  and web initiated
calls  could  not  be  made  by  our   customers,   until  the   connection  was
reestablished.  If a local  terminating  party in a  foreign  country  loses its
Internet  connection,  we  could  not  route  calls  over the  Internet  to that
destination until the connection was  reestablished.  These failures could cause
us to lose customers and our ability to sell virtual calling cards and telephone
services would be affected.

     In addition, we rely on suppliers for our Internet storefront. There can be
no assurance that any relationship  between the Company and any such third party
will continue to be  beneficial  to the Company.  There can also be no assurance
that the third  parties  will  continue  to produce  products in the future that
retain their current level of market acceptance, that the products will continue
to be available in adequate  quantities at the times  required by the Company or
that such third party products will not contain  defects or errors.  The Company
may  experience  lost  revenues  due to the third  party's  delay in  correcting
defects in their products, delay in getting an adequate supply of their products
to the Company, or from any resulting loss of market share.

Our Failure To Comply With Government Regulations Relating To The Internet Could
Harm Our Operations

     Uncertainties  regarding the  applicability  of foreign,  federal and state
laws and  regulations  to the Internet may result in our violation of these laws
and regulations. Our failure to comply with the laws and governmental regulatory
requirements  may result in, among other  things,  indemnification  liability to
business customers and others doing business with us, administrative enforcement
actions and fines,  and civil and criminal  liability.  The occurrence of one or
more of these events could  materially harm our business,  results of operations
and financial condition.

     The parties conducting  business with us may be subject to similar foreign,
federal and state regulation.  These parties act as independent  contractors and
not as our  agents  in their  solicitations  and  transactions  with  consumers.
Consequently,  we cannot ensure that these entities will comply with  applicable
laws and regulations at all times. Failure on the part of a business customer to
comply with these laws or  regulations  could  result in,  among  other  things,
claims of  vicarious  liability  or a  negative  impact on our  reputation.  The
occurrence  of one or more of these events could  materially  harm our business,
results of operations, and financial condition.

We May Face Risks If New Laws Or Government  Regulations  Regarding The Internet
Are Enacted

The laws  relating to our  business  and  operations  are evolving and few clear
legal  precedents  have been  established.  Most of the laws governing  Internet
transactions have not been substantially revised or updated to fully accommodate
electronic  commerce.  Moreover,  it may take years to  determine  the extent to
which existing laws relating to issues such as intellectual  property  ownership
and infringement  and personal  privacy are applicable to the Internet.  Many of
these  laws  were  adopted  prior to the  advent  of the  Internet  and  related
technologies  and, as a result,  do not contemplate or address the unique issues
of  the  Internet  and  related  technologies.  Until  these  laws,  rules,  and
regulations are revised to clarify their applicability to transactions conducted
through electronic commerce,  particularly content,  marketing,  advertising and
taxation related to Internet operations,  any company providing services through
the  Internet  or other  means  of  electronic  commerce  will  face  compliance
uncertainty.  Further,  the adoption of new laws or the  application of existing
laws may decrease the growth in the use of the  Internet.  These  results  could
decrease  the demand for our  services or increase  our cost of doing  business,
each of which would cause our revenues to decline and harm our business.

We Have  Tangible Net Worth  Deficit And A  Going-Concern  Qualification  In Our
Certifying  Accountant's Financial Statement Report, Either Or Both Of Which May
Make Capital  Raising More  Difficult  And May Require Us To Scale Back Or Cease
Operations.

     We have a net worth  deficit  as of our latest  balance  sheet  date.  This
deficit indicates that we will be unable to meet our future  obligations  unless
additional  funding  sources are  obtained.  To date we have been able to obtain
funding and meet our obligations in a timely manner.  However,  if in the future
we are  unsuccessful in attracting new sources of funding then we will be unable
to continue in  business.  In addition,  the report of our  auditors  includes a
going concern  qualification which indicates an absence of obvious or reasonably
assured  sources  of future  funding  that will be  required  by us to  maintain
ongoing operations.  To date we have successfully funded iDial Networks, Inc. by
attracting  additional  equity  investments  and small issues of debt.  However,
there  is no  guarantee  that our  efforts  will be able to  attract  additional
necessary  equity  and/or  debt  investors.  If we are  unable  to  obtain  this
additional funding, we may not be able to continue operations.

Risks Relating to our Stock:

The Lack of a Mature  Trading  Market for our  Common  Stock May Cause our Stock
Price to Decline Significantly and Limit the Liquidity of our Common Stock.

     We do not meet the listing requirements for the listing or quotation of our
common  stock on any  national  or  regional  securities  exchange or on Nasdaq.
Currently, our common stock is traded on the Over-The-Counter Bulletin Board. As
a result,  accurate  current  quotations as to the value of our common stock are
unavailable  making it more  difficult  for  investors  to dispose of our common
stock. The lack of current quotations and liquidity can cause our stock price to
decline or to trade lower than the prices that might  prevail if our  securities
were listed or quoted on an exchange or on Nasdaq.

Our  Common  Stock is  Subject  to the  "Penny  Stock"  Rules of the SEC and the
Trading Market in our  Securities is Limited,  Which Makes  Transactions  in our
Stock Cumbersome and May Reduce the Value of an Investment in our Stock.

Since our common stock is not listed or quoted on any exchange or on Nasdaq, and
no  other  exemptions  currently  apply,  trading  in our  common  stock  on the
Over-The-Counter  Bulletin  Board is subject to the "penny  stock"  rules of the
SEC.  These rules  require,  among other things,  that any broker  engaging in a
transaction  in our  securities  provide its  customers  with a risk  disclosure
document,   disclosure  of  market  quotations,   if  any,   disclosure  of  the
compensation of the broker and its salespersons in the transaction,  and monthly
account  statements  showing  the market  values of our  securities  held in the
customer's  accounts.  The brokers  must  provide bid and offer  quotations  and
compensation information before making any purchase or sale of a penny stock and
also provide this information in the customer's confirmation. Generally, brokers
may be less willing to execute  transactions in securities subject to the "penny
stock"  rules.  This may make it more  difficult for investors to dispose of our
common stock and cause a decline in the market value of our stock.

Forward  Looking  Statements.

Certain  statements  in  this  Form  10-KSB,  including  statements  of our  and
management's expectations,  intentions, plans, objectives and beliefs, including
those contained in or implied by  "Management's  Discussion and Analysis or Plan
of Operation", are "forward-looking  statements",  within the meaning of Section
21E of the Securities  Exchange Act of 1934, that are subject to certain events,
risks and uncertainties that may be outside our control.  These  forward-looking
statements   may  be   identified  by  the  use  of  words  such  as  "expects,"
"anticipates,"   "intends,"  "plans"  and  similar  expressions.   They  include
statements  of our future plans and  objectives  for our future  operations  and
statements of future economic  performance,  information regarding our expansion
and possible results from expansion, our expected growth, our capital budget and
future capital  requirements,  the availability of funds and our ability to meet
future  capital  needs,  the  realization  of our deferred  tax assets,  and the
assumptions described in this report underlying such forward-looking statements.
Actual results and developments  could differ materially from those expressed in
or implied by such  statements  due to a number of  factors,  including  without
limitation,  those described in the context of such forward-looking  statements,
our  expansion  and  acquisition  strategy,  our  ability to  achieve  operating
efficiencies,    our   dependence   on   network    infrastructure,    capacity,
telecommunications carriers and other suppliers,  industry pricing an technology
trends,  evolving  industry  standards,  domestic and  international  regulatory
matters,  general economic and business  conditions,  the strength and financial
resources of our competitors,  our ability to find and retain skilled personnel,
the political  and economic  climate in which we conduct  operations,  the risks
discussed  above under "Risk Factors That May Effect  Results of Operations  and
Financial  Condition," and other risk factors described from time to time in our
other  documents and reports filed with the Securities  and Exchange  Commission
(the  "Commission").  We do not assume any responsibility to publicly update any
of our forward-looking  statements regardless whether factors change as a result
of new  information,  future  events or for any other  reason.  We advise you to
review any additional  disclosures we make in our 10-QSB, 8-K and 10-KSB reports
filed with the Commission.


                          ITEM 7. FINANCIAL STATEMENTS.

     Reference is made to Auditors  Report of December 31, 2000 filed  herewith.
Those financial  statements,  attached thereto are  incorporated  herein by this
reference as though fully set forth herein.


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

     We  changed  our  independent  auditors  from  Enrhardt,  Keefe,  Steiner &
Hottman,  7079 7979 E. Tufs Ave.,  Suite 400,  Denver,  Colorado  80237-24843 to
Kenneth  Lieberman  C.P.A.  PA, 9690 West Sample Road, Suite 202, Coral Springs,
Florida 33065.  There has been no disagreement  with any auditor about any item.
No adverse opinion,  disclaimer of opinion or opinions  qualified or modified as
to any  uncertainly,  audit scope or  accounting  has been  rendered,  issued or
expressed,  during the two preceding  years or at any time.  During the two most
recent  fiscal years and any  subsequent  interim  period  preceding the change,
there  were no  disagreements  with the  former  accountants  on any  matter  of
accounting principles or practices,  financial statement disclosure, or auditing
scope or  procedure  which if not  resolved  to the  satisfaction  of the former
accountants, would have caused it to make reference to the subject matter in its
reports


      ITEM 9.  SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS AND 5% OWNERS.

