U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB

                                   (Mark One)

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
                                DECEMBER 31, 2001

                                       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: 000-28153

                      THE CYBER GROUP NETWORK CORPORATION
             (Exact name of registrant as specified in its charter)

          NEVADA                                         33-0901534
  (State  or  jurisdiction  of                        (I.R.S.  Employer
incorporation  or  organization)                      Identification  No.)

720  E.  Carnegie  Dr  Suite  200  San  Bernardino,  CA          92408
  (Address  of  principal  executive  offices)                (Zip  Code)

                  Registrant's telephone number: (909) 890-9769

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

  Securities  registered  pursuant  to  Section  12(g)  of  the  Act: 24,756,661
                         Common  Stock,  $0.001  Par  Value

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) been subject to such filing requirements
for the past 90 days.
Yes     X        No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this  Form  10-KSB  [  ].

Registrant's revenue for the twelve months ended December 31, 2001:  $167,665


                                        1
<PAGE>
                                TABLE OF CONTENTS

PART  I
Item  1   -  Description  of  Business
Item  2   -  Description  of  Property
Item  3   -  Legal  Proceedings
Item  4   -  Submission  of  Matters  to  Vote  of  Security  Holders

PART  II
Item  5   -  Market  for  Common  Equity  and  Related  Stockholder  Matters
Item  6   -  Management's  Discussion  and  Analysis
Item  7   -  Financial  Statements
Item  8   -  Changes  In  and  Disagreements  With  Accountants  on
             Accounting  and  Financial  Disclosures

PART  III
Item  9   -  Directors  and  Executives  Officers  of  the  Registrant
Item  10  -  Executive  Compensation
Item  11  -  Security  Ownership  of  Certain  Beneficial  Owners  and
             Management
Item  12  -  Certain  Relationships  and  Related  Transactions
Item  13  -  Exhibits  and  Reports  on  Form  8-K


                                        2
<PAGE>
PART  I

Item 1 - Description of Business
--------------------------------

OVERVIEW AND HISTORY
--------------------
We are a Nevada Corporation, incorporated on September 24, 1998 as Hollywood
Entertainment Network, Inc. On May 23, 2000, we purchased 89.1% of Hollywood
Entertainment's outstanding common stock for $295,000. Subsequently, we merged
with The Cyber Group Network Corporation and then changed our name to The Cyber
Group Network Corporation.

We entered into a Plan of Merger Agreement with CGN Acquisitions Corporation, a
Nevada Corporation with offices in San Bernardino, California. The merger took
place on December 7, 2000 and entitled us ownership, rights, privileges, powers,
franchises, patents, trademarks, licenses, and other assets and accounts
receivable of every kind and description of CGN Acquisitions. Subsequent to the
completion of the merger agreement, CGN Acquisitions was dissolved. Prior to the
merger, CGN Acquisitions Corporation entered into a licensing agreement on
November 20, 2000 with Sterno, Inc., a Nevada Corporation with offices in Los
Angeles, California. The licensing agreement was entered into for the purpose of
the use of Sterno's business model for our banking program. CGN Acquisitions and
Adaptive Systems Inc., entered into a technology transfer agreement on November
20, 2000. The technology transfer agreement granted CGN Acquisitions the right
to Adaptive System Inc.'s proprietary technology for use within the E-Snitch
device.

We are a technology driven, Internet based, computer security company with three
main areas of focus: Computer Security, Acquisitions and Public Internet
Devices. Our primary purpose is to continue to transition ourselves into a
self-sufficient, revenue-generating company, capable of increasing shareholder
value. We are also very focused on exceeding customer expectations and industry
demand.

In an effort to fulfill the goal of providing sound computer security, we have
developed PPIRT (Password Protection Information Retrieval Technology). PPIRT is
a computer software program designed to protect a customer's valuable
information from hackers and thieves. With PPIRT, a customer is able to, amongst
other things, encrypt files, thrash files to make them unrecoverable and manage
passwords. In addition, PPIRT offers a tracking device that will allow us to
track a stolen computer and recover files from that computer once it is
connected to the Internet. We made our first shipment of PPIRT to Fry's
Electronics in November 2001. With our dedicated staff, we are continuously
striving to penetrate other retail locations throughout the United States.

Subsequent to the year-end, we established relationships and ascertained
purchase orders for PPIRT from Comp USA, Micro Centers and PC Mall. In addition,
we entered into a non-exclusive license agreement with Global Marketing Partners
to distribute our products through Ingram Micro. This agreement will allow us to
market our products to a larger retail audience.

Our Electronic Snitching Device (E-Snitch) is an electronic tracking tool that
can locate missing/stolen computers within fifty feet of their location. It has
several capabilities, including retrieving and destroying information off of the


                                        3
<PAGE>
hard drive without the computer being connected to the Internet. Our development
of the E-Snitch device is in the completion stage. Adaptive Systems and
Specialized Control Systems are the primary contractors developing the hardware
and plan to have the final version completed by the second quarter 2002. Our
main purpose and objective for this new and innovative technology is to generate
sales via licensing agreements and/or product placement in retail stores.

We are concentrating on developing a solid marketing campaign to create various
distribution channels and related sales for our software and E-Snitch. We are in
the process of determining which advertising avenue is the most appropriate for
the successful marketing of our products and which avenue is most cost
effective. We are presently test-marketing television and magazines
advertisements in computer-based venues to help determine which path is the most
beneficial.


PRINCIPAL PRODUCTS
------------------
Password Protection Information Retrieval Technology (PPIRT) - Computer
encryption software designed to protect individuals and businesses from hackers
and thieves. PPIRT is designed to be the most advanced computer tracking, data
retrieval and encryption software on the market. If your computer is lost or
stolen, PPIRT can track the computer across the Internet and send notification
of the location of your computer by way of Caller ID and/or Internet Protocol
Address. Additionally, PPIRT gives the ability to remotely retrieve and/or
destroy data from the hard drive of a lost or stolen computer. Our software also
provides several methods of protection against unwanted intrusion into lost or
stolen data housed on a computer. For example, PPIRT encrypts data, making it
virtually unbreakable. It can also completely destroy data, literally
irreversibly wiping it from the device.

E-SNITCH - Computer hardware device that can track missing or stolen computers
within fifty feet of their location. It also has the ability to retrieve and
destroy information from a secure storage space on the hard drive without being
connected to the Internet. Our device includes a number of features in addition
to its tracking and retrieval capabilities. E-Snitch has GPS navigation
capabilities, virus distribution, beacon sound warnings, hard drive password
protection, wireless e-mail, paging services and voice over IP. The E-Snitch can
also receive news, weather sports and stock information while the computer is
turned off.

Members of a Hi-Tech Hustler - Fictional novel written by our Founder, Gregory
D. Evans and other ghostwriters. This novel is a fictional account of how highly
technical criminal organizations committed various acts of federal offenses and
the financial gains derived from these crimes. It also describes the enormous
risks and consequences involved with high-tech crimes.

SpyAmericaOnline.com - Maintains an extensive line of personal and professional
security products to give the end user various levels of protection.

Cyber Crime Corporation.Com and Big Target.Net - Information based websites
designed to address general web user requirements as well as list information
about computer security. Both websites are designed for the purpose of
educating, informing, and assisting consumers, businesses, and organizations on


                                        4
<PAGE>
how to detect, prevent and defend their systems against Hi-Tech Thieves. These
sites are presently non-revenue generating sites; they are provided for the
education of our consumers. We do, however, advertise our software on these
websites.


DISTRIBUTION
------------
We currently distribute our software and novel to retail stores via in-house
sales representatives and our external distributor. The initial launch of PPIRT
was distributed via a marketing agency located in Southern California. The
software and novel are available for purchase across the continental United
States, with a concentration in the western region.

During the next fiscal year, we will be targeting several geographic areas
primarily within the United States. Our demographic targets will consist of
consumers, business organizations and manufacturers. Distribution of our
products will occur through various distributors and sales agents of our
company. We are currently developing a strategic marketing plan that details a
solid distribution avenue to allow for a smooth transition from a development
stage company to one of sales and marketing.


NEW PRODUCT OFFERINGS
---------------------
We anticipate introducing new security-related software programs, products and
services during the next fiscal year. We are in the process of researching the
costs involved in developing a training school to teach consumers and businesses
how to protect themselves by learning the basics in computer and data security.
The classes would teach, amongst other things, personal firewall installation,
file encryption and decryption, password management and anti-computer forensics.
We are also contemplating the development of a security game and magazine.
Release of additional information will occur once the products and/or services
have met all of our testing, marketing and financial requirements. We can
provide no assurance, however, that we will introduce these new products in the
current fiscal year.


COMPETITION
-----------
There are other companies that are engaged in the same business as us. Many of
our competitors are more established companies with substantially greater
capital resources and greater marketing capabilities. No assurances can be given
that we will be able to successfully compete with such companies. We anticipate
that the number of competitors will increase in the future. We are aggressively
trying to differentiate ourselves from our competition by providing far more
superior products at competitive prices.


PATENTS, LICENSES AND AGREEMENTS
--------------------------------
We filed a provisional patent for E-Snitch on November 9, 2000 that expired on
November 9, 2001. The patent was not renewed because the original technology
involved in the development of E-Snitch changed during the various upgrades of
the product. We expect to file for another patent before the end of the second
quarter, once the device is completed.


                                        5
<PAGE>
RESEARCH AND DEVELOPMENT ACTIVITIES
-----------------------------------
For the past two fiscal years, we were primarily in the development stage. We
launched our first software package, PPIRT, during the fourth quarter of 2001.
Therefore, substantially all of the expenses incurred over the past two years is
directly related to the research and development of both PPIRT and E-Snitch.


EMPLOYEES
---------
As  of  December 31, 2001, we employed ten (10) full-time employees of which two
(2)  were  in  management  positions.


RISK FACTORS
------------
In Note Number 2 to the audited financial statements, our independent auditors
have reported that we have suffered recurring losses from operations that raise
substantial doubt about our ability to continue as a going concern. During the
year ended December 31, 2001 and 2000, we incurred a net loss of $4,902,903 and
$4,509,712, respectively.

