<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

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

For the quarterly period ended:  May 31, 2004
                                 ------------

                                       or

[ ]   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:  001-31954
                         ---------

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

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

                         #13F., NO. 77, HSIN TAI WU ROAD
                          SEC. HIS-CHIH, TAIPEI COUNTY
                            TAIWAN, REPUBLIC OF CHINA
                            -------------------------
           (Address of principal executive offices)      (Zip Code)

                               011-886-2-2698-8588
                               -------------------
                           (Issuer's telephone number)

      (Former name, former address and former fiscal year, if changed since
                                  last report)

                     APPLICABLE ONLY TO ISSUERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS

      Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13, or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.

      Yes             No
           ---           ---
<PAGE>
                      APPLICABLE ONLY TO CORPORATE ISSUERS:

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 27,500,000

      Transitional Small Business Disclosure Format (check one):

      Yes                     No    X
            --------             ------


                                       2
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                             PAGE
                                                                             ----

<S>                                                                          <C>
PART I. FINANCIAL INFORMATION............................................      1

      Item 1.     Financial Statements...................................      1

            CONSOLIDATED STATEMENTS OF FINANCIAL POSITION................      1

            CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)............      2

            CONSOLIDATED STATEMENTS OF CASH FLOWS........................      3

            CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY...      4

            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.........     15

      Item 2.     Management's Discussion and Analysis...................     16

      Item 3.     Controls And Procedures................................     17

PART II. OTHER INFORMATION...............................................     17

      Item 1.     Legal Proceedings......................................     17

      Item 2.     Changes in Securities and Use of Proceeds..............     17

      Item 3.     Defaults Upon Senior Securities........................     17

      Item 4.     Submission of Matters to a Vote of Security Holders....     17

      Item 5.     Other Information......................................     17

      Item 6.     Exhibits and Reports on Form 8-K.......................     17
</TABLE>


                                       i
<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

                  CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


                                     ASSETS

<TABLE>
<CAPTION>
                                                                    May 31, 2004
                                                                     (Unaudited)   February 29, 2004
                                                                     -----------   -----------------
<S>                                                                 <C>            <C>
Current Assets
      Cash and cash equivalents                                      $ 1,745,979      $ 2,723,573
      Accounts receivable, net                                         8,079,597        7,173,149
      Inventory                                                          538,474          910,190
      Other receivables                                                  101,449          126,492
      Prepaid expenses                                                 1,059,690          557,903
                                                                     -----------      -----------

              Total Current Assets                                    11,525,189       11,491,307
                                                                     -----------      -----------


Fixed Assets, net                                                      2,719,437        2,745,664
                                                                     -----------      -----------

             Total Fixed Assets                                        2,719,437        2,745,664
                                                                     -----------      -----------

Other Assets
      Deposits                                                           301,126          255,706
      Trademarks                                                           1,927            1,966
      Equity in net assets of affiliated company                         770,845          770,678
      Intangible assets                                                1,000,000        1,000,000
      Other current assets                                                    93               96
                                                                     -----------      -----------

              Total Other Assets                                       2,073,991        2,028,446
                                                                     -----------      -----------

      Total Assets                                                   $16,318,617      $16,265,417
                                                                     ===========      ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
      Accounts payable and accrued expenses                          $ 6,475,389      $ 6,838,620
      Due to related party                                               458,828          334,812
      Loan payable                                                             0        1,680,329
      Deferred revenue                                                    23,595          260,498
      Deposits payable                                                         0            4,371
      Current portion, long-term debt                                  2,695,893        2,316,689
                                                                     -----------      -----------

      Total Current Liabilities                                       11,334,034       11,435,319

Long-term debt, net of current portion                                   380,240          263,041
                                                                     -----------      -----------

      Total Liabilities                                               11,714,274       11,698,360
                                                                     -----------      -----------

Stockholders' Equity

      Common stock, $.001 par value, 100,000,000
        shares authorized, 27,500,000 and 25,000,000
        issued and outstanding, respectively                              27,500           25,000
      Additional paid in capital                                       5,937,946        4,260,117
      Cumulative foreign-exchange translation adjustment                  53,019           29,663
      Retained earnings                                                  266,207          252,277
                                                                     -----------      -----------

      Total Stockholders' Equity                                       6,284,672        4,567,057
                                                                     -----------      -----------

      Total Liabilities and Stockholders' Equity                     $16,318,617      $16,265,417
                                                                     ===========      ===========
</TABLE>

                            See accompanying notes.


