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                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   -----------
                                   FORM 10-KSB

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

                   FOR THE FISCAL YEAR ENDED FEBRUARY 29, 2004

/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                  FOR THE TRANSITION PERIOD FROM       TO

                       COMMISSION FILE NUMBER: 333-61286

                               CITY NETWORK, INC.
        (Exact name of small business issuer as specified in its charter)

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<S>                                                        <C>
                   NEVADA                                       88-0467944
       (State or other jurisdiction of                       (I.R.S. Employer
       incorporation or organization)                      Identification No.)

    #13F., NO. 77, HSIN TAI WU ROAD, SEC.                          N/A
    HIS-CHIH, TAIPEI COUNTY, TAIWAN, ROC                        (Zip Code)
  (Address of principal executive offices)
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                 ISSUER'S TELEPHONE NUMBER: 011-886-2-2698-8588

              SECURITIES REGISTERED UNDER SECTION 12(B) OF THE ACT:

                               $0.001 COMMON STOCK
                                (Title of Class)

              SECURITIES REGISTERED UNDER SECTION 12(G) OF THE ACT:

                                      NONE

Check whether the issuer (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 shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES /X/ NO / /

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained herein, and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements incorporated by
reference in Part II of this Form 10-K or any amendments to this Form 10-K. [X]

The issuer's revenues for the fiscal year ended February 29, 2004: $19,647,749.

As of February 29, 2004, there were 25,000,000 shares of the registrant's Common
Stock, $0.001 par value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

Transitional Small Business Disclosure Format (Check one): Yes [ ]; No [X]
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                                TABLE OF CONTENTS

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                                                                            PAGE
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PART I.....................................................................    2
      Item 1.     Description of Business..................................    2
      Item 2.     Description of Property..................................   10
      Item 3.     Legal Proceedings........................................   10
      Item 4.     Submission of Matters to a Vote of Security
                  Holders..................................................   10

PART II....................................................................   11
      Item 5.     Market for Common Equity and Related
                  Stockholder Matter Market Information and
                  Market Price.............................................   11
      Item 6.     Management's Discussion and Analysis or Plan of
                  Operation................................................   11
      Item 7.     Financial Statements.....................................   15
      Item 8.     Changes in and Disagreements with Accountants
                  on Accounting and Financial Disclosure...................   15
      Item 8A     Controls and Procedures..................................   16

PART III...................................................................   16
      Item 9.     Directors, Executive Officers, Promoters and
                  Control Persons, Compliance with Section 16(A)
                  of the Exchange Act......................................   16
      Item 10.    Executive Compensation...................................   18
      Item 11.    Security Ownership of Certain Beneficial Owners
                  and Management...........................................   18
      Item 12.    Certain Relationships and Related Transactions...........   19
      Item 13.    Exhibits and Reports on Form 8-K.........................   19
      Item 14.    Principal Accountant and Fees............................   20

Financial Statements and Schedules.........................................  F-1
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                     FACTORS THAT MAY AFFECT FUTURE RESULTS

The discussion contained herein contains "forward-looking statements" that
involve risk and uncertainties. These statements may be identified by the use of
terminology such as "believes," "expects," "may," "will," "should" or
anticipates" or expressing this terminology negatively or similar expressions or
by discussions of strategy. The cautionary statements made in this Form 10-KSB
report should be read as being applicable to all related forward-looking
statements wherever they appear in this report. Our actual results could differ
materially from those discussed in this report.

Important factors that could cause or contribute to such differences include
those discussed under the caption entitled "Risk Factors," as well as those
discussed elsewhere in this Form 10-KSB.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

BACKGROUND OF THE COMPANY

      City Network, Inc., a Nevada corporation, was incorporated in 1996 and is
a provider of internet broadband communication and wireless infrastructure
equipment and services for the rapidly expanding broadband marketplace. We are
dedicated to delivering the most user-friendly, cost-effective, and
customer-tailored, high-speed internet broadband and communication access
equipment to meet the growing business needs of the International Telecoms, ISP,
SI and to a lesser degree the hospitality, residential property,
telecommunication and Small and Medium Enterprise marketplace to solve the "last
mile" problems worldwide.

      We were originally incorporated on August 8, 1996 as Investment Agents,
Inc. ("Investment Agents") and acted as a referral agent and collected selling
commissions for referring customers who purchased Verio, Inc.'s ("Verio") domain
registration services, web hosting services and e-commerce services. On December
11, 2002, we acquired all of the issued and outstanding stock of City Network
Technology, Inc. (formerly Gelcrest Investments Limited), a British Virgin
Islands company ("CNT"), pursuant to an Amended Exchange Agreement dated
November 14, 2002 and amended on December 11, 2002 by and among CNT, the
shareholder of CNT, Pamela Ray Stinson, Raymond Robert Acha, Joseph H.
Panaganiban and Investment Agents (the "Exchange Agreement"). CNT is the parent
company of City Network Inc. - Taiwan, formerly City Engineering, Inc., which
was incorporated under the laws of the Republic of China on September 6, 1994
("CNT-Taiwan").

      Pursuant to the Exchange Agreement, CNT became a wholly-owned subsidiary
of City Network (then known as Investment Agents), and in exchange for the CNT
shares, we issued 12,000,000 shares of its common stock to the shareholders of
CNT, representing 49% of City Network's outstanding stock at that time. In
connection with the exchange and change in control, the name of the company was
changed from Investment Agents to City Network, the officers and directors of
City Network resigned and new officers and directors were appointed. Upon the
effective date of the exchange and change in control, City Network ceased its
relationship with Verio and no longer acts as a referral agent for Verio.

BUSINESS OF THE COMPANY

      With the continuous expansion of the internet worldwide, we intend to
capitalize on what we believe to be vast underdeveloped and overlooked new and
emerging growth internet markets. Together with a combination of technical,
sales, design and manufacturing experience, we believe that we are poised to tap
the potential of new clients throughout the globe. Our customers have the choice
to source what we believe to be one of the most convenient, low-cost and diverse
product packages combined with the best personal service to make up a
comprehensive business solution.

      We design, manufacture and market a comprehensive line of broadband
communication and wireless internet access solutions. Our product line ranges
from our device for the blooming worldwide residential building and hospitality
market to the simple DSL bridge/modem for the home and small business user. All
of our broadband access


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equipment includes GUI-based remote management and routing technology software
packages for simplified setup, extensive network management and global network
connectivity capabilities. Currently, our Home PNA and xDSL broadband access
equipment is deployed by major telecommunication carriers, ISPs, and system
integrators worldwide. With the development and production of our complete
series of internet products, we are able to provide a "total solution" for any
customers needs. Our motto is "Establish the Broadband Highway, Innovate A
Bright New Life."

PRODUCT AREAS

      Our product repertoire contains items compatible with all major
distribution platforms. We believe that our product packages and selections give
clients a one-stop shop for all their broadband internet needs.

ADSL/VDSL Access Devices

      Our ADSL/VDSL devices provide broadband access based on leading internet
technologies. The 20Mbps VDSL over Ethernet equipment allows both developing
businesses as well as home users to meet their media and communication needs
quickly and in a cost-effective manner. It can also provide high speed internet
without influencing quality over a larger distance for a cost-effective and
efficient method of broadband access. We believe that the low level of
maintenance required and high level of connectivity should be able to meet
market demand for many years into the future.

HPNA Access Devices

      HPNA is a broadband network access system based on the HomePNA technology
originally invented in the United States. This system can provide 1M/10Mbps
broadband data access through existing telephone lines. This technology allows
both voice and data to be shared by the same telephone line. Furthermore, our
HPNA technology extends internet transmission distance, allows for multiple
single-line users (up to 25), and is compatible with cable, fiber, wireless and
xDSL. Combined with our ADSL and VDSL access devices, HomePNA is a great
solution to "the last mile problem." We believe that the quality and
affordability makes the product ideal for residences, schools, cafes and hotel
resorts.

Wireless Communication Products

      Our wireless networking products allow computers and appliances to
communicate through radio signals, providing added mobility and convenience.
With the development of our IEEE802.11 and IEEE802.lx wireless solutions, both
individual and corporate clients can enjoy work environments free of cords and
wires. Furthermore, customers can enjoy the stability and security of our LAN
products. All wireless solutions are equipped with a user verification function
to maximize security and reduce outside interference.

      We were one of the first companies in Taiwan to develop wireless products
with IEEE902.olx in May 2002. Together with Easy-Up, one of Taiwan's leading
wireless ISP companies, we have provided solutions to Korea Life Insurance in
connection with their 1600 Enterprise Hot Spot Project. Easy-Up established
Taiwan McDonald's 365 stores Hot Spot solution and the Mobile Taiwan project. We
also extended our wireless Hot Spot solution business with China Putian.

      Also, as a result of our relationship with International Telecoms, we
expanded our business to mobile handsets, including GSM/GPRS, CDMA/CDMA 2000 IX
Mobile handsets. We also cooperated with Korean and Taiwan partners to develop
and expand our business in Africa and other Asian countries.

Fiber and Other Important Access Equipment

      FTTB (Fiber to Building) and FTTH (Fiber to Home) was a new growth market
for us. To meet our customer's needs we began outsourcing the Fiber solutions
last year, and have already shipped these solutions to Korea and Malaysia.

      With our access equipment, bandwidth can be distributed efficiently to
multiple end users. For developing countries such as China, our solution of
integrating wireless with existing telephone lines or cable is often much more
attractive than building new infrastructure. From routers and hubs, to PCMCIA
cards and USB adapters, we provide customers with a wide range of networking
products to meet all customer needs.

GPS MODULE

      The GPS solution is another new market for us. We began outsourcing our
GPS solution last year and have shipped this solution to Korea.

CORPORATE PROFILE

      We believe that we deliver the most comprehensive solution in the market
for broadband qualification, installation and support. It is our goal to
simplify how people access the internet through easy-to-use broadband
connectivity products and solutions. Our product offerings and development
efforts are focused on increasing the speed and efficiency of the "last mile"
portion of communications networks. Through a combination of fixed-wire and
wireless products, our network equipment connects internet service providers to
their end users.

      We are growing fast and are one of the leading technology developers of
broadband and wireless networking products. We have gained industry recognition
for developing high performance broadband access


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solutions. City Network's range of products provide a complete solution for
providing high speed broadband internet access in homes, airports, convention
centers, hotels and other public establishments. Simplicity of use, ease of
implementation and cost-effectiveness are the cornerstones of our solution. We
are quickly evolving into a global company with rapid expansion of our
distribution network and marketing offices in North and South America, Europe,
Japan and the entire Asia Pacific region.

PRODUCTS

      We believe that the core of today's communications networks are components
that enhance the speed, bandwidth and quality of internet/data, video and voice
transmissions. Our fiber, copper, and wireless connectivity components serve as
the critical junction and connection points that link one network to another. We
believe that we have both the agility and depth to deliver tailored and exact
solutions to meet customers' needs. We offer products for several technology
platforms. We believe we have the capability of delivering high speed broadband
access to the end user whether they are at home, in the office or on the road.

Cable/Optical Networking Products

-     Our cable and optical products multiplies bandwidth among all users over
      tree-based topology coax or optical cables.

-     We are able to custom design this product to meet large systems
      integrators and telecommunications companies' needs.

-     Our products are designed to be easily set-up, integrated and maintained
      to meet the needs of multi-dwelling unit buildings and large office
      complexes.

XDSL Products

-     xDSL is an alternate and lower cost technology to connect to the internet.
      xDSL is substantially cheaper than a T1 line which can cost from $1,000 to
      $2,000 for installation and equipment.

-     xDSL does not require a high-level technical support structure. xDSL can
      often cost under USD$100 to $300 to install and implement making it most
      suitable to small businesses and telecommuters who cannot afford a T1
      line.

-     Our xDSL standard can achieve 13-54 Mbps and higher rates of data
      transfer. We are able to provide the QAM or DMT solution with what we
      believe is higher quality at a low cost.

-     Our ADSL Solution has received certification by China Telecom and China
      Network Communication.

Home Phone Line Wiring (HPNA)

-     Our HPNA products allow for networking a home using the existing phone
      wiring.

-     Our HPNA 2.0 standard can achieve 10-16Mbps and higher rates of data
      transfer.

-     HPNA technology allows up to twenty-five computers to connect
      simultaneously using the same internet source.

-     Compatible with POTS telephony and ADSL signaling on the same wire.

Wireless

-     Wireless broadband eliminates the need for phone lines, cables and
      electrical outlets.

