United States
 **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 Year ended 12/31/03
 
 Commission File Number: 000-30565
 
 KNW Networks, Inc.
 
 formerly
 Knowledge Networks, Inc.
 
 Nevada91-2014670
(Jurisdiction of Incorporation)(I.R.S. Employer Identification No.)

24843 Del Prado, Suite 318, Dana Point, CA92629
(Address of principal executive offices)    (Zip Code)

Registrant's telephone number, including area code:(949) 487-7295

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

Securities registered pursuant to Section 12(g) of the Act:Common Stock

As ofDecember 31, 2003Common shares issued and outstanding:22,844,254

As ofMarch 31, 2004Common shares issued and outstanding:1,522,950

As ofDecember 31, 2003, 2,777,588shares of shares of Common Stock were held by non-affiliates, with a market value calculated at$1,249,914, based on closing low bid of$0.45per share. Bid prices for thinly traded issues may be unreliable and subject to considerable volitivity on very modest volume.

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

[  ](Indicate by check mark whether if disclosure of delinquent filers (§29.405) is not and will not to the best of Registrant's knowledge be contained herein, in definitive proxy or information statements incorporated herein by reference or any amendment hereto.)

Transitional Small Business Disclosure Format (check one):  yes [    ]  no [X]
 Page - 1
   CONTENTS
 
 INTRODUCTION
3PART I
3ITEM 1. Description of Business
3(a) Historical Information
3(b) No Acquisitions
3(c) No Business of Registrant
3(d) Financing Plans
3(e) Planned Acquisitions
3(f) Employees
3ITEM 2. Description of Property
3ITEM 3. Legal Proceedings
3ITEM 4. Submission of Matters to a Vote of Security Holders
3PART II
4ITEM 5. Market for Common Equity and Stockholder Matters
4(a) Market Information
4(b) Holders
4(c) Dividends
4(d) Sales of Unregistered Common Stock 2002
5ITEM 6. Management's Discussion and Analysis or Plan of Operation
5(a) Plan of Operation for the next twelve months
5(b) Discussion and Analysis of Financial Condition and Results of Operations
5ITEM 7. Financial Statements
6(a) Audit Committee
6(b) Financial Statements
6ITEM 8. Changes In and Disagreements With Accountantson Accounting and Financial Disclosure
6PART III
7ITEM 9. Directors and Executive Officers, Promoters and Control Persons;Compliance with Section 16(a) of the Exchange Act
7ITEM 10. Executive Compensation
8ITEM 11. Security Ownership of Certain Beneficial Owners and Management
8ITEM 12. Certain Relationships and Related Transactions
9ITEM 13. Controls and Procedures
9(b) Exhibits
10(c) Form 8-K Reports
10
 Page - 2 
 INTRODUCTION
 
 This Registrant (Reporting Company) has elected to refer to itself, whenever possible, by normal English pronouns, such as "We", "Us" and "Our".
 
 This Form 10-KSB contains forward-looking statements. Such statements include statements concerning plans, objectives, goals, strategies, future events, results or performances, and underlying assumptions that are not statements of historical fact. This document and any other written or oral statements made by us or on our behalf may include forward-looking statements which reflect our current views, with respect to future events or results and future financial performance. Certain words indicate forward-looking statements, words like "believe", "expect", "anticipate", "intends", "estimates", "forecast", "projects", and similar expressions.
 
 PART I
 
 
 ITEM 1 . Description of Business.
 
 ( a ) Historical Information.
 
 ( 1 ) Form and Year of Organization.  Knowledge Networks, Inc. , ( ? the Registrant ? )("we, "us," or "our") was incorporated in the State of Nevada on December 23, 1998. On or about October 15, 2002, we changes our name from Knowledge Networks, Inc . to KNW Networks, Inc.
 
 ( 2 ) Issuance and Cancellations of Shares. The history of our share issuance and cancellations is unchanged from our previous annual report. Please see Item 4 of this Part.
 
 ( b ) No Business of Registrant. We have no present business or productive assets. We may seek to find one or more profitable business opportunities when market and financial conditions are more favorable. We are substantially dormant at this time.
 
 ( c ) Financing Plans. None presently. For more information, please see Item 6 of Part II, Management's Discussion and Analysis.
 
 ( d ) Planned Acquisitions. None.
 