     Common  Stock:  To the best of Company s knowledge and belief the following
disclosure presents, as of the date of this report, December 31, 2000, the total
beneficial security ownership of all Directors and Nominees, naming them, and by
all Officers  and  Directors as a group,  without  naming them,  of the Company,
known to or discoverable by the Company, and the total security ownership of all
persons,  entities and groups,  known to or discoverable  by Company,  to be the
beneficial  owner or owners of more than five  percent  of any  voting  class of
Company s stock.  More than one  person,  entity or group  could be  beneficiary
interested  in the same  securities,  so that the total of all  percentages  may
accordingly exceed one hundred percent. The Company has only one class of stock,
namely Common Voting Equity Shares.



NAME AND ADDRESS OF BENEFICIAL OWNER     AMOUNT      PERCENTAGE OF
                                        OWNERSHIP
-------------------------------------------------------------------
Mark T. Wood, Chairman of the Board . .  18,100,000           20.7%
19009 Preston Road, Suite 215 PMB #236
Dallas, TX  75252
Carl K. Battie, Vice Chairman
7771 W. Oakland Park Blvd, Suite 217
-------------------------------------------------------------------
Sunrise, FL  33351. . . . . . . . . . .  13,100,000             15%
-------------------------------------------------------------------
Klaus Scholz, Director and COO. . . . .   3,040,000            3.5%
19019 Preston Road, Suite 616
Dallas, TX  75252
-------------------------------------------------------------------
Thomas G. Seifert . . . . . . . . . . .   1,463,204            1.7%
1211 S. Parker Road, Suite 201
Denver, CO  80231
-------------------------------------------------------------------
Edward J. Janusz, Director. . . . . . .     100,000            .01%
7 Lacewing Place
The Woodlands, TX
-------------------------------------------------------------------
Gerald Lesher . . . . . . . . . . . . .   1,200,000            1.4%
1555 Palm Beach Lakes Blvd., Suite 1510
West Palm Beach, FL  33404
-------------------------------------------------------------------
All Directors and Officers Total. . . .  37,003,204           42.5%
-------------------------------------------------------------------
George V. Stein . . . . . . . . . . . .   5,000,000            5.7%
1640 E. Layton
Englewood, CO  80110
-------------------------------------------------------------------
Lynn Lasarow. . . . . . . . . . . . . .   4,000,000            4.6%
18 Tobacco Road
Weston, CT  06883
-------------------------------------------------------------------
David Lifson. . . . . . . . . . . . . .   7,054,710            8.1%
1930 Young Street, Box 1182
Toronto, Ontario
CANADA
-------------------------------------------------------------------
Total Shares Issued and Outstanding . .  87,969,856            100%
                                         87,144,454
-------------------------------------------------------------------


    ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
                COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     We have assembled a team of seasoned  senior  management,  and is currently
recruiting other industry veterans to fill key leadership  roles.  Additionally,
the Company is  augmenting  its Board of  Directors  and Board of Advisors  with
skilled  executives  that can aid the growth of the Company  through  high-level
access to potential  customers and strategic  alliance  partners.  The following
table sets forth  certain  information  as of December 31, 2000  concerning  our
executive officers.


NAME. . . . . . .  AGE  POSITION
-----------------  ---  ------------------------------------
Mark T. Wood. . .   40  Chairman of the Board
Carl K. Battie. .   44  Vice Chairman
Klaus Scholz. . .   50  Chief Operating Officer and Director
Edward J. Janusz.   52  Director
Gerald Lesher . .   62  Director
Thomas G. Seifert   29  CFO * Appointed March 26, 2001



MARK T. WOOD,  CHAIRMAN  OF THE BOARD.  Prior to iDial,  Mr.  Wood held  several
executive  positions  at  international   telecommunications   companies,  which
included Vice  President and General  Manager of Loxcomm  America,  Inc.,  Chief
Operating Officer of WorldQuest  Networks  (NASDAQ:WQNI),  and Vice President of
International Sales at Intellical, Inc. (AMEX:ICL).

CARL K. BATTIE,  VICE CHAIRMAN.  Mr. Battie s skills as an  achievement-oriented
business professional experienced in strategic traditional marketing,  sales and
public relations encompass the past 24 years. Mr. Battie consistently identifies
and capitalizes upon new product/business  opportunities  resulting in increased
revenue,  expanded market penetration and dominant market share. Mr. Battie also
specializes in developing cross promotion platforms integrating current business
relationship models as well as bringing in new partners for maximizing expansion
and exposure.  Through entrepreneurial  initiative, Mr. Battie has developed and
executed  many large  comprehensive  sales and marketing  programs.  Most of his
clients  include  large  national  and  multi-national  companies  in the United
Kingdom such as British Gas, London Electricity, Easter Electricity, ACC Telecom
(part of AT&T) and BUPA, the largest private  healthcare  provider in the United
Kingdom.

KLAUS SCHOLZ,  CHIEF OPERATING OFFICER AND DIRECTOR.  Mr. Scholz joined iDial in
1999 and has been responsible for the network operations of company. A native of
Germany,   Mr.  Scholz  has  held  several   senior   management   positions  in
international  technology companies.  He served for 10 years as Country Manager,
Southeast Europe for Hewlett Packard before moving to Asia in 1987. In Thailand,
he became  Managing  Director of  Semiconductor  Ventures  International  LTD, a
publicly traded company. In that capacity, he worked with the Chinese government
to  improve  quality  and  safety  standards  for  the  Taiwanese  semiconductor
industry.  Mr. Scholz also served as Vice  President,  Business  Development for
Loxley Public  Companies,  Ltd., a publicly  traded  international  conglomerate
based in Bangkok, Thailand.

EDWARD J.  JANUSZ,  DIRECTOR.  Mr.  Janusz is a  seasoned  sales and  operations
executive serving the Company as a Director. Mr. Janusz is Vice President of Cap
Gemini, a leading worldwide IT consulting firm serving Fortune 500 companies.

GERALD  LESHER,  DIRECTOR.  Mr.  Lesher is a  practicing  licensed  attorney  in
Pennsylvania and Florida. He was the Senior Partner, for Baskin & Sears

(Pittsburgh),  for bankruptcy,  corporate  reorganization and banking litigation
and the manager for the Palm Beach  Office of Lesher,  Allen & Macmillan in Palm
Beach (Florida).  Mr. Lesher was also the founder and Chairman of Sterling Bank,
Florida.  Mr. Lesher has  developed  numerous  business  plans for clients and a
variety of industries.  He  concentrates on commercial  litigation,  bankruptcy,
banking,  real estate, real estate broker,  corporate,  and entertainment areas;
Mr. Lesher was lead counsel for 17 banks in Western Pennsylvania and specializes
in  business  plans  for  domestic  and  international  clients.  He has  strong
negotiating skills and substantial negotiating experience.

THOMAS G. SEIFERT,  CFO. Mr. Seifert is a graduate of Colorado State  University
and  graduated  with  a  Bachelor  s of  Science  in  Finance  with a  minor  in
Accounting.  Mr. Seifert has worked as the  controller for Integrated  Telephony
Products, Inc., as well as controller for Mountain Vacations,  Inc. and assisted
with the sale of each  company  to a  publicly  trading  company.  He was also a
co-founder of 2Sendit.com, Inc.


CHANGE OF COMPANY S CFO:  RECENT EVENT. We received and accepted the resignation
of our Chief  Financial  Officer,  Louis Sopov,  effective  March 21,  2001.  We
promoted our  controller,  Thomas G.  Seifert,  to the position of CFO effective
March 26, 2001.


ITEM 11.  EXECUTIVE COMPENSATION.

                                           Annual Compensation                        Awards                 Payouts
                                ----------------------------------------     -------------------------    -----------
                                                              (e) Other         (f)            (g)                       (i)All
(a) Name and                                                    Annual       Restricted    Underlying         (h)         other
  Principal          (b)          (c)             (d)           Compen-        Stock         Options/        LTIP         Compen-
  Position          Year        Salary($)       Bonus($)       sation($)     Award(s)($)      SARs(#)      Payouts($)     sation
--------------    ---------     ---------      ----------    ------------    -----------   -----------     ----------    ---------


Mark T. Wood        2000                                                      1,176,000
Chief Executive
Officer             1999
                    1998


            ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

We have entered into the  following  related  transactions  with our  directors,
officers, or affiliates:

Mauricio Vega, a shareholder of the Company, loaned the Company $100,000 on June
22, 2000.

Mark Wood,  the Company's  Chairman of the Board,  loaned the Company a total of
$1,232,797 in various loans from December 31, 1999 through December 2000.

Karl Rodriguez,  a shareholder of the Company,  loaned the Company $44,820.50 on
May 27, 2000.

Charmon  Malhotra,  a shareholder  of the Company,  loaned the Company $7,500 on
July 18, 2000.

Carl  Battie,  the  Company's  Vice  Chairman  of the Board,  loaned the Company
$242,043.10 in various loans from September 14, 2000 through December 13, 2000.


   ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.


     (A) FINANCIAL STATEMENTS. Audited Financial Statements: for the years ended
December 31, 2000 and 1999. See Exhibit FK-00.

 (B)  FORM  8-K  REPORTS.

CHANGE OF COMPANY S AUDITOR.  The Company changed it s independent auditors from
Enrhardt,  Keefe,  Steiner &  Hottman,  7079 E. Tufs Ave.,  Suite  400,  Denver,
Colorado  80237-24843  to Kenneth  Lieberman  C.P.A.  PA, 9690 West Sample Road,
Suite 202, Coral Springs, Florida 33065. There has been no disagreement with any
auditor about any item.

CHANGE OF COMPANY S CFO:  RECENT EVENT. We received and accepted the resignation
of our Chief  Financial  Officer,  Louis Sopov,  effective  March 21,  2001.  We
promoted our  controller,  Thomas G.  Seifert,  to the position of CFO effective
March 26, 2001.









                 SUPPLEMENTARY INFORMATION TO BE FURNISHED WITH
              REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY
                REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
                       PURSUANT TO SECTION 12 OF THE ACT.

     No annual report or proxy material has been sent to security holders.


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

                              IDIAL NETWORKS, INC.

                                    formerly
                        Desert Springs Acquisitions, Inc.

Dated:  January 30, 2002
/s/Mark  T.  Wood          /s/Carl  K.  Battie          /s/Klaus  Scholz
   Mark  T.  Wood             Carl  K.  Battie             Klaus  Scholz

/s/Edward J. Janusz        /s/Gerald Lesher             /s/Thomas  G. Seifert
   Edward J. Janusz           Gerald Lesher                Thomas  G. Seifert

















    -----------------------------------------------------------------------
                                  EXHIBIT FK-00

                          AUDITED FINANCIAL STATEMENTS:

                               FOR THE YEARS ENDED

                           DECEMBER 31, 2000 AND 1999

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








                              TABLE OF CONTENTS



          PAGE  1     -     AUDITORS  LETTER

          PAGE  2     -     BALANCE  SHEET

          PAGE  3     -     INCOME  STATEMENT

          PAGE  4     -     STATEMENT  OF  CHANGES  IN  CASH  FLOW

          PAGE  6     -     STOCKHOLDER'S  EQUITY

          PAGE  7     -     NOTES  TO  FINANCIAL  STATEMENTS







Kenneth Lieberman C.P.A., P.A.                              (954) 971-8020
4400 W. Sample Road, Suite 216                          Fax (954) 971-1623
Coconut Creek,  FL. 33077




      To the Board of Directors and Stockholders
      IDial Networks, Inc.
      The Woodlands, Texas



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

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

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

      The accompanying  financial  statements have been prepared  assuming that
      the company will continue as a going concern.  As discussed in Note 11 to
      the  consolidated   financial   statements,   the  Company  has  suffered
      recurring  losses from  operations and has a working  capital  deficiency
      that raise  substantial  doubt  about its  ability to continue as a going
      concern.   Management's  plans  in  regard  to  these  matters  are  also
      described  in Note  11.  The  consolidated  financial  statements  do not
      include  any  adjustments  that  might  result  from the  outcome of this
      uncertainty.

      As discussed in Note 13 to the  consolidated  financial  statements,  the
      consolidated  financial  statements  have been  restated  to reflect  the
      Company's  change in its method of accounting  for business  combinations
      and to correct an error in the value  assigned to common  stock issued to
      consultants, officers and directors.

     Kenneth Lieberman CPA, PA.
     Coconut Creek, Florida
     July 19, 2001, except for Note 13, as to which the date is November 6, 2001






                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders
Idial Networks, Inc.
Dallas, Texas


We have audited the  accompanying  balance  sheet of Idial  Networks,  Inc as of
December  31,  1999  and  1998,  and  the  related   statements  of  operations,
accumulated  deficit  and cash flows for the years then ended.  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  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our 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 Idial  Networks,  Inc. As of
December 31, 1999 and 1998 and the results of its  operations and its cash flows
for the years then ended,  in  conformity  with  generally  accepted  accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
company  will  continue  as a  going  concern.  As  discussed  in  note 1 to the
financial   statements,   the  company's   history  of  operating  losses  raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these  matters are also  described  in Note 1. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.




                                       /S/ EHRHARDT KEEFE STEINER & HOTTMAN PC
                                           EHRHARDT KEEFE STEINER & HOTTMAN PC
March 6, 2000
Denver, Colorado






                              IDIAL NETWORKS, INC.
                                 AND SUBSIDIARES

                           Consolidated Balance Sheets


                                                                             December 31,
                                                                     ----------------------------
                                                                         2000            1999
                                                                     ------------    ------------
                                                                      (Restated)
                                     Assets
Current assets
  Cash and cash equivalents ......................................   $     67,410    $     11,481
  Accounts receivable - trade ....................................         51,531          26,614
  Marketable securities ..........................................         31,200            --
  Other receivables ..............................................        105,000         100,000
  Inventory ......................................................         10,000            --
                                                                     ------------    ------------
   Total current assets ..........................................        265,141         138,095
                                                                     ------------    ------------

Fixed assets (net) ...............................................      2,576,928         255,587
                                                                     ------------    ------------

Notes receivable .................................................           --              --
Intangibles, net .................................................      7,254,636         215,000
Deposits .........................................................         52,618           8,855
                                                                     ------------    ------------
   Total other assets ............................................      7,307,254         223,855
                                                                     ------------    ------------

Total assets .....................................................   $ 10,149,323    $    617,537
                                                                     ============    ============

                Liabilities and Stockholder's Equity (Deficiency)

Current liabilities
  Accounts payable ...............................................   $  1,186,824    $    347,445
  Advances from stockholder's ....................................           --           119,100
  Accrued consulting fees ........................................           --            55,000
  Accrued wages ..................................................           --            25,000
  Accrued interest ...............................................         49,786            --
  Deferred revenue ...............................................         31,256            --
  Current portion of long-term debt ..............................        111,623          96,416
                                                                     ------------    ------------
   Total current liabilities .....................................      1,379,489         642,961

Long-term liabilities
  Advances from stockholder's and related parties ................      1,624,103            --
  Notes payable ..................................................         16,435          26,741
  Capital leases payable .........................................         98,439         121,644
                                                                     ------------    ------------
   Total long-term liabilities ...................................      1,738,977         148,385
                                                                     ------------    ------------

Total liabilities ................................................      3,118,466         791,346
                                                                     ------------    ------------

Commitments

Common stock, $.001 par value, 100,000 shares
 authorized, 87,144,454 shares issued and
 outstanding in 2001 and 2000, 37,085,000 shares
 issued and outstanding in 1999 ..................................         87,144          37,085
Preferred stock, no par value, 30,000,000 shares
 authorized, no shares issued and outstanding ....................           --              --
Additional paid in capital .......................................     16,956,020         643,915
Accumulated deficit ..............................................     (9,970,307)       (854,809)
Accumulated other comprehensive income (loss) ....................        (42,000)           --
                                                                     ------------    ------------
   Total stockholder's equity (deficiency) .......................      7,030,857        (173,809)
                                                                     ------------    ------------

Total liabilities and stockholder's equity
(deficiency) .....................................................   $ 10,149,323    $    617,537
                                                                     ============    ============






                              IDIAL NETWORKS, INC.
                                 AND SUBSIDIARES

                      Consolidated Statements of Operations


                                                         For the Years Ended
                                                             December 31,
                                                     ----------------------------
                                                         2000            1999
                                                     ------------    ------------
                                                      (Restated)

Sales ............................................   $  1,796,897    $  1,575,826
Cost of sales (exclusive of depreciation) ........      1,607,831       1,388,703
Depreciation .....................................        461,743         113,333
                                                     ------------    ------------

Gross profit (loss) ..............................       (272,677)         73,790

Selling, general and administrative expenses .....      8,686,191         543,896
                                                     ------------    ------------

Net operating loss ...............................     (8,958,868)       (470,106)

Other expenses
  Interest expense ...............................       (156,630)        (90,654)
                                                     ------------    ------------

Net loss .........................................     (9,115,498)       (560,760)

Other comprehensive loss
  Unrealized loss on available-for-sale securities        (42,000)           --
                                                     ------------    ------------

Comprehensive loss ...............................   $ (9,157,498)   $   (560,760)
                                                     ============    ============

Net loss per share ...............................   $      (0.19)   $      (0.07)
                                                     ============    ============

Weighted average per common share ................     48,479,304       7,744,452
                                                     ============    ============