-     Supports bandwidth-intensive applications such as graphic rich media,
      animation, internet phone calls and video conferencing (without breaking
      up), sending and receiving of large email messages or files, online
      banking, investing or online shopping. Our family of wireless access
      devices allow users to access their LAN or VPN, as if the remote office
      was connected directly to our backbone network. It also lets business


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      customers raise the level of worker productivity and allow companies to
      offer highly efficient work-at-home programs to their employees.

-     Using authentication and verification technology, we are able to ensure
      the security of a wireless network.

Our Public Hot Spot Wireless Solution (PWLAN) has what we believe to be a good
security function. We have already established successful projects in Korea
and Taiwan.

MARKET OVERVIEW

      Information is proliferating worldwide, and demand for that information,
by businesses, governments, universities and individuals is exploding, driven
primarily by the exponential increase in use of the internet for communications,
information gathering and electronic commerce.

      As business becomes more complex and geographically diverse, the demand
for information, delivered to the "transaction point," wherever in the world
that point might be, has fueled the increase in networks and computer
connectivity systems. These trends have created an ever-increasing demand for
bandwidth to accommodate both internet and network traffic. However, we do not
believe that the growth and technological advancement of the hardware backbone
for networking and computer connectivity has kept pace with that demand. We
believe that the worldwide struggle to bring networking and computer
connectivity hardware up to the level of demand represents a business
opportunity for us. Our strategic objective is to become a leading designer and
manufacturer in the networking and computer connectivity equipment industry.

BUSINESS STRATEGY

      The networking and computer connectivity industry is characterized by
rapid technological change. To maintain and enhance our competitive position, we
constantly adapt to technological changes by upgrading and expanding our product
line, and eliminating obsolete products within that line.

      We believe that the networking and computer connectivity industry is also
characterized by inevitable price erosion across the life cycle of products and
technologies. To maintain profitability in the face of constantly shrinking
gross margins, our strategy is to seek out low cost producers without
sacrificing quality and to develop and maintain efficient internal operations
which would allow us to control our expenses.

      We are constantly expanding and changing product lines to increase the
total number of products offered to attract new customers, to penetrate new
geographic and vertical markets and to increase gross sales. By expanding our
product line to include products for different technologies, frequencies and
connection configuration, we have been able to expand sales activities into a
number of new markets.

      Seven years ago City Network Inc.-Taiwan developed and expanded the Home
PNA business. In order to establish good business relationships with
telecommunication companies we prepared a variety of solutions for them,
including project proposals. We believe that because of our willingness to
assist these companies in the past, we will be successful in expanding our
business relationships with these companies.

INDUSTRY GROWTH DRIVERS

Growing Need for Additional Bandwidth

      We believe that the computer networking industry is witnessing a growing
demand for additional bandwidth as a result of the popularity of the internet
and global need for rapid, current information. We believe that many people who
use the internet cannot access information/download pages quickly because their
ISP's hardware is out-dated or low-quality and therefore unable to process
hundreds of thousands of requests simultaneously. This is a particularly acute
problem during peak hours and in markets with little infrastructure. Therefore,
we are is focused on improving the quality of internet connectivity in systems
worldwide.

In-Home Networking Systems

      We believe that an emerging market opportunity exists in connecting
household appliances and computers in homes. With our HPNA networking products,
we believe numerous applications can be developed to program, control and
interact with home heating, lighting, security, and appliances. We believe
advances such as these will spur growth and encourage innovation worldwide and
we believe that we are in a position to help make these technologies accessible.


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Proliferation of Handheld/Communication Devices

      We believe that the cornerstone on which the new economy is built is the
timely delivery and access to information at any location. We believe that the
growth and productivity of today's business economy is reliant upon the
accuracy, efficiency and accessibility to data and communication. With the
growth in popularity of handheld/communication devices and their great
functional complexity, consumers will be able to access a wide array of
multimedia content wherever they may be located. We believe that in the future,
mobile phones and PDA's will enjoy unhindered access to rich multimedia content
via the internet and it is our intention to play a role in this type of
transaction.

Expansion of PC's Into Developing Countries

      As PC's become ubiquitous throughout the world's emerging economies, we
believe the number of high capacity PC's with added features and better
voice/image quality will increase exponentially. We believe that the spread of
the information economy will continue to drive and enable developing countries
to utilize internet technology.

Growth of the Internet

      The growth of the internet has forced many telecommunication service
providers to replace their voice networks with more efficient, data-oriented
packet networks. We believe that the increased demand for services and data over
the internet will require companies to upgrade their infrastructure to meet
demand. We are partnering with local telecommunications companies to develop
new, cost effective and complete solutions for broadband internet access in new
markets.

GROWTH/EXPANSION STRATEGY

      It is our strategic objective to become a leader in the computer and
network connectivity equipment market, and to make our name synonymous with
excellence and state-of-the-art hardware in this segment.

Providing Integrated Solutions

      We provide voice, data and internet solutions which are capable of being
integrated into one seamless IP-based communications network. We believe that an
integrated solution will cost effectively connect an unlimited variety of
applications and services, enabling broader choice of devices for customer
services provided over a common platform.

Explore Additional Revenue Generating Services

      We believe that unlocking content (voice, data, video, text, commerce,
etc.) so it can flow unfettered among applications will have the potential to
provide a future revenue source. We believe that the creation of content and the
precision delivery to targeted clients and markets will also become increasingly
important. Some examples include news, online shopping, gaming, video, security
and other relevant content.

Building International Presence

      We believe that the low penetration rate of broadband internet in
developing countries has created an enormous opportunity for us. The demand for
internet throughout the world creates opportunity in otherwise unexpected
venues. Particularly in new and emerging growth markets, we intend to continue
partnering with individuals, companies and governments in these areas as part of
our growth strategy.

Partnering, Acquiring and Cooperating with Third Parties

      We believe that our success has been largely due to the fact that we have
established long term relationships with system integrators, electronics
manufacturers and telecommunication companies. Joint ventures


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and cooperative efforts have been the hallmark of our development into new
areas. In the future, we intend to continue expanding through mergers and other
cooperative synergies. We believe that the blending of manufacturing expertise,
market savvy and local know-how will contribute to our growth in the future.

CUSTOMERS

      We develop, market and focus our sales efforts to broadband and wireless
internet services providers that provide wireless solutions such as Phoneline
solution, HomePNA, xDSL, Ethernet solution, fiber solution and wireless
solutions. We also focus our sales efforts on the service provider and systems
integrator for WLAN systems and to system integrators for private broadband
systems. We also focus our sales efforts on service providers and systems
integrators for WLAN systems and private broadband systems. We have also
expanded our sales efforts to the mobile handset market and the 3G market. We
believe that we provide the best service to our existing customers and
partners, such as Korea Telecom, China Telecom, Malaysia Telecom, and those
located in Finland, Japan, Asia and Africa. We do our best to expand our
business with our existing customers and to develop new partners and customers
through our good product solutions, great service and good costs.

SERVICE PROVIDERS

      Over 100 independent operating companies in over 20 countries now use our
products to deliver Internet service over HomePNA, xDSL and other broadband
networks. Our customers include a cross-section of small, medium and large
telecommunications companies in the United States, Asia and Europe. We have
established business relationships with companies such as Korea Telecom, OCC
Communications in Japan and nSTREAMS in the United States as well as with other
companies in Mainland China, Finland, Malaysia and Singapore, the latter of
which uses our HomePNA solution and launched HomePNA Internet services on its
network. Korea Life Insurance ("KLI") has contracted with us to establish over
1,600 branches of WLAN internet service for KLI in Korea. In addition, we were
also appointed by McDonalds to set up WLAN services in approximately 360
McDonalds stores in Taiwan.

SYSTEM INTEGRATORS

      We market our private broadband data systems to domestic and international
system integrators who in turn market and sell our products to educational and
government institutions, small to large commercial enterprises, and to regional
competitive service providers and national carriers. Our system integrators
range from small local companies to volume distributors such as Easy-Up
Corporation, to country-specific integrators such as Terton Communications in
Finland, and to international integrators such as KWON C&C Ltd. in Korea and
China Telecom in China.

MARKETING, SALES AND CUSTOMER SUPPORT

Marketing

      We seek to increase demand for our products and to expand both the
visibility of the company and our products in the market. In addition to
customer-specific sales efforts, our marketing activities include attendance at
major industry tradeshows and conferences, the distribution of sales and product
literature, operation of a web site, direct marketing and ongoing communications
with our customers, the press, and industry analysts. As appropriate, we enter
into cooperative marketing and/or development agreements with strategic partners
that may include key customers, application manufacturers, fiber, or video
equipment manufacturers, set-top box manufacturers, and others.

Sales

      We sell our products through multiple sales channels in overseas markets,
including a select group of regional value added resellers, system integrators
and distributors, data networking catalogs and directly to service providers.
Internationally, we sell and market our products through sales agents, systems
integrators and distributors. In 1999, we opened a sales office in Shanghai and
partnered with Shanghai Telecom to establish their HomePNA + xDSL Internet
service project. We now have a sales presence in China. We believe that our
products can serve a substantial market for digital and high-speed data access
products outside of the United States.


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Customer Support

      We believe that consistent high-quality service and support is a key
factor in attracting and retaining customers. Service and technical support of
our products is coordinated by our customer support organization. Our Systems
Application Engineers, located in each of our sales regions, support pre-sales
and post-sales activities. Customers can also access technical information and
receive technical support via our web site. We train our sales support to solve
the problem at the customer's first call.

RESEARCH AND DEVELOPMENT

      Our research and development efforts are focused on enhancing our existing
products and developing new products through our emphasis on early stage system
engineering. The product development process begins with a comprehensive
functional product specification based on input from the sales and marketing
organizations. We incorporate feedback from end users and distribution channels,
and through participation in industry events, industry organizations and
standards development bodies, such as the FS-VDSL Committee and MPEG-4 Industry
Forum. Key elements of our research and development strategy include:

-     Core Designs. We seek to develop and/or acquire core designs that allow
      for cost-effective deployment and flexible upgrades that meet the needs of
      multiple markets and applications. These designs place emphasis on the
      following characteristics of our products: user friendly, high
      performance, robustness, standardization, and value adding.

-     Product Line Extensions. We seek to extend our existing product lines
      through product modifications and updating chipsets to provide for greater
      bandwidth in order to meet the needs of particular customers and markets.
      Products resulting from our product line extension efforts include the
      Phoneline solution, HomeHPNA, xDSL and Fiber solution. We also focus on
      updating the Wireless solution to the new generation including WIRELESS
      IEEE802.11G, a worldwide specification/standard.

-     Our design philosophy emphasizes the use of industry standard hardware and
      software components whenever possible to reduce time to market, decrease
      the cost of goods and reduce the risks inherent in new design. In order to
      maintain low costs of our services, we established a Components Sales
      Department whose main goals are to process our current customer's business
      and to seek out secondary sources of components and spare product parts in
      order to continually lower the cost of manufacturing and assembly.

-     New Technologies. We seek to enhance our product lines by incorporating
      emerging technologies, such as IEEE802.1x Security, higher speed
      interfaces and new network management software features. Our wireless
      solution with IEEE802.1x Security was the first ever such solution used in
      the wireless channel in Taiwan. We are now in the process of developing
      the 54M , 4-Band VDSL systems.

-     Extend Product Line by Partnering with Other Companies. Due to the
      expanding mobile phone market, we extended our product line in 2003.
      First, we are cooperating with Korea Startel to develop a new model of the
      GPRS mobile phone. The planned release date is in 2003 where mass
      production will likely begin in June 2003. Furthermore, we have plans to
      develop the CDMA 2001.1x GSM public phone to meet the high demand of such
      phone in the Mainland China market. In addition, we have extended our
      product line by cooperating with our main Korean partner K-WON, a company
      which recently developed a Bluetooth Headset and has granted City Network
      distribution and sales rights to this product for any country outside of
      Korea.

-     Extend Product Line by Partnering with Other Companies. Due to the
      expanding mobile phone market, we extended our mobile product line in
      2003. First, we cooperated with Korea Startel to develop a new model of
      the GPRS mobile phone and began mass production in June 2003. Furthermore,
      we have plans to develop the CDMA 2001.1x in 2004, and have already had it
      approved with China Unicom. For the increasing 3G market, CDMA 2000.1x
      public phones meet the high demands for such phones in Mainland China and
      the US markets. We have plans to develop the CDMA 2000.1x internet PCMCIA
      card and USB adapter in 2004.

      We have plans to join forces with a local Taiwanese university in an
effort to encourage rapid product growth and to facilitate the continuous
training of future technical personnel. We have formally established an
educational and development center at Tamkang University in Taiwan, the primary
focus of which is on the technology and information industry. We believe that
the establishment of this type of partnership will have a profound effect on our
product competitiveness and marketing ability in the long term.