 ( e ) Employees. We have one Officer/Director.
 
 
 ITEM 2 . Description of Property.
 
 None.
 
 
 ITEM 3 . Legal Proceedings.
 
 There are no legal proceedings pending, threatened or suspected, by or against our Corporation, as of the preparation of this Report.
 
 
 ITEM 4 . Submission of Matters to a Vote of Security Holders.
 
 On February 12, 2004, an absolute majority of all shares issued and outstanding, and which would be entitled to vote at meeting of shareholders empowered and directed a Reverse Split of our common stock, fifteen shares to become one share. The Record date was the opening of business February 27, 2004 and Date of Entitlement ("Execution Date") was the close of business February 26, 2004. The split was pursuant to a mandatory share exchange and resulted in a new trading symbol.
 
 Page - 3 
 PART II
 
 
 ITEM 5 . Market for Common Equity and Stockholder Matters.
 
 ( a ) Market Information. We have one class of securities, Common Voting Equity Shares ( ? Common Stock ? ). Our Company's Securities may be quoted in the over-the-counter market, but there is a young, sporadic and potentially volatile trading market for them. Quotations for, and transactions in the Securities, and transactions are capable of rapid fluctuations, resulting from the influence of supply and demand on relatively thin volume. There may be buyers at a time when there are no sellers, and sellers when there are no buyers, resulting in significant variations of bid and ask quotations by market-making dealers, attempting to adjust changes in demand and supply. A young market is also particularly vulnerable to short selling, sell orders by persons owning no shares of stock, but intending to drive down the market price so as to purchase the shares to be delivered at a price below the price at which the shares were sold short. Based upon standard reporting sources, the following information is provided:
 
 quarter
high bid
low bid
volume4th 2000
2.70
1.90
687,8001st 2001
2.18
2.10
870,0002nd 2001
2.90
0.31
520,0003rd 2001
1.00
0.13
200,0004th 2001
2.00
0.14
600,0001st 2002
2.00
0.10
1,800,0001st 2002
2.00
0.10
1,800,0002nd 2002
2.25
0.75
155,1603rd 2002
3.75
0.75
282,9604th 2002
3.00
0.35
222,7801st 2003
3.00
1.10
168,1002nd 2003
2.00
1.01
92,6203rd 2003
1.05
0.51
725,1004th 2003
0.55
0.45
15,142,740
 
 The foregoing price information is based upon inter-dealer prices without retail mark-up, mark-down or commissions and may not reflect actual transactions. SOURCE: Yahoo Fiance.
 
 ( b ) Holders. Management calculates that the approximate number of shareholders of record of the Company's Common Stock, as of December 31, 2003 and currently, was believed to be over 100, taking into account shares held in Broker's accounts.
 
 ( c ) Dividends. We have not paid any cash dividends on our Common Stock, and do not anticipate paying cash dividends on its Common Stock in the next year. We anticipate that any income generated in the foreseeable future will be retained for the development and expansion of our business. Future dividend policy is subject to the discretion of the Board of Directors and will depend upon a number of factors, including future earnings, debt service, capital requirements, business conditions, the financial condition of the Company and other factors that the Board of Directors may deem relevant.
 
 ( d ) Sales of Unregistered Common Stock 2003. On January 7, 2003, we sold 20,000,000 (pre-2004 reverse) new investment shares, for $2,500.00 cash, pursuant to Section 4(2) of the 1933 Act, to a single investor, who, by reason of the amount of the issuance becane an affiliate of our corporation.
 
 
 ITEM 6 . Management's Discussion and Analysis or Plan of Operation.
 
 Management's discussion and analysis is intended to be read in conjunction with our audited financial statements and the notes attached to them. The following statements may be forward looking in nature and actual results may differ from forward looking statements.
 
 ( a ) Plan of Operation for the next twelve months . We do not expect any business activity in the period before January 1, 2003. We expect to remain substantially dormant for 2003.
 
 ( 1 ) Cash Requirements and of Need for additional funds, twelve months. None.
 
 ( 2 ) Summary of Product Research and Development. None.
 
 ( 3 ) Expected purchase or sale of plant and significant equipment. None.
 
 ( 4 ) Expected significant change in the number of employees. None.
 
 ( b ) Discussion and Analysis of Financial Condition and Results of Operations.
 