                                      -1-
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                      Three Months Ended
                                               --------------------------------
                                                  May 31,             May 31,
                                                   2004                2003
                                               ------------        ------------
<S>                                            <C>                 <C>
Sales, net                                     $  6,403,354        $  4,742,451

Cost of sales                                     6,072,148           4,436,356
                                               ------------        ------------

  Gross profit                                      331,206             306,095

General and administrative expenses                 329,281             239,980
                                               ------------        ------------

  Income (loss) from operations                       1,925              66,115
                                               ------------        ------------

Other (Income) Expense
  Interest income                                      (782)            (11,783)
  Other income                                       (2,557)             (4,932)
  Rent income                                        (8,425)                  0
  Repair income                                     (45,064)                  0
  Gain on currency exchange                          (1,392)               (369)
  Equity in earnings of investee                       (167)                  0
  Interest expense                                   19,945              11,699
  Bad debt expense                                    4,275              36,645
  Miscellaneous expense                              11,852                   0
                                               ------------        ------------

  Total Other (Income) Expense                      (22,315)             31,260
                                               ------------        ------------

  Income (loss) before income taxes                  24,240              34,855

Provision for income taxes                           10,310               4,548
                                               ------------        ------------

  Income (loss)                                $     13,930        $     30,307
                                               ============        ============


  Net income (loss) per share (basic
    and diluted)
       Basic                                   $      0.001        $      0.001
       Diluted                                 $      0.001        $      0.001

  Weighted average number of shares
       Basic                                     25,833,333          24,500,000
       Diluted                                   25,833,333          24,500,000
</TABLE>


                             See accompanying notes.


                                      -2-
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                   Three Months Ended
                                                                 May 31,            May 31,
                                                                   2004              2003
                                                               -----------       -----------
<S>                                                            <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
      Net Income (loss)                                        $    13,930       $    30,307

Adjustments to reconcile net income to net cash
used in operating activities:
      Depreciation and amortization                                 27,280             6,596
      Equity in earning of investee                                   (167)                0
      Bad debt                                                       4,275            36,645
      Gain on foreign currency exchange                             (1,392)             (369)
      Decrease (Increase) in receivables                          (906,448)       (2,698,764)
      Decrease (Increase) in inventory                             371,716           163,684
      Decrease (Increase) in other receivables                      25,043          (101,511)
      Decrease (Increase) in prepaid expenses                     (501,787)         (258,975)
      Decrease (Increase) in deferred charges                            0             2,447
      Decrease (Increase) in deposit                               (45,420)         (108,711)
      Decrease (Increase) in other current assets                        3          (317,442)
      (Decrease) Increase in accounts
        payable and accrued expenses                              (363,231)        2,975,698
      (Decrease) Increase in deferred revenue                     (236,903)                0
      (Decrease) Increase in deposits payable                       (4,371)                0
                                                               -----------       -----------

      Total Adjustments                                         (1,631,402)         (300,702)
                                                               -----------       -----------

      Net cash used in operations                               (1,617,472)         (270,395)
                                                               -----------       -----------

CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from sale of investment                                   0           108,594
      Purchase of furniture and equipment                             (933)          (21,403)
                                                               -----------       -----------

      Net cash provided by (used in) investing activities             (933)           87,191
                                                               -----------       -----------

CASH FLOWS FROM FINANCING ACTIVITIES
      Payment on current portion debt                           (1,198,086)          (42,911)
      Loan from related party debt                                 124,015           290,582
      Issuance of notes payable                                    477,953                 0
      Issuance of short-term debt                                1,214,386           306,328
                                                               -----------       -----------

      Net cash provided by financing activities                    618,269           553,999
                                                               -----------       -----------

      Effect of exchange rate                                       22,543           (23,038)

      Net change in cash and cash equivalents                     (977,593)          347,757
                                                               -----------       -----------

      Cash and cash equivalents at beginning of year             2,723,573           620,264
                                                               -----------       -----------

      Cash and cash equivalents at end of period               $ 1,745,980       $   968,021
                                                               ===========       ===========


      Supplemental cash flows disclosures:

           Income tax payments                                 $         0       $         0
                                                               -----------       -----------

           Interest payments                                   $    19,945       $    11,699
                                                               -----------       -----------

      Non cash transaction:

           Conversion of debt to equity                        $ 1,680,329       $         0
</TABLE>


                             See accompanying notes.