      In fiscal year 2002, we spent approximately USD$1,000,000 to buy the
exclusive rights to A Best Home PNA Technology, which allowed us to expand our
broadband business quickly, including into the Korean Market. We also had the
opportunity to cooperate with China Putian to establish a joint venture company,
Beijing Putian Hexin, which was named as one of the top 10 ADSL best vendors of
China Telecom in 2003.

      We are responsible for providing funding for expenses such as salary and
stipends for the center's staff, as well as other general expenditures.
Expenditures for research and development in the 2004 fiscal year totaled


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USD$12,000 compared to USD$1,500,000 in the 2003 fiscal year. The reason for the
reduction in these expenditures is due to the fact that some third party
development corporation projects were not finished in 2003, and needed to be
modified. We anticipate that we will continue to have significant research and
development expenditures in the future to provide a continuing flow of
innovative and high-quality products to enhance our competitive position.

MANUFACTURING

      We do not manufacture any of our own products. We rely on contract
manufacturers to assemble, test and package our products. We require
International Organization for Standardization (ISO) 9002 registration for these
contract manufacturers as a condition of qualification. We monitor each
contractor's manufacturing process performance through audits, testing and
inspections. Each contractor's quality is also rigorously assessed through
incoming testing and inspection of packaged products received from each
contractor. In addition, we monitor the reliability of our products through
in-house repair, reliability audit testing and field data analysis.

      The manufacturers' warranty for each of our products is two years.
Typically we offer the same warranty on these products to our customers but for
a shorter time period, generally 12 to 18 months. We have implemented this
practice to protect ourselves against risk and financial loss on products
shipped to customers which break, need repair or are defective. Depending on the
situation, we can extend the warranty period enhancing the quality of service
and strengthening relationships with our customers. In order to decrease costs,
we have established joint venture projects with product manufacturers in
Mainland China. This allows us to save transport costs and forwarding charges
when distributing products to customers in Mainland China. We have established a
rigid system of quality control with these manufacturing partners.

      We currently purchase a substantially portion of the raw materials and
components used in our products through contract manufacturers. We forecast our
product requirements to maintain sufficient product inventory to ensure that we
can meet the required delivery times demanded by our customers. Our future
success will depend in significant part on our ability to obtain manufacturing
on time, at low costs and in sufficient quantities to meet demand.

INTELLECTUAL PROPERTY

      Our trademarks, service marks, trade secrets, proprietary technology and
other intellectual property rights distinguish our products and services from
those of our competitors, and contribute to our competitive advantage in its
target markets. To protect the our brand, products and services and the systems
that deliver those products and services to our customers we rely on a
combination of trademark and trade secret laws as well as confidentiality
agreements and licensing arrangements with its employees, customers, independent
contractors, sponsors and others.

      We strategically pursue the registration of our intellectual property
rights. However, effective patent, trademark, service mark, copyright and trade
secret protection may not always be available. Existing laws do not provide
complete protection, and monitoring the unauthorized use of our intellectual
property requires significant resources. We cannot be sure that our efforts to
protect our intellectual property rights will be adequate or that third parties
will not infringe or misappropriate these rights. In addition, there can be no
assurance that competitors will not independently develop similar intellectual
property. If others are able to copy and use our products and delivery systems,
we may not be able to maintain our competitive position. If litigation is
necessary to enforce our intellectual property rights or determine the scope of
the proprietary rights of others, we may have to incur substantial costs or
divert other resources, which could harm our business. We presently have no
patents or patent applications granted or pending in the United States.

      In order to develop, improve, market and deliver new products and
services, we may be required to obtain licenses from others. There can be no
assurance that we will be able to obtain licenses on commercially reasonable
terms or at all or that rights granted under any licenses will be valid and
enforceable.

EMPLOYEES

      As of June 6, 2004, we had a total of 65 employees. Of these, 15 are in
administration, 8 are in finance, 15 are in research and development, 7 are in
international partner cooperation and 20 are in sales and marketing. None of our
employees are covered by any


                                       9
<PAGE>
collective bargaining agreement. We generally consider our relationship with our
employees to be satisfactory and have never experienced a work stoppage.

REGULATIONS

      We have not been materially impacted by existing government regulation and
are not aware of any potential government regulation that would materially
affect our operations.

ITEM 2. DESCRIPTION OF PROPERTY.

      Our main office is located at 13F., No. 77, Hsin Tai Wu Road, Sec. J,
Hsi-Chih, Taipei County, Taiwan, R.O.C., consisting of approximately 370.68
square meters. We purchased this facility in April 2001. We entered into a loan
agreement with the Fubon Bank in the amount of NTD$10,500,000 for the purchase
of this facility. The term of the loan is 15 years that began on May 29, 2001
and is schedule to terminate on May 29, 2016. The monthly principal payments are
NTD$187,500 every three months. The monthly interest payment on the loan is
approximately NTD$26,293. The annual interest rate is 3.175%.

      We also lease office space located at 6F-3, NO. 16, Jian Ba Road,
Jhongue City, Taipei County, Taiwan, R.O.C., consisting of approximately
557.72 square meters. The landlord is Goang Dyi Shing Industrial Co. Ltd.
The rent is NTD$135,000 per month and the lease expires on May 31, 2005.

ITEM 3. LEGAL PROCEEDINGS.

      There is no litigation pending or threatened by or against City
Network.

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

      None.


                                       10
<PAGE>
                                    PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTER MARKET
        INFORMATION AND MARKET PRICE

       Our common stock began trading on the American Stock Exchange on January
14, 2004 under the symbol "CSN". On June 25, 2002, our common stock was
initially traded on the OTC Bulletin Board under the symbol "IVAG", and on
January 17, 2003 our symbol changed to "CYNW". Prior to June 25, 2002, there was
no public market for our stock. The following table sets forth, (i) the high and
low bids as reported on the OTC BB during the fiscal year ended 2002 and the
quarters ended through January 13, 2004, and (ii) the high and low sales
quotations for the partial period in fiscal year 2004 from January 14, 2004
through February 29, 2004, and the partial period in the first quarter of fiscal
year 2005, based upon information supplied by AMEX.

<TABLE>
<CAPTION>
                                            HIGH         LOW
                                            ----         ---
<S>                                        <C>         <C>
2002

June 25, 2002 - August 31, 2002            $    0      $0.010
September 1, 2002 - November 30, 2002      $ 0.20      $0.001
December 1, 2002 - February 28, 2003       $ 3.00      $ 2.00

2003

March 1, 2003 - May 30, 2003               $ 3.05      $ 2.00
June 1, 2003 - August 31, 2003             $ 3.00      $ 2.00
September 1, 2003 - November 30, 2003      $ 2.90      $ 2.40
December 1, 2003 - January 13, 2004        $ 3.00      $ 2.30
January 14, 2004 - February 29, 2004       $ 2.74      $ 2.10

2004

March 1, 2004 - June 10, 2004              $ 2.10      $ 0.73
</TABLE>

      As of June 10, 2004, there were approximately 2,600 shareholders of record
of our common stock.

DIVIDEND POLICY

      All shares of common stock are entitled to participate proportionally in
dividends if our board of directors declares them out of the funds legally
available. These dividends may be paid in cash, property or additional shares of
common stock. We have not paid any dividends since our inception and presently
anticipate that all earnings, if any, will be retained for development of our
business. Any future dividends will be at the discretion of our board of
directors and will depend upon, among other things, our future earnings,
operating and financial condition, capital requirements, and other factors.
Therefore, there can be no assurance that any dividends on the common stock will
be paid in the future.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

      City Network, Inc., formerly Investment Agents, Inc., was incorporated on
August 8, 1996 under the laws of the State of Nevada. City Network Technology,
Inc., formerly Gelcrest Investments Limited, was incorporated under the laws of
the British Virgin Islands on March 1, 2002. City Network, Inc -Taiwan, formerly
City Engineering, Inc., was incorporated under the laws of Republic of China on
September 6, 1994.  City Construction was incorporated under the laws of
Republic of China on October, 10, 2003. City Network, Inc. owns 100% of the
capital stock of City Network Technology, Inc., and City Network Technology,
Inc. owns 100% of the capital stock of City Network, Inc. - Taiwan, and City
Construction.  Collectively the four corporations are referred to herein as the
"Company".  When used in these notes, the term "Company," means City Network,
Inc. and its subsidiaries.

      On November 14, 2002, City Network Technology, Inc became a wholly owned
subsidiary of City Network, Inc. through an Exchange Agreement, which was
amended on December 4, 2002 whereby City Network, Inc. acquired all of the
issued and outstanding capital stock of City Network Technology, Inc.  in
exchange for 12,000,000 shares of City Network, Inc.

      The following discussion should be read in conjunction with the
Consolidated Financial Statements and Notes thereto appearing elsewhere in this
Form 10-KSB. The following discussion contains forward-looking statements. Our
actual results may differ significantly from those projected in the
forward-looking statements.


                                       11
<PAGE>
Factors that may cause future results to differ materially from those projected
in the forward-looking statements include, but are not limited to, those
discussed in "Risk Factors" and elsewhere in this Form 10-KSB.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

      The discussion and analysis of our financial conditions and results of
operations is based upon our financial statements, which have been prepared in
accordance with generally accepted accounting principles in the United States of
America ("GAAP"). The preparation of these financial statement requires us to
make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses, and related disclosure of contingent assets
and liabilities. We believe that the following are some of the more critical
judgment areas in the application of our accounting policies that currently
affect our financial condition and results of operations.

REVENUE RECOGNITION

      Revenue generated from sales of products is recognized upon shipment or
when title passes to customers based on terms of sales, and is recorded net of
returns, discounts and allowances. Service income is recognized as the related
services are provided per terms of the service agreement.

ACCOUNTS RECEIVABLE

      Accounts receivables are reported as the outstanding unpaid balances
reduced by an allowance for doubtful accounts. We estimate doubtful accounts
based on historical bad debts, factors related to specific customer's ability to
pay, and current economic trends. We write off accounts receivable against the
allowance when a balance is determined to be uncollectable.

NOTES RECEIVABLE

      Our subsidiary, CNT-Taiwan usually receives post-dated checks as permitted
by Taiwanese law. CNT-Taiwan will typically send an invoice to the customer
after which the customer will issue a check dated two to three months, sometimes
longer, from the date of the invoice. On CNT - Taiwan's books, the post dated
checks are categorized as notes receivables and the invoice is then taken off on
the accounts receivables side.

OVERVIEW - RESULTS OF OPERATIONS

      Fiscal Year ended February 29, 2004 Compared to Fiscal Year Ended February
28, 2003 for City Network-Taiwan.

      Net Revenue. Net sales for fiscal year ended February 29, 2004 ("FY 2004")
totaled $19,647,749, compared to $7,132,970 for fiscal year ended February 28,
2003 ("FY 2003"). The increase in revenues for FY 2004 was due to the GPS's
market expansion and the new source of revenue which is from Bejing Putain.
CNT-Taiwan's net-sales for FY 2004 totaled $19,647,749 compared to $7,132,970
for FY 2003.

      Cost of Revenue. Cost of revenue for FY 2004 totaled $17,827,486, compared
to $6,267,128 for the same period in FY 2003. The increase in cost of revenues
was due to the GPS's market expansion, the new source of cost which is from
Bejing Putain and City Neywork Construction. Also, the gross profit is
decreasing. CNT-Taiwan's cost of revenues for FY 2004 totaled $17,827,486
compared to $6,266,401 for FY 2003.

      General and Administrative. Selling, general and administrative expenses
for FY 2004 totaled $1,391,658, compared to $780,300 for FY 2003. The increase
was due to the GPS's market expansion and the new source of revenue which is
from Bejing Putain. Also the number of employees are increasing. CNT-Taiwan's
selling, general and administrative expenses for FY 2004 totaled $1,391,658
compared to $645,222 for FY 2003.

      Interest Expense. Interest expense for FY 2004 totaled $67,691, compared
to $54,887 for FY 2003. The increase in interest expense was due to the increase
of financing sources for funds. CNT-Taiwan's interest expenses for FY 2004
totaled $67,691 compared to $54,887 for FY 2003

      As a result of the foregoing, Income (loss) Before Income Taxes totaled
$261,385 for FY 2004 and $165,257 for FY 2003. Provision for income taxes
expenses is $85,190 for FY 2004 and $44,180 for FY 2003. The result of the above
tax calculations resulted in that net income (loss) is $176,195, $121,077,
respectively, for FY 2004 and FY 2003. CNT-Taiwan contributed net income of
$185,059 for FY 2004.



                                       12
<PAGE>
Fluctuations in Quarterly Results.