 Our independent auditor has indicated the following material information in notes to our financial statements: first, our financial statements have been prepared assuming that the Company will continue as a going concern. The Company is dependent upon raising capital to commence or continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. While it is management's long-term plan to raise capital in order to define their business operations, thus creating necessary operating revenues. We have enjoyed no revenues since inception, and expect to remain dormant during at least part of 2004. We do not expect to engage in any capital formation activities or business operations, during the first half of 2004. Conditions applicable to the second half of 2004 have not been determined. We have virtually no cash and no other productive assets. We have enjoyed no revenues since inception. We have an accumulated deficit of $1,057,235.
 
 Cautionary Statement. There can be no assurance that we will be successful at any time in the future. We expect to remain dormant for the balance of 2003. Even in the event that we launch or acquire a business, there can be no assurance of our success, in raising capital through private placements or otherwise. Even if we are successful in raising capital through the sources specified, there can be no assurances that any such financing would be available in a timely manner or on terms acceptable to us and our current shareholders. Additional equity financing could be dilutive to our then existing shareholders, and any debt financing could involve restrictive covenants with respect to future capital raising activities and other financial and operational matters.
 
 
 ITEM 7 . Financial Statements.
 
 ( a ) Audit Committee. The Audit Committee of this Corporation for this fiscal year consists of the our Board of Directors. Management is responsible for our internal controls and the financial reporting process. Our independent auditors are responsible for performing an independent audit of our financial statements in accordance with generally accepted accounting standards and to issue a report thereon. It is the responsibility of our Board of Directors to monitor and oversee these processes. In this context the Committee has met and held discussions with management and the independent accountants. Management recommended to the Committee that our financial statements were prepared in accordance with generally accepted accounting principles, and the Committee has reviewed and discussed the financial statements with Management and such independent accountants, matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees). Our independent accountants also provided to the Committee the written disclosures required by Independence Board Standard No. 1 (Independence Discussions with Audit Committees), and the Committee discussed with the independent accountants that firm's independence.
 
 Based upon the Committee's discussions, and review, of the foregoing, the Committee recommended that our audited financial statements in our Annual Report on Form 10-KSB for the year ended December 31, 2003 be included and filed with the Securities and Exchange Commission.
 
 ( b ) Financial Statements. Audited Financial Statements for years ended December 31, 2002 are provided as Attachment FK-03, attached hereto, filed herewith and incorporated herein by this reference as though fully set forth herein.
 
 
 ITEM 8 . Changes In and Disagreements With Accountants
 on Accounting and Financial Disclosure.
 
 None.
 
 
   The Remainder of this Page is Intentionally left Blank
 
 Page - 4
    
 PART III
 
 
 ITEM 9 . Directors and Executive Officers, Promoters and Control Persons;
 Compliance with Section 16(a) of the Exchange Act.
 
 April 4, 2002 Marlen L. Roepke was appointed as the sole director and elected President and Treasurer respectively; following which, Raymond J. McNamee retired from all corporate offices.
 
 Marlen L. Roepke (58) was Director, Customer Account Management, Thinktanks Worldwide.com, Houston, Texas (4/00-8/01); Director Service Delivery, Sprint Enterprise Network Services, Houston, Texas (5/98-4/00); Director, Systems Integration, MCI Systemhouse Corporation, Houston, Texas (5/94-5/98); Manager, Product Support, Oracle Corporation, Houston, Texas (5/93-5/94); Vice President, Systems Integration, The Technology Group, Inc., Houston Texas (4/87-5/93); Director, Information Resources, Texas Municipal Power Agency, Bryan Texas (8/85-4/87); Manager, Information Services, Skytop Brewster, Houston Texas (5/77-6/79); Manager Data Administration, Cameron Iron Works, Houston Texas (4/75-5/77); and he earned his BA, Business Administration, University of Minnesota, in accounting, in 1965.
 
 The Remainder of this Page is Intentionally left Blank
 
 Page - 5 
 
 ITEM 10 . Executive Compensation.
 
 During 2001, management has devoted only an insubstantial amount of time to date, on the affairs of this corporation. No compensation has been accrued or paid during 2001, nor has any plan of compensation been adopted as of this time.
 