                                      -3-
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                         May 31, 2004
                                                         (Unaudited)    February 29, 2004
                                                         -----------    -----------------
<S>                                                      <C>            <C>
Common stock, number of shares outstanding
          Balance at beginning of period                  25,000,000       24,500,000
          Stock cancellation                                       0                0
          Stock split                                              0                0
          Common stock issued                              2,500,000          500,000
                                                         -----------      -----------

          Balance at end of period                        27,500,000       25,000,000
                                                         ===========      ===========

Common stock, par value $.001 (thousands of shares)
          Balance at beginning of period                 $    25,000      $    24,500
          Stock cancellation                                       0                0
          Stock split                                              0                0
          Common stock issued                                  2,500              500
                                                         -----------      -----------

          Balance at end of period                            27,500           25,000
                                                         -----------      -----------

Additional paid in capital
          Balance at beginning of period                   4,260,117        3,540,617
          Common stock issued                              1,677,829          719,500
                                                         -----------      -----------

          Balance at end of period                         5,937,946        4,260,117
                                                         -----------      -----------

Cumulative foreign-exchange translation adjustment
          Balance at beginning of period                      29,663                0
          Foreign currency
          translation                                         23,356           29,663
                                                         -----------      -----------

          Balance at end of period                            53,019           29,663
                                                         -----------      -----------
Total stockholders' equity at end of period              $ 6,284,672      $ 4,567,057
</TABLE>


                             See accompanying notes.


                                      -4-
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004


NOTE 1 - NATURE OF OPERATIONS

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
their 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.

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

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Interim Financial Information - The accompanying financial statements
have been prepared by City Network, Inc., pursuant to the rules and regulations
of the Securities and Exchange Commission (the "SEC") Form 10-QSB and Item 310
of Regulation S-B, and generally accepted accounting principles for interim
financial reporting. These financial statements are unaudited and, in the
opinion of management, include all adjustments (consisting of normal recurring
adjustments and accruals) necessary for a fair presentation of the statement of
financial position, operations, and cash flows for the periods presented.
Operating results for the three months ended May 31, 2004 and 2003 are not
necessarily indicative of the results that may be expected for the year ending
February 28, 2005, or any future period, due to seasonal and other factors.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting policies
have been omitted in accordance with the rules and regulations of the SEC. These
financial statements should be read in conjunction with the audited consolidated
financial statements and accompanying notes, included in the Company's Annual
Report for the year ended February 29, 2004.


                                      -5-
<PAGE>
                       CITY NETWORK, INC. AND SUBSIDIARIES
                       (FORMERLY INVESTMENT AGENTS, INC.)

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004

Basis of Consolidation - The consolidated financial statements for 2004 include
the accounts of City Network, Inc., and it's wholly owned subsidiary 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.

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.

Cash and Cash Equivalents - Cash equivalents are stated at cost. Cash
equivalents are highly liquid investments readily convertible into cash with an
original maturity of three months or less and consist of time deposits with
commercial banks.

Allowance for Doubtful Accounts - The Company establishes an allowance for
doubtful accounts on a case-by-case basis when it believes the required payment
of specific amounts owed is unlikely to occur after a review of historical
collection experience, subsequent collections and management's evaluation of
existing economic conditions.

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. Whenever an asset is retired or disposed of, its cost and accumulated
depreciation or amortization is removed from the respective accounts and the
resulting gain or loss is credited or charged to income.

Depreciation is computed using the straight-line and declining-balance methods
over the following estimated useful lives:

<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 periods ended May 31, 2004 and 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.

Inventory - Inventory is valued at the lower of cost or market; cost is
determined on the weighted average method. As of May 31, 2004, inventory
consisted only of finished goods.


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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. As of May 31, 2004 and the date of our report, management has
informed us that there are no matters that warrant disclosure in the financial
statements.

Advertising - Advertising costs are expensed in the year incurred.

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.

Concentration of Credit Risk - Financial instruments, which subject the Company
to credit risk, consist primarily of cash equivalents and trade accounts
receivable 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. Concentration of credit risk with respect to trade accounts receivable is
primarily from customers located in Asia. The Company actively evaluates the
creditworthiness of the customers with which it conducts business through credit
approvals, credit limits and monitoring procedures.