      The majority of City Network's revenue comes from Taiwan and Mainland
China. In January, the sales performance review meeting took place and the CEO
set up the sales goals for each salesman. In February, the sales team reached
its goals and created sales volume equal to three months sales. Therefore,
revenues for the last quarter of 2004 are much more than compared to other
quarters.

Liquidity and Capital Resources.

      For the fiscal year ended February 29, 2004 the company had cash provided
by operations of $125,703 and cash (used in) investments of ($1,235,912) and net
cash provided by financing arrangements, including loans from related parties,
of $3,208,675. The company's liquidity is currently dependent on its ability to
strengthen its accounts receivable collection time period and its ability to
continue to raise cash from financing sources to fund its expansion.

      We currently are engaged in discussions with a number of companies
regarding strategic acquisitions or investments. Although these discussions are
ongoing, there can be no assurance that any of these discussions will result in
actual acquisitions or investment. Several potential investors have already
shown their interest to invest in the company. As of May 2003, the amount of
committed funds are $2,400,000. An additional $1,800,000 is still required.

Factors that interrupt the company's operations.

      Our major risk is incurring a large amount of bad debt.

      City Network's short-term and long-term liquidity may be influenced by
uncollected account receivables. If the amount of bad debt is high, it will
severely effect the company's ability to continue operations. Therefore, we are
taking precautions to manage this risk. The company will try to diversify its
customer base and control credit risk related to Accounts Receivable through
credit approvals, credit limits and monitoring procedures. Although we have
already taken these measures, it is still possible to incur a large amount of
bad debt.

      Financial instruments that potentially subject the Company to
concentrations of credit risk are cash, accounts receivable and other
receivables arising from its normal business activities. The Company places its
cash in what it believes to be credit-worthy financial institutions. However,
cash balances have exceeded the FDIC insured levels at various times during the
year and at year-end. The Company has a diversified customer base, most of which
are related parties. The Company controls credit risk related to accounts
receivable through credit approvals, credit limits and monitoring procedures.
The Company routinely assesses the financial strength of its customers and,
based upon factors surrounding the credit risk, establishes an allowance, if
required, for un-collectible accounts and, as a consequence, believes that its
accounts receivable credit risk exposure beyond such allowance is limited.

RISK FACTORS

Factors That May Affect Future Results

      Prospective investors should carefully consider the following risk factors
in evaluating us and our business. The factors listed below represent certain
important factors which we believe could cause such results to differ. These
factors are not intended to represent a complete list of the general or specific
risks that may affect us. It should be recognized that other risks may be
significant, presently or in the future, and the risks set forth below may
affect us to a greater extent than indicated.

Limited Operating History

      We have a limited operating history upon which potential investors may
base an evaluation of its prospects and there can be no assurance that we will
achieve our objectives. Our prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stages of development, particularly companies in a rapidly evolving market such
as the market for internet broadband and wireless infrastructure equipment and
services. Such risks include, but are not limited to: our ability to obtain and
retain customers and attract a significant number of new customers, the growth
of the satellite, wireless, broadband and Internet markets, our ability to
implement our growth strategy, especially the sales and marketing efforts,
intense competition from providers of broadband products, services and the
telecommunication industry in general, and other risks associated with
financing, liquidity requirements, rapidly changing customer requirements and
the volatility of the public markets.


                                       13
<PAGE>
Future Capital Needs, Uncertainty of Future Additional Financing

      We currently anticipate that our available funds and resources, including
product sales will be sufficient to meet our anticipated needs for working
capital and capital expenditures for the next twelve months. We will need to
raise additional funds in the future in order to fund more aggressive brand
promotion and more rapid expansion, to develop new or enhanced products, to
respond to competitive pressures or to acquire complementary businesses or
technologies. If additional funds are raised through the issuance of equity or
convertible debt securities, the current stockholders may experience dilution
and any such securities may have rights, preferences or privileges senior to
those of the rights of our common stock. There can be no assurance that
additional financing will be available on terms favorable to us, or at all. If
adequate funds are not available or not available on acceptable terms, we may
not be able to fund our expansion, promote our brand name as we desire, take
advantage of unanticipated acquisition opportunities, develop or enhance
products or respond to competitive pressures. Any such inability could have a
material adverse effect on our business, results of operations and financial
condition.

Fluctuations in Quarterly Operating Results

      We may experience significant fluctuations in future quarterly operating
results that may be caused by many factors, including, among others: delays in
our introduction of products or product enhancements; costs associated with
product or technology acquisitions; the size and timing of individual orders;
competition and pricing in the broadband internet access industry; seasonality
of revenues; customer order deferrals in anticipation of new products; market
acceptance of new products; reductions in demand for existing products and
shortening of product life cycles as a result of new product introductions;
changes in operating expenses; changes in our personnel; changes in regulatory
requirements; mix of products sold; and general economic conditions. As a
result, we believe that period-to-period comparisons of its results of
operations are not necessarily meaningful and should not be relied upon as
indications of future performance.

      Certain conditions may exist as of the date the financial statements are
issued, which may result in a loss to the Company but which will only be
resolved when one or more future events occur or fail to occur. The Company's
management and legal counsel assess such contingent liabilities, and such
assessment inherently involves an exercise of judgment. In assessing loss
contingencies related to legal proceedings that are pending against the Company
or unasserted claims that may result in such proceedings, the Company's legal
counsel evaluates the perceived merits of any legal proceedings or unasserted
claims as well as the perceived merits of the amount of relief sought or
expected to be sought.

      If the assessment of a contingency indicates that it is probable that a
material loss has been incurred and the amount of the liability can be
estimated, then the estimated liability would be accrued in the Company's
financial statements. If the assessment indicates that a potential material
loss contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, together with
an estimate of the range of possible loss if determinable and material would be
disclosed.

      Loss contingencies considered to be remote by management are generally not
disclosed unless they involve guarantees, in which case the guarantee would be
disclosed.

Failure to Manage Growth Will Adversely Affect Operations

      We plan to significantly expand our sales, marketing, research and
development activities, hire a number of additional employees, expand internal
information, accounting and billing systems and establish additional
distribution outlets throughout the world. In addition, we plan to expand our
infrastructure by investing in additional research and development talent. In
order to successfully manage growth, management must identify, attract,
motivate, train and retain highly skilled managerial, financial, engineering,
business development, sales and marketing and other personnel. Competition for
this type of personnel is intense. If management fails to effectively manage our
growth, our business and viability will be materially and adversely impacted.

We May Fail to Keep Pace with Rapidly Changing Technologies

      The market segments we are targeting are characterized by rapidly changing
technology, evolving industry standards and frequent new product and service
introductions. These factors require management to continually improve the
performance, features and reliability of the array of our products. Management
may not successfully respond quickly enough or on a cost-effective basis to
these developments. We may not achieve widespread acceptance of our services
before our competitors offer products and services with speed, performance,
features and quality similar to or better than our products or that are more
cost-effective than our services.

We May Not Be Able to Compete Effectively

      The market for internet broadband and wireless infrastructure equipment
and services is rapidly evolving and highly competitive. Many of our competitors
and potential competitors have substantially greater financial, technical, and
managerial and marketing resources, longer operating histories, greater name
recognition and more established relationships than us. Since our business is
partially dependent on the overall success of the Internet as a communication
medium, it also competes with traditional hardware based access and equipment
providers. Management expects competition from these and other types of
competitors to increase significantly.


                                       14
<PAGE>
We May Experience Difficulties in Integrating Businesses, Products and
Technologies it May Acquire Into Its Business

      We may acquire businesses, products and technologies and enter into joint
ventures and strategic relationships with other companies. Any of these
transactions exposes us to additional risks, including: the difficulty of
assimilating and integrating the operations of the combined companies; retaining
key personnel; the potential disruption of our core business; and the potential
additional expenses associated with amortization of acquired intangible assets,
integration costs and unanticipated liabilities or contingencies.

Loss of Key Personnel Could Harm Our Business

      Given the early stage of development of our business, it depends highly on
the performance and efforts of its President and Chief Executive Officer, Mr.
Tiao Tsan "Andy" Lai, its Chief Financial Officer, Mr. Hsin-Nan Lin, staff and
the Board of Directors. If we should lose the service of any members of its
management team or other key personnel, its business prospects will be
materially impacted.

Enactment of New Laws or Changes in Government Regulations Could Adversely
Affect Our Business

      We are not currently required to comply with direct regulation by any
domestic or foreign governmental agency, other than regulations applicable to
businesses generally and laws or regulations directly applicable to the
Internet. However, due to the increasing popularity of the Internet, it is
possible that additional laws may be adopted regarding the Internet, any of
which could materially harm our business. The adoption of any additional laws
may decrease the growth of Internet use, which could lead to a decrease in the
demand for our services or increase the cost of doing business.

The Inability to Obtain Patent and Copyright Protection for Our Technology or
Misappropriation of Our Intellectual Property Could Adversely Affect Our
Competitive Position

      Our success depends on internally developed technologies, know-how,
trademarks and related intellectual properties. Management regards the
technology as proprietary and will attempt to protect it by seeking patents,
copyrights or trademarks, and by invoking trade secret laws and confidentiality
and nondisclosure agreements. Despite these precautions, it may be possible for
a third party to obtain and use our services or technology without
authorization.

      We intend to apply for registration of certain copyrights and a number of
key trademarks and service marks and intends to introduce new trademarks and
service marks. Management may not be successful in obtaining registration for
one or more of these trademarks. Management may need to resort to litigation in
the future to enforce or to protect intellectual property rights, including
patent and trademark rights. In addition, our technologies and trademarks may be
claimed to conflict with or infringe upon the patent, trademark or other
proprietary rights of third parties. If this occurred, we would have to defend
ourselves against such challenges, which could result in substantial costs and
the diversion of resources. Any of these events could materially harm our
business.

ITEM 7. FINANCIAL STATEMENTS

      Our Financial Statements together with the independent auditor's report
thereon are included on pages F-1 through F-18 hereof.

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

      There have been no changes nor any disagreements with the accountants or
the accountant's findings.


                                       15
<PAGE>
ITEM 8A CONTROLS AND PROCEDURES

      Under the supervision and with the participation of the Company's
management, including our chief executive officer and the chief financial
officer, the Company conducted an evaluation of the effectiveness of the design
and operation of its disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end
of the period covered by this report (the "Evaluation Date"). Based on this
evaluation, the Company's chief executive officer and chief financial officer
concluded as of the Evaluation Date that the Company's disclosure controls and
procedures were effective such that the material information required to be
included in our Securities and Exchange Commission ("SEC") reports is recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms relating to the Company, including our consolidating
subsidiaries, and was made known to them by others within those entities,
particularly during the period when this report was being prepared.

      Additionally, there were no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to the Evaluation Date. We have not identified any significant
deficiencies or material weaknesses in our internal controls, and therefore
there were no corrective actions taken.

                                    PART III

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

DIRECTORS, OFFICERS, PROMOTERS AND CONTROL PERSONS.

      Our directors, executive officers and other significant employees and
their ages and positions are as follows:

<TABLE>
<CAPTION>
Name of Individual        Age      Position
------------------        ---      --------
<S>                       <C>      <C>
Tiao Tsan "Andy" Lai       41      Chairman, Director President and Chief
                                   Executive Officer
Hsin Nan Lin               43      Chief Financial Officer and Director
Alice Chen                 40      Vice President and Director
Chin-Yuan Liao             31      Manager and Director
I-Min Ou                   34      Director
</TABLE>

      Set forth below is a description of the backgrounds of each of the
officers and directors of City Network:

      TIAO TSAN "ANDY" LAI holds an MBA degree from St. Thomas University in
Minnesota, USA. Mr. Lai has been Chairman, President and Director of City
Network since October 2002. Mr. Lai has been Chairman, President and Director of
City Network Taiwan since June, 1997. As a pioneer in the network equipment
market he was the first entrepreneur to bring the Home PNA solution to Taiwan,
China and Asia. With Mr. Lai's guidance, City Network implemented Home PNA in a
winning design for an Internet Service Model for the Taipei city government in
1998. In 1999, Mr. Lai also procured an open tender for a Home PNA project with
Korea Telecom. From 1999 to the present, City Network has had its products
approved for purchase and sale by China Telecom, Taiwan's HiNet, Japan OCC and
Finland Telecom. In addition, Mr. Lai established business projects with
Shanghai Telecom, Fujian Telecom and Guang Dong Telecom. In October, 2000, Mr.
Lai was presented the "Excellent Manager" industry award in Taiwan for
outstanding service as Chairman of City Network. In June, 2002, Mr. Lai was also
awarded the "The Excellent Alumnus" award for his success in business beyond
graduation from the Taiwan National Military Academy.