 Long Term CompensationAnnual Compensation
Awards
Payoutsa



Name
and
Principal
Position
b






Year
c





Salary
($)
d





Bonus
($)
e


Other
Annual
Compen-sation ($)
f


Restric-ted
Stock
Awards
($)
g

Securi-ties
Under-
lying
Options
SARs (#)
h




LTIP
Payouts
($)
i


All Other
Compen-sation
($)Jeffrey A. Harry

President/CEO
Apr. 23, 2001 - Feb. 7, 2002
2002
0
0
0

0
0
02001
0
0
0
50,000
0
0
02000
0
0
0
0
0
0
01999
0
0
0
0
0
0
0Jay Roberge

President/CEO
Dec. 6, 2000 -
Apr. 23, 2001
2002
0
0
0
0
0
0
02001
0
0
0
0
0
0
02000
0
0
0
0
0
0
01999
0
0
0
0
0
0
0Marlen L. Roepke
Sole Officer/ Director
Feb. 7, 2002
2003
0
0
0
0
0
0
02002
0
0
0
66,666
0
0
02001
0
0
0
0
0
0
02000
0
0
0
0
0
0
01999
0
0
0
0
0
0
0 
 
 ITEM 11 . Security Ownership of Certain Beneficial Owners and Management.
 
 To the best of our knowledge and belief the following disclosure presents the total beneficial security ownership of all Directors and Nominees, naming them, and by all Officers and Directors as a group, without naming them, and of all persons, entities and groups, known to or discoverable by us, to be the beneficial owner or owners of more than five percent of any voting class of Registrant's stock., known to or discoverable by Registrant. More than one person, entity or group could be beneficially interested in the same securities, so that the total of all percentages may accordingly exceed one hundred percent of some or any classes. Please refer to explanatory notes if any, for clarification or additional information.
 
 Page - 6 
 Certain Beneficial Owners and Owners of 5% or more
 
 Name and Address of Beneficial Owner
Common Stock
Share
Ownership
% of TotalMarlen L. Roepke
1914 Agusta #8
Houston TX 77054
66,666
0.29Officers and Directors as Group
66,666
0.29Eradio Diaz
Sun Tower # 5
Avenida Ricardo J. Alfaro
Panama 5 Panama
20,000,000
87.55Total other 5% Owners
20,000,000
87.55Total all affiliates and 5% owners.
20,066,666
87.84Total Issued and Outstanding (for reference)
22,844,254
100.00Less All affiliates
20,066,666
87.84Total Non-Affiliate Shares
2,777,588
12.16
  
 
 ITEM 12 . Certain Relationships and Related Transactions.
 
 None.
 
 
 ITEM 13 . Controls and Procedures.
 
 Evaluation of Disclosure Controls and Procedures. Based upon an evaluation under supervision and with the participation of our management, as of a date within 90 days of the filing date of this Annual Report on form 10-KSB, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)) under the Securities Exchange Act of 1934, are effective to ensure that information required to be disclosed (in reports that we file or submit under that Exchange Act) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
 
 Changes in Internal Accounting. There were no significant changes in our internal controls or other factors that could significantly affect these controls subsequent to the date of their evaluation. There wee no significant deficiencies or material weaknesses, and therefore there were no corrective actions taken. However, the design of any system of controls is based in part upon the assumptions about the likelihood of future events, and there is no certainty that any design will succeed in achieving its stated goal under all potential future considerations, regardless of how remote.
 
 ( a ) Attachments.
 
 (31) Ceritification pursuant to 302 .
 
 (32) Ceritification pursuant to 1350 .
 
 (A 99.1) Audit Committee Report
 
 (AFK-02) Audited Financial Statements for the years ended December 31, 2003, 2002 and from Inception.
 
 ( b ) Exhibits. Please see our Previous Annual Report on Form 10-KSB, for the year ended December 31, 2001, for Exhibits: (3.1) Articles of Incorporation ; (3.2) By-Laws , incorporated herein by this reference.
 
 ( c ) Form 8-K Reports. None.
 
 
   Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and individualy and in the
 capacities and on the date indicated.
 