                              IDIAL NETWORKS, INC.
                                 AND SUBSIDIARES

                      Consolidated Statements of Cash Flow


                                                           For the Years Ended
                                                               December 31,
                                                        --------------------------
                                                            2000           1999
                                                        -----------    -----------
                                                         (Restated)
Cash flow from operating activities
  Net loss ..........................................   $(9,115,498)   $  (560,760)
                                                        -----------    -----------
  Adjustments to reconcile net loss to net cash used
   in operating activities
   Writeoff of accrued interest .....................          --           60,000
   Stock issued for services ........................     4,538,321         69,600
   Stock issued for compensation ....................     1,754,884           --
   Write off of loan acquisition costs ..............          --           16,765
   Depreciation .....................................       596,220        113,333
   Amortization .....................................       616,647           --
   Changes in assets and liabilities
     Accounts receivable ............................        (3,661)      (109,562)
     Other receivables ..............................      (105,000)          --
     Inventory ......................................        (8,000)          --
     Deposits .......................................       (27,596)         2,154
     Accounts payable ...............................     1,029,200        317,224
     Accrued expenses ...............................       (30,214)        60,000
     Deferred revenue ...............................        31,256           --
                                                        -----------    -----------
      Net cash used in operating activities .........      (723,441)       (31,246)
                                                        -----------    -----------

Cash flow from investing activities
  Purchase of property and equipment ................       (26,700)       (26,651)
  Acquisition of subsidiaries, net of cash acquired .       129,702           --
  Notes receivable ..................................          --             --
                                                        -----------    -----------
      Net cash from (used in) investing activities ..       103,002        (26,651)
                                                        -----------    -----------

Cash flows from financing activities
  Proceeds from issuance of long term debt ..........          --           35,000
  Payment of long term debt .........................        (7,920)       (16,371)
  Stockholder loans .................................       757,662           --
  Proceeds from issuance of common stock ............       100,000           --
  Net (repayment to) advances from members ..........          --          (67,744)
  Payments of long term capital lease ...............      (173,374)          --
                                                        -----------    -----------
      Net cash  provided  from  (used  in)  financing
activities ..........................................       676,368        (49,115)
                                                        -----------    -----------

Net increase (decrease) in cash and cash equivalents         55,929       (107,012)

Cash and cash equivalents beginning of period .......        11,481        118,493
                                                        -----------    -----------

Cash and cash equivalents end of period .............   $    67,410    $    11,481
                                                        ===========    ===========





                              IDIAL NETWORKS, INC.
                                 AND SUBSIDIARES

                      Consolidated Statements of Cash Flow




Supplemental disclosures of cash flow information

                                                           For the Years Ended
                                                               December 31,
                                                        --------------------------
                                                            2000           1999
                                                        -----------    -----------
                                                         (Restated)
Cash paid during the year for
  Interest
  Income taxes

Supplemental schedule of noncash investing and
 financing activities

Property and equipment  acquired  under capital lease
 obligations ........................................   $   117,544   $   169,601

Issuance of common stock in connection  with
 acquisition of subsidiaries ........................   $10,068,959   $      --

Issuance of common stock by a stockholder for
 satisfaction  of property and equipment  obligations
 incurred  by the Company  recorded as advances  from
 stockholders and related parties ...................   $   190,265   $      --

Issuance of common stock by a stockholder for
 satisfaction of obligations  incurred by the Company
 in connection with services  rendered to the Company
 recorded as advances from  stockholders  and related
 parties ............................................   $   557,076   $      --






During the year ended  December 31, 1999, the company  transferred  common stock
effecting assets and liabilities as follows:

                                                    Fair Value   Reduction
                                                    of Shares   of Accounts
            Description                 Shares        Issued     Receivable     Totals
----------------------------------    -----------  ------------ -------------  ----------

Acquisition of trademark for common
  stock and reduction of accounts
  receivable                              50,000    $  165,000       50,000   $  215,000

Issuance of common stock for
  telephone equipment                    380,000       125,000           -       125,000

Issuance of common stock and
  reduction of accounts receivable
  for settlement of note receivable
  and accrued interest on equipment
  purchased                              170,000        56,100      120,097      176,197

Stock issued for consulting services      20,000         6,600           -         6,600

Issuance of common stock for
  subscription receivable,
  collected in full in January 2000      300,000       100,000           -       100,000







                                                                                                    Consolidated Statement of Stockholder's Equity (Deficit)





                                                                                           Woodcom International, Inc.                          Idial Networks, Inc.
                                                                                                (prior to merger)                     (formerly Desert Springs Acquisition Corp.)
                                                                                   ------------------------------------------    ----------------------------------------------------
                                                                                           Common Stock $.01 Par Value                Common Stock $.001 Par Value
                                                                                   ------------------------------------------    ---------------------------------------
                                                                                                                                                                                          Accumulated
                                                                                                                                                                                             Other          Total
                                                                                                                  Additional                                 Additional                   Comprehensive  Stockholder's
                                                                                                                    Paid-in                                   Paid-in      Accumulated       Income         Equity
                                                                                       Shares        Amount         Capital         Shares        Amount     In Capital      Deficit         (Loss)      (Deficiency)
                                                                                    -----------    -----------    -----------    -----------   -----------   -----------   -----------    -----------    -----------

Balance, December 31, 1998 ......................................................         2,000    $        20    $       280    $      --     $      --     $      --     $  (294,049)   $      --      $  (293,749)

Exchange of all the outstanding common stock of Woodcom International, Inc. for
 common stock of Idial Networks, Inc. (formerly Desert Springs Acquisition Corp.)
 and the related charge to retained earning to effect the merger of the companies        (2,000)           (20)          (280)    36,015,000        36,015       292,285          --             --          328,000

Stock issued for retirement debt ................................................          --             --             --          170,000           170        55,930          --             --           56,100

Stock issued for fixed assets ...................................................          --             --             --          380,000           380       124,620          --             --          125,000

Stock issued for intangible assets ..............................................          --             --             --          500,000           500       164,500          --             --          165,000

Stock issued for consulting services ............................................          --             --             --           20,000            20         6,580          --             --            6,600

Net loss ........................................................................          --             --             --             --            --            --        (560,760)          --         (560,760)
                                                                                    -----------    -----------    -----------    -----------   -----------   -----------   -----------    -----------    -----------

Balance, December 31, 1999 ......................................................          --             --             --       37,085,000        37,085       643,915      (854,809)          --         (173,809)

Stock issued with acquisition - Whoofnet.com, Inc. ..............................          --             --             --       19,787,000        19,787     8,080,213          --             --        8,100,000

Stock issued with acquisition - 2 Sendit.com, Inc. ..............................          --             --             --        8,399,994         8,400     1,960,559          --             --        1,968,959

Stock issued to officers and directors ..........................................          --             --             --        5,908,460         5,908     1,748,976          --             --        1,754,884

Stock issued for consulting services ............................................          --             --             --       15,964,000        15,964     4,522,357          --             --        4,538,321

Other comprehensive losses ......................................................          --             --             --             --            --            --            --          (42,000)       (42,000)

Net loss from operations ........................................................          --             --             --             --            --            --      (9,115,498)          --      $(9,115,498)
                                                                                    -----------    -----------    -----------    -----------   -----------   -----------   -----------    -----------    -----------

Balance, December 31, 2000 (restated) ...........................................          --      $      --      $      --      $87,144,454   $    87,144   $16,956,020   $(9,970,307)   $   (42,000)   $ 7,030,857
                                                                                    ===========    ===========    ===========    ===========   ===========   ===========   ===========    ===========    ===========





                              IDIAL NETWORKS, INC.
                                 AND SUBSIDIARES

                   Notes to Consolidated Financial Statements


Note 1 - Organization, Summary of Significant Accounting Policies and
Principal Business Activity

Organization, Principal Business Activity and Principles of Consolidation

The consolidated  financial statements include the accounts of Idial Networks,
Inc.,  (Idial)  and  it's  wholly  owned  subsidiaries,   Whoofnet.com,   Inc,
(Whoofnet) and 2Sendit.Com,  Inc.  (2Sendit)  (collectively the Company).  All
significant  inter-company  transactions  and balances  have been  eliminated.
(See note 8 for stock split).

The    Company    provides    Internet-based    services    including    voice
telecommunication   to  customers  around  the  world.  The  Company  operates
selected  communication  services,  including phone cards and Internet enabled
telephony.   The  Internet  triggered  calls  combine  the  flexibility  of  a
computer  (on-line billing and call records) with the low tariffs of USA based
carriers via calling centers or direct from home anywhere in the world.

Woodcomm,  LLC was  established  in May 1997 in the state of Nevada  and began
commercial  operations in June 1998 as a  facilities-based  wholesale provider
of international  long-distance  telephone  services into South East Asia from
the United States. In April 1999, Woodcomm,  LLC was reorganized changing from
an LLC to a Nevada Corporation, Woodcomm International, Inc. (WCI).

In December 1999, Desert Springs Acquisition  Corporation (Desert Springs),  a
Colorado  corporation acquired all of the issued and outstanding common shares
of WCI in exchange for  30,930,000  shares of common stock of Desert  Springs.
For financial reporting purposes,  the business  combination was accounted for
as an additional  capitalization of WCI (a reverse acquisition with WCI as the
acquirer).  WCI is considered the surviving entity.  The historical  financial
statements  prior to the merger are those of WCI.  Desert Springs' only assets
and  liabilities  consisted of a liability for $80,346,  which was not assumed
in the merger. The former  shareholders of Desert Springs owned  approximately
14% of the common stock after the merger.

In  January  2000,  Desert  Springs  moved  its  state of  incorporation  from
Colorado  (with  500,000,000  shares of common  stock  authorized,  $.0001 par
value) to Nevada (with 100,000,000  shares of common stock  authorized,  $.001
par  value)  and  changed  its  name  to  Idial   Networks,   Inc.  (a  Nevada
corporation).