      HSIN NAN LIN holds an EMBA degree from Chiai University in the Republic of
China. He has been Chief Financial Officer and a Director of City Network since
October 2002. He has been Vice President and a Director of City Network (Taiwan)
since June, 2002. In addition, he serves on the board of directors for a large
Taiwanese investment company called Chief Financial Consultants, Inc. Before
joining these groups, Mr. Lin served


                                       16
<PAGE>
ten years as the general manager of manufacturing for a company with gross sales
of over 3.5 million US dollars per year. From 1990 through to the present, Mr.
Lin has had twelve years service as financial consultant for several public
companies in Asia and has served as Vice President of Chei-Hwa Financial and
Investment Consulting Co., Ltd.

      ALICE CHEN possesses a degree in Legal Policy from a government university
in the Republic of China. Ms. Chen has been Vice President and a Director of
City Network since October 2002. Ms. Chen has been Vice General Manager of Sales
and Marketing and a Director of City Network (Taiwan) since January, 1999. Ms.
Chen's duty is to implement and develop City Network's worldwide sales and
marketing plan. Before joining City Network, Ms. Chen had ten years experience
working for the Taiwanese National Security Agency as a national policy analyst.
Additionally, Ms. Chen spent three years working as head of sales and marketing
for a Taiwanese public company.

      I-MIN OU has been Manager of the Technology Department and a Director of
City Network since October 2002. From February 2001 to October 2002, Mr. Ou
served as a Manager of the Tongnan Technology Company. From June 1999 to January
2001, he served as a Manager of the Gulite Technology Company. From February
1998 to May 1999, Mr. Ou was a Manager for the Hueng Kwuo Technology Company.
From 1991 to 1997, he served as a Manager of the Ikuani Technology Company.
Since graduating from Tongnan Industry Technology College in July 1991, I-Min Ou
has been primarily engaged in electronic engineering and computer automation
industry. He has 11 years of experience in engineering.

      CHIN-YUAN LIAO has been a Director and Manager of the Engineering
Department since October 2002. From January 2000 to October 2002, Mr. Liao
served as Manager of the Engineering Department for City Network (Taiwan). From
February 1997 to November 2001, he served as Manager of Ikuan Engineering, Inc.
From 1990 to 1996, Mr. Liao served as Manager of Taiwuang Engineering, Inc.

      The directors named above will serve until the next annual meeting of City
Network's stockholders or until their successors are duly elected and have
qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the
board of directors, absent any employment agreement, of which none currently
exists. There is no arrangement or understanding between any of the directors or
officers of City Network and any other person pursuant to which any director or
officer was or is to be selected as a director or officer, and there is no
arrangement, plan or understanding as to whether non-management shareholders
will exercise their voting rights to continue to elect the current directors to
City Network's board. There are also no arrangements, agreements or
understandings between non-management shareholders that may directly or
indirectly participate in or influence the management of City Network's affairs.
There are no agreements or understandings for any officer or director of City
Network to resign at the request of another person and none of the officers or
directors are acting on behalf of or will act at the direction of any other
person.

AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

      The board of directors has established a separately designated stand alone
audit committee established in accordance with Section 3(a)(58(A) of the
Exchange Act, which was comprised of Mei-Chu Lai, Yu-Hung Kao and Chia-Hui Lin.
These individuals are no longer serving on the Board of Directors. The Board
will appoint new independent directors to serve on the Audit Committee for
fiscal year 2005. They were all considered "independent" under Section 121(A) of
the listing standards of the American Stock Exchange. The audit committee
recommends to the board of directors the annual engagement of a firm of
independent accountants and reviews with the independent accountants the scope
and results of audits, our internal accounting controls and audit practices and
professional services rendered to us by our independent accountants.

      The board of directors has determined that we have at least one audit
committee financial expert serving on our audit committee. Ms. Chien-Hui Lin is
the "audit committee financial expert", and is an independent member of the
board of directors.


                                       17
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Exchange Act, as amended, requires the officers and
directors of City Network and every person who is directly or indirectly the
beneficial owner of more than 10% of any class of security of City Network to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission. Such persons also are required to furnish City Network with
copies of all Section 16(a) forms they file. Based solely on its review of
copies of such forms received by it, the company believes that all other Section
16(a) filing requirements applicable to the reporting persons were complied with
by such persons during 2004.

CODE OF ETHICS

      We adopted a code of ethics that applies to our Chief Executive Officer
and Chief Financial Officer, and other persons who perform similar functions. A
copy of our Code of Ethics is filed as an exhibit to this Annual Report on Form
10-KSB. Our Code of Ethics is intended to be a codification of the business and
ethical principles which guide us, and to deter wrongdoing, to promote honest
and ethical conduct, to avoid conflicts of interest, and to foster full, fair,
accurate, timely and understandable disclosures, compliance with applicable
governmental laws, rules and regulations, the prompt internal reporting of
violations and accountability for adherence to this Code.

ITEM 10. EXECUTIVE COMPENSATION

      The following table sets forth the fiscal year indicated the compensation
paid by City Network to the Chief Executive Officer. No other executive officer
received a total annual salary and bonus exceeding USD$100,000.

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION         YEAR          SALARY USD             BONUS
---------------------------         ----          ----------             -----
<S>                                 <C>           <C>                  <C>
Tiao Tsan "Andy" Lai                2003          USD$31,200           USD$2,600
                                    2002          USD$31,200           USD$2,600
                                    2001          USD$31,200           USD52,600
</TABLE>

      Our directors do not receive any compensation for serving on the
board of directors.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

      The following table sets forth as of June 10 2004, the number and
percentage of the 25,000,000 outstanding shares of common stock that were
beneficially owned by (i) each person who is currently a director, (ii) each
executive officer, (iii) all current directors and executive officers as a group
and (iv) each person who, to the knowledge of City Network is the beneficial
owner of more than 5% of the outstanding common stock.

<TABLE>
<CAPTION>
            NAME AND ADDRESS               NUMBER OF SHARES        PERCENT
            ----------------               ----------------        -------
<S>                                        <C>                      <C>
Tiao-Tsan "Andy" Lai                           2,000,000               8%
13 F, No. 77, Hsin Tai Wu Road, Sec. 1
His-Chih
Taipei, Taiwan, R.O.C.

Hsin-Nan Lin                                           0               0
13 F, No. 77, Hain Tai Wu Road, Sec. 1
His-Chih,
Taipei, Taiwan, R.O.C.

Alice Chen                                        61,000               *
13 F, No. 77, Hsin Tai Wu Road, Sec. 1
His-Chih
Taipei, Taiwan, R.O.C.
</TABLE>


                                       18
<PAGE>
<TABLE>
<CAPTION>
            NAME AND ADDRESS               NUMBER OF SHARES        PERCENT
            ----------------               ----------------        -------
<S>                                        <C>                      <C>
I-Min Ou                                          20,000               *
13 F. No. 77, Hsin Tai Wu Road, Sec. 1
His-Chih,
Taipei, Taiwan, R.O.C.

Chin-Yuan Liao                                    45,000               *
13 F, No. 77, Hsin Tai Wu Road, Sec. 1
His-Chih Chang
Hua Hsien, Taiwan

All officers and directors as a group          2,126,000             8.5%
(5 persons)
</TABLE>

-------------
* Less than 1%.

CHANGE IN CONTROL

      There are currently no arrangements which would result in a change in
control of the company.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Throughout the history of City Network, certain members of the Board of
Directors and general management have made loans to the company to cover
operating expenses or operating deficiencies.

      As of February 28, 2003, City Network has a non interest-bearing loan from
Tiao-Tsan Lai, the president of City Network in the amount of $1,271,658.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)   The following documents are filed as part of this Form 10-KSB:

      1.    The following financial statements of the company, with the
            independent auditor's report, are filed as part of this Form 10-KSB:

<TABLE>
<S>                                                                          <C>
            Independent Auditor's Report .................................   F-2
            Consolidated Balance Sheets ..................................   F-3
            Consolidated Statements of Income ............................   F-4
            Consolidated Statements of Cash Flow .........................   F-5
            Consolidated Statements of Changes in Stockholders' Equity ...   F-6
            Notes to Consolidated Financial Statements ...................   F-7
</TABLE>

      2.    The following exhibits are filed with this report and incorporated
            by reference as set forth below:

<TABLE>
<CAPTION>
Exhibit
  No.                                    Description
  ---                                    -----------
<S>      <C>   <C>
  2.1    (1)   Exchange Agreement dated December 4, 2002 by and among City
               Network, Inc., the shareholders of City Network, Inc., Investment
               Agents, Inc., Pamela Ray Stinson, Raymond Robert Acha, and Joseph
               H. Panganiban

  3.1    (2)   Articles of Incorporation of City Network
</TABLE>


                                       19
<PAGE>
<TABLE>
<S>      <C>   <C>
  3.2    (2)   Certificate of Amendment to Articles of Incorporation of City
               Network

  3.3    (3)   Certificate of Amendment of the Articles of Incorporation of City
               Network

  3.4    (2)   Bylaws of City Network

   14          Code of Ethics

 21.1    (4)   Subsidiaries of City Network

   31          Certification of Chief Executive Officer and Chief Financial
               Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of
               2002.

   32          Certification of Chief Executive Officer and Chief Financial
               Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
               2002.
</TABLE>

-------------
(1)   Previously filed with the Securities and Exchange Commission as an Exhibit
      to City Network's Form 8-K filed March 5, 2003, and incorporated herein by
      reference.

(2)   Previously filed with the Securities and Exchange Commission as an Exhibit
      to City Network's Form SB-2 filed May 18, 2001, and incorporated herein by
      reference.

(3)   Previously filed with the Securities and Exchange Commission as an Exhibit
      to City Network's Proxy Statement filed March 21, 2003, and incorporated
      herein by reference.

(4)   Previously filed with the Securities and Exchange Commission as an Exhibit
      to City Network's Annual Report on Form 10-KSB filed June 16, 2003, and
      incorporated herein by reference.

(b)   Reports on Form 8-K.

      None.

ITEM 14.    PRINCIPAL ACCOUNTANT AND FEES

      During fiscal years ended December 31, 2002 and 2003, our principal
independent auditor was Lichter, Weil & Associates. The following are the
services provided and the amount billed.

AUDIT FEES

      The aggregate fees billed by Lichter, Weil & Associates for professional
services rendered for the audit of the Company's annual financial statements for
the fiscal years ended February 29, 2004 and February 28, 2003, and for the
review of the financial statements included in the Company's Quarterly Reports
on Form 10-QSB for fiscal years 2004 and 2003 were $66,530 and $40,000,
respectively.

AUDIT RELATED FEES

      Other than the fees described under the caption "Audit Fees" above,
Lichter, Weil & Associates did not bill any fees for services rendered to us
during fiscal years 2003 and 2002 for assurance and related services in
connection with the audit or review of our consolidated financial statements.

TAX FEES

      The aggregate fees billed by Lichter, Weil & Associates for tax services
during the fiscal year ended February 29, 2004, was $3,920. There were no fees
billed by Lichter, Weil & Associates for tax services during the fiscal year
ended February 28, 2003.


                                       20
<PAGE>
ALL OTHER FEES

      There were no fees billed by Lichter, Weil & Associates for other
professional services rendered during the fiscal years ended February 29, 2004
and February 28, 2003.

PRE-APPROVAL OF SERVICES

      The Audit Committee pre-approves all services, including both audit and
non-audit services, provided by our independent accountants. For audit services,
each year the independent auditor provides the Audit Committee with an
engagement letter outlining the scope of the audit services proposed to be
performed during the year, which must be formally accepted by the Committee
before the audit commences. The independent auditor also submits an. audit
services fee proposal, which also must be approved by the Committee before the
audit commences.


                                       21
<PAGE>
                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                    CITY NETWORK, INC.


                                    By: /s/ Tiao Tsan Lai
                                        -----------------------------------
                                        TIAO TSAN LAI
                                        Chief Executive Officer

Date: June 14, 2004


      In accordance with Section 13 or 15(d) 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 capacities and on the dates indicated.

<TABLE>
<CAPTION>
NAME                       TITLE                             DATE
----                       -----                             ----
<S>                        <C>                               <C>
/s/ Tiao Tsan Lai          Director, Chairman and
------------------
Tiao Tsan Lai              Chief Executive Officer           June 14, 2004
                           (Principal Executive
                           Officer)

/s/ Hsin Nan Lin           Director and Chief                June 14, 2004
------------------
Hsin Nan Lin               Financial Officer
                           (Principal Accounting
                           Officer)

/s/ Alice Chen             Director and Vice President       June 14, 2004
------------------
Alice Chen

/s/ Chin Yuan Liao         Director and Manager              June 14, 2004
------------------
Chin-Yuan Liao

/s/ I-Min Oun              Director                          June 14, 2004
------------------
I-Min Oun
</TABLE>


                                       22
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                       (FORMERLY INVESTMENT AGENTS, INC.)