 
 Knowledge Networks, Inc.
 Dated: March 31, 2004  by
 
 /s/ Marlen L. Roepke
 Marlen L. Roepke
 
  
 Page - 7
  
 
 
 Exhibit 31
 
  
 
 
 Page - 8


CERTIFICATIONS PURSUANT TO SECTION 302
 
 I, Marlen L. Roepke , certify that:
 
 1. I have reviewed this annual report on Form 10-KSB of KNW Networks, Inc. ;
 
 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
 
 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
 
 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
 
 a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
 
 b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
 
 c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
 
 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
 
 a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
 
 b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
 
 6. The registrant's other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
 Dated: March 29, 2004
 
 by
 
 
 /s/ Marlen L. Roepke
 Marlen L. Roepke










Page - 9
      Exhibit 32
 
  
 
 Page - 10
 **CERITIFICATION PURSUANT TO 18 USC SECTION 1350**
 
 In connection with this Annualy Report on Form 10-KSB, I Marlen L. Roepke Sole Officer and Director of this Registrant Company, hereby certifiy, to the best of our knowledge and belief:
 
 (1)  This report fully complies with with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
 (2)  The information contained in this reprot fairly presents, in all material aspects, the financial condition and results of operations of this Registrant Company.
 
 
 Dated: March 31, 2004
 
 /S/Marlen L. Roepke
Marlen L. Roepke
president/director
 
 
 Page - 11
   
 Attachment AC-99.1
 
 Audit Committe Report
 
 
 
 
  Page - 12
  
  
 KNW Networks
 24843 Del Prado, Suite 318
 Dana Point, CA 92629
 Form Type: 10-KSB
 
 AUDIT COMMITTEE REPORT
 
 The Audit Committee of KNW Networks, Inc., is composed of the Corporation's Board of Directors. The members of the Committee is Marlen Roepke. The Committee recommended, subject to stockholder ratification, the selection of the Corporation's independent accountants.
 
 Management is responsible for the Corporation's internal controls and the financial reporting process. The independent accountants are responsible for performing an independent audit of the Corporation's consolidated financial statements in accordance with the generally accepted auditing standards and to issue a report thereon. The Committee's responsibility is to monitor and oversee these processes.
 
 In this context, the Committee has met and held discussions with management and the independent accountants. Management represented to the Committee that the Corporation's financial statements were prepared in accordance with generally accepted accounting principles, and the Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Committee discussed with the independent accountants matters required to be discussed by the Statement on Auditing Standards No. 61.
 
 The Corporation's independent accountants also provided to the Committee the written disclosures required by Independence Standards Board Standard No. 1, and the Committee discussed with the independent accountant that firms independence.
 
 Based upon Committee's discussion with management and the independent accountants and the Committee's review of the representation of management and the report of the independent accountants to the Committee, the Committee recommended that the audited consolidated financial statements be included in the Corporation's Annual Report on Form 10-KSB for the year ended December 31, 2001 filed with the Securities and Exchange Commission.
 
 Dated: March 31, 2004
 
 /S/Marlen L. Roepke
 Marlen L. Roepke
president/director
 
  Page - 13
  
 **KNW NETWORKS, INC.**
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 
 FINANCIAL STATEMENTS
 
 December 31, 2003 and 2002
 
 
 
 
 Page - 14 
 
 
 
 C O N T E N T S
 
 
 Independent Auditors Report
 
 Balance Sheets
 
 Statements of Operations
 
 Statements of Stockholders Equity
 
 Statements of Cash Flows
 
 Notes to the Financial Statements
 
 Page - 15 
 
 
 
 
 
 INDEPENDENT AUDITORS REPORT
 
 
 To the Board of Directors and Stockholders of
 **KNW Networks, Inc**
 (formerly Knowledge Networks, Inc.)
 (A Development Stage Company)
 
 We have audited the accompanying balance sheets of KNW Networks, Inc. (formerly Knowledge Networks, Inc.) (a development stage company) as of December 31, 2003 and 2002 and the related statements of operations, stockholders equity and cash flows for the years ended December 31, 2003 and 2002 and from inception on December 16, 1998 through December 31, 2003. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with auditing standards generally accepted in the United States 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 financial statements referred to above present fairly, in all material respects, the financial position of KNW Networks, Inc. (formerly Knowledge Networks, Inc.) (a development stage company) as of December 31, 2003 and 2002 and the results of its operations and cash flows for the years ended December 31, 2003 and 2002 and from inception on December 16, 1998 through December 31, 2003 in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has minimal assets and all revenues are from a shareholder. These factors raise substantial doubt about its ability to continue as a going concern. Managements plans in regard to these matters are also described in the Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 /s/ Chisholm, Bierwolf & Nilson
 Chisholm, Bierwolf & Nilson
 Bountiful, Utah
 February 12, 2004
 