On August 7, 2000,  Idial  acquired  100% of the stock of Whoofnet in exchange
for the issuance of  approximately  19.8 million  shares of Idial common stock
with a fair market value of  $8,100,000.  The  acquisition  was  accounted for
using  the  purchase  method  and  accordingly  the  purchase  price  has been
allocated to the assets  acquired  aggregating  $2,479,365 and the liabilities
assumed  aggregating  $ 104,353  based on their  estimated  fair values at the
date of  acquisition.  The excess of purchase  price over the  estimated  fair
value of the net assets acquired,  totaling  approximately  $5.7 million,  has
been  recorded  as goodwill  and is being  amortized  using the  straight-line
method over 5 years.  The operating  results of this  acquisition are included
in  the  Company's  consolidated  results  of  operations  from  the  date  of
acquisition.

Whoofnet is a next generation  Internet  Company  designed for direct selling.
The company was formed  under the laws of Florida on March 6, 2000.  The major
product is an Internet portal for use by the general  public.  The Company has
recently  completed  its  field-testing  and  management  plans to begin sales
within the next several  months.  All costs  associated with the startup phase
of the
organization  has been  expensed in the  current  period as per  Statement  of
Position  98-5.

Whoofnet also formed 6 subsidiary Delaware  Corporations between the months of
March and May 2000, and 2 foreign  subsidiary  corporations for the operations
of various aspects of its business.

1) Whoofbiz,  Inc.  organized  in  March  2000 is  planned  to  provide  small
    business  services,  which  includes a 24-hour  customer  service  center,
    product  fulfillment,  merchant  account  fulfillment,  and low cost  high
    quality telecommunications services.

2) Whoofhealth,  Inc. sells its own  homeopathic  herbal  branded  products to
    the  general  public.  The  product  is  marketed  through  various  media
    including  TV,  Direct Sales and the  Internet.  The Company was organized
    April 28, 2000.

3) Whoofmail,  Inc. was organized to provide free multilingual  email services
    to be  offered  to the  general  public,  in order to build  the  customer
    base.  The Company was organized April 28, 2000.

4) Whoofmall,  Inc.  will  provide a shopping  mall on the  Internet,  whereby
    other  vendors  can  advertise  and sell  their  products  to the  general
    public.  The Company will  receive its revenue  through  various  services
    offered  to  the  vendors  who  are   participating   in  the  mall.   The
    Company was organized  May 2000.

5) Whoofmusic.com,  Inc.  was  created to sell its own label  specializing  in
    music from the 60's, 70's, 80's and 90's and related  products.  Marketing
    will be done  through TV Press  media and the  Internet.  The  Company was
    organized May 2000.

6) Whooftelco,  Inc.  will  be a  low  cost  high  quality  telecommunications
    provider  to the  European  and Asian  wireless  community  and to the low
    cost  domestic  and  international  calls  customer in the United  States.
    The Company was organized March 2000.

7) Whoofnet.Com  AC is a Swedish  corporation  that was formed on January  16,
    2001   subsequent  to  the  year-end.   The  purpose  is  to  act  as  the
    European   call  center  for   Whoofnet.Com.   The   Company   received  a
    $10,000,000  grant from the Swedish  Government to provide the development
    and  expansion  of a  telephone  customer  call  center  for  the  Swedish
    government..

8) Whoofstore.Com  AB was  formed  on  January  16,  2000  is  also a  Swedish
    corporation  as a duty free sales center.  Management  estimates  that the
    licenser  granting  the  Company  a  tax-free  status  has a market  value
    between $5 to 10 million US dollars.

As of the date of these  financial  statements none of the  subsidiaries  were
active or  funded.

On October  12, 2000 Idial  acquired  100% of the stock of 2sendit in exchange
for the  issuance of  approximately  8.4 million  shares of Idial common stock
with a fair market value of  $1,968,959.  The  acquisition  was  accounted for
using  the  purchase  method  and  accordingly  the  purchase  price  has been
allocated to the assets  acquired  aggregating  $204,132  and the  liabilities
assumed  aggregating  $166,468  based on their  estimated  fair  values at the
date of  acquisition.  The excess of purchase price over their  estimated fair
value of the net assets acquired,  totaling  approximately  $1.9 million,  has
been  recorded  as goodwill  and is being  amortized  using the  straight-line
method over 5 years.  The operating  results of this  acquisition are included
in  the  Company's  consolidated  results  of  operations  from  the  date  of
acquisition.

2sendit provides a marketing  service by advertising the products and services
through  a  variety  of media  with a  primary  focus on the use of fax  mail,
direct  mail  and  email.   In  addition   the  company   provides   ancillary
services,   which  include  the  sales  of  mailing  lists,  and  consultation
services.

The  primary  customer  has been the  investment  market but the  company  has
recently expanded its integration into the general business market.

The following summary,  pro forma,  unaudited data of the Company reflects the
acquisitions  of Whoofnet  and  2Sendit as if they had  occurred on January 1,
2000 and 1999, respectively:

                                               Pro Forma (Unaudited)
                                                     Fiscal
                                          ----------------------------
                                               2000           1999
                                          ------------    ------------

Sales ...................                 $  2,173,583    $  1,827,301

Net loss ................                 $(11,035,991)   $ (2,330,478)

Net loss per common share                 $       (.23)   $       (.30)


Concentration of Credit Risk

The  Company's  financial  instruments  that are exposed to  concentration  of
credit risk consist primarily of cash and accounts  receivable.  Additionally,
the Company  maintains  cash  balances in bank  deposit  accounts,  which,  at
times,  may exceed  federally  insured limits.  During the year ended December
31, 1999,  predominantly  all of the Company's  sales were  generated from one
company  whose  accounts  receivable  balance at December 31, 1999  aggregated
$20,611 or 77% of total trade accounts receivable.

Cash and Cash Equivalents

The Company  considers  all highly liquid  investments  with maturity of three
months or less when purchased to be cash equivalents.

Marketable Securities

Marketable  securities  consist of common  stock.  Marketable  securities  are
stated at market  value as  determined  by the most  recently  traded price of
each  security  at the  balance  sheet date.  By policy,  the Company  invests
primarily in high-grade marketable  securities.  All marketable securities are
defined as  trading  securities  or  available-for-sale  securities  under the
provisions of the  Statement of Financial  Accounting  Standards No.  ("SFAS")
115, "Accounting for Certain Investments in Debt and Equity Securities."

Management  determines  the  appropriate  classification  of its investment in
marketable   securities  at  the  time  of  purchase  and   reevaluates   such
determination at each balance sheet date.  Securities that are bought and held
principally  for the purpose of selling  them in the near term are  classified
as trading  securities and unrealized holding gains and losses are included in
earnings.  Available-for-sale  securities  are  carried at fair value with the
unrealized gain and losses,  net of tax,  reported as a separate  component of
other  comprehensive  loss. The cost of investments  sold is determined on the
specific identification or the first-in-first-out method.

Advertising Costs

The Company expenses advertising costs as incurred.

Use of Estimates

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

Property and Equipment

Property and equipment are stated at cost,  equipment under capital leases are
stated at the  lower of fair  market  value or net  present  value of  minimum
lease  payments at inception  of the leases.  Depreciation  is computed  using
the  straight-line  method over the  estimated  useful lives or lease terms of
the related assets.

Goodwill and Other Intangible Assets

Goodwill  and other  Intangible  assets are  amortized  over 5 years using the
straight  line method and  consist of  trademarks  aggregating  $215,000 as of
December  31,  1999  and net of  accumulated  amortization  of  $43,000  as of
December  31,  2000.  In  addition,  goodwill  aggregating  $7,656,283  as  of
December  31, 2000 arising from  business  acquisitions  during the year ended
December  31,  2000,   accounted  for  under  the  purchase  method,   net  of
accumulated amortization of  $573,647.

Revenue Recognition

The  Company has adopted  the SEC Staff  Accounting  Bulletin  (SAB) No. 101 -
Revenue  Recognition  in  Financial  Statements  in January 2000 as its formal
guidelines  for the  recognition  of revenue.  The effect of this adoption has
had no effect on the  financial  statements  because past revenue  recognition
practices followed the precepts of SAB 101.

The  Company  sells  long  distance  service  through  a  network  of  various
distributors.  The consumer of the product receives a credit card representing
a prepaid  set of minutes  allowing  them  access to long  distance  telephone
services.  In addition  to a fixed  amount of time  allotted  to each  prepaid
calling card,  each card has a three (3) month life before the unused  minutes
expire.  Revenue  is  initially  recognized  in the  fiscal  period  when  the
individual cards are used for their intended purpose.  As cards expire,  based
on their  3-month  life,  the  balances  of the  remaining  unused  funds  are
recognized  as  revenue  in the period of  expiration.  Un-expired  cards with
balances are recorded as deferred revenue.

The Company recognizes revenue from its marketing services,  when the services
contracted for are completed.  In some  circumstances,  contracts will require
services  to be  performed  over a period of two months In those  cases,  fees
are  specifically  identified  with the various  services  to be provided  and
revenue is recognized as each of the  individual  tasks are  completed.  Funds
received as deposits from future services are recorded as deferred revenues.