                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
Independent Auditors Report ..............................................   F-2

Consolidated Balance Sheets ..............................................   F-3

Consolidated Statements of Income ........................................   F-4

Consolidated Statements of Cash Flow .....................................   F-5

Consolidated Statements of Changes in Stockholders' Equity ...............   F-6

Notes to Consolidated Financial Statements ...............................   F-7
</TABLE>


                                      F-1
<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
CITY NETWORK, INC. AND SUBSIDIARIES
Las Vegas, Nevada

We have audited the accompanying consolidated balance sheets of City Network,
Inc. and its subsidiaries ("the Company") as of February 29, 2004 and February
28, 2003 and the related consolidated statements of income, changes in
stockholders' equity, 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 audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
City Network, Inc. and Subsidiaries as of February 29, 2004 and February 28,
2003 and the consolidated results of its operations and cash flows for the year
then ended, in conformity with accounting principles generally accepted in the
United States of America.

/s/ Lichter, Weil & Associates
------------------------------
Lichter, Weil & Associates

May 18, 2004
San Diego, California


                                       F-2
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)
                           CONSOLIDATED BALANCE SHEETS
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


<TABLE>
<CAPTION>
                                                                    2004             2003
                                                                    ----             ----
<S>                                                              <C>              <C>
                            ASSETS
Current Assets
  Cash and cash equivalents                                      $ 2,723,573      $   620,264
  Accounts receivable, net ...................................     7,173,149        1,520,341
  Inventory ..................................................       910,190          367,006
  Investments ................................................             0          108,594
  Other receivables ..........................................       126,492           11,460
  Prepaid expenses ...........................................       557,903          209,957
                                                                 -----------      -----------
    Total Current Assets .....................................    11,491,307        2,837,622
                                                                 -----------      -----------

Fixed Assets, net ............................................     2,745,664        2,338,943
                                                                 -----------      -----------
    Total Fixed Assets .......................................     2,745,664        2,338,943
                                                                 -----------      -----------

Other Assets
  Deposits ...................................................       255,706              969
  Trademarks .................................................         1,966            1,193
  Deferred charges ...........................................             0           36,836
  Equity in net assets of affiliated company .................       770,678                0
  Intangible assets ..........................................     1,000,000        1,000,000
  Other current assets .......................................            96           72,758
                                                                 -----------      -----------
    Total Other Assets .......................................     2,028,446        1,111,756
                                                                 -----------      -----------
  Total Assets ...............................................   $16,265,417      $ 6,288,321
                                                                 ===========      ===========
</TABLE>

<TABLE>
<CAPTION>
                                                                     2004             2003
                                                                     ----             ----
<S>                                                              <C>              <C>
             LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts payable and accrued expenses ......................   $ 6,838,620      $   540,926
  Due to related party .......................................     2,015,141        1,271,755
  Deferred revenue ...........................................       260,498                0
  Deposits payable ...........................................         4,371                0
  Current portion, long-term debt ............................     2,316,689          523,142
                                                                 -----------      -----------
  Total Current Liabilities ..................................    11,435,319        2,335,823
Long-term debt, net of current portion .......................       263,041          311,299
                                                                 -----------      -----------
  Total Liabilities ..........................................    11,698,360        2,647,122
                                                                 -----------      -----------

Stockholders' Equity
  Common stock, $.001 par value, 100,000,000 and 25,000,000
    shares authorized, 25,000,000 and 24,500,000
    issued and outstanding, respectively .....................        25,000           24,500
  Additional paid in capital .................................     4,260,117        3,540,617
  Cumulative foreign-exchange translation adjustment .........        29,663                0
  Retained earnings ..........................................       252,277           76,082
                                                                 -----------      -----------
  Total Stockholders' Equity .................................     4,567,057        3,641,199
                                                                 -----------      -----------
  Total Liabilities and Stockholders' Equity .................   $16,265,417      $ 6,288,321
                                                                 ===========      ===========
</TABLE>

                   See Accompanying Notes and Auditor's Report


                                      F-3
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)
                        CONSOLIDATED STATEMENTS OF INCOME
           FISCAL YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003




<TABLE>
<CAPTION>
                                                                2004              2003
                                                            ------------       -----------
<S>                                                         <C>                <C>
Sales, net                                                  $ 19,647,749       $ 7,132,970
Cost of sales                                                 17,827,486         6,267,128
                                                            ------------       -----------
       Gross profit                                            1,820,263           865,842

General and administrative expenses                            1,391,658           708,300
                                                            ------------       -----------

       Income (loss) from operations                             428,605           157,542
                                                            ------------       -----------
Other (Income) Expense
       Interest income                                           (20,202)           (9,431)
       Rental income                                              (3,085)                0
       Commission income                                         (15,517)           (6,767)
       Forgiveness of debt                                             0           (33,745)
       (Gain) loss on currency exchange                          (13,815)          (18,480)
       Other income                                              (11,263)                0
       Equity in earnings of investee                              1,674                 0
       Miscellaneous                                               2,499               497
       Bad debt expense                                          159,238                49
       Loss on disposal of assets                                      0             5,275
       Interest expense                                           67,691            54,887
                                                            ------------       -----------
       Total Other (Income) Expense                              167,220            (7,715)
                                                            ------------       -----------
            Income (loss) before income taxes                    261,385           165,257

Provision for income taxes                                        85,190            44,180
                                                            ------------       -----------
       Net income (loss)                                    $    176,195       $   121,077
                                                            ============       ===========

       Net income (loss) per share (basic and diluted)
            Basic                                           $      0.007       $     0.016
            Diluted                                         $      0.007       $     0.016

       Weighted average number of shares
            Basic                                             24,958,333         7,525,342
            Diluted                                           24,958,333         7,525,342
</TABLE>


                   See Accompanying Notes and Auditor's Report


                                       F-4
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FISCAL YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


<TABLE>
<CAPTION>
                                                                  2004              2003
                                                              -----------       -----------
<S>                                                           <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
       Net Income (loss)                                      $   176,195       $   121,077

Adjustments to reconcile net income (loss) to net cash
  provided by (used) in operating activities:
       Depreciation and amortization                               44,057            45,309
       Equity in earning of investee                                1,674                 0
       Loss on disposal of assets                                       0             5,275
       Bad debt                                                   159,238                49
       Forgiveness of debt                                              0           (33,745)
       Gain on foreign currency exchange                          (13,815)          (18,480)
       Decrease (Increase) in receivables                      (5,652,808)         (952,867)
       Decrease (Increase) in inventory                          (543,184)         (248,083)
       Decrease (Increase) in other receivables                  (115,032)          (11,100)
       Decrease (Increase) in prepaid expenses                   (347,946)          390,036
       Decrease (Increase) in deposit                            (254,737)                0
       Decrease (Increase) in deferred charges                     36,836          (114,019)
       Decrease (Increase) in other current assets                 72,662          (316,508)
       (Decrease) Increase in accounts payable
            and accrued expenses                                6,297,694        (1,001,173)
       (Decrease) Increase in deferred revenue                    260,498                 0
       (Decrease) Increase in deposits payable                      4,371                 0
                                                              -----------       -----------
       Total Adjustments                                          (50,492)       (2,255,306)
                                                              -----------       -----------
       Net cash provided by (used in) operations                  125,703        (2,134,229)
                                                              -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES
       Proceed from sale of investments                           108,594                 0
       Purchase of intangibles                                       (838)           (1,286)
       Purchase of investments                                   (772,352)         (108,594)
       Purchase of furniture and equipment                       (462,722)         (502,691)
                                                              -----------       -----------
       Net cash used in investing activities                   (1,235,912)         (612,571)
                                                              -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES
       Payment on notes payable                                (2,229,705)         (230,753)
       Issuance of loan from related party                        743,386         1,292,154
       Issuance of notes payable                                3,974,994           460,212
       Issuance of common stock                                   720,000         1,755,870
                                                              -----------       -----------
       Net cash provided by financing activities                3,208,675         3,277,483
                                                              -----------       -----------
       Effect of exchange rate change on cash                       4,843                 0

       Net change in cash and cash equivalents                  2,103,309           530,683
                                                              -----------       -----------
       Cash and cash equivalents at beginning of year             620,264            89,581
                                                              -----------       -----------
       Cash and cash equivalents at end of year               $ 2,723,573       $   620,264
                                                              ===========       ===========

       Supplemental cash flows disclosures:
            Income tax payments                               $     9,235       $    24,767
                                                              -----------       -----------
            Interest payments                                 $    67,691       $    62,425
                                                              -----------       -----------
            Stock dividend paid                               $         0       $    11,910
                                                              -----------       -----------
            Issuance of stock for purchase of subsidiary      $         0       $ 3,500,000
                                                              -----------       -----------
</TABLE>

See Accompanying Notes and Auditor's Report


                                       F-5
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
           FISCAL YEARS ENDED FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


<TABLE>
<CAPTION>
                                                            2004              2003
                                                         -----------      ------------
<S>                                                      <C>              <C>
Common stock, number of shares outstanding
       Balance at beginning of period                     24,500,000         1,970,000
       Stock                                                       0        (1,380,000)
       cancellation
       Stock split                                                 0        11,910,000
       Common stock issued                                   500,000        12,000,000
                                                         -----------      ------------
       Balance at end of period                           25,000,000        24,500,000
                                                         ===========      ============

Common stock, par value $.001 (thousands of shares)
       Balance at beginning of year                      $    24,500      $      1,970
       Stock                                                       0            (1,380)
       cancellation
       Stock split                                                 0            11,910
       Common stock issued                                       500            12,000
                                                         -----------      ------------
       Balance at end of year                                 25,000            24,500
                                                         -----------      ------------

Additional paid in capital
       Balance at beginning of year                        3,540,617            13,500
       Issuance of stock                                     719,500         3,527,117
                                                         -----------      ------------
       Balance at end of year                              4,260,117         3,540,617
                                                         -----------      ------------

Cumulative foreign-exchange translation adjustment
       Balance at beginning of year                                0                 0
       Foreign currency translation                           29,663                 0
                                                         -----------      ------------
       Balance at end of year                                 29,663                 0
                                                         -----------      ------------

Retained (deficits)
       Balance at beginning of year                           76,082           (33,085)
       Issuance of stock dividend                                  0           (11,910)
       Net income (loss)                                     176,195           121,077
                                                         -----------      ------------
       Balance at end of year                                252,277            76,082
                                                         -----------      ------------

Total stockholders' equity at end of year                $ 4,567,057      $  3,641,199
                                                         ===========      ============
</TABLE>


                                       F-6
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE A - ORGANIZATION

   City Network, Inc., formerly Investment Agents, Inc., was incorporated on
   August 8, 1996 under the laws of the State of Nevada. City Network
   Technology, Inc., formerly Gelcrest Investments Limited, was incorporated
   under the laws of the British Virgin Islands on March 1, 2002. City Network,
   Inc - Taiwan, formerly City Engineering, Inc., was incorporated under the
   laws of Republic of China on September 6, 1994. City Construction was
   incorporated under the laws of Republic of China on October, 10, 2003. City
   Network, Inc. owns 100% of the capital stock of City Network Technology,
   Inc., and City Network Technology, Inc. owns 100% of the capital stock of
   City Network, Inc. - Taiwan, and City Construction. Collectively the four
   corporations are referred to herein as the "Company". When used in these
   notes, the terms "Company" means City Network, Inc. and
   its subsidiaries.

   On November 14, 2002, City Network Technology, Inc became a wholly owned
   subsidiary of City Network, Inc. through an Exchange Agreement, which was
   amended on December 4, 2002 whereby City Network, Inc. acquired all of the
   issued and outstanding capital stock of City Network Technology, Inc. in
   exchange for 12,000,000 shares of City Network, Inc.

   The Company is a provider of Internet broadband and wireless infrastructure
   equipment and service for the rapidly expanding broadband marketplace. The
   Company intends to be an important provider of these services predicated upon
   our dedication to delivering user friendly, cost effective, and customer
   tailored, high speed internet access equipment to meet the business needs of
   the hospitality, residential property and telecommunication industry
   worldwide.

   Our Company operates in an industry characterized by significant competition
   and rapid technological changes. We will need additional investments and
   funding in order to complete the development and improvements necessary for
   our products and our planned operations.


                                       F-7
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Revenue Recognition

      Revenue from sales of products to customers is recognized upon shipment or
      when title passes to customers based on the terms of the sales, and is
      recorded net of returns, discounts and allowances. Service income is
      recognized as the related services are provided pursuant to the terms of
      the service agreement.