 Page - 16 
   KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 **Balance Sheets**
 
 December 31,2003


2002ASSETSCURRENT ASSETSCash

$
26

$
144Total Current Assets


26


144TOTAL ASSETS

$
26

$
144LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable

$
6,223

$
5,978Accounts payable - related party (Note 4)


112,245


58,973Notes payable (Note 5)


35,000


35,000Total Current Liabilities


153,468


99,951STOCKHOLDERS EQUITYCommon stock, authorized100,000,000 shares of $0.001 par value,issued and outstanding 22,844,254 and2,844,254 shares, respectively


22,845


2,845Additional paid-in capital


880,948


500,948Retained earnings (deficit)


(1,057,235
)

(603,600
)Total Stockholders Equity


(153,442
)

(99,807
)TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
26

$
144
     
 
    Page - 17
  
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 **Statements of Operations**
 
 FromInception onFor the Year Ended


December 16,December 31,


1998 Through2003


2002


2003REVENUES

$
-

$
-

$
-EXPENSESGeneral and administrative


453,635


293,861


747,496Total Expenses


453,635


293,861


747,496INCOME (LOSS) FROM OPERATIONS:


(453,635
)

(293,861
)

(747,496
)DISCONTINUED OPERATIONS:Income (loss) from discontinued operations


-


-


(443,238
)Gain (loss) on disposal of operations


-


-


133,499Income (Loss) from DiscontinuedOperation


-


-


(309,739
)NET (LOSS)

$
(453,635
)
$
(293,861
)
$
(1,057,235
)NET LOSS PER SHARE:(Loss) from continuing operations

$
(0.02
)
$
(0.29
)
$
(0.16
)(Loss) from discontinued operations


-


-


(0.07
)Loss Per Share

$
(0.02
)
$
(0.29
)
$
(0.23
)Weighted average shares outstanding


21,145,624


986,961


4,438,838
  
 
 
   
 Page - 18
  
 
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 **Statements of Stockholders Equity**
 Additional


RetainedCommon Stock

Paid


EarningsShares


Amount


In Capital


(Deficit)Balance at inception -December 16, 1998


7,127

$
7

$
8,013

$
-Shares issued forsubscriptions receivableat $11.25 per share


871


1


9,799


-Spin off adjustment (Note 1)


-


-


6,844


-Net loss for the period endedDecember 31, 1998


-


-


-


(11,209
)Balance, December 31, 1998


7,998


8


24,656


(11,209
)Shares issued for cash at$112.50 per share


920


1


103,499


-Shares issued for servicesat $112.79 per share


221


-


24,926


-Shares issued for servicesat $1.15 per share


68


-


78


-Net loss for the year endedDecember 31, 1999


-


-


-


(72,381
)Balance, December 31, 1999


9,207


9


153,159


(83,590
)Shares issued for servicesat $1.13 per share


22,517


23


25,315


-Cancellation of shares


(8,886
)

(9
)

9


-Net loss for the year endedDecember 31, 2000


-


-


-


(44,771
)Balance, December 31, 2000


22,838

$
23

$
178,483

$
(128,361
)
  
    Page - 19
  
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 **Statements of Stockholders Equity (Continued)**
 
 
 AdditionalPaid-InCapital


RetainedCommon Stock

(Discount on


EarningsShares


Amount


Stock)


(Deficit)Balance, December 31, 2000


22,838

$
23

$
178,483

$
(128,361
)Shares issued for servicesat $0.15 per share


133,333


133


19,867


-Shares issued for servicesat $0.15 per share


333,333


333


49,667


-Cancellation of shares


(11,667
)

(11
)

11


-Shares issued in round-up


2


-


-


-Net loss for the year endedDecember 31, 2001


-


-


-


(181,378
)Balance, December 31, 2001


477,839


478


248,028


(309,739
)Shares issued in round up


19,748


20


267


-Shares issued for reductionof debt at $0.44 per share


113,334


114


49,886


-Shares issued for reductionof debt at $0.75 per share


133,333


133


99,867


-Shares issued for servicesat $0.05 per share


2,100,000


2,100


102,900


-Net loss for the year endedDecember 31, 2002


-


-


-


(293,861
)Balance, December 31, 2002


2,844,254

$
2,845

$
500,948

$
(603,600
)Shares issued for servicesat $0.02 per share


20,000,000

$
20,000

$
380,000


-Net loss for the year endedDecember 31, 2002


-


-


-


(453,635
)Balance, December 31, 2002


22,844,254

$
22,845

$
880,948

$
(1,057,235
)
  
