SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter year ended March 31, 2002
Commission File Number: 000-28481
ICONET, INC.
FORMERLY KNOWN AS
DIGITAL VIDEO DISPLAY TECHNOLOGY CORP.
______________________________________________________
(Exact name of registrant as specified in its charter)
Nevada 86-0891931
_______________________ ____________________________________
(State of organization) (I.R.S. Employer Identification No.)
8 Gaucho Drive
Rolling Hills Estates, CA 90274
________________________________________
(Address of principal executive offices)
(416) 682-9255
_________________________________________________
Registrants telephone number, including area code
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months and (2) has been
subject to such filing requirements for the past 90 days. Yes [x]
Securities registered under Section 12(g) of the Exchange Act:
There are 31,257,115 shares of common stock outstanding as of September 30,
2001. The shares are traded on the OTC Bulletin Board, under the symbol "DVDT".
TABLE OF CONTENTS
_________________
PART I FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
ITEM 2 MANAGEMENT'S DISCUSSION OF OPERATIONS AND FINANCIAL
CONDITION
PART II OTHER INFORMATION
ITEM 7 SIGNATURES
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ICONET CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 2002, AND 2001
TABLE OF CONTENTS
Balance Sheets
Statements of Operations
Statements of Cash Flows
Notes to Financial Statements
ICONET, INC
(A Company in the Development Stage)
BALANCE SHEETS
March 31, 2002
(Unaudited) December 31, 2001
______________ _________________
ASSETS
CURRENT ASSETS
Cash $ 620 $ 1,068
Prepaid expenses - 81,250
___________ ___________
Total current assets 620 82,318
___________ ___________
DEFERRED TAX ASSET (NET OF VALUATION ALLOWANCE OF
$1,067,447 AND $1,025,175) - -
___________ ___________
Total assets 620 82,318
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 363,679 $ 363,679
Bank overdraft payable 30,519 30,519
Related party payable 525,164 522,164
Officer advances 3,600 -
Related party line of credit 60,274 22,574
Interest payable 144,877 143,644
Accrued expenses 34,230 57,132
Wages payable 68,327 68,327
Payroll tax payable 16,338 16,338
___________ ___________
Total current and total liabilities 1,247,008 1,224,377
___________ ___________
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 100,000,000 shares
authorized, 31,257,115 shares issued and
outstanding at March 31, 2002, and December 31, 2001 31,257 31,257
Additional paid-in capital 2,221,906 2,221,906
Deferred compensation costs (360,000) (380,000)
Deficit accumulated during the development stage (3,139,551) (3,015,222)
___________ ___________
Total stockholders' equity (1,246,388) (1,142,059)
___________ ___________
Total liabilities and stockholders' equity $ 620 $ 82,318
=========== ===========
See Notes to the Interim Financial Statements
ICONET, INC.
(A Company in the Development Stage)
STATEMENTS OF OPERATIONS
(Unaudited)
Cumulative From
Inception (August Three Months Three Months
1997) through Ended Ended
March 31, 2002 March 31, 2002 March 31, 2001
_________________ ______________ ______________
REVENUE
OPERATING COSTS AND EXPENSES
Consulting $(1,538,231) $ (88,750) $ (41,250)
Research and development (179,027) - -
Marketing expense (159,394) - (20,000)
Labor expense (40,000) (20,000) -
Legal and accounting (331,583) (7,000) (42,563)
Operating and administrative expense (749,716) (7,346) (1,671)
Depreciation expense (5,562) - -
Amortization expense (16,500) - -
___________ ___________ __________
Total operating costs and expenses (3,020,013) (123,096) (105,484)
NON-OPERATING INCOME
Dividend income 1,212 - -
Gain on cancellation of contracts 90,604 - -
Loss on disposal of assets (59,641) - -
___________ ___________ __________
Total non-operating income 32,175 - -
INTEREST EXPENSE (151,713) (1,233) (20,848)
___________ ___________ __________
Net loss before income taxes (3,139,551) (124,329) (126,332)
___________ ___________ __________
Provision for income taxes - - -
___________ ___________ __________
Net loss $(3,139,551) $ (124,329) $ (126,332)
=========== =========== ==========
Loss per common share - basic $ (0.15) $ (0.00) $ (1.18)
=========== =========== ==========
Weighted average common shares -basic 20,814,428 31,257,115 107,115
=========== =========== ==========
Loss per common share - diluted $ (0.14) $ (0.00) $ (0.04)
=========== =========== ==========
Weighted average common shares- diluted 21,719,791 32,162,478 2,857,115
=========== =========== ==========
See Notes to the Interim Financial Statements
ICONET, INC.