      Principles of Consolidation

      The consolidated financial statements include the accounts of City
      Network, Inc., and it's wholly owned subsidiaries City Network Technology,
      Inc. and its wholly owned subsidiaries, City Network, Inc - Taiwan and
      City Construction, collectively referred to within as the Company. All
      material intercompany accounts, transactions and profits have been
      eliminated in consolidation.

      Risks and Uncertainties

      Our Company is subject to substantial risks from, among other things,
      intense competition from the providers of broadband products, services and
      the telecommunication industry in general, other risks associated with
      financing, liquidity requirements, rapidly changing customer requirements,
      limited operating history, and the volatility of public markets.

      Contingencies

      Certain conditions may exist as of the date the financial statements are
      issued, which may result in a loss to the Company but which will only be
      resolved when one or more future events occur or fail to occur. The
      Company's management and legal counsel assess such contingent liabilities,
      and such assessment inherently involves an exercise of judgment. In
      assessing loss contingencies related to legal proceedings that are pending
      against the Company or unasserted claims that may result in such
      proceedings, the Company's legal counsel evaluates the perceived merits of
      any legal proceedings or unasserted claims as well as the perceived merits
      of the amount of relief sought or expected to be sought.

      If the assessment of a contingency indicates that it is probable that a
      material loss has been incurred and the amount of the liability can be
      estimated, then the estimated liability would be accrued in the Company's
      financial statements. If the assessment indicates that a potential
      material loss contingency is not probable but is reasonably possible, or
      is probable but cannot be estimated, then the nature of the contingent
      liability, together with an estimate of the range of possible loss if
      determinable and material would be disclosed.

      Loss contingencies considered to be remote by management are generally not
      disclosed unless they involve guarantees, in which case the guarantee
      would be disclosed.


                                       F-8
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Use of Estimates

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make certain
      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. Significant estimates include collectibility of accounts
      receivable, accounts payable, sales returns and recoverability of
      long-term assets.

      Allowance for Doubtful Accounts

      We have made an allowance for doubtful accounts for trade receivables
      based on a combination of write-off history, aging analysis, and any
      specific known troubled accounts.

      Fixed Assets

      Property and equipment are stated at cost less accumulated depreciation.
      Expenditures for major additions and improvements are capitalized, and
      minor replacements, maintenance and repairs are charged to expense as
      incurred. Depreciation is provided on the straight-line method over the
      estimated useful lives of the assets, or the remaining term of the lease,
      as follows:

<TABLE>
<S>                                             <C>
          Furniture and Fixtures                5 years
          Equipment                             5 years
          Computer Hardware and Software        3 years
          Building and Improvements             50 years
</TABLE>

      Intangible Assets:

      Effective July 2002, the Company adopted SFAS No. 142, "Goodwill and Other
      Intangible Assets." The adoption of SFAS No. 142 required an initial
      impairment assessment involving a comparison of the fair value of
      trademarks, patents and other intangible assets to current carrying value.
      No impairment loss was recognized for the years ended February 29, 2004
      and February 28, 2003.

      Trademarks and other intangible assets determined to have indefinite
      useful lives are not amortized. We test such trademarks and other
      intangible assets with indefinite useful lives for impairment annually, or
      more frequently if events or circumstances indicate that an asset might be
      impaired. Trademarks and other intangible assets determined to have
      definite lives are amortized over their useful lives or the life of the
      trademark and other intangible asset, whichever is less.

      Exchange Gain (Loss):

      During fiscal year ended February 29, 2004, the transactions of City
      Network, Inc. - Taiwan and City Construction were denominated in a foreign
      currency and are recorded in New Taiwan dollars at the rates of exchange
      in effect when the transactions occur. Exchange gains and losses are
      recognized for the different foreign exchange rates applied when the
      foreign currency assets and liabilities are settled.


                                       F-9
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Translation Adjustment

      As of February 29, 2004, the accounts of City Network, Inc. - Taiwan and
      City Construction were maintained, and their financial statements were
      expressed, in New Taiwan Dollars (NTD). Such financial statements were
      translated into U.S. Dollars (USD) in accordance with Statement of
      Financial Accounts Standards ("SFAS") No. 52, "Foreign Currency
      Translation", with the NTD as the functional currency. According to the
      Statement, all assets and liabilities were translated at the current
      exchange rate, stockholder's equity are translated at the historical rates
      and income statement items are translated at the weighted average exchange
      rate for the period. The resulting translation adjustments are reported
      under other comprehensive income in accordance with SFAS No. 130,
      "Reporting Comprehensive Income".

      As of February 29, 2004 and February 28, 2003 the exchange rates between
      NTD and the USD was NTD$1=USD$0.02994 and NTD$1=USD$0.02857. The
      weighted-average rate of exchange between NTD and USD was NTD$1 =
      USD$0.02617 and NTD$1=USD$0.02899. Total translation adjustment recognized
      for the year ended February 29, 2004 and February 28, 2003 is $29,663 and
      $0 respectively.

      Fair Value of Financial Instruments

      Our Company measures its financial assets and liabilities in accordance
      with generally accepted accounting principles. For certain of the
      Company's financial instruments, including accounts receivable (trade and
      related party), notes receivable and accounts payable (trade and related
      party), and accrued expenses, the carrying amounts approximate fair value
      due to their short maturities. The amounts owed for long-term debt and
      revolving credit facility also approximate fair value because interest
      rates and terms offered to the Company are at current market rates.

      Statement of Cash Flows

      In accordance with Statement of Financial Accounting Standards No. 95,
      "Statement of Cash Flows", cash flows from the Company's operations is
      based upon the local currencies. As a result, amounts related to assets
      and liabilities reported on the statement of cash flows will not
      necessarily agree with changes in the corresponding balances on the
      balance sheet.

      Concentration of Credit Risk

      Financial instruments that potentially subject the Company to
      concentrations of credit risk are cash, accounts receivable and other
      receivables arising from its normal business activities. The Company
      places its cash in what it believes to be credit-worthy financial
      institutions. However, cash balances have exceeded the FDIC insured levels
      at various times during the year and at year-end. The Company has a
      diversified customer base, most of which are related parties. The Company
      controls credit risk related to accounts receivable through credit
      approvals, credit limits and monitoring procedures. The Company routinely
      assesses the financial strength of its customers and, based upon factors
      surrounding the credit risk, establishes an allowance, if required, for
      un-collectible accounts and, as a consequence, believes that its accounts
      receivable credit risk exposure beyond such allowance is limited.


                                      F-10
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Inventory

      Inventory is valued at the lower of cost or market. Cost is determined on
      the weighted average method. As of February 29, 2004 and February 28,
      2003, inventory consisted only of finished goods.

      Product Warranties

      The Company estimates its warranty costs based on historical warranty
      claim experience and applies this estimate to the revenue stream for
      products under warranty. Future costs for warranties applicable to revenue
      recognized in the current period are charged to cost of revenue. The
      warranty accrual is reviewed quarterly to verify that it properly reflects
      the remaining obligation based on anticipated expenditures over the
      balance of the obligation period. Adjustments are made when accrual
      warranty claim experience differs from estimate.

      Long-term equity investments

      Long-term equity investments are accounted for by the equity method when
      the Company and its subsidiaries owns 20% or more of the investee's voting
      shares, or less than 20% of investee's voting shares but is able to
      exercise significant influence over the investee's operation and financial
      polices, but not more then 50%. All other long-term equity investments are
      accounted for by either the lower-of-cost-or-market method or cost method.
      For long-term equity investments accounted for under the equity method
      related to investee's that are publicly listed companies, unrealized
      losses resulting from declines in the market value below cost are recorded
      as a separate component of stockholders' equity.

      For long-term equity investments in non-listed companies accounted for
      under the cost method, investments are stated at original cost. A
      write-down of the investment balance to earnings is taken only if it is
      determined that there is a permanent decline in the investment's value.
      Stock dividends do not result in the recognition of investment income.

      For long-term equity investments accounted for by the equity method, the
      investment is initially recorded at cost, then reduced by dividends and
      increased or decreased by investor's proportionate share of the investee's
      net earnings or loss.

      Cash and Cash Equivalents

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

      Advertising

      Advertising costs are expensed in the year incurred.


                                      F-11
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      Income Taxes

      Provisions for income taxes are based on taxes payable or refundable for
      the current year and deferred taxes on temporary differences between the
      amount of taxable income and pretax financial income and between the tax
      bases of assets and liabilities and their reported amounts in the
      financial statements.

      Deferred tax assets and liabilities are included in the financial
      statements at currently enacted income tax rates applicable to the period
      in which the deferred tax assets and liabilities are expected to be
      realized or settled as prescribed in SFAS No. 109, "Accounting for Income
      Taxes". As changes in tax laws or rates are enacted, deferred tax assets
      and liabilities are adjusted through the provision for income taxes.

      Earnings Per Share

      The Company uses SFAS No. 128, "Earnings Per Share", for calculating the
      basic and diluted earnings (loss) per share. Basic earnings (loss) per
      share are computed by dividing net income (loss) attributable to common
      stockholders by the weighted average number of common shares outstanding.
      Diluted earnings per share are computed similar to basic earnings per
      share except that the denominator is increased to include common stock
      equivalents, if any, as if the potential common shares had been issued.

      Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of
      The Company adopted the provision of FASB No. 121, "Accounting for the
      Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
      of". This statement requires that long-lived assets and certain
      identifiable intangibles be reviewed for impairment whenever events or
      changes in circumstances indicate that the carrying amount of an asset may
      not be recoverable. Recoverability of assets to be held and used is
      measured by a comparison of the carrying amount of an asset to future net
      cash flows expected to be generated by the asset. If such assets are
      considered to be impaired, the impairment to be recognized is measured by
      the amount by which the carrying amounts of the assets exceed the fair
      values of the assets. In assessing the impairment of these identifiable
      intangible assets, identifiable goodwill will be allocated on a pro rata
      basis using fair values of the assets at the original acquisition date. In
      estimating expected future cash flows for determining whether an asset is
      impaired and if expected future cash flows are used in measuring assets
      that are impaired, assets will be grouped at the lowest level (entity
      level) for which there are identifiable cash flows that are largely
      independent of the cash flows of other groups of assets. Assets to be
      disposed of are reported at the lower of the carrying amount or fair value
      less costs to sell. In recording an impairment loss, any related goodwill
      would be reduced to zero before reducing the carrying amount of any
      identified impaired asset.

      For goodwill not identifiable with an impaired asset, the Company will
      establish benchmarks at the lowest lever (entity level) as its method of
      assessing impairment. In measuring impairment, unidentifiable goodwill
      will be considered impaired if the fair value at the lowest level is less
      than its carrying amount. The fair value of unidentifiable goodwill will
      be determined by subtracting the fair value of the recognized net asset at
      the lowest level (excluding goodwill) from the value at the lowest level.
      The amount of the impairment loss should be equal to the difference
      between the carrying amount of goodwill and the fair value of goodwill. In
      the event that impairment is recognized, appropriate disclosures would be
      made.


                                      F-12
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      New Accounting Pronouncements

      In October 2001, the FASB issued SFAS No. 143, "Accounting for Asset
      Retirement Obligations," which requires companies to record the fair value
      of a liability for asset retirement obligations in the period in which
      they are incurred. The statement applies to a company's legal obligations
      associated with the retirement of a tangible long-lived asset that results
      from the acquisition, construction, and development or through the normal
      operation of a long-lived asset. When a liability is initially recorded,
      the company would capitalize the cost, thereby increasing the carrying
      amount of the related asset. The capitalized asset retirement cost is
      depreciated over the life of the respective asset while the liability is
      accreted to its present value. Upon settlement of the liability, the
      obligation is settled at its recorded amount or the company incurs a gain
      or loss. The statement is effective for fiscal years beginning after June
      30, 2003. The Company does not expect the adoption to have a material
      impact to the Company's financial position or results of operations.

      In December 2003, the FASB issued FASB Interpretation No. 46 (revised
      December 2003) ("Interpretation 46"), "Consolidation of Variable Interest
      Entities." Application of this interpretation is required in our financial
      statements for interests in variable interest entities that are considered
      to be special-purpose entities for the year ended February 29, 2004. Our
      Company determined that we do not have any arrangements or relationships
      with special-purpose entities. Application of Interpretation 46 for all
      other types of variable interest entities is required for our Company
      effective March 31, 2004.

      Interpretation 46 addresses the consolidation of business enterprises to
      which the usual condition (ownership of a majority voting interest) of
      consolidation does not apply. This interpretation focuses on controlling
      financial interests that may be achieved through arrangements that do not
      involve voting interests. It concludes that in the absence of clear
      control through voting interests, a company's exposure (variable interest)
      to the economic risks and potential rewards from the variable interest
      entity's assets and activities are the best evidence of control. If an
      enterprise holds a majority of the variable interests of an entity, it
      would be considered the primary beneficiary. The primary beneficiary is
      required to include assets, liabilities and the results of operations of
      the variable interest entity in its financial statements.