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Stock Based Compensation - The Company accounts for stock-based employee
compensation arrangements in accordance with the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and complies with the disclosure provisions of Statement of
Financial Accounting Standards ("SFAS") 123, "Accounting for Stock-Based
Compensation." Under APB 25, compensation cost is recognized over the vesting
period based on the difference, if any, on the date of grant between the fair
value of the Company's stock and the amount an employee must pay to acquire the
stock.

Impairment of Long-Lived Assets - On January 1, 2002 the Company adopted SFAS
144 "Accounting for the Impairment or Disposal of Long-Lived Assets". The
Company evaluates long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying value of an asset may not be
recoverable. If the estimated future cash flows (undiscounted and without
interest charges) from the use of an asset are less than the carrying value, a
write-down would be recorded to reduce the related asset to its estimated fair
value. There have been no such impairments to date.

Earnings Per Share - Earnings per share are based on the weighted average number
of shares of common stock and common stock equivalents outstanding during each
period. Earnings per share are computed using the treasury stock method. The
options to purchase common shares are considered to be outstanding for all
periods presented but are not calculated as part of the earnings per share.

Income Taxes - Income taxes have been provided based upon the tax laws and rates
in the countries in which operations are conducted and income is earned. The
income tax rates imposed by the taxing authorities vary. Taxable income may vary
from pre-tax income for financial accounting purposes. There is no expected
relationship between the provision for income taxes and income before income
taxes because the countries have different taxation rules, which vary not only
to nominal rates but also in terms of available deductions, credits and other
benefits. Deferred tax assets and liabilities are recognized for the anticipated
future tax effects of temporary differences between the financial statement
basis and the tax basis of the Company's assets and liabilities using the
applicable tax rates in effect at year end as prescribed by SFAS 109 "Accounting
for Income Taxes".

Exchange Gain (Loss) - As of May 31, 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.


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Translation Adjustment - As of May 31, 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 May 31, 2004 and 2003 the exchange rates between NTD and the USD was
NTD$1=USD$0.02992 and NTD$1=USD$0.02879. The weighted-average rate of exchange
between NTD and USD was NTD$1 = USD$0.03003 and NTD$1=USD$0.02874. Total
translation adjustment recognized for the period ended May 31, 2004 and 2003 is
$53,019 and $29,633 respectively.

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.


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

NOTE 3 - CONCENTRATION

The Company had ten major customers during the three months ended May 31, 2004.
Those customers comprise 80.5% of the total sales during the first quarter ended
May 31, 2004. Sales to these customers were approximately $5,158,380. Included
in accounts receivable is $2,917,302 from these customers as of May 31, 2004.

Note 4 - 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 May 31, 2004 and 2003, there were no uninsured portions of the
balances held at the bank.


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004

Note 5 - FIXED ASSETS

      Fixed assets consist of the following:

<TABLE>
<CAPTION>
                                          May 31, 2004         February 29, 2004
                                          ------------         -----------------
<S>                                       <C>                  <C>
Land                                       $ 1,966,694           $ 1,966,694
Building                                       305,429               305,429
Machinery and equipment                        428,057               427,126
Furniture and fixtures                         142,402               142,402
                                           -----------           -----------
                                           $ 2,842,582           $ 2,841,651
Accumulated depreciation                      (123,145)              (95,987)
                                           -----------           -----------
                                           $ 2,719,437           $ 2,745,664
                                           ===========           ===========
</TABLE>


Note 6 - COMPENSATED ABSENCES

Employees can 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 May 31, 2004 no accumulated vacation liability exists.

Note 7 - COMMITMENTS

A Best Information - City Network, Inc. - Taiwan, signed an agreement with A
Best Information in 2002 for the exclusive right to sell A Best Information's
products. There is no expiration date in the agreement, and the Company has the
right 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.

Co-Construction Agreement - In April 2004, City Construction Co., Ltd. entered
into a Co-Construction Agreement with another company in Taipei, Taiwan. Under
the Agreement, the Company will finance, construct and own 50% of the building
project. The Company has not yet begun construction on the building.