Revenue from product sales are recognized  when the products are shipped.  Due
to the  nature  of the  product,  customers  are not given the right to return
product.  Therefore,  management  has  elected  not to allow for a reserve for
future returns.

Fair Value of Financial Instruments

The  carrying  amounts  of  financial  instruments  including  cash,  accounts
receivable,  accounts payable and accrued  expenses  approximate fair value as
of December 31, 2000, as a result of the  relatively  short  maturity of these
instruments.

The fair value of the notes  payable  approximate  the carrying  value as both
the stated rate and  discount  rate on the notes  approximates  the  estimated
current market rate.

Long-Lived Assets

The Company  reviews its long-lived  assets for impairment  whenever events or
changes in  circumstances  indicate that the carrying  amount of the asset may
not be  recovered.  The Company  looks  primarily to the  undiscounted  future
cash flows in its  assessment  of whether or not  long-lived  assets have been
impaired.  At December 31, 1999 and 2000 the Company  determined  there was no
impairment.

Income Taxes

The Company  employs  the  liability  method of  accounting  for income  taxes
pursuant to SFAS No. 109  "Accounting  for Income  Taxes,"  under which method
the Company  recognizes  deferred tax  liabilities and assets for the expected
future tax  consequences  of events that have been  included in the  financial
statements or tax returns.  Under this method,  deferred tax  liabilities  and
assets are determined based on the difference between the financial  statement
and tax basis of assets and liabilities  using the enacted tax rates in effect
for  the  year  in  which  the  differences  are  expected  to  reverse.   The
measurement of deferred tax assets is reduced, if necessary,  by the amount of
any tax benefits  that,  based on available  evidence,  are not expected to be
realized.  The Company  provides a valuation  allowance that reduces  deferred
tax assets to their net realizable value.

Net Loss Per Share 

The Company  computes net loss per share in accordance  with the provisions of
SFAS No. 128,  "Earnings Per Share" ("SFAS 128"). Under the provisions of SFAS
128,  basic earnings per share (EPS) is computed by dividing the net loss from
operations  for the period by the  weighted  average  number of common  shares
outstanding for the period.  Diluted EPS reflects the potential  dilution that
could occur from  common  stock  issuable  through  stock  based  compensation
including  stock  options,   restricted  stock  awards,   warrants  and  other
convertible  securities.  Diluted  EPS is not  presented  since the  effect is
antidilutive.

Convertible Notes Payable

The  company  accounts  for  convertible   notes  payable  with in-the-money
conversion features in accordance with EITF 98-5 and EIRG 00-27; accordingly,
the intrinsic  value of the  conversion  feature is initially  recorded as an
addition to paid-in-capital  and a discount on the related  convertible notes
with the discount being amortized over the remaining  contractual life of the
respective note. Any unamortized  discount remaining upon conversion prior to
the stated  maturity date of the note is  immediately  recognized as interest
expense.

In December 2000 the company issued a two-for-one  stock split effected in the
form  of  a  100%  stock  dividend.   Previously  reported  shares  have  been
retroactively restated (See note 8).

Reclassification

The consolidated  statement of operations for the year ended December 31, 1999
has been  reclassified  to  conform  to the  presentation  for the year  ended
December 31, 2000.

Recently Issued Accounting Pronouncements

The Company does not believe that any  recently  issued but not yet  effective
accounting  standards,  have a material  effect on the Company's  consolidated
financial position,  results of operations or cash flows except for the effect
of adoption of SFAS No. 142,  "Goodwill and Other  Intangible  Assets"  ("SFAS
No. 142") which  effect has not yet been  determined.  SFAS No. 142  addresses
the  financial  accounting  and  reporting  for  acquired  goodwill  and other
intangible  assets.  It  addresses  how  intangible  assets that are  acquired
individually  or with a group of other  assets  (but not those  acquired  in a
business  combination)  should be accounted for in financial  statements  upon
their  acquisition.  SFAS 142 also addresses how goodwill and other intangible
assets  should be accounted for after they have been  initially  recognized in
the financial statements.  The Company will be adopting the provisions of this
new standard beginning with  the first quarter of 2002.

During June 2001 SFAS No. 141,  "Business  Combinations"  ("SFAS No. 141") was
released.  This  standard  addresses  financial  accounting  and reporting for
business combinations.  All business combinations within the scope of SFAS 141
are  to be  accounted  for  using  one  method  -  the  purchase  method.  The
provisions  of SFAS 141 apply to all  business  combinations  initiated  after
June 30, 2001.  Use of the pooling - of - interests  method for those business
combinations  is  prohibited.  It also  applies to all  business  combinations
accounted for using the purchase  method for which the date of  acquisition is
July 1, 2001 or later.




Note 2 - Property and Equipment

Property and equipment consists of the following:

                                               December 31,
                                       ---------------------------
                                                                        Estimated
                                                                          Useful
                                                                         Life or
                                                                         Term Of
                                           2000            1999           Lease
                                       -----------     -----------    -----------


Telephone equipment                    $   440,158     $   137,158    2-5 years
Computers and equipment                    729,714         277,893    5 years
Software                                 1,996,614              -     3 years
Furniture and fixtures                     159,876              -     5 years
                                       -----------     -----------
                                         3,326,362         415,051
Less accumulated depreciation             (749,434)       (159,464)
                                       -----------     -----------

                                       $ 2,576,928     $   255,587
                                       ===========     ===========

Property and equipment  includes  assets  acquired under capital leases in the
aggregate  amount of  $161,139  as of  December  31,  1999 and  $278,683 as of
December  31,  2000 net of  accumulated  depreciation  of $ 71,955,  $164,849,
respectively.


Note 3 - Marketable Securities

The following is a summary of available-for-sale securities:

                                               December 31, 2000
                             -----------------------------------------------------
                                                                         Gross
                                                                       Unrealized
                                                   Fair Market          Holding
                                  Cost                Value               Loss
                             -------------       -------------       -------------

Equity Securities            $      73,200       $      31,200       $      42,000
                             =============       =============       =============

The Company's  marketable  securities  were  acquired in  connection  with the
Whoofnet  acquisition.  There were no  investments  in  marketable  securities
during the year ended  December 31, 1999. The Company did not have any trading
securities  at December  31, 2000.  There were no sales of  available-for-sale
securities  during  the  year  ended  December  31,  2000.  Accumulated  other
comprehensive  income (loss)  included in  stockholder's  equity  (deficiency)
includes  an  unrealized   holding  loss,  net  of  related  tax  effect,   on
available-or-sale securities of $42,000.






Note 4 - Long-Term Debt

Long-term debt consists of the following:
                                                               December 31,
                                                        ---------------------------
                                                             2000           1999
                                                        -------------   -----------
Capital  leases with  monthly  installments  totaling
 $3,295 at December  31, 2000 and  December 31, 1999,
 including  interest at 23% per annum and expiring at
 various dates through August 2003.                     $     202,641   $    213,025

Equipment note payable in monthly  installments  of $
 795 including interest at 12.9 % expiring May 2003.           23,856         31,776

Stockholder   loans  payable   issued  with  interest
 payable annually at 7% per annum (Note 5).                 1,624,103             -
                                                        -------------   -----------
                                                            1,850,600        244,761
Less current portion                                         (111,623)       (96,416)
                                                        -------------   ------------

Long term debt                                          $   1,738,977   $    148,385
                                                        =============   ============


Maturities of long-term debt as of December 31, 2000 are as follows:

                                                Long-Term      Capital
      Year Ending December 31,                     Debt        Leases       Total
      ------------------------                  ----------   ----------   ----------

           2001                                 $    7,421   $  147,401   $  154,822
           2002                                     12,588       63,606       76,194
           2003                                      3,847       44,194       48,041
                                                ----------   ----------   ----------
                                                    23,856      255,201      279,057
           Less amount representing interest            -       (52,560)     (52,560)
                                                ----------   ----------   ----------
                                                    23,856      202,641      226,497
           Less current portion                     (7,421)    (104,202)    (111,623)
                                                ----------   ----------   ----------

                                                $   16,435   $   98,439   $  114,874
                                                ==========   ==========   ==========



Note 5 - Stockholder Loans Payable

The Company  received loans from  stockholders to fund  operations.  The loans
are interest  bearing at 7% per annum and are convertible at the option of the
stockholders  into  restricted  common stock at the current  market price less
20% at the  time of  conversion.  As of  December  31,  1999  the  loans  from
stockholders  totaled $186,844 and as of December 31, 2000 totaled $1,624,103.
The debt has been  reclassified  as  long-term  at December 31, 2000 since the
stockholders had entered into an agreement during October,  2000 that requires
the Company to convert the obligation into equity  securities or to repay such
obligation on January 15th 2002.