       Our Company holds interests in certain entities currently accounted for
      under the equity method of accounting that are not considered variable
      interest entities. We do not expect compliance with Interpretation 46 to
      have an impact on our financial statements.


                                      F-13
<PAGE>
                      CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE C - EXCHANGE AGREEMENT

      On November 14, 2002, City Network Technology, Inc. became a wholly
      owned subsidiary of City Network, Inc. through an Exchange
      Agreement, which was amended on December 4, 2002. City Network, Inc.
      acquired all of the issued and outstanding capital stock of City
      Network Technology, Inc.  pursuant to the Exchange Agreement, by
      issuing 12,000,000 shares of City Network, Inc. stock.

      In connection with the exchange and change in control the name of
      the Company was changed from Investment Agents, Inc. to City
      Network, Inc. and the officers and directors of City Network, Inc.
      resigned and new officers and directors were appointed.  Upon the
      effective date of the exchange and change in control, the Company
      ceased its relationship with Verio and no longer acts as a referral
      agent for Verio. See Commitments Note G.


NOTE D -   STOCK PURCHASE BUSINESS COMBINATION

      On November 14, 2002, the Company completed the purchase of City Network
      Technology, Inc., a provider of internet broadband and wireless
      infrastructure equipment and service for the rapidly expanding broadband
      marketplace, by acquiring all of the outstanding capital stock of City
      Network Technology, Inc. in exchange for 12,000,000 shares of City
      Network,. Inc. common stock. The acquisition was accounted for using the
      purchase method of accounting and, accordingly, City Network, Inc.'s
      results of operations have been included in the consolidated financial
      statements since the date of acquisition.

      The following table presents the allocation of the acquisition cost,
      including professional fees and other related acquisition costs, to the
      assets acquired and liabilities assumed:

<TABLE>
<S>                                             <C>
      Cash and cash equivalents                 $   207,000
      Accounts receivable                         1,255,000
      Other receivable                               73,000
      Prepaid expenses                              181,000
      Inventories                                    58,000
      Property, plant, and equipment              2,449,000
      Investments                                   109,000
      Patents                                     1,000,000
      Other noncurrent assets                        86,000
                                                -----------
         Total assets                           $ 5,418,000
                                                -----------

      Accounts payable                          $  (588,000)
      Loan payable                                 (194,000)
      Other current liabilities                    (231,000)
      Current portion - long term debt             (171,000)
      Officer advances                             (242,000)
      Long-term debt                               (492,000)
                                                -----------
         Total liabilities                      $(1,918,000)
                                                -----------
      Total acquisition cost                    $ 3,500,000
                                                ===========
</TABLE>


                                      F-14
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                    FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE D - STOCK PURCHASE BUSINESS COMBINATION (CONTINUED)

      The following (unaudited) pro forma consolidated results of operations
      have been prepared as if the acquisition of City Network Technology, Inc.
      had occurred at March 1, 2002:

<TABLE>
<CAPTION>
                                              Year Ending
                                           February 28, 2003
                                           -----------------
<S>                                        <C>
      Sales                                  $7,236,161
      Net income                                121,077
      Net income per share -- basic                 .02

      Net income per share -- diluted               .02
</TABLE>

      The pro forma information is presented for informational purposes only and
      is not necessarily indicative of the results of operations that actually
      would have been achieved had the acquisitions been consummated as of that
      time, nor is it intended to be a projection of future results.

NOTE E - CASH

      The Company maintains its cash balances at various banks in Taiwan and
      Hong Kong. All balances are insured by the Central Deposit Insurance
      Corporation (CDIC). As of February 29, 2004 and February 28, 2003, there
      were no uninsured portions of the balances held at the bank.

NOTE F - FIXED ASSETS

      Fixed assets consist of the following:

<TABLE>
<CAPTION>
                                  2004              2003
                              -----------       -----------
<S>                           <C>               <C>
Land                          $ 1,966,694       $ 1,966,694
Building                          305,429           305,429
Machinery and equipment           427,126            18,656
Furniture and fixtures            142,402           100,094
                              -----------       -----------
                              $ 2,841,651       $ 2,390,873

Accumulated depreciation          (95,987)          (51,930)
                              -----------       -----------
                              $ 2,745,664       $ 2,338,943
                              ===========       ===========
</TABLE>


                                       F-15
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE G- COMMITMENTS

      Verio, Inc.

      Upon the effective date of the Exchange Agreement, dated December 14,
      2002, and the change in control, City Network ceased its relationship with
      Verio and no longer acts as a referral agent for Verio, Inc. The agreement
      with Verio, Inc. was a non-exclusive authorized sales representative
      agreement, whereby City Network would solicit sales of Vario's services in
      the United States, in exchange for commission income. These services
      included various domain registration services, web hosting services and
      e-commerce services.

      A Best Information

      City Network, Inc. - Taiwan, signed an agreement with A Best Information
      in 2003 for the exclusive right to sell A Best Information's products.
      There is no expiration date in the agreement, and the Company has the
      rights to transfer the agreement to any third party with a negotiable
      price. The Company paid $1,000,000 for these rights.

      Reseller agreements

      City Network, Inc. - Taiwan has several signed reseller agreements with
      various customers. These resellers are given special sales prices and are
      paid commissions for their sales orders.

      Operating Leases

      The Company leases three office facilities under operating leases that
      terminate on various dates. Rental expense for these leases consisted of
      $13,482 and $0 for February 29, 2004 and February 28, 2003. The Company
      has future minimum lease obligations as follows:

<TABLE>
<CAPTION>
<S>                                     <C>
                        2005            $78,693
                        2006             11,813
                                        -------
                        Total           $90,506
                                        =======
</TABLE>


                                      F-16
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE H- LONG-TERM INVESTMENT

      Unium Technology

      On December 25, 2001 the Company purchased approximately nine percent (9%)
      of Unium Technology Corporation for $108,594. On May 1, 2003 the Company
      sold the Unium Technology Corporation investment for $108,594, cost. As of
      February 29, 2004, there was a balance due of $43,439 from the buyer.
      Union Technology is not publicly traded or listed. The cost method
      accounting for the long-term equity investment of Unium Technology
      Corporation was being used.

      Beijing Putain Hexin Network Technology Co., Ltd

      On August 31, 2003 the Company purchased approximately twenty-five percent
      (25%) of Beijing Putain Hexin Network Technology Co., Ltd for $325,000. On
      December 4, 2003 the Company purchased an additional fifteen percent (15%)
      for $398,500. Beijing Putain Hexin Network Technology Co., Ltd is not
      publicly traded or listed. The Company is using the complete equity method
      to record its share of the subsidiary's net income and loss. As of
      February 29, 2004 the Company recognized a loss $1,674 from their
      acquisition.

NOTE I - COMPENSATED ABSCENSES

      Employees earn annual vacation leave at the rate of seven (7) days per
      year for the first three years. Upon completion of the third year of
      employment, employees earn annual vacation leave at the rate of ten (10)
      days per year for years four through five. Upon completion of the fifth
      year of employment, employees earn annual vacation leave at the rate of
      fourteen (14) days per year for years six through ten. Upon completion of
      the tenth year of employment, one (1) additional day for each additional
      year, until it reaches thirty (30) days per year. At termination,
      employees are paid for any accumulated annual vacation leave. As of
      February 29, 2004 no accumulated vacation liability exists.

NOTE J - INCOME TAXES

      Total Federal and State income tax expense for the years ended February
      28, 2004 and 2003 amounted to $85,190 and $44,180, respectively. For the
      years ended February 28, 2004 and 2003, there is no difference between the
      federal statutory tax rate and the effective tax rate.


                                      F-17
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003

NOTE J - INCOME TAXES (CONTINUED)

      The following is a reconciliation of income tax expense:

<Table>
<Caption>
      2004                    U.S.       State      International      Total
                            -------     -------    ---------------    -------
<S>                       <C>            <C>        <C>               <C>
      Current                $3,321          $0       $81,869         $85,190
      Deferred                    0           0             0               0
                             ------       -----       -------         -------
         Total               $3,321          $0       $81,869         $85,190
                             ======       =====       =======         =======
</Table>

<Table>
<Caption>
      2003                    U.S.       State      International      Total
                            -------     -------    ---------------    -------
<S>                       <C>            <C>        <C>               <C>
      Current                    $0          $0         $44,180       $44,180
      Deferred                    0           0               0             0
                             ------       -----         -------       -------
         Total                   $0          $0         $44,180       $44,180
                             ======       =====         =======       =======
</Table>

      Reconciliation of the differences between the statutory U.S. Federal
      income tax rate and the effective rate is as follows:

<Table>
<Caption>
                                                     2004          2003
                                                    ------        ------
<S>                                                 <C>           <C>
      Federal statutory tax rate                      33%           27%
      State, net of federal benefit                    0%            0%
                                                    ------        ------
      Effective tax rate                              33%           27%
                                                    ------        ------
</Table>

NOTE K - DEBT

      At February 29, 2004, the Company had notes payable outstanding in the
      aggregate amount of $2,579,730. Payable as follows:

<TABLE>
<S>                                                      <C>
      Secured note payable to a bank in Taiwan,
      interest at 3.175% per annum, due on
      May 29, 2016                                       $ 280,689

      Secured note payable to a bank in Taiwan,
      interest at 7.425% per annum, due on
      May 9, 2004                                           30,972

      Secured note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      June 6, 2005                                          13,011

      Notes payable to a bank in Taiwan,
      4.25% per annum, due on
      June 12, 2005                                          1,497

      Notes payable to a bank in Taiwan,
      7.5% per annum, due on
      June 16, 2004                                        179,641
</TABLE>


                                      F-18
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE K - DEBT (CONTINUED)

<TABLE>
<S>                                                   <C>
      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      December 30, 2004                                    269,462

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      March 13, 2004                                       119,760

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      March 26, 2004                                       188,623

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      May 4, 2004                                          572,405

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      March 5, 2004                                         78,635

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      April 8, 2004                                        225,573

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      April 23, 2004                                         8,994

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      April 8, 2004                                         19,805

      Notes payable to a bank in Taiwan,
      3.77% per annum, due on
      April 8, 2004                                        261,871

      Note payable to a bank in Taiwan,
      interest at 4.269% per annum, due on
      August 25,2004                                       328,792
                                                      ------------
                                                         2,579,730

                  Current portion                        2,316,689
                                                      ------------

                  Long-term portion                   $    263,041
                                                      ============
</TABLE>


                                      F-19
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                     FEBRUARY 29, 2004 AND FEBRUARY 28, 2003


NOTE L - RELATED PARTY TRANSACTIONS

      Throughout the history of the Company, certain members of the Board of
      Directors, and general management have made loans to the Company to cover
      operating expenses or operating deficiencies.

      Andy Lai - As of February 29, 2004 and February 28, 2003, the Company has
      a non interest-bearing loan from Andy Lai, the Company's President, in the
      amount of $2,015,141 and $1,271,658, respectively.

      Officer advance - As of the date of the exchange agreement, all prior
      officer advances were forgiven by the officers of City Network, Inc. These
      advances totaled $33,745. We have recognized this amount as forgiveness of
      debt income during the year ended February 28, 2003.

NOTE M - FAIR VALUE OF FINANCIAL INSTRUMENTS

      The carrying amounts of cash and cash equivalents, accounts receivable,
      deposits and accounts payable approximate their fair value because of the
      short maturity of those instruments.

      The carrying amounts of the Company's long-term debt approximate their
      fair value because of the short maturity and/or interest rates which are
      comparable to those currently available to the Company on obligations with
      similar terms.

NOTE N - STOCK

      On February 14, 2003 the Board of Directors of the Company approved and
      recommended that Company's Articles of Incorporation be amended to
      increase the number of authorized shares of common stock, par value $0.001
      of the Company, from 25,000,000 shares to 100,000,000; and to authorize
      50,000,000 shares of preferred stock, par value $0.001.

      On February 17, 2003, the holders of approximately 52% of the outstanding
      shares of common stock of City Network executed a written consent adopting
      and approving the Charter Amendment. The Charter Amendment was filed with
      the Secretary of State of the State of Nevada in March 2003.

NOTE O - SUBSEQUENT EVENT

     On March 24, 2004, the Board of Directors of the Company approved and
     consummated a private placement offering of 2,500,000 shares of its common
     stock, par value $0.001 per share, for $1.44 per share (total of
     $3,600,000) pursuant to regulation S of the Securities Act of 1933.



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