As of December 31, 2001, we had a negative working capital of $717,481. These
factors, along with an accumulated deficit of $9,412,615 at December 31, 2001,
raise substantial doubt about our ability to continue as a going concern. We
will need to raise approximately $1,000,000 in operating capital in order to
remain viable as a going concern for the current fiscal year. We can provide no
assurance that we will be able to raise these necessary funds and therefore may
not be able to continue as a going concern.


ITEM 2 - PROPERTIES
-------------------
We are located at 720 East Carnegie Drive, Suite 200, San Bernardino, CA 92408.
The monthly lease payment for this facility is $2,284. We have no other
locations in which business is conducted. We are committed to a two-year
operating lease for this facility that will expire on August 30, 2002.


ITEM 3 - LEGAL PROCEEDINGS
--------------------------
In December 2001, we filed a civil lawsuit, in the United States District Court
Central District of California, against a former Officer and Board of Director,
a former employee and other individuals not associated with our company. This
lawsuit alleges that the former Officer used her confidential relationship with
our company to conceal her personal use of company funds, make unauthorized
stock issuances and cash loans to outside business partners and/or family. We
allege that these acts were committed in a manner intended to defraud us and
divert funds to the other co-conspirators named in the lawsuit. As of the date
of this filing, all of the defendants named have defaulted as they failed to
respond to the legal complaint. We are currently taking the necessary steps to
begin recovery of the stolen funds.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------------------------------------------------------------
None


                                        6
<PAGE>
PART II

ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
-----------------------------------------------------------------
Our common stock, par value $0.001 per share ("Common Stock"), is traded on the
NASDAQ Over The Counter Bulletin Board ("OTCBB") under the symbol "CGPN". There
was no active trading market for the Common Stock before May 22, 2000. The
following table sets forth, for the periods indicated, the reported high and low
closing bid quotations for our common stock as reported on the OTCBB. The bid
prices reflect inter-dealer quotations, do not include retail markups, markdowns
or commissions and do not necessarily reflect actual transactions.

                                    HIGH            LOW
QUARTER  ENDED                      BID (*)         BID (*)

March  31,  2000                     **             **
June  30,  2000                     $.32           $.07
September  30,  2000                $.47           $.08
December  31,  2000                 $.62           $.07


March  31,  2001                    $.19           $.05
June  30,  2001                     $.13           $.02
September  30,  2001                $.04           $.009
December  31,  2001                 $.51           $.003


(*) On November 23, 2001 we executed a 15 to 1 reverse split of our Common Stock
and  all  the  share  amounts  in  this  Form  10-KSB are reverse split amounts.

(**)  Indicates  that  there  were  no  reported  trades  during  this  quarter.

The bid price of our common stock was $.03 on March 12, 2002. As of March 12,
2002, there were approximately 138 holders of record of our common stock.


HOLDERS
-------
As of December 31, 2001 there were 141 stockholders of record.


DIVIDENDS
---------
While there are no restrictions that limit our ability to pay dividends, we have
not paid, and do not currently intend to pay cash dividends on our common stock
in the foreseeable future. Our policy is to retain all earnings, if any, to
provide funds for operation and expansion of our business. The declaration of
dividends, if any, will be subject to the discretion of our Board of Directors,
which may consider such factors as our results of operations, financial
condition, capital needs and acquisition strategy, among others.


                                        7
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
---------------------------------------------
This Annual Report on Form 10-KSB includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. This Act
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information about them so long as they identify these
statements as forward-looking and provide meaningful cautionary statements
identifying important factors that could cause actual results to differ from the
projected results. All statements other than statements of historical fact made
in this Annual Report on Form 10-KSB are forward-looking. In particular, the
statements herein regarding industry prospects and future results of operations
or financial position are forward-looking statements. Forward-looking statements
reflect our management's current expectations and are inherently uncertain. Our
actual results may differ significantly from our management's expectations.

The following discussion and analysis should be read in conjunction with our
consolidated financial statements and related footnotes for the year ended
December 31, 2001 included in this Annual Report. The discussion of results,
causes and trends should not be construed to imply any conclusion that such
results or trends will necessarily continue in the future.


INTRODUCTION
------------
In Note Number 2 to the audited financial statements, our independent auditors
have reported that we have suffered recurring losses from operations that raise
substantial doubt about our ability to continue as a going concern. Our
continued existence is dependent upon our ability to resolve our liquidity
problems, principally by obtaining equity capital and commencing profitable
operations. While pursuing equity capital, we must continue to operate on cash
flow generated from operations and financing activity. We experienced a net loss
of $4,902,903 for the year ended December 31, 2001 and have a negative working
capital of $717,481. These factors raise substantial doubt about our ability to
continue as a going concern. The opinion expressed by our auditors clearly
highlights our negative financial condition, which conditions evidence the high
degree of risk associated with making an investment in our company. Our
financial condition also makes finding suitable investors difficult due to the
risk involved.


PLAN  OF  OPERATION
-----------------
Our plans in regards to our going concern matter and to further aide in the
development of our business are to raise capital and become profitable by
performing the following tasks. We believe that these efforts will generate
positive cash flow during the next fiscal year:

     (1)  Raise  additional  operating  capital  by  considering  various
          alternatives,  including  private  placement,  debt financing and SB-2
          filings.  One  or  a combination of these alternatives can allow us to
          meet  our  cash  flow  needs  until  our product sales can sustain our
          operations.  Our  current  financing  is  primarily  in  the  form  of
          short-term  loans  from  both  businesses  and  individual  investors.
     (2)  Complete  E-Snitch  and develop distribution and/or licensing channels
          to  create  revenue  growth.
     (3)  Implement  aggressive  marketing  plans  to  create  name recognition,
          customer awareness and ultimately steady revenue growth. We anticipate


                                        8
<PAGE>
          that  television  and  computer  magazine  advertisements  will be the
          avenue  for  achieving  these  goals.
     (4)  Create  a knowledgeable sales force that will allow for the aggressive
          distribution  of  our  products.  We  are  considering various ways of
          accomplishing  this,  including  the  use  of  independent  field
          representatives  and  an  in-house  sales  team.
     (5)  Develop  an  attractive  incentive  plan to attract and retain quality
          employees  and  sales representatives. We acknowledge that to continue
          and  expand  in  today's market, we must rely on talented individuals.
     (6)  Continue  to seek strategic alliances with various retailers and OEMs.

We will encounter various risks while attempting to implement our business
model, particularly in this continuously evolving technology market. We cannot
guarantee that we will be successful in addressing such risks, and the failure
to do so could have materially adverse effects on our business and results of
operations.


RESULTS OF OPERATIONS
---------------------
Since inception in May 2000, we have been in the development stage. The primary
focus has been on the development and marketing of E-Snitch and PPIRT. Because
we made our first shipment of PPIRT and the novel in the fourth quarter of 2001,
we have generated minimal revenue to date. Because substantially all of our
efforts have been concentrated in research and development activities, we have
operating at a net loss for the last two fiscal year-ends. We incurred a net
loss of $4,902,903 and $4,509,712 for the years ended December 31, 2001 and
2000, respectively. Although we plan on implementing aggressive marketing and
sales strategies, we still expect to continue operating at a net loss during the
majority of the next fiscal year. This is primarily due to our being in a
transitional stage, transitioning from research and development to marketing and
distribution. Therefore, we can give no assurance that we will achieve
profitability or that a stream of revenue can be generated and sustained in the
future.


PRODUCT DELAYS
--------------
The release of E-Snitch has been postponed due to various reasons, including the
under development of the GPS Network and the need to improve the device's
capabilities. The E-Snitch can track missing or stolen computers within five
feet of their location. It also has the ability to retrieve and destroy
information from a secure storage space on the hard drive. We filed a
provisional patent for this device in November 2000 that expired in November
2001. The purpose of filing this patent was to protect our rights while the
device was showcased at the computer fair, Comdex. Since Comdex, the majority of
the technology in the E-Snitch has been overhauled in order to create a state of
the art hardware device that can physically and intellectually attract the
attention of individuals and businesses.


CASH REQUIREMENTS AND ADDITIONAL FUNDING
----------------------------------------
We need to immediately raise additional capital to run the daily operating
activities of the business. We believe that our cash on hand is insufficient to
meet our anticipated needs for working capital, capital expenditures and
business development for the next twelve months. Our monthly expenses are


                                        9
<PAGE>
expected to be $75,000 over the next twelve months. Because we have not
sustained a consistent revenue stream, we will need to raise capital to meet our
operating needs. We will research various methods of acquiring capital, like
private placement, debt refinancing and SB-2 filings. We recognize that filing
an SB-2 can potentially lead to stock dilution, however it may be the most
effective means to generate cash flow for us. Irrespective of the funding
method, this funding will cover costs such as marketing and distribution,
maintaining and upgrading our technology, recurring overhead expenses for the
day-to-day operation of the business and other unexpected expenses due to
economic changes. We cannot guarantee that the financing will be available in
certain amounts or on acceptable terms.