Note 6 - Income Taxes

The tax effect of loss carry forwards and the valuation allowance that gives
rise to deferred tax assets are as follows:
                                                               December 31,
                                                       -----------------------------
                                                           2000             1999
                        -                              -------------   -------------

Net operating loss carry forwards                      $   1,501,846   $     128,221
Less valuation allowance                                  (1,501,846)       (128,221)
                        -                              -------------   -------------

Deferred tax assets                                    $          -    $          -
                                                       =============   =============


As of December 31, 2000,  the Company had net  operating  loss carry  forwards
available  to  offset  future  taxable  income  of  approximately  $9,970,000,
which  expire  in  various  years  through  2015.  Between  December  1999 and
December 2000 the Company  completed a reverse merger and two  acquisitions in
exchange for common  stock.  Under  section 382 of the  Internal  Revenue Code
(the  "Code")  these  activities  effected  an  ownership  change and thus may
severely limit, on an accrual basis, the Company's  ability to utilize its net
operating  loss carry  forwards.  The Company  uses the lowest  marginal  U.S.
corporate  tax rate of 15% to  determine  deferred tax amounts and the related
valuation  allowance  because the Company has had no taxable  earnings through
December 31, 2000.

The  reconciliation  of income tax benefit  resulting from applying US federal
statutory  tax  rates to pretax  loss and the  reported  amount of income  tax
benefit is as follows:


                                                           For the Years Ended
                                                               December 31,
                                                       -----------------------------
                                                           2000            1999
                                                       -------------   -------------

Tax benefit at federal statutory rate of 15%           $      84,114   $     336,550
Increases in valuation allowance                             (84,114)       (336,550)
                                                       -------------   -------------

                                                       $          -    $          -
                                                       =============   =============

For  the  year  ended  December  31,  2000,  the  Company  and  each  of  its'
subsidiaries had losses.  Idial,  Whoofnet and 2Sendit each file their own tax
return.



Note 7 - Commitments

The  Company   leases  office  space  and   furniture   and  equipment   under
non-cancelable  operating  leases,  which expire at various dates through July
2003.

Rent expense charged to operation under the operating  leases was $149,146 and
$41,954 for the years ended December 31, 2000 and 1999, respectively

Future  minimum  obligations  under  the  non-cancelable  operating  leases at
December 31, 2000 are as follows:

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

         2001                                               $    55,700
         2002                                                    29,960
                                                            -----------

         Total                                              $    85,660
                                                            ===========


Note  8 - Common Stock

As of January 1, 1999 the financial  statements  have been restated to reflect
the   recapitalization   pursuant  to  the  Desert   Springs   reverse  merger
transaction.

Effective  December 15, 2000,  the Company's  Board of Directors  approved a 2
for 1 stock split  whereby the number of shares of  outstanding  common  stock
increased   from   43,572,225   to   87,144,454.   A  total  of  $435,722  was
reclassified  from the  Company's  additional  paid in capital  account to the
Company's  common  stock  account.  All share and per share  amounts have been
restated to retroactively reflect the stock split.

During December 1999, the  stockholders of WCI were issued  22,770,000  shares
of common  stock in  exchange  for  $165,000 of accrued  wages.  Additionally,
various  consultants  were  issued  common  stock in the  amount of  7,860,000
shares in exchange  for services of  $63,000.00.  The fair market value of the
common  stock on the date of these  issuances  was  determined,  using  quoted
market  prices  on the  date of  issuance  as that  amount  was  more  readily
determinable and reliably  measurable than the fair market value of the common
stock transferred.

The  following  schedule  details  the stock  issuances  during the year ended
December 31, 2000:


Transaction                                                                       Common Stock       Additional
----------                                                                   ----------------------   Paid-in                  Price Per
   Date        Recipient                       Description                     Shares      Amount     Capital       Total         Share
--------   ----------------- -----------------------------------------       -----------  --------- -----------  -----------  -------------
08/07/00   Woofnet.Com (4)   Corporate acquisition                           19,787,000      19,787    8,080,213   8,100,000         0.4094
10/12/00   2Sendit (3)       Corporate acquisition                            8,399,994       8,400    1,960,559   1,968,959         0.2344
                                                                             -----------  --------- -----------  -----------  -------------
                                                                             28,186,994      28,187   10,040,772  10,068,959
                                                                             -----------  --------- -----------  -----------  -------------
08/30/00   Carl Battie (2)   Director Compensation                              800,000         800     415,200      416,000         0.5200
08/30/00   Supree Wanapun (2)Director Compensation                               20,000          20      10,380       10,400         0.5200
08/30/00   Klaus Scholz (2)  Employee compensation                               40,000          40      20,760       20,800         0.5200
08/30/00   Mark T. Wood (1)  Employee compensation                              800,000         800     415,200      416,000         0.5200
10/16/00   Mark T. Wood (1)  Employee compensation                            4,000,000       4,000     756,000      760,000         0.1900
09/25/00   Gerald Lesher (1) Stock issued for consulting services                80,460          80      42,564       42,644         0.5300
09/25/00   Kevin Wright (1)  Stock issued for consulting services                40,000          40      21,160       21,200         0.5300
09/25/00   Supree Wanapun (1)Stock issued for consulting services               128,000         128      67,712       67,840         0.5300
                                                                             -----------  --------- -----------  -----------  -------------
                                                                              5,908,460       5,908   1,748,976    1,754,884
                                                                             -----------  --------- -----------  -----------  -------------
08/30/00   Charlie Macari    Stock issued for consulting services               836,734         837     434,265      435,102         0.5200
08/30/00   Frank Katana      Stock issued for consulting services                 5,160           5       2,678        2,683         0.5200
08/30/00   Gary Hanson       Stock issued for consulting services                 6,664           7       3,458        3,465         0.5200
08/30/00   Ivana Servalle    Stock issued for consulting services                   932           1         484          485         0.5200
08/30/00   Jeannette CallahanStock issued for consulting services                 1,904           2         988          990         0.5200
08/30/00   Joe Spence        Stock issued for consulting services                 2,704           3       1,403        1,406         0.5200
09/25/00   Joseph Alloca     Stock issued for consulting services               128,000         128      67,712       67,840         0.5300
09/25/00   Julie Crosby      Stock issued for consulting services               128,000         128      67,712       67,840         0.5300
08/30/00   Karl E. Rodriquez Stock issued for consulting services               120,000         120      62,280       62,400         0.5200
09/25/00   Karl E. Rodriquez Stock issued for consulting services               410,000         410     216,890      217,300         0.5300
10/16/00   Karl E. Rodriquez Stock issued for consulting services               500,000         500      94,500       95,000         0.1900
09/25/00   Kenneth Lieberman Stock issued for consulting services                80,000          80      42,320       42,400         0.5300
10/16/00   Lanette J. SeifertStock issued for consulting services               200,000         200      37,800       38,000         0.1900
08/30/00   Lazo Sopov        Stock issued for consulting services                13,332          13       6,920        6,933         0.5200
09/25/00   Louie Sopov       Stock issued for consulting services               120,000         120      63,480       63,600         0.5300
08/30/00   Maribeth Callahan Stock issued for consulting services                 3,808           4       1,976        1,980         0.5200
08/30/00   Mark Berman       Stock issued for consulting services                 1,332           1         692          693         0.5200
08/30/00   Mary Callahan     Stock issued for consulting services                 1,904           2         988          990         0.5200
09/25/00   Pamela Zelman     Stock issued for consulting services               800,000         800     423,200      424,000         0.5300
10/16/00   Pamela Zelman     Stock issued for consulting services               800,000         800     151,200      152,000         0.1900
09/25/00   Paulina Gidziela  Stock issued for consulting services                40,000          40      21,160       21,200         0.5300
08/30/00   Richard Borrow    Stock issued for consulting services                   664           1         344          345         0.5200
10/16/00   Richard Borrow    Stock issued for consulting services             2,000,000       2,000     378,000      380,000         0.1900
08/30/00   Ron Ardt          Stock issued for consulting services               140,000         140      72,660       72,800         0.5200
09/25/00   Ron Ardt          Stock issued for consulting services               760,000         760     402,040      402,800         0.5300
08/30/00   Sheba Berkovits   Stock issued for consulting services                13,332          13       6,920        6,933         0.5200
08/30/00   Stan Majorum      Stock issued for consulting services               105,258         105      54,629       54,734         0.5200
08/30/00   Tom Callahan      Stock issued for consulting services                 1,904           2         988          990         0.5200
08/30/00   Tom Schutte       Stock issued for consulting services                 2,704           3       1,403        1,406         0.5200
08/30/00   Valeria Servalle  Stock issued for consulting services                 1,332           1         692          693         0.5200
09/25/00   William Stocker   Stock issued for consulting services               410,000         410     216,890      217,300         0.5300
09/25/00   Ziyon Shaky       Stock issued for consulting services               128,000         128      67,712       67,840         0.5300
10/16/00   Charlie Macari    Stock issued for consulting services             4,000,000       4,000     756,000      760,000         0.1900
09/25/00   Daffney Austin    Stock issued for consulting services               200,000         200     105,800      106,000         0.5300
10/16/00   Daffney Austin    Stock issued for consulting services             2,000,000       2,000     378,000      380,000         0.1900
08/30/00   David Schild      Stock issued for consulting services                   332          -          173          173         0.5200
10/16/00   David Schild      Stock issued for consulting services             2,000,000       2,000     378,000      380,000         0.1900
                                                                             -----------  --------- -----------  -----------  -------------
                                                                              15,964,000     15,964   4,522,357    4,538,321
                                                                             -----------  --------- -----------  -----------  -------------

                                                                             $50,059,454  $  50,059 $16,312,105  $16,362,164  $
                                                                             ===========  ========= ===========  ===========  =============

(1)   - Officers and directors of Idial.
(2)   - Directors of Idial
(3)   - Conversion ratio of Idial Stock for 2Sendit stock was 32.68:1
(4)   - Conversion ratio of Idial Stock for Whoofnet stock was 1:1
(5)   - All share and market value per share amount have been retroactively
        restated to reflect the stock split.