(A Company in the Development Stage)
STATEMENTS OF CASH FLOWS
(Unaudited)
Cumulative From
Inception (August Three Months Three Months
1997) through Ended Ended
March 31, 2002 March 31, 2002 March 31, 2001
_________________ ______________ ______________
Cash Flows from Operating Activities
Net loss $(3,139,551) $(124,329) $(126,332)
Adjustments to reconcile net loss to net
cash used in operating activities:
Amortization and depreciation expense 22,062 - -
Deferred compensation expense 40,000 20,000 -
Gain on cancellation of amortization (16,500) - -
Loss on disposal of assets 59,641 - -
Decrease in deposits 14,925 - -
Increase in deferred tax asset (1,067,447) (42,272) (46,352)
Increase (decrease) in accounts payable 427,654 - (105,360)
Increase in related party payable 525,164 3,000 67,500
Increase in wages payable 68,327 - -
Increase in interest payable 144,877 1,233 20,848
Increase in deferred tax valuation allowance 1,067,447 42,272 46,352
Increase (decrease) in accrued expenses 50,568 (22,902) -
Expenses paid by issuance of
common stock 736,628 81,250 -
___________ _________ _________
Net cash used in operating activities (1,066,205) (41,748) (143,344)
___________ _________ _________
Cash Flows from Investing Activities
Deposit paid (14,925) - -
Purchase of fixed assets (65,203) - -
___________ _________ _________
Net cash used in investing activities (80,128) - -
___________ _________ _________
Cash Flows from Financing Activities
Proceeds received from issuance of stock 204,635 - -
Proceeds received from officer advances 3,600 3,600
Proceeds received from shareholder advances 5,474 -
Proceeds from bank overdraft 30,519 - -
Payment of shareholder advances (5,474) - -
Proceeds received from related party line of credit 908,199 37,700 143,344
___________ _________ _________
Net cash provided by financing activities 1,146,953 41,300 143,344
___________ _________ _________
Net increase in cash 620 (448) -
Cash and cash equivalents at
December 31, 2001, and 2000 - 1,068 -
___________ _________ _________
Cash and cash equivalents at
March 31, 2002, and 2001 $ 620 $ 620 $ -
=========== ========= =========
SUPPLEMENTARY INFORMATION
During the three months ended March 31, 2002, and 2001, no amounts were actually paid for either interest or income taxes.
See Notes to the Interim Financial Statements
ICONET, INC.
(A Company in the Development Stage)
NOTES TO THE INTERIM FINANCIAL STATEMENTS
March 31, 2002
1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Iconet, Inc.
(the "Company") have been prepared by the Company in accordance with
accounting principles generally accepted in the United States of
America, pursuant to the Securities and Exchange Commission rules and
regulations. In management's opinion all adjustments necessary for a
fair presentation of the results for the interim periods have been
reflected in the interim financial statements. The results of
operations for any interim period are not necessarily indicative of the
results for a full year. All adjustments to the financial statements
are of a normal recurring nature.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. Such disclosures
are those that would substantially duplicate information contained in
the most recent audited financial statements of the Company, such as
significant accounting policies and stock options. Management presumes
that users of the interim statements have read or have access to the
audited financial statements and notes thereto included in the
Company's most recent annual report on Form 10-KSB.
2. GOING CONCERN
These financial statements have been prepared assuming that the Company
will continue as a going concern. The Company is currently in the
development stage, and existing cash, other material assets, and
available credit are insufficient to fund the Company's cash flow needs
for the next year. In October 2001 a related party extended the Company
a line of credit for $100,000 (see Note 3). Management is attempting to
raise additional capital.
3. RELATED PARTY LINE OF CREDIT
In October 2001 the Company obtained an unsecured line of credit from a
shareholder for $100,000 at 12% per annum. The line of credit is due on
demand. At March 31, 2002, the outstanding balance on this line of
credit was $ 60,274.
8. COMMITMENTS AND CONTINGENCIES
There are various claims and lawsuits pending against the Company
arising in the normal course of the Company's business. Although the
amount of liability at March 31, 2002, cannot be ascertained,
management is of the opinion that any resulting liability will not
materially affect the Company's financial position.
Merrill Lynch Canada Inc., has filed suit against the Company regarding
a dispute related to the sale of its restricted common stock by an
unrelated third party to Merrill Lynch. The case is still in its early
stages and the Company is trying to reach a settlement with Merrill
Lynch. At this time the Company does not know if it will sustain a
loss, or the amount of the loss.
The Company is a defendant in an action by a bank regarding an
overdraft. The bank is seeking to recover $30, 519, which has been
accrued by the Company.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIST
ICONET, INC
MARCH 31, 2002
Since the year end, December 31, 2001, Mr. Randy Miller has been serving as
President, Treasurer and Secretary of the Corporation. The Company has been
going through a re-organization and has been working on reducing the debt and
the payables of the Corporation. We are in the midst of reviewing our business
plan and also assessing the viability of this business plan. We plan to move
forward and try to settle all the outstanding issues from previous activities
and addressing management issues that have been arising as we move through our
corporate files. We intend to work on financing the company and moving forward
with our business plan. We are also still processing a registration statement on
Form SB-2.
PART II OTHER INFORMATION
ITEM 7. SIGNATURES
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ICONET, INC.
Date: May 17, 2002 /s/ RANDY MILLER
------------------------- -----------------------
Randy Miller