                                       10
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
-----------------------------


                      THE CYBER GROUP NETWORK CORPORATION
                                  AND SUBSIDARY
                          (DEVELOPMENT STAGE COMPANIES)
                        CONSOLIDATED FINANCIAL STATEMENTS
                          AS OF DECEMBER 31, 2001 AND
                       DECMEBER 31, 2000 AND FOR THE YEAR
                ENDED DECEMBER 31, 2001 AND FOR THE PERIOD FROM
              MARCH 21, 2000 (INCEPTION) THROUGH DECEMBER 31, 2000





THE  CYBER  GROUP  NETWORK  CORPORATION  AND  SUBSIDIARY
(DEVELOPMENT  STAGE  COMPANIES)
CONTENTS
FOR  THE  PERIODS  ENDED  DECEMBER  31,  2001  AND  2000

=======================================================================

12  -  13     REPORTS  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS

CONSOLIDATED FINANCIAL STATEMENTS

14  -  15     Consolidated  Balance  Sheets

16            Consolidated  Statements  of  Operations

17  -  18     Consolidated  Statements  of  Shareholders'  Deficit

19  -  20     Consolidated  Statements  of  Cash  Flows

21  -  33     Notes  to  Consolidated  Financial  Statements


                                       11
<PAGE>
INDEPENDENT AUDITORS' REPORT

To The Board of Directors
The Cyber Group Network Corporation and subsidiary
(development stage companies)
San Bernardino, California

     We  have  audited the consolidated balance sheet of The Cyber Group Network
Corporation  and  subsidiary  (the  Company)  as  of  December 31, 2001, and the
related  consolidated  statements  of operations, shareholders' deficit and cash
flows for the year then ended.  These  consolidated financial statements are the
responsibility  of the Company's management. Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based on our audit. The
consolidated  financial  statements of the Company for the period ended December
31,  2000  were  audited  by  other  auditors  whose report, dated May 15, 2001,
expressed an unqualified opinion on those statements and included an explanatory
paragraph  describing  conditions  that  raised  substantial  doubt  about  the
Company's  ability  to  continue  as  a  going  concern.

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

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all  material  respects,  the financial position of The Cyber Group
Network  Corporation  and subsidiary as of December 31, 2001, and the results of
their operations and their cash flows for the year then ended in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity  with  generally  accepted  accounting  principles  which contemplate
continuation  of  the Company as a going concern.  As discussed in Note 2 to the
financial  statements,  during  the  period  from  March 21, 2000 (inception) to
December  31,  2001,  the  Company  incurred  a  net  loss of $9,412,615.  As of
December  31,  2001,  the Company had a working capital deficit of $717,481.  In
addition,  the  Company  was  in  the development stage as of December 31, 2001.
These factors raise substantial doubt about the Company's ability to continue as
a  going  concern.  Management's  plans  in  regard  to  these  matters are also
described  in  Note 2.  The consolidated financial statements do not include any
adjustments  that  might  result  from  the  outcome  of  this  uncertainty.

/S/  MOORE STEPHENS FRAZER AND TORBET, LLP

March 26, 2002
Walnut, California


                                       12
<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors
The Cyber Group Network Corporation and subsidiary
(development stage companies)
San Bernardino, California

We have audited the accompanying consolidated balance sheet of The Cyber Group
Network Corporation and subsidiary (development stage companies) as of December
31, 2000, and the related consolidated statements of operations, shareholders'
deficit, and cash flows for the period from March 21, 2000 (inception) to
December 31, 2000. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Cyber Group
Network Corporation and subsidiary as of December 31, 2000, and the results of
its operations and its cash flows for the period from March 21, 2000 (inception)
to December 31, 2000 in conformity with accounting principles generally accepted
in the United States of America.

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles which contemplate
continuation of the Company as a going concern. As discussed in Note 2 to the
financial statements, during the period from March 21, 2000 (inception) to
December 31, 2000, the Company incurred a net loss of $4,509,712. In addition,
the Company was in the development stage at December 31, 2000. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note 2. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



/S/  SINGER LEWAK GREENBAUM & GOLDSTEIN LLP

Los Angeles, California
May  15,  2001


                                       13
<PAGE>
<TABLE>
<CAPTION>
THE  CYBER  GROUP  NETWORK  CORPORATION  AND  SUBSIDIARY

(DEVELOPMENT  STAGE  COMPANIES)

CONSOLIDATED  BALANCE  SHEETS
DECEMBER  31,  2001  AND  2000
================================================================================

                                                         DECEMBER 31,   DECEMBER 31,
                                                             2001           2000
                                                         -------------  ------------
<S>                                                      <C>            <C>
                              ASSETS

CURRENT ASSETS

CASH                                                            8,053         48,549
ACCOUNTS RECEIVABLE, NET                                       19,146          1,640
RECEIVABLE FROM RELATED PARTY                                       -          9,250
INVENTORY                                                       2,765              -
PREPAID EXPENSES                                               28,453              -
                                                         -------------  ------------
  TOTAL CURRENT ASSETS                                         58,417         59,439

OTHER RECEIVABLES, NET                                         87,413              -
PROPERTY AND EQUIPMENT, NET                                    73,824         94,685
LICENSE RIGHTS, NET                                                 -         68,056
DEPOSIT                                                         1,940          2,776
                                                         -------------  ------------
    TOTAL ASSETS                                              221,594        224,956
                                                         =============  ============

               LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES

ACCOUNTS PAYABLE                                              104,576        176,181
ACCRUED EXPENSES                                               38,742          9,722
LOAN PAYABLE                                                  552,008              -
PAYABLE TO RELATED PARTY                                       52,210         52,210
DUE TO OFFICERS, NET                                           28,362         13,994
                                                         -------------  ------------
  TOTAL CURRENT LIABILITIES                                   775,898        252,107

CONVERTIBLE REDEEMABLE DEBENTURES                                   -        169,415
                                                         -------------  ------------
    TOTAL LIABILITIES                                         775,898        421,522
                                                         -------------  ------------


                                       14
<PAGE>
SHAREHOLDERS' DEFICIT

PREFERRED STOCK, $0.001 PAR VALUE

    50,000,000 SHARES AUTHORIZED
    2,000,000 AND 0 SHARES ISSUED AND OUTSTANDING AS
    OF DECEMBER 31, 2001 AND 2000, RESPECTIVELY                 2,000              -

COMMON STOCK, $0.001 PAR VALUE

    500,000,000 SHARES AUTHORIZED
    24,756,661 AND 2,594,205 (ADJUSTED FOR REVERSE SPLIT)
    SHARES ISSUED AND OUTSTANDING AS
    OF DECEMBER 31, 2001 AND 2000, RESPECTIVELY                24,756          2,594
ADDITIONAL PAID-IN CAPITAL                                  8,831,555      4,310,552
DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE               (9,412,615)    (4,509,712)

                                                         -------------  ------------
  TOTAL SHAREHOLDERS' DEFICIT                                (554,304)      (196,566)
                                                         -------------  ------------

  TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                 221,594        224,956
                                                         =============  =============
</TABLE>


         The accompanying notes are an integral part of this statement.


                                       15
<PAGE>
<TABLE>
<CAPTION>
THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD FROM MARCH 21, 2000
(INCEPTION) TO DECEMBER 21, 2000
===========================================================================

                                                      FROM            FROM
                                                    MARCH 21,       MARCH 21,
                                     FOR THE          2000            2000
                                      YEAR         (INCEPTION)     (INCEPTION)
                                      ENDED            TO              TO
                                   DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                      2001            2000            2001
                                  -------------  ---------------  -------------
<S>                               <C>            <C>              <C>
REVENUE                                167,665            6,141        173,806
COST OF GOODS SOLD                     (27,738)               -        (27,738)
SELLING, GENERAL, AND
ADMINISTRATIVE                      (4,742,768)      (3,061,517)    (7,804,285)
                                  -------------  ---------------  -------------

LOSS FROM OPERATIONS                (4,602,841)      (3,055,376)    (7,658,217)
                                  -------------  ---------------  -------------
OTHER EXPENSE
    IMPAIRMENT OF GOODWILL                   -         (295,000)      (295,000)
    INTEREST EXPENSE                  (300,062)      (1,159,336)    (1,459,398)
                                  -------------  ---------------  -------------
    TOTAL OTHER EXPENSE               (300,062)      (1,454,336)    (1,754,398)
                                  -------------  ---------------  -------------
NET LOSS                            (4,902,903)      (4,509,712)    (9,412,615)
                                  =============  ===============  =============
BASIC AND DILUTED LOSS PER SHARE          (.56)           (2.87)         (1.68)
                                  =============  ===============  =============
AVERGARE SHARES USED TO COMPUTE
LOSS PER SHARE                       8,713,108        1,571,140      5,590,961
                                  =============  ===============  =============
</TABLE>


         The accompanying notes are an integral part of this statement.


                                       16
<PAGE>
<TABLE>
<CAPTION>
THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
FOR THE YEAR ENDED DECEMBER 31, 2001 AND FOR THE PERIOD FROM
MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2000
================================================================================

                                                                                     Deficit
                                                                                   Accumulated
                             Preferred  Stock      Common  Stock      Additional   During  the
                             ----------------      -------------       Paid-In     Development
                              Shares   Amount     Shares    Amount     Capital       Stage         Total
                            ---------  -------  ----------  -------  -----------  ------------  ------------
<S>                         <C>        <C>      <C>         <C>      <C>          <C>           <C>
ISSUANCE OF COMMON
STOCK AND RECAPITALIZATION
DUE TO ACQUISITION ON
MARCH 21, 2000                                     740,400  $   740  $     (740)  $         -   $         -

ISSUANCE OF STOCK
FOR SERVICES RENDERED                              608,519      609   1,277,591                   1,278,200

ISSUANCE OF STOCK
AS COMPENSATION                                     83,487       83     243,372                     243,455

ISSUANCE OF STOCK
AS DONATIONS                                        18,333       18      29,932                      29,950

CONVERSION OF
CONVERTIBLE REDEEMABLE
DEBENTURES                                         794,058      794     999,206                   1,000,000

CONVERSION OF
CONVERTIBLE REDEEMABLE
DEBENTURES                                         260,519      261     271,239                     271,500

STOCK OPTIONS ISSUED
AS COMPENSATION                                                         237,750                     237,750

STOCK OPTIONS ISSUED
FOR SERVICES RENDERED                                                   220,000                     220,000

INTEREST FROM BENEFICIAL
CONVERSION FEATURES                                                     932,291                     932,291

ISSUANCE OF STOCK AS
INTEREST EXPENSE                                    88,889       89      99,911                     100,000

NET LOSS                                                                           (4,509,712)   (4,509,712)
                            ---------  -------  ----------  -------  -----------  ------------  ------------

BALANCE,
DECEMBER 31, 2000                   0  $     0   2,594,205  $ 2,594  $4,310,552   $(4,509,712)  $  (196,566)

ISSUANCE OF STOCK
FOR SERVICES RENDERED                           13,350,675  $13,350  $2,752,503                 $ 2,765,853

ISSUANCE OF STOCK
AS COMPENSATION                                  1,998,841    1,999     592,296                     594,295

CONVERSION OF
CONVERTIBLE REDEEMABLE
DEBENTURES                                         657,385      657     603,188                     603,845

INTEREST FROM BENEFICIAL
CONVERSION FEATURES                                                     218,922                     218,922

ISSUANCE OF OTHER
STOCK - REFER TO ITEM                              600,000      600     148,400                     149,000
3 - LEGAL PROCEEDINGS
IN THIS FORM 10-KSB


                                       17
<PAGE>
ISSUANCE OF RESTRICTED
SHARES                                           5,555,555    5,556      (5,556)                          -

PREFERRED STOCK
ISSUED                      2.000,000    2,000                          211,250                     213,250


NET LOSS                                                                           (4,902,903)   (4,902,903)
                            ---------  -------  ----------  -------  -----------  ------------  ------------

BALANCE,
DECEMBER 31, 2001           2,000,000  $ 2,000  24,756,661  $24,756  $8,831,555   $(9,412,615)  $  (554,304)
                            =========  =======  ==========  =======  ===========  ============  ============
</TABLE>


         The accompanying notes are an integral part of this statement.