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004

Note 7 - COMMITMENTS (continued)

Operating Leases - The Company leases three office facilities under operating
leases that terminate on various dates. Rental expense for these leases
consisted of $20,722 and $0 for the three months ended May 31, 2004 and 2003.
The Company has future minimum lease obligations as follows:

<TABLE>
<CAPTION>
                          Year ending
                            May 31,
                          -----------
<S>                                     <C>
                             2005       $54,973
                                        -------
                             Total      $54,973
                                        =======
</TABLE>

Note 8- LONG-TERM INVESTMENT

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 May 31, 2004 the Company recognized
a loss $1,507 from their acquisition.

Note 9 - DEBT

At May 31, 2004, the Company had notes payable outstanding in the aggregate
amount of $3,076,133. Payable as follows:


<TABLE>
<S>                                                                <C>
      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      December 30, 2004                                            $  269,100

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      June 13, 2004                                                   119,600

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      June 26, 2004                                                   118,370

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      July 1, 2004                                                    171,820

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      July 9, 2004                                                    100,913
</TABLE>


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004

Note 9- DEBT (continued)

<TABLE>
<S>                                                                <C>
      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      July 30, 2004                                                    19,779

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      Sept. 14, 2004                                                   34,531

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      Sept. 16, 2004                                                   39,106

      Note payable to a bank in Taiwan,
      interest at 3.77% per annum, due on
      Sept. 23, 2004                                                  275,919

      Note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      August 25, 2004                                                 328,352

      Note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      August 25, 2004                                                 289,054

      Note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      Sept. 19, 2004                                                  148,765

      Note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      October 23, 2004                                                 250,432

      Note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      October 4, 2004                                                  75,666

      Notes payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      June 12, 2004                                                     1,346

      Secured note payable to a bank in Taiwan,
      interest at 3.175% per annum, due on
      May 29, 2016                                                    274,706
</TABLE>


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

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  MAY 31, 2004

      NOTE 9.  DEBT  (continued)

<TABLE>
<S>                                                                <C>
      Secured note payable to a bank in Taiwan,
      interest at 4.25% per annum, due on
      June 12, 2005                                                    10,721

      Note payable to a corporation,
      interest at 6.25% per annum, due on
      November 20, 2005, personally guaranteed by
      an Officer of the Company                                       477,953
                                                                   ----------
                                                                    3,076,133

                   Current portion                                  2,695,893

                  Long-term portion                                $  380,240
                                                                   ==========
</TABLE>

Note 10 - 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.

Note 11 - 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.'s 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.

Note 12 - 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. As of May 31, 2004, the Company
has a non interest-bearing loan from Andy Lai, the Company's President, in the
amount of $458,828. Mr. Lai has also personally guaranteed a note payable of
the Company in the amount of $477,953.

Note 13 - COMMON STOCK

In May 2004, the Company issued 2,500,000 shares of its common stock in
exchange for the conversion in full of a note and short term debt payable to
third parties in the aggregate of $1,680,329. The note and short term debt
payable were converted into shares of common stock at a price of approximately
$0.672 per share.


                                      -14-
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

      The following discussion of the financial condition and results of
operations should be read in conjunction with the consolidated financial
statements and related notes thereto. The following discussion contains certain
forward-looking statements that involve risk and uncertainties. Our actual
results could differ materially from those discussed herein. Factors that could
cause or contribute to such differences include, but are not limited to, risks
and uncertainties related to the need for additional funds, the rapid growth of
the operations and our ability to operate profitably after the initial growth
period is completed.

THREE MONTHS ENDED MAY 31, 2004 AND MAY 31, 2003 FOR CITY NETWORK, INC. AND FOR
CITY NETWORK-TAIWAN

SALES. Net sales for the three months ended May 31, 2004 were $6,403,354
compared to $4,742,451 for the three months ended May 31, 2003. The increase in
sales for the three months ended May 31, 2004 was due to the Company's
aggressive approach in diversifying and developing its sales products.
CNT-Taiwan's net sales for the three months ended May 31, 2004 were $6,403,354
compared to $4,742,451 for the three months ended May 31, 2003. The increase in
sales was due to CNT-Taiwan's aggressive approach in diversifying and developing
its sales products.