 The accompanying notes are an integral part of these financial statements.
   Page - 20
   KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 **Statements of Cash Flows**
 
 FromInception onDecember 16,For the Year Ended

1998 ThroughDecember 31,


December 31,2003


2002


2003CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(453,635
)
$
(293,861
)
$
(1,057,235
)Adjustments to reconcile net loss to net cashprovided by operations:Stock issued for services


400,000


105,287


625,629Stock issued for satisfaction of payables


-


150,000


199,984Bad debt


-


-


11,154Increase in accounts payable


245


29,793


20,232Increase in accounts payable - related party


53,272


-


112,245Net Cash Flows Used in Operating Activities


(118
)

(8,781
)

(87,991
)CASH FLOWS USED IN INVESTMENT ACTIVITIESCash payments for notes receivable


-


-


(63,993
)Net Cash Used in Investment Activities


-


-


(63,993
)CASH FLOWS FROM FINANCING ACTIVITIESCash received from notes payable


-


-


35,000Cash received from subscriptions receivable


-


-


9,800Cash received from spin-off (Note 1)


-


-


3,710Issuance of stock for cash


-


-


103,500Net Cash Flows from Financing Activities


-


-


152,010NET INCREASE (DECREASE) IN CASH


(118
)

(8,781
)

26CASH, BEGINNING OF YEAR


144


8,925


-CASH, END OF YEAR

$
26

$
144

$
26
 
   
  Page - 21
  
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 **Statements of Cash Flows (Continued)**
  
 FromInception onDecember 16,For the Year Ended

1998 ThroughDecember 31,

20032003


2002


December 31,SUPPLEMENTAL CASH FLOW INFORMATIONCash Paid for:Interest

$
-

$
-

$
-Taxes

$
-

$
-

$
-
   
 SUPPLEMENTAL NON-CASH INFORMATION
 
 During January 2001, the Company forgave an officer of the Company of a $63,993 note receivable.
 
 During January 2001, the Company was forgiven of debt in the amount of $14,009 from Intrepid International, Inc., a service provider.
 
 During July 2001, the Company issued 133,333 shares of common stock for services valued at $20,000 of which 46,666 shares were issued to an officer of the Company.
 
 During July 2001, the Company issued 333,333 shares of common stock for services valued at $50,000, to an officer of the Company.
 
 During June 2002, the Company issued 113,334 shares of common stock for satisfaction of payables in the amount of $50,000.
 
  During September 2002, the Company issued 133,333 shares of common satisfaction of payables in the amount of $100,000.
 
 During October 2002, the Company issued 2,100,000 shares of common stock for services valued at $105,000.
 
 Fraction shares in the amount of 19,748 were issued as a result of a 10:1, 3:1, and 5:1 reverse stock splits during the year ended December 31, 2002.
  During January 2003, the Company issued 20,000,000 shares of common stock for services valued at $400,000, to an officer of the Company.
 
 
 
  
 Page - 22
    KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 Notes to the Financial Statements
 December 31, 2003 and 2002
 
 
 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 a. Organization
 
 KNW Networks, Inc., (the Company) is a Nevada corporation organized on December 16, 1998. The Company was created on this date through a spin off of the operations and assets to the shareholders of Knowledge Networks Acquisitions, Inc. The Company specialized in Microsoft consulting and training as well as telecommunications consulting, training and outsourcing.
 
 b. Accounting Method
 
 The Company recognizes income and expenses on the accrual basis of accounting.
 
 c. Earnings (Loss) Per Share
 
 The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the financial statements.
  