                                       18
<PAGE>
<TABLE>
<CAPTION>
THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
(DEVELOPMENT STAGE COMPANIES)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2001 AND
FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2000
================================================================================

                                                                                         FROM            FROM
                                                                                       MARCH 21,       MARCH 21,
                                                                         FOR THE         2000            2000
                                                                          YEAR        (INCEPTION)     (INCEPTION)
                                                                          ENDED            TO              TO
                                                                      DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                                          2001            2000            2001
                                                                     --------------  --------------  --------------
<S>                                                                  <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  NET LOSS                                                              (4,902,903)     (4,509,712)     (9,412,615)
  ADJUSTMENTS TO RECONCILE NET LOSS TO CASH
    USED IN OPERATING ACTIVITIES:
      DEPRECIATION AND AMORTIZATION                                         99,313          22,371         121,684
      AMORTIZATION OF DISCOUNT ON CONVERTIBLE
        REDEEMABLE DEBENTURES                                               59,429          28,106          87,535
      INTEREST FROM BENEFICIAL CONVERSION FEATURE                          218,922         932,291       1,151,213
      ISSSUANCE OF STOCK FOR SERVICES RENDERED                           2,765,853       1,278,200       4,044,053
      ISSSUANCE OF STOCK AS COMPENSATION                                   594,295         243,455         837,750
      ISSUANCE OF STOCK AS DONATIONS                                             -          29,950          29,950
      ISSUANCE OF PREFERRED SHARES FOR SERVICES                            213,250               -         213,250
      ISSUANCE OF STOCK OPTIONS FOR SERVICES
        RENDERED                                                                 -         220,000         220,000
      ISSUANCE OF STOCK OPTIONS AS COMPENSATION                                  -         237,750         237,750
      ISSUANCE OF STOCK AS INTEREST EXPENSE                                      -         100,000         100,000
      ISSUANCE OF STOCK - ITEM 3 LEGAL PROCEEDINGS                         149,000               -         149,000
      (INCREASE)/DECREASE IN:
        ACCOUNTS RECEIVABLE                                                (17,506)         (1,640)        (19,146)
        RECEIVABLE FROM RELATED PARTY                                        9,250          (9,250)              -
        OTHER RECEIVABLES                                                  (87,414)              -         (87,414)
        PREPAID EXPENSES                                                   (28,453)              -         (28,453)
        INVENTORY                                                           (2,765)                         (2,765)
        DEPOSIT                                                                836          (2,776)         (1,940)
      INCREASE/(DECREASE) IN:
        ACCOUNTS PAYABLE AND ACCRUED EXPENSES                              (42,597)        185,903         143,306
        PAYABLE TO RELATED PARTY                                                 -          52,210          52,210
        PAYABLE TO OFFICER                                                  14,368          13,994          28,362
                                                                     --------------  --------------  --------------
  NET CASH USED IN OPERATING ACTIVITIES                                   (957,122)     (1,179,148)     (2,136,270)


                                       19
<PAGE>
CASH FLOWS FROM INVESTING ACTIVITIES
  PURCHASE OF PROPERTY AND EQUIPMENT                                       (10,394)       (115,112)       (125,506)
  PURCHASE OF LICENSE RIGHTS                                                     -         (70,000)        (70,000)
                                                                     --------------  --------------  --------------
    NET CASH USED IN INVESTING ACTIVITIES                                  (10,394)       (185,112)       (195,506)
                                                                     --------------  --------------  --------------

CASH FLOWS FROM FINANCING ACITIVITIES
  PROCEEDS FROM LOANS                                                      552,019               -         552,019
  PROCEEDS FROM ISSUANCE OF CONVERTIBLE DEBT                               375,001       1,412,809       1,787,810
                                                                     --------------  --------------  --------------
    NET CASH PROVIDED BY FINANCING ACTIVITIES                              927,020       1,412,809       2,339,829
                                                                     --------------  --------------  --------------
      NET (DECREASE)/INCREASE IN CASH                                      (40,496)         48,549           8,053

CASH, BEGINNING OF PERIOD                                                   48,549               -               -

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

CASH, END OF PERIOD                                                          8,053          48,549           8,053
                                                                     ==============  ==============  ==============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
INCOME TAXES PAID                                                    $       1,922   $           -   $       1,922
                                                                     ==============  ==============  ==============

INTEREST PAID                                                        $           -   $           -   $           -
                                                                     ==============  ==============  ==============

NON-CASH STOCK ISSUANCES:

ISSSUANCE OF STOCK FOR SERVICES RENDERED                                 2,765,853       1,278,200       4,044,053
(13,350,675 AND 608,519 SHARES ISSUED IN 2001 AND 2000,
 RESPECTIVELY)

ISSSUANCE OF STOCK AS COMPENSATION                                         594,295         243,455         837,750
(1,998,841 AND 83,487 SHARES ISSUED IN 2001 AND 2000, RESPECTIVELY)

ISSUANCE OF STOCK AS DONATIONS                                                   -          29,950          29,950
(0 AND 18,333 SHARES ISSUED IN 2001 AND 2000, RESPECTIVELY)

ISSUANCE OF PREFERRED SHARES FOR SERVICES                                  213,250               -         213,250
(2,000,000 AND 0 PREFERRED SHARES ISSUED IN 2001 AND 2000,
 RESPECTIVELY)

ISSUANCE OF STOCK AS INTEREST EXPENSE                                            -         100,000         100,000
(0 AND 88,889 SHARES ISSUED IN 2001 AND 2000, RESPECTIVELY)



                                       20
<PAGE>
ISSUANCE OF STOCK - ITEM 3 LEGAL PROCEEDINGS                               149,000               -         149,000
(600,000 AND 0 SHARES ISSUED IN 2001 AND 2000, RESPECTIVELY)
                                                                     --------------  --------------  --------------
                                                                     $   3,722,398   $   1,651,605   $   5,374,003
                                                                     ==============  ==============  ==============

</TABLE>


         The accompanying notes are an integral part of this statement.


                                       21
<PAGE>
NOTE 1 - BUSINESS ACTIVITY

The Cyber Group Network (the "Company", "CGPN", "Cyber Group") is a technology
driven, Internet based, computer security company with three main areas of
focus: Computer Security, Acquisitions and Public Internet Devices. The primary
purpose is to continue to transition the Company into a self-sufficient,
revenue-generating company, capable of increasing shareholder value. The Company
is also very focused on exceeding customer expectations and industry demand.

Cyber Group is a Nevada Corporation, incorporated on September 24, 1998 as
Hollywood Entertainment Network, Inc. On May 23, 2000, CGPN purchased 89.1% of
Hollywood Entertainment's outstanding common stock for $295,000. Subsequently,
CGPN merged with The Cyber Group Network Corporation and then changed its name
to The Cyber Group Network Corporation. In addition, on May 23, 2000,
immediately prior to the purchase transaction, the Board of Directors of
Hollywood Entertainment approved the disposition of the movie rights to a
shareholder of Hollywood Entertainment. Therefore, at the time of the
transaction, Hollywood Entertainment had minimal assets and liabilities.
Accordingly, no pro forma disclosures were made. As the core business changed
subsequent to the purchase transaction, the entire amount recorded as goodwill
of $295,000 was written off in 2000. This transaction was recorded as a purchase
transaction, similar to a reverse merger, whereby the equity section was
retroactively restated to reflect the capital structure of Hollywood
Entertainment (a recapitalization).


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of The Cyber Group
Network Corporation and its wholly owned subsidiary, Cyber Crime Corporation
("Cyber Crime"). During the current fiscal year, no financial activity was
maintained in Cyber Crime Corporation. Any intercompany balances and
transactions are eliminated in consolidation.


Basis of Presentation
---------------------
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles that contemplate the
Company's continuation as a going concern. For the fiscal year ended December
31, 2001 and from March 21, 2000 (inception) to December 31, 2000 CGPN incurred
net losses of $4,902,903 and $4,509,712, respectively. As of December 31, 2001,
the Company had a working capital deficit of $717,481. In addition, the Company
was in the development stage as of December 31, 2001. These factors raise
substantial doubt about the Company's ability to continue as a going concern.


Recovery of the Company's assets is dependent upon future events, the outcome of
which is indeterminable. The attainment of profitable operations is dependent
upon the Company obtaining adequate debt and/or equity financing and developing
an effective marketing campaign to generate a consistent cash flow. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue in existence.


                                       22
<PAGE>
Development Stage Enterprise
----------------------------
As of December 31, 2001, CGPN was a development stage company as defined in
Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting and
Reporting by Development Stage Enterprises." The Company devoted substantially
all of its efforts to its formation, raising capital, research and development
and product development. Substantially all losses accumulated since inception
are considered to be a part of the Company's development stage activities.