COST OF SALES. Cost of sales for the three months ended May 31, 2004 was
$6,072,148 or 94.8% of net sales, as compared to $4,436,356 during the three
months ended May 31, 2003. CNT-Taiwan's cost of sales for the three months ended
May 31, 2004 was $6,072,148, or 94.8% of net sales, as compared to $4,436,316 or
93.54 % of net sales, for the three months ended May 31, 2003. The increase in
cost of sales is related to the increase in sales.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses were
$329,281, or 5.1% of net sales, for the three months ended May 31, 2004, as
compared to $239,980 for the three months ended May 31, 2003. The increase was
due to increased marketing and promotion costs related to new products and an
increase in salary expense related to hiring new employees to increase marketing
and promotion development. CNT-Taiwan's general and administrative expense for
the three months ended May 31, 2004was $364,818 or 5.7 % of net sales as
compared to $266,040, or 5.61% for the three months ended May 31, 2003. The
increase was due to increased marketing and promotion costs related to new
products and an increase in salary expense related to hiring new employees to
increase marketing and promotion development.

INCOME (LOSS) FROM OPERATIONS. Income from operations for the three months ended
May 31, 2004 was $1,925, compared to income from operations for the three months
ended May 31, 2003 of $66,115. The decrease in income from operations was due to
the gross profit rate decreasing and general & administrative expenses
increasing. CNT-Taiwan's income from operations for the three months ended May
31, 2004 was $10,420 as compared to income from operations of $76,700 for the
three months ended May 31, 2003. This decrease is primarily due to the gross
profit rate decreasing and general & administrative expenses increasing.

OTHER (INCOME) EXPENSE. Other (income) expense was $(22,315) for the three
months ended May 31, 2004, as compared to $31,260 for the three months ended May
31, 2003. This increase in other income was the result of rental income and
non-operating income, such as maintenance revenue. CNT-Taiwan's other (income)
expense for the three months ended May 31, 2004 was $22,302, as compared to
$31,260 for the three months ended May 31, 2003. The increase in other income is
attributed to rental income and non-operating income, such as maintenance
revenue.

NET INCOME (LOSS). Net income for three months ended May 31, 2004 was $13,930
compared to net income of $30,307 for the three months ended May 31, 2003. The
decrease in net income is due


                                      -15-
<PAGE>
to the gross profit rate decreasing and general and administrative expense
increasing. CNT-Taiwan had a net income for the three months ended May 31, 2004
of $22,245 as compared to net income of $40,932 for the three months ended May
31, 2003. The decrease in net income is due to the gross profit rate decreasing
and general and administrative expense increasing.

LIQUIDITY AND CAPITAL RESOURCES

For the three months ended May 31, 2004, the Company had cash and cash
equivalents of $1,745,979. The Company used $1,617,472 of net cash in
operations, used $933 of net cash in investing activities and had $618,269 of
net cash provided by financing activities. 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. The Company's short-term and long-term liquidity may be
influenced by uncollected accounts receivables. If the amount of bad debt is
high, it will severely effect the Company's ability to continue operations.
Therefore, the Company is taking precautions to manage this risk, including
diversifying its customer base and controlling credit risk through credit
approvals, credit limits and monitoring procedures. There can be no assurance
that these measures will prove successful. The Company's inability to manage
this risk will have a material adverse effect upon its business, financial
condition and results of operations.


ITEM 3.     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 has materially affected, or is reasonably
likely to materially affect our internal control over financial reporting..


                                      -16-
<PAGE>
                           PART II. OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

None

ITEM 2.     CHANGES IN SECURITIES AND USE OF PROCEEDS

In May 2004, the Registrant issued 2,500,000 shares of its common stock in
exchange for the conversion in full of a note and short term debt payable to
third parties in the amount of $1,680,329. The note and short term debt payable
were converted into shares of common stock at a price of approximately $0.672
per share. The shares were not registered and are exempted securities under
Section 3(a)(9) of the Securities Act of 1933, as amended.

ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5.     OTHER INFORMATION

None

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits:

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

      32    Certifications of the Chief Executive Officer and Chief Financial
            Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)   Reports on Form 8-K:

      There were no reports on Form 8-K filed during the quarter ended May 31,
2004.


                                      -17-
<PAGE>
                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Dated: July 20, 2004          CITY NETWORK, INC.

                              By: /s/ Tiao Tsan Lai
                                  ------------------------------------
                                  Tiao Tsan Lai
                                  Chief Executive Officer
                                  (Principal Executive Officer)

Dated: July 20, 2004
                              By: /s/ Hsin Nan Lin
                                  ------------------------------------
                                  Hsin Nan Lin
                                  Chief Financial Officer
                                  (Principal Financial Officer)


                                      -18-