In December 1999,  subsequent to the reverse  acquisition,  the Company issued
common shares in exchanged for debt to acquire  various  assets and in payment
of consulting services.  In December 1999, the fair market value of the common
stock on the date of these  issuances  was  determined to be $.33 based on the
issuance of 300,000  common shares of stock for $100,000 in December 1999. The
various stock transactions which occurred in December 1999 are as follows:

The Company issued  170,000 shares of common stock to an equipment  vendor and
customer in exchange for  satisfaction  of a note payable and related  accrued
interest  totaling   $482,443.   This  amount  was  netted  with  an  accounts
receivable  balance  due the  Company  which  totaled  $120,097.  The  related
equipment's  acquisition  cost was  reduced  by  approximately  $306,000  as a
result of this transaction.

The  Company  issued  500,000  shares  of  common  stock  in  exchange  for an
intangible  asset in  connection  with  this  transaction,  the  Company  also
settled  an  accounts  receivable  balance of  $50,000.  The fair value of the
intangible  assets was  determined  to be  $215,000  and is  reflected  in the
accompanying financial statements.

A  consultant  was granted  380,000  shares of common  stock in  exchange  for
equipment  with a fair value of $125,000  and 20,000  share of common stock in
exchange  for  $6,600  of  consulting  services.  The  accompanying  financial
statements  reflect the consulting expense and the fair value of the equipment
as a result of this transaction.

In  December  1999,  prior to the  reverse  merger,  Idial  agreed to transfer
300,000  share of common  stock in  exchange  for  $100,000.  This  amount was
received in full in January 2000.


Note 9 - Segment information

The Company has three  principal  operating  segments  which are (1) providing
Internet-based  voice  telecommunication  to customers  around the world,  (2)
providing a marketing service for various  businesses and (3) marketing a next
generation  Internet Company designed for direct selling to the general public
through an internet portal.  These operating segments were based on the nature
of the product and the  services  offered.  Operating  segments are defined as
components of an enterprise  about which  separate  financial  information  is
available that is evaluated  regularly by the chief  operating  decision-maker
in deciding  how to  allocate  resources  and in  assessing  performance.  The
Companies  chief  executive  officer  and chief  financial  officer  have been
identified  as  the  chief  decision-makers.  The  Company's  chief  operating
decision  makers  direct the  allocation  of resources  to operating  segments
based on the profitability and cash flow of the respective segments.

The  Company  has  determined  that  there  are two  reportable  segments  (1)
providing  Internet-based  voice  telecommunication  to  customers  around the
world and (2) providing a marketing service for various businesses.  The other
segment  was not  reported  because  it does not meet any of the  quantitative
thresholds  under SFAS No. 131  "Disclosures  about  Segments of an Enterprise
and Related Information".

The  accounting  policies of the segments  are the same as those  described in
the Summary of significant accounting policies.

The following table summarizes the Company's revenues for the different
reportable segments:

                            Internet-
                           Based Voice
                               Tele-         Marketing
                          communications     Services        Other (a)      Total
                            --------------------------------------------------------
                                                   December 31, 2000
                            --------------------------------------------------------
Net sales from
 external customers          1,728,562         66,965           1,370      1,796,897
Intersegment net sales              -              -               -              -
Gross profit (loss)           (323,408)        50,731              -        (272,677)
Net operating loss          (8,812,036)      (146,832)             -      (8,958,868)
Interest expense               152,523            771           3,336        156,630
Depreciation and
amortization                   617,698         11,089         584,080      1,212,867
Total assets                   665,847        232,238       9,251,238     10,149,323
Capital expenditures            26,700             -               -          26,700

                            --------------------------------------------------------
                                                  December 31, 1999
Net sales from
 external customers          1,575,826             -               -       1,575,826
Intersegment net sales              -              -               -              -
Gross profit (loss)             73,790             -               -          73,790
Net operating loss            (470,106)            -               -        (470,106)
Interest expense                90,654             -               -          90,654
Depreciation and
amortization                   113,333             -               -         113,333
Total assets                   617,537             -               -         617,537
Capital expenditures            26,651             -               -          26,651



Note 10 - Other Comprehensive Income (Loss)

The pretax and after-tax effects of the components of other comprehensive
income (loss) for 2000 are as follows:
                                                  Pretax        Tax       After Tax
                                                -----------  -----------  ----------

Unrealized holding loss on available-for-sale
 securities                                     $  (42,000)  $       -    $  (42,000)





Note 11 - Going Concern

The Company has suffered  recurring  losses from  operations and has a working
capital  deficiency at December 31, 2000. The Company's  financial  statements
have been  prepared  on the  assumption  that the Company  will  continue as a
going  concern.  Management  has  instituted  a cost  reduction  program  that
includes a  reduction  of labor and fringe  benefit  costs.  In  addition  the
Company  has  consolidated  several  of its  operations,  increased  marketing
efforts on its product  lines,  adjusted  sales prices of certain  products to
bring them in line with  costs and  negotiated  more  favorable  contracts  to
provide  services  at more  efficient  costs.  As a result  of  these  efforts
management  believes that  profitability  will be achieved in the near future.
In addition,  during July 2001 the Company  issued a  convertible  note in the
aggregate  amount of  $750,000  and  warrants to acquire  common  stock to the
convertible  note holder (see note 12), to fund working capital and expansion.
If the actions  described above are not successful in achieving  profitability
or additional  financing  cannot be obtained,  the Company would be materially
and  adversely  affected and there is  substantial  doubt about the  Company's
ability to  continue  as a going  concern.  The  financial  statements  do not
include any  adjustments  necessary if the Company  becomes unable to continue
operations for any reason.


Note 12 - Subsequent Event

On July 6, 2001, the Company  issued an 8%  convertible  note in the principal
amount of $750,000.  Net proceeds  aggregating  $610,250  will be used to fund
working  capital and  expansion.  The note is  convertible  into shares of the
Company's  common  stock,  as  described  in  the  Convertible  Note  Purchase
Agreement  ("the  Agreement").  In addition the Company issued warrants to the
purchaser of the  convertible  note to acquire shares of the Company's  common
stock,  as  described  in the  Agreement.  The  Agreement  also  provides  the
purchaser demand and piggyback registration rights.



Note 13 - Restatement of Consolidated Financial Statements

The  consolidated  financial  statements  for the year ended December 31, 2000
have  been  restated  to  reflect  a  correction  in the  company's  method of
accounting for business  combinations in accordance with Accounting Principles
Board  Opinion No. 16 ("APB  16").  Pursuant  to APB 16, the  purchase  method
requires  the  reported  income  of  an  acquiring   corporation  include  the
operations  of the acquired  company after  acquisition,  based on the cost to
the acquiring  corporation.  The consolidated  financial  statements have been
restated  to  reflect  the  operating  results  of the  Whoofnet  and  2Sendit
acquisitions  from the respective dates of acquisition.  The previously issued
consolidated  financial  statements  included  in the  company's  registration
statement  on Form  SB-2/A  filed on  August 2, 2001  included  the  operating
results of Whoofnet for the period from March 6, 2000 (date of  inception)  to
December  31,  2000  and 2 Sendit  for the  period  from  January  1,  2000 to
December  31,  2000 in error.  The  effect of the  correction  on net loss for
the year ended  December  31,  2000 was a decrease  in net loss of $930,732 or
$.02 per share. In addition,  the  consolidated  financial  statements for the
year ended December 31, 2000 included in the company's  registration statement
on Form SB-2  Amendment  No. 2 filed on October 12, 2001 have been restated to
reflect  a  correction  in  the  computation  of  goodwill  in the  amount  of
$276,476,  a correction  of the  computation  of  amortization  of goodwill of
($165,488)  and a correction  in the value  assigned to common stock issued to
consultants,  officers and  directors  (see Note 8) to  recognize  approximate
fair market  value.  The effect of such  corrections  on net loss for the year
ended  December 31, 2000 was an increase in net loss pf $2,579,102 or $.05 per
share.

                                                                       Net Loss Per
                                                          Net Loss        Share
                                                        -------------- --------------

As previously stated                                     $(7,449,128)    $      (0.25)

Change in method of accounting for business
 combinations in accordance with apb 16                      930,732             0.02

Change in net loss per share to reflect retroactive
 restatement for stock split                                      -              0.09


Correction in the computation of amortization of
 goodwill                                                    165,488             -

Correction in the value assigned to common stock
 issued to consultants officers and directors             (2,762,590)           (0.05)
                                                         -----------     ------------

As restated on the consolidated statement of
 operations                                              $(9,115,498)    $      (0.19)
                                                         ===========     ============`