Revenue Recognition
--------------------
Revenue is recognized when services are performed or products are shipped.


Comprehensive Income
--------------------
The Company utilizes SFAS No. 130, "Reporting Comprehensive Income." This
statement establishes standards for reporting comprehensive income and its
components in a financial statement. Comprehensive income as defined includes
all changes in equity (net assets) during a period from non-owner sources.
Examples of items to be included in comprehensive income, which are excluded
from net income, include foreign currency translation adjustments and unrealized
gains and losses on available-for-sale securities. Comprehensive income is not
presented in these financial statements since the Company did not have any of
the items of comprehensive income in the periods presented.


Cash Equivalents
----------------
For the purpose of the statement of cash flows, the Company considers all highly
liquid investments purchased with original maturities of three months or less to
be cash equivalents.


Inventory
---------
The Company does not maintain significant inventory levels. Rather, software is
manufactured once orders are placed with the Company. As of December 31, 2001
and 2000, the Company's inventory balance was $2,765 and $0, respectively.


Property and Equipment
----------------------
Property and equipment are recorded at cost, less accumulated depreciation.
Depreciation is provided using the straight-line method over the estimated
useful lives as follows:

                                                      2001               2000
                                                      ----               ----
          Furniture  and  fixtures                   3  years          7  years
          Office  equipment                          3  years          5  years
          Computer  hardware  and  software          3  years          3  years

The Company changed the estimated useful lives for Furniture and Fixtures and
Office Equipment from seven (7) and five (5) years to three (3) years,
respectively. This depreciation period is preferable because it more


                                       23
<PAGE>
appropriately reflects the actual lives of the equipment. This change in
estimate resulted in an increase in the Company's net loss by $6,844.

Maintenance and minor replacements are charged to expense as incurred. Gains and
losses on disposals are included in the results of operations.


Software Development Costs
--------------------------
Development costs incurred in the research and development of new software
products are expensed as incurred until technological feasibility in the form of
a working model has been established. The Company did not capitalize any costs
as of December 31, 2001, however, CGPN will evaluate its capitalization
practices during the next fiscal year.


Notes Payable
-------------
During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company acquired financing from
individual investors and businesses totaling $552,008 and $0, respectively. The
interest rates range from 3% to 10% per year and the Company pays 10% per month
on one of the loans. All are due during the fiscal year 2002.


License Rights
--------------
On November 30, 2000, the Company entered into a license agreement for certain
rights related to the Community Banking Program. Minimal benefit from this
license agreement has been received and the Company determined that the
remaining asset had little to no remaining value. Therefore, CGPN wrote-off the
remaining unamortized balance of $50,558 in December 31, 2001.


Stock-Based Compensation
------------------------
SFAS No. 123, "Accounting for Stock-Based Compensation," established and
encourages the use of the fair value based method of accounting for stock-based
compensation arrangements under which compensation costs are determined using
the fair value of stock-based compensation determined as of the date of grant.
It is recognized over the periods in which the related services are rendered.
For stock-based compensation issued to non-employees, the Company uses the fair
value method of accounting under the provision of SFAS No. 123.

The Company adopted only the disclosure provisions of SFAS No. 123. The Company
applies Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued
to Employees," and related interpretations in accounting for its stock issuances
to employees and does not recognize compensation expense for its stock-based
compensation other than for restricted stock and options issued to outside third
parties.


                                       24
<PAGE>
Stock Split
-----------
On November 23, 2001, the Board of Directors approved a fifteen to one reverse
stock split on all of the outstanding common shares of the Company. All
references to common shares and loss per common share amounts have been adjusted
to reflect the 15-to-1 reverse common stock split. The common shares commenced
trading on a post reverse split basis on November 26, 2001.


Fair Value of Financial Instruments
-----------------------------------
The Company measures its financial assets and liabilities in accordance with
generally accepted accounting principles. For certain of the financial
instruments, including cash, accounts receivable, accounts payable and accrued
expenses, the carrying amounts approximate the fair value due to their short
maturities.


Advertising
-----------
The Company expenses advertising costs as incurred. CGPN incurred $96,835 and
$174,615 in advertising expenses during the fiscal year ended December 31, 2001
and for the period from March 21, 2000(inception) to December 31, 2000,
respectively.


Income Taxes
------------
The Company accounts for income taxes under the asset and liability method that
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial
statements or tax returns. Under this method, deferred income taxes are
recognized for the tax consequences in future years of differences between the
tax basis of assets and liabilities and their financial reporting amounts at
each period-end based on enacted tax laws and statutory tax rates applicable to
the periods in which the differences are expected to affect taxable income.
Valuation allowances are established, when necessary, to reduce deferred tax
assets to the amount expected to be realized.


Basic and Diluted Loss per Share
--------------------------------
For the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company adopted SFAS No. 128,
"Earnings per Share." Basic loss per share is computed by dividing the loss
available to common shareholders by the weighted-average number of common shares
outstanding. Diluted loss per share is computed similar to the basic loss per
share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
common shares had been issued and if the additional common shares were dilutive.
For the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company incurred a net loss.
Therefore, basic and diluted losses per share are the same. The common shares
used in the weighted average calculation to determine the basic and diluted loss
per share reflect post-split share amounts.


                                       25
<PAGE>
Estimates
---------
The preparation of financial statements in conformity with generally accepted
accounting principles require the Company to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements, as
well as the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.


Risk Concentrations
-------------------
The Company places its cash with high quality financial institutions, and at
times may exceed the Federal Deposit Insurance Corporation $100,000 insurance
limit. As of December 31, 2001, the Company did not have any uninsured cash.

One customer accounted for approximately 14% and 0% of the Company's sales for
2001 and 2000, respectively. Financial instruments potentially subject to
concentration of credit risk consist of trade receivables. As of December 31,
2001 and 2000, one of the Company's customers accounted for 100% and 0%,
respectively, of the total gross accounts receivable.


Recently Issued Accounting Pronouncements
-----------------------------------------
In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements," to provide guidance on the recognition, presentation, and
disclosure of revenue in financial statements. Changes in accounting to apply
the guidance in SAB No. 101 may be accounted for as a change in accounting
principle effective January 1, 2000. The Company adopted this new statement in
May 2000 and it does not have a material affect on the consolidated financial
statements.

In March 2000, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
Compensation," (an Interpretation of Accounting Principles Bulletin Opinion No.
25 ("APB 25")("FIN 44"). FIN 44 provides guidance on the application of APB 25,
particularly as it relates to options. The effective date of FIN 44 is July 1,
2000, and the Company adopted FIN 44 as of that date.

In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Instruments
and Certain Hedging Activities." This statement is not applicable to the
Company.

In June 2000, the FASB issued SFAS No. 139, "Rescission of FASB Statement No. 53
and Amendments to Statements No. 63, 89, and 121." This statement is not
applicable to the Company.

In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, a replacement
of FASB Statement No. 125." This statement is not applicable to the Company.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets". These statements change the
accounting for business combinations, goodwill and other intangible assets in
two significant ways. First, SFAS 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
Use of the pooling-of-interests method will be prohibited. Second, SFAS 142


                                       26
<PAGE>
changes the accounting for goodwill from an amortization method to an impairment
only method. Accordingly, amortization of goodwill, including goodwill recorded
in past business combinations, will cease upon adoption of that statement, which
for companies with calendar year ends, will be January 1, 2002. Certain other
intangible assets with indefinite lives are subject to the same rule. The
Company expects that the adoption of these new statements will not have a
material affect on its consolidated financial statements.

In 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations". This Statement requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is incurred
if a reasonable estimate of fair value can be made. The associated asset
retirement costs are capitalized as part of the carrying amount of the
long-lived asset. This Statement is effective for financial statements issued
for fiscal years beginning after June 15, 2002. The Company expects that the
adoption of this Statement will not have a material affect on its consolidated
financial statements.

In 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets". This Statement requires that one accounting
model be used for long-live assets to be disposed of by sale, whether previously
held and used or newly acquired, and broadens the presentation of discontinued
operations to include more disposal transactions. That accounting model retains
the requirement of FASB No. 121 to measure a long-lived asset classified as held
for sale at the lower of its carrying amount or fair value less cost to sell and
to cease depreciation (amortization). This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those fiscal years. The Company expects that the adoption
of this Statement will not have a material affect on its consolidated financial
statements.


NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment as of December 31, 2001 and 2000 consisted of the
following:

<TABLE>
<CAPTION>
                                        2001      2000
                                       -------  --------
<S>                                    <C>      <C>

  Furniture and fixtures               $50,813  $ 50,263
  Office equipment                      16,209    11,711
  Computer hardware and software        58,485    53,138
                                       -------  --------

                                       125,507   115,112
  Less accumulated depreciation         51,683    20,427
                                       -------  --------

    TOTAL                            $  73,824  $ 94,685
                                     =========  ========
</TABLE>

Depreciation expense for the fiscal year ended December 31, 2001 and for the
period from March 21, 2000 (inception) to December 31, 2000 was $31,256 and
$20,427, respectively.


                                       27
<PAGE>
NOTE 4 - LICENSE RIGHTS

On November 30, 2000, the Company entered into a license agreement related to
the Community Banking Program (the "Program"), whereby CGPN acquired the right,
in perpetuity, for $70,000, to implement, use, and modify the Program to engage
in the business of promotion, advertising, merchandising, and the distribution
of debit cards used in banking transactions.  In accordance with this agreement,
the sellers retained the right to use the Program.  The Company determined that
this program had a useful life of three years.  During the current fiscal year,
the Company was not satisfied with the direction of the program and the
anticipated future costs were deemed to be excessive.  As a result, the Company
wrote-off the remaining asset balance of $50,558 in December 2001.


NOTE 5 - CONVERTIBLE REDEEMABLE DEBENTURES

May 2000 Debentures
-------------------
On May 17, 2000, the Company issued Series A Senior Subordinated Convertible
Redeemable Debentures (the "May 2000 Debentures") with a face amount totaling
$1,000,000, at a 10% discount, to three purchasers in the amounts of $333,333,
$333,333, and $333,334.  The May 2000 Debentures were issued in denominations of
$10,000 with accrued interest at 8% per annum, commencing May 17, 2000, and were
originally due on May 17, 2002.

The Company paid interest by issuing common stock equal to the total monthly
interest accrued divided by 70% of the lowest closing bid price of the common
stock for the three consecutive trading days immediately preceding the date of
the monthly interest payment.  At any time after 90 days from the issuance of
the May 2000 Debentures, the Company had the option to pay the holder 125% of
the principal amount of the debenture, in full, to the extent the debenture had
not been converted.

Related to this issuance, the Company recorded interest expense totaling
$832,540 in fiscal year 2000 related to the beneficial conversion feature of the
debentures.

As of December 31, 2000, the holders of the May 2000 Debentures converted
$1,000,000 into 790,241 shares of our common stock (reflective of reverse split)
and accrued interest of $4,293 into 3,817 shares of common stock (reflective of
reverse split).  Conversion prices ranged from approximately $0.03 to $0.16.  In
relation to this transaction, the Company recorded interest expense totaling
$100,000 in fiscal year 2000 for the issuance of 88,889 shares of common stock
(reflective of reverse split) in exchange for a 10% discount in cash totaling
$100,000.


December 2000 Debentures
------------------------
On December 11, 2000, the Company entered into an agreement to issue Series SPA
Senior Subordinated Convertible Redeemable Debentures (the "December 2000
Debentures") with a face amount totaling $1,000,000, at a 10% discount, to three
purchasers in the amounts of $333,333, $333,333, and $333,334.  The December
2000 Debentures were issued in denominations of $10,000, accrued interest at 8%
per annum, commencing December 11, 2000, and were originally due on December 11,
2002.  As of December 31, 2001 and 2000, total funds raised under the December
2000 Debentures were $375,001 and $458,677, respectively.


                                       28
<PAGE>
The Company paid interest by issuing common stock equal to the total monthly
interest accrued divided by 75% of the lowest closing bid price of the common
stock for the three consecutive trading days immediately preceding the date of
the monthly interest payment. At any time after 90 days from the issuance of the
December 2000 Debentures, the Company had the option to pay the holder 125% of
the principal amount of the debenture, in full, to the extent the debenture had
not been converted.

Related to this issuance, the Company recorded interest expense related to the
beneficial conversion feature of the December 2000 Debentures for the fiscal
year ended December 31, 2001 and for the period from May 23, 2000 (Inception) to
December 31, 2000 totaling $218,922 and $99,751, respectively.

As of December 31, 2001 and 2000, the holders of the December 2000 Debentures
converted $873,345 and $271,500 and into 917,904 and 260,519 shares of common
stock (reflective of reverse split), respectively.  Conversion prices ranged
from approximately $0.06 to $0.09.


NOTE 6 - COMMITMENTS AND CONTINGENCIES

Leases
------
The Company leases its facility under an operating lease that expires in August
2002.  The future minimum aggregate lease payment remaining under the operating
sublease at December 31, 2001 is $18,272.

Rent expense was $68,484 and $22,224 during the fiscal year ended December 31,
2001 and for the period from March 21, 2000 (inception) to December 31, 2000,
respectively.


Consulting Agreement
--------------------
On June 1, 2000, the Company entered into a three-year consulting agreement with
the Chairman of the Board of Directors for certain consulting services as
requested by the Company.  In accordance with the agreement, the consultant
receives an annual nonrefundable $20,000 retainer, payable on June 1 of each
year.  Any services rendered by the consultant are first deducted from the
retainer, and any subsequent services are billed at an hourly rate of $150.  The
Company also pays the consultant an annual bonus based upon the attainment of
certain financial and strategic goals, with an annual minimum bonus of $10,000.
In addition, the Company is to transfer to the consultant 10,000 shares of
common stock each year during the term of the agreement.  During the most recent
fiscal year, the Company did not make all of the payments due under this
contract.  As of December 31, 2001, the Company owed the consultant
approximately $30,000.  As a result, the consultant agreed to accept the
payments for this year's compensation during the next fiscal year, or whenever
it is financially feasible by the Company to make the payments.

If the consulting agreement is terminated during the term of the agreement, then
the Company is to pay the consultant an amount equal to twice the sum of the
annual retainer and the consultant's highest gross bonus award paid prior to the
year of termination, in addition to certain other accrued obligations.


                                       29
<PAGE>
Employment Agreements
---------------------
On November 9, 2001, the Company entered into a five-year employment agreement
with the Chief Financial Officer.  In accordance with the agreement, the Company
pays an annual base salary of $150,000 with $100,000 for the first year payable
up front in the form of restricted stock.  The remaining $50,000 is to be paid
in the form of cash, stock, stock options or a combination, thereof.  As a
result of agreeing to this payment method, the Company issued the employee
133,333 shares of common stock (reflective of reverse split) prior to the
execution of this agreement.  The employee has the ability to receive a maximum
of 50% of her base salary in performance and company based incentive bonuses.
Employee is also eligible to participate in the employee stock option plan.

On May 1, 2001, the Company entered into a ten-year employment agreement with
the Founder and now former Chief Executive Officer.  In accordance with the
agreement, the Company agreed to pay a signing bonus of $500,000, an annual base
salary of $200,000, incentives and other bonuses.  To date, the Company has not
paid the signing bonus and CGPN also owes back payments.  The Company plans to
make these payments before the end of the fourth quarter 2002 in the form of
cash, stock or a combination thereof.  In March 2002, the employee rendered his
temporary resignation due to the receipt of a forty-eight (48) month sentencing
for his felony conviction prior to the creation of the Company (as noted in Item
9 of this Form 10K-SB).  Upon his resignation, he was subsequently hired as a
consultant with the Company.

On June 24, 2000, the Company entered into an employment agreement with the
former Director of Public Relations.  In accordance with the agreement, the
Company paid an annual salary of $30,000 and an annual bonus of $10,000.  In May
2001, the employee left the Company and this agreement was terminated.

On March 21, 2000, the Company entered into a five-year employment agreement
with the former Chief Administrative Officer.  In accordance with the agreement,
the Company paid an annual salary of $50,000 and an annual bonus of not less
than 50% of the base salary, in addition to certain other bonuses.  These
bonuses were paid in the form of cash, stock, stock options or a combination,
thereof.  In October 2001, the employee was terminated with cause and this
employment agreement was terminated.

On February 25, 2000, the Company entered into an employment agreement with the
former Assistant Director of Research and Development.  In accordance with the
agreement, the Company paid an annual salary of $24,000 and an annual bonus of
$10,000.  In addition, the agreement stipulated that the Company pay a $1,000
bonus for every 1,000 units of products sold, subject to certain conditions.
This bonus was never paid, as the employee did not meet the quota to receive the
$1,000 per unit bonus.  In May 2001, the employee and this agreement contract
were terminated.


Litigation
----------
In December 2001, the Company filed a civil lawsuit, in the United States
District Court Central District of California, against a former Officer and
Board of Director, a former employee and other individuals not associated with
the Company.  This lawsuit alleges that the former Officer used her confidential
relationship with the Company to conceal her personal use of company funds, make
unauthorized stock issuances and cash loans to outside business partners and/or
family.  The Company alleges that these acts were committed in a manner intended
to defraud the Company and divert funds to the other co-conspirators named in


                                       30
<PAGE>
the lawsuit.  As of the date of this filing, all of the defendants named have
defaulted as they failed to respond to the legal complaint.  The Company is
currently taking the necessary steps to begin recovery of the stolen funds.  As
of December 31, 2001, CGPN recorded an $87,413 non-current receivable related to
this lawsuit.  To date, CGPN can provide no assurance as to the collectibility
of these funds.  As a result, the Company established a fifty percent reserve
that is reflected in the $87,413 balance.

The Company is involved in certain legal proceedings and claims that arise in
the normal course of business.  The Company does not believe that the outcome of
these matters will have a material adverse effect on its financial position or
results of operations.


NOTE 7 - SHAREHOLDERS' EQUITY

Common Stock
------------
During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company converted $603,845 and
$1,271,500 of its Series A and Series SPA Subordinated Convertible Redeemable
Debentures into 657,385 and 1,050,760 shares of common stock (reflective of
reverse split), respectively.  In relation to these transactions, the holder of
the debentures converted accrued interest totaling $0 and $4,293 in 2001 and
2000, respectively.  This accrued interest resulted in the issuance of 0 and
3,817 shares (reflective of reverse split) in 2001 and 2001, respectively.

During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company issued 13,350,675 and 608,519
shares of common stock (reflective of reverse split) for services rendered
valued at $2,765,853 and $1,278,200, respectively.  The services were valued at
the fair market value of the stock on the date of issuance.

During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company issued 1,998,841 and 83,487
shares of common stock (reflective of reverse split) as compensation totaling
$594,295 and $243,455, respectively.  These transactions were valued at the fair
market value of the stock on the date of issuance.

During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company issued 0 and 18,333 shares of
common stock (reflective of reverse split) as donations to nonprofit
organizations valued at $0 and $29,950, respectively.  These transactions were
valued at the fair market value of the stock on the date of issuance.

During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company issued 0 and 88,889 shares of
common stock (reflective of reverse split) as interest expense totaling $0 and
$100,000, respectively.

During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company issued options (net of those
terminated) to employees and Board of Directors to purchase 6,255,972 and
4,250,000 shares of common stock.


                                       31
<PAGE>
Stock Options
-------------
The Company adopted only the disclosure provisions of SFAS No. 123. It applies
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its stock issuances to
employees and does not recognize compensation expense for its stock-based
compensation other than for restricted stock and options issued to outside third
parties.

If the Company had elected to recognize compensation expense based upon the fair
value at the grant date for awards under this plan consistent with the
methodology prescribed by SFAS No. 123, the Company's net loss and loss per
share would be reduced to the pro forma amounts for the fiscal year ended
December 31, 2001 and for the period from March 21, 2000 (inception) to December
31, 2000:

<TABLE>
<CAPTION>
                                  December 31, 2001  December 30, 2000
                                  -----------------  -----------------
<S>                               <C>                <C>
       Net loss
          As reported             $     (4,902,903)  $     (4,509,712)
          Pro forma               $     (4,810,654)  $     (4,888,629)
     Basic loss per common share
          As reported             $          (0.56)  $          (2.87)
          Pro forma               $          (0.55)             (3.11)
</TABLE>


The reported and basic loss per common share amounts were recalculated using the
common shares reflective of the reverse split.  For purposes of computing the
pro forma disclosures required by SFAS No. 123, the fair value of each option
granted to employees and directors is estimated using the Black-Scholes
option-pricing model with the following weighted-average assumptions for the
fiscal year ended December 31, 2001: dividend yield of 0%, expected volatility
of 364% and risk-free interest rate ranging from 1.7% to 2.3%.  No options were
issued during the period where the exercise price exceeded the stock price at
the date of grant.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable.  In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility.  Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in the
Company's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its employee stock options.


Other Stock Options
-------------------
During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company issued options to consultants
to purchase 0 and 233,333 shares of common stock (reflective of reverse split).
In relation to these transactions, the Company recorded consulting expenses
totaling $0 and $220,000, respectively.


The following table summarizes the Company's stock option transactions for the
fiscal year ended December 31, 2001:


                                       32
<PAGE>
<TABLE>
<CAPTION>
                                           Adjusted
                     Stock       Stock       Stock      Stock      Stock
                    Options     Options     Options    Options    Options
Prices              Granted    Terminated   Granted   Exercised  Remaining
----------------  -----------  ----------  ---------  ---------  -----------
<S>               <C>          <C>         <C>        <C>        <C>
25% of Stock       10,521,442   4,265,470  6,255,972  6,255,972            -
Market Value
At Exercise Date
</TABLE>


NOTE 8 - RELATED PARTY TRANSACTIONS

During the fiscal year ended December 31, 2001 and for the period from March 21,
2000 (inception) to December 31, 2000, the Company made certain advances to and
had loans from its now former Chief Executive Officer and other related
individuals.  As of December 31, 2001 and 2000, the total net loans due to
related parties totaled $28,362 and $4,744, respectively.

As of December 31, 2001 and 2000, the Company had a loan payable to a related
party totaling $52,210.


NOTE 9 - INCOME TAXES

As of December 31, 2001, the Company had approximately $9,400,000 in net
operating loss carryforwards that may be offset against future taxable income.
No provision for income taxes for the fiscal year ended December 31, 2001 or for
the period from March 21, 2000 (inception) to December 31, 2001 was made since
the Company incurred a loss during these periods.  The deferred income tax
benefit of the loss carryforward is the only significant deferred income tax
asset or liability.  It has been offset by a valuation allowance of the same
amount since the Company does not believe the recoverability of this deferred
tax asset is likely.  Accordingly, no deferred income tax benefit has been
recognized in these financial statements.



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

Refer to Item 13, Exhibit I incorporated in this Form 10-KSB filing.


PART III

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

The names and positions of the Company's directors, executive officers, and
significant employees are as follows:


                                       33
<PAGE>
<TABLE>
<CAPTION>
Name                      Age          Position         Appointed
------------------------  ---  -------------------  -----------------
<S>                                                                    <C>
Thomas Hobson              42  Chairman - Director   March 21, 2000

R. Scott Cramer            38  Board of Director,    November 8, 2001,
                               Interim CEO           March 8, 2002

Richard Serrano            39  Board of Director,    March 8, 2002
                               Interim President

Danette Garrett            28  Board of Director,    October 8, 2001
                               CFO                   November 9, 2001
                               COO                   March 8, 2002

Hector Berrellez           55  Board of Director     November 8, 2001

Gregory Evans              33  Board of Director     May 1, 2000 - March 8, 2002
                               CEO                   May 1, 2000 - March 8, 2002
                               Consultant            March 8, 2002
</TABLE>


THOMAS HOBSON
-------------
Thomas Hobson was appointed to the Board as Chairman on March 21, 2000.  Mr.
Hobson also served as the Company's Interim President from September 28, 2000
through January 8, 2001.  As Chairman of the Board, Mr. Hobson is paid $70,000
per year in cash, stock, stock options, or a combination, thereof.

From 1996 through 1998, Mr. Hobson was the Director of Operations for Sempra
Energy.  In 1998, he was promoted to Director of Consumer Products and Services
where he was accountable for the profit and loss for all consumer related
in-house products and services.  He also assisted in the development of the
expansion strategy to position the company as a national distributor of energy,
communications and information based services.  He was again promoted to Manager
of Partnership Marketing for Sempra Energy.  In this position he worked to
develop strategic partnerships that enhanced the company's brand positioning and
business return, along with obtaining and managing selected sports and
entertainment properties and targeted events.  Currently, Hobson is the Manager
of Alliance Marketing for California Federal Bank.  In this position Hobson
develops and manages partnerships that enhance the company's brand position.

Thomas Hobson is currently under a three year Consulting and Professional
Services Agreement with the Company.  This contract expires on June 30, 2003.
His responsibilities include all tasks and services requested by the Company,
above and beyond the duties performed as a director, during the term of this
agreement. The compensation called for under this agreement includes a $20,000
retainer per year and an annual performance bonus of $10,000.  Either party, at
anytime for just cause, can terminate this agreement.


Richard Serrano was appointed to the Board and accepted the Interim President
position on March 8, 2002.  As a Board of Director, Mr. Serrano is paid $50,000
per year in cash, stock, stock options or a combination, thereof.

Mr. Serrano is currently the President and CEO of Team400, Inc. in Montebello,
CA.  Team400, Inc. is a high technology company specializing in the sale of
Security Software, Computer Forensic Recovery Services, Computer Systems
Security Consulting, Systems Integration and Security Policy Development and
Adherence.  Serrano is responsible for the day-to-day operations along with


                                       34
<PAGE>
developing strategic marketing strategies.  Serrano's previous experience
includes the position of Vice President of Sales and Marketing at Palace Guard
Software, Inc. in Long Beach, CA.  Here, he was directly responsible for the
inception and management of various revenue-generating ventures, including the
development of a successful in-house security project for sale in the Midrange
Computing market.


Danette Garrett was appointed to the Board on October 8, 2001 and accepted the
Chief Financial Officer position effective November 9, 2001.  Garrett accepted
the Chief Operating Officer position on March 8, 2002.  As a Board of Director,
Ms. Garrett is paid $50,000 per year in cash, stock, stock options or a
combination, thereof.

Ms. Garrett began her accounting career in 1995 at Ernst & Young, LLP where she
was a Staff Auditor.  In 1997, Ms. Garrett accepted a Financial Analyst position
with Heller Financial.  Here, Garrett was responsible for auditing and reviewing
existing and potential customers to ensure compliance with contractual rules and
regulations.  In 1999, Ms. Garrett accepted the Supervisor of Financial
Reporting position with Warner Bros (WB).  At WB, she analyzed her assigned
division's financial statements, compiled financial results and reported
findings to upper management.  Most recently, Garrett was the Accounting
Supervisor at DIRECTV where she maintained the monthly accounting tasks, the
evaluation and tracking of purchase accounting reserves and regular
communication with Hughes corporate.


R. Scott Cramer was appointed to the Board on November 8, 2001 and accepted the
Interim Chief Executive Officer position on March 8, 2002.  As a Board of
Director, Mr. Cramer is paid $50,000 per year in cash, stock, stock options or a
combination, thereof.

Mr. Cramer is currently the President of Cramer & Associates, a firm
specializing in retirement management, estate planning and investments.  Cramer
has held this position for many years and has built a solid standing in the
investment field.  Mr. Cramer currently resides in Florida and will not relocate
to California while performing his duties as the Interim CEO.


Hector Berrellez was appointed to the Board on November 8, 2001.  As a Board of
Director, Mr. Berrellez is paid $50,000 per year in cash, stock, stock options
or a combination, thereof.

Mr. Berrellez has twenty-seven years of experience in local, state and federal
law enforcement.  Berrellez also has extensive experience in developing
international investigations.


Gregory Evans was appointed to the Board and accepted the Chief Executive
Officer position on May 1, 2001.  Evans remained in these positions until his
temporary resignation on March 8, 2002 (refer to Item 13, Exhibit 2).  Upon his
resignation, the Company hired Evans as a consultant.

Mr. Evans is the Founder of the Company and has dedicated most of his time to
its development.  Evans is responsible for the E-Snitch and PPIRT software
products and also wrote the novel, Memoirs of a Hi-Tech Hustler, along with
                                   ----------------------------
other ghostwriters.


                                       35
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and Executive Officers, and persons who own more than ten percent of a
registered class of equity securities, to file with the SEC initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of our Company.  Officers, Directors and greater than ten-percent
stockholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. To our knowledge, based solely on review
of the copies of such reports furnished to us and written representations that
no other reports were required during the fiscal year ended December 31, 2001,
our officers, directors and greater than ten percent beneficial owners complied
with all Section 16(a) filing requirements.  However, all of our current Board
of Directors and Officers filed their FORM 3, Initial Statement of Beneficial
Ownership of Securities, with the SEC after the ten day designated deadline.


ITEM 10. EXECUTIVE COMPENSATION
-------------------------------

<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE

                                          ANNUAL
                                       COMPENSATION
                              -------------------------------
NAME AND PRINCIPAL                                                  OTHER
     POSITION           YEAR    SALARY           BONUS            COMPENSATION
----------------------- ----  ----------  -------------------  ---------------------
<S>                     <C>   <C>         <C>                  <C>
Gregory D. Evans (1)    2001  $  200,000            $ 100,000  $500,000 plus options
Former CEO

Danette Garrett  (2)    2001  $  150,000  $  30,000 - $75,000  2,000,000 options
CFO
<FN>
Footnotes:
(1)  As of December 31, 2001, Mr. Evans was the Chief Executive Officer of the
     Company. On March 8, 2002, he temporarily resigned from this position and
     was hired as a consultant. Although Mr. Evan's employment contract
     stipulates an annual salary and bonus of $200,000 and $100,000,
     respectively, he only received $52,475 in cash (unaudited) during the most
     recent fiscal year. This is primarily due to the Company being in the
     development stages for most of the year. In addition, Mr. Evans was issued
     766,667 shares of stock (reflective of reverse split) during the year. The
     Company recorded a payroll expense totaling $529,500 for these issuances.
     This amount was calculated using the fair market value of the stock on the
     date of issuance. The $500,000 in "Other Compensation" represents a signing
     bonus due to Mr. Evans. In December 2001, the Company issued Mr. Evans
     5,555,555 in restricted stock to compensate him for a portion of this
     bonus. Subsequent to the fiscal year-end, this issuance was returned to
     treasury and may be re-issued during 2002. As such, no expense was recorded
     for this issuance in fiscal year 2001.


                                       36
<PAGE>
(2)  Of the $150,000 annual base salary, Ms. Garrett agreed to take the first
     $100,000 of her base up front in restricted stock. The Company issued Ms.
     Garrett 5,000,000 shares of restricted common stock subsequent to the
     fiscal year end. The remaining $50,000 is to be paid in either cash, stock,
     stock options or a combination, thereof. From November 9, 2001 through
     December 31, 2001, Ms. Garrett exercised 156,250 option shares. The Company
     recorded an expense of $14,063 related to these options. As a signing
     bonus, the Company issued Ms. Garrett 133,333 shares of stock (reflective
     of reverse split). The Company recorded an expense totaling $28,000 as a
     result of this issuance. The expense was calculated using the fair market
     value of the stock at the date of issuance.

     Ms. Garrett's employment contract is for a term of five years and expires
     on November 9, 2006.
</TABLE>


STOCK OPTIONS GRANTED IN LAST FISCAL YEAR
-----------------------------------------
During the fiscal year 2001, the Company issued certain stock options to its
employees and officers for bonuses and incentives.  The stock option plan
requires the employees to exercise options monthly, after the completion of a
full calendar month of service.  As of December 31, 2001, all earned options
were exercised.  Therefore, there was no deferred compensation recorded as of
December 31, 2001. The total options granted during the fiscal year totaled
10,521,442, of which 4,265,470 were terminated.  The options were terminated due
to normal attrition and the termination of the former CAO.  Therefore, the net
options granted and remaining at December 31, 2001 totaled 6,255,972 and 0,
respectively.

The exercise price of the stock options is 25% of the market value of the stock
on the day(s) of exercise.  The Company recognizes the expense for options upon
the sale by the employees and/or officers.  During the fiscal year, the Company
reported an expense of $226,248 for the options exercised and $0 in deferred
compensation for all options remaining as of December 31, 2001.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-----------------------------------------------------------------------
The following table sets forth certain information as of December 31, 2001, with
respect to the beneficial ownership of Common Stock by: (i) all persons known by
the Company to be beneficial owners of more than 10% of Common stock, (ii) each
director and named executive officer, and (iii) by all executive officers and
directors as a group.

<TABLE>
<CAPTION>
                              Shares Beneficially         Percentage of Shares
Name and Address                    Owned                     Outstanding
----------------              -------------------         ---------------------
<S>                           <C>                         <C>
Thomas Hobson                             422,917                     2%
Chairman
720 E. Carnegie Dr, #200
San Bernardino, CA 92408

Danette Garrett                           289,583                     1%
CFO/Director
720 E. Carnegie Dr, #200
San Bernardino, CA 92408


                                       37
<PAGE>
R. Scott Cramer                           156,250                     1%
Director
720 E. Carnegie Dr, #200
San Bernardino, CA 92408

Hector Berrellez                          156,250                     1%
Director
720 E. Carnegie Dr, #200
San Bernardino, CA 92408

Gregory Evans                           6,111,805                    25%
Former CEO & Former Director
720 E. Carnegie Dr, #200
San Bernardino, CA 92408

Total ownership by officers
and directors                           7,136,805                    29%
</TABLE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
-------------------------------------------------------
There were no actual or proposed transactions that occurred over the past two
years, to which any person related to the issuer had or is to have a direct or
indirect material interest as set forth in item 404 of Regulation S-B of the
Securities and Exchange Act of 1933.


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

EXHIBIT I: Form 8-K Disagreement with Former Accountant - Amended 8-K

                     U.S. SECURITIES AND EXCHNAGE COMMISSION
                             Washington, D.C. 20549

                               Form 8-K - AMENDED

                                 Current Report

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

        Date of Report (Date of earliest event reported): October 3, 2001

                       THE CYBER GROUP NETWORK CORPORATION
                       -----------------------------------
             (Exact name of registrant as specified in its chapter)

                                     NEVADA
             (State or Jurisdiction of incorporation or origination)

                                    000-28153
                            (Commission File Number)


                     (I.R.S. Employer Identification Number)


     720 E. Carnegie Dr. Suite 200, San Bernardino, Ca          92408
     -------------------------------------------------          -----
      (Address of principal executive offices)                   (Zip Code)


                 Registrant's telephone number:  (909) 890-9769
                                                 --------------


                                       38
<PAGE>
Item 4.          CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT - AMENDED

     (a)  The purpose of this filing is to clarify the types of disagreements
          encountered with our previous independent accountants, Singer Lewak
          Greenbaum & Goldstein LLP (SLGG). As previously reported, SLGG
          resigned as our independent accountants on September 7, 2001 and the
          accountant's report on the financial statements for the year ended
          December 31, 2000 contained an unqualified opinion with an explanatory
          paragraph due to the uncertainty about the Company's ability to
          continue as a going concern.

          The termination of SLGG's relationship with the Company occurred due
          to both lack of communication and a disagreement with our June 2001
          quarterly filing. The lack of communication was primarily due to
          general activities. Regarding the disagreement, SLGG believes that the
          financial statements for the quarter ended June 2000 are misstated.
          SLGG claims that there were some year-end audit adjustments, booked in
          December 2000, related to the June 2000 quarter. As such, SLGG
          believes that the respective adjustments should be reflected in the
          appropriate categories in the June 2001 quarterly filing.

          In October 2001, we engaged our current accountants, Moore Stephens
          Frazer & Torbet LLP (MSFT). The Company's Board of Directors approved
          this decision. Prior to their acceptance of this engagement, we
          discussed with MSFT the nature of our disagreements with SLGG and they
          subsequently discussed them with SLGG. The Company did not seek MSFT's
          advice on any accounting matter prior to the acceptance of this
          engagement.

          Both the company and MSFT agree that we must review the June 2000
          statements and file an amended filing, if necessary. We plan on
          performing this review upon completion of our annual audit. Given
          this, we should have idea of the necessity of an amended filing before
          the end of the second quarter of 2002.



                                    SIGNATURE

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf  by  the  undersigned.


                                           THE CYBER GROUP NETWORK CORPORATION

DATED:  March 29, 2002                      _______________________________
                                           By:  /s/  Danette Garrett
                                           Danette Garrett
                                           Chief Financial Officer


                                       39
<PAGE>
EXHIBIT II:  FORM 8-K - Sentencing of Chief Executive Officer
-------------------------------------------------------------

                         Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 8-K
                                 Current Report
     Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

                        Date of Report: February 4, 2002

                       The Cyber Group Network Corporation
             (Exact Name of Registrant As Specified in Its Charter)

           Nevada                        000-28153
(State Or Other Jurisdiction      (Commission File Number)      (IRS Employer
Of Incorporation Or Organization)                            Identification No.)

            720 E. Carnegie Dr., Suite 200, San Bernardino, CA 92408
          (Address of Principal Executive Offices, Including Zip Code)

                                 (909) 890-9769
              (Registrant's Telephone Number, Including Area Code)

Item 5.     Other Events

     This Form 8-K is being filed to report the sentencing of our chief
executive officer, Gregory D. Evans, in a criminal case named USA v. Evans, Case
Number CR98-1154-DT, in the U.S. District Court, Central District of California.
In November 1998, Mr. Evans pleaded guilty to federal conspiracy and wire fraud
charges related to fraudulently obtaining more than 125 toll-free phone numbers
from phone companies that were never paid for. Mr. Evans and a now defunct
company that Mr. Evans controlled named ICB Telecommunications Corporation d/b/a
Connect America took part in the conspiracy and fraud. Mr. Evans was president
of Connect America.

     On February 4, 2002, Mr. Evans was sentenced to 24 months in federal prison
with any credit for time he already served which will be determined by the
Bureau of Prisons, and was ordered to pay more than $9 million in restitution.
Mr. Evans was also ordered to pay $7,500 in fines. Mr. Evans is scheduled to
self-surrender on March 18, 2002.



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.

                               THE CYBER GROUP NETWORK CORPORATION


                               -------------------------------------------------
Date: February 7, 2002         By: /s/ Gregory D. Evans, Chief Executive Officer
                               Gregory D. Evans, Chief Executive Officer


                                       40
<PAGE>
INDEX TO EXHIBITS

Exhibit             Name  and/or  Identification  of  Exhibit
-------             -----------------------------------------
Number
------

3   Articles of Incorporation & By-Laws
          (a)  Articles of Incorporation of the     Rendered as Previously Filed
               Company filed October 29, 1999       ----------------------------
          (b)  By-Laws  of  the Company adopted
               November  1,  1999                   Rendered as Previously Filed
                                                    ----------------------------
10  Material Contracts
               If Applicable
23  Consent Letters
               Incorporated

                                   SIGNATURES

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

THE CYBER GROUP NETWORK CORPORATION

Date:  April 15, 2002
       --------------
                                    By:
                                        -----------------------------
                                        Thomas Hobson
                                        Chairman, Board of Directors

                                