 FromInception onDecember 16,For the Years Ended

1998 ThroughDecember 31,

December 31,2003


2002


2003Numerator - loss fromcontinuing operations

$
(453,635
)
$
-

$
(747,496
)Numerator - loss fromdiscontinued operations


-


(181,378
)

(309,739
)Denominator - weightedaverage number of sharesoutstanding


21,145,624


711,253


4,438,838Loss per share:Loss from continuing operations

$
(0.02
)
$
-

$
(0.16
)Loss from discontinued operations


-


(0.25
)

(0.07
)Loss per share

$
(0.02
)
$
(0.25
)
$
(0.23
)
   
 Page - 23 
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 Notes to the Financial Statements
 December 31, 2003 and 2002
 
 
 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 d. Cash and Cash Equivalents
 
 The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.
 
 e. Provision for Income Taxes
 
 No provision for income taxes has been recorded due to net operating loss carryforwards totaling approximately $1,057,235 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2019. No tax benefit has been reported in the financial statements because the Company believes there is a 50% or greater chance the carryforward will expire unused.
 
 Accordingly, per FASB 109, the potential tax benefits of the loss carryforwards are offset by the valuation of the same amount.
 
 Deferred tax assets and the valuation account is as follows at December 31, 2003 and 2002.
 
 
 December 31,2003


2002Deferred tax asset:NOL carryforward

$
359,460

$
205,224Valuation allowance


(359,460
)

(205,224
)Total

$
-

$
-
 
 
 f. Use of Estimates
 
 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimated and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
 NOTE 2 -GOING CONCERN
 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company is dependent upon raising capital to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is managements plan to remain in the development stage until a profitable opportunity is found. The Company has minimal expenses and will be funded by shareholders during the coming year.
 
 Page - 24
  
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 (A Development Stage Company)
 Notes to the Financial Statements
 December 31, 2003 and 2002
 
 NOTE 3 -COMMON STOCK
 During February 2001, the Company canceled 11,667 shares of common stock.
 
 During June 2001, the Company authorized a 10 for 1 reverse split. The financial statements have been retroactively restated to reflect the reverse split.
 
 During July 2001, the Company issued 133,333 shares of common stock for services valued at $20,000 of which 46,666 shares were issued to an officer of the Company.
 
 During July 2001, the Company issued 333,333 shares of common stock for services valued at $50,000 to an officer of the Company
 
 During June 2002, the Company issued 113,334 shares of common stock for forgiveness of debt in the amount of $50,000.
 
 During September 2002, the Company issued 133,333 shares of common stock for forgiveness of debt in the amount of $100,000.
 
 During October 2002, the Company issued 2,100,000 shares of common stock for services valued at $105,000.
 
 Fraction shares in the amount of 19,748 were issued as a result of a 10:1, 3:1, and 5:1 reverse stock splits during the year ended December 31, 2002.
 
 During February 2002, the Company authorized a 10 for 1 reverse split. The financial statements have been retroactively restated to reflect the reverse split.
 
 During September 2002, the Company authorized a 3 for 1 reverse split. The financial statements have been retroactively restated to reflect the reverse split.
 
 During October 2002, the Company authorized a 5 for 1 reverse split. The financial statements have been retroactively restated to reflect the reverse split.
 
  During January 2003, the Company issued 20,000,000 shares of common stock for services valued at $400,000.
  
 
 NOTE 4 -RELATED PARTY TRANSACTIONS
 During 1999, $63,993 was paid to an officer the Company. The note is payable upon demand with no provision for interest.
 
 During 2000, sales of $55,000 were to a shareholder.
 
 During 2000, 22,517 shares of common stock were issued to officers and shareholders for consulting services of $25,338.
 
 
 Page - 25
  
 KNW NETWORKS, INC.
 (formerly KNOWLEDGE NETWORKS, INC.)
 ( A Development Stage Company)
 Notes to the Financial Statements
 December 31, 2003 and 2002
 
 **NOTE 4 -RELATED PARTY TRANSACTIONS** (Continued)
 During 2000, services were performed by a shareholder. The balance payable at December 31, 2000 is $14,009
 
 During January 2001, the Company forgave an officer, of a $63,993 note receivable
 
 During July 2001, the Company issued 333,333 and 133,333 shares of common stock valued at $50,000 and $20,000 to two officers of the Company.
 
 
 NOTE 5 -NOTES PAYABLE
 On December 14, 2001, the Company entered into a note payable agreement with Patagonia Commercial.S.A. in the amount of $35,000. The note bears no interest and is due December 2002. As of December 31,2003, no payments have been made on the note.




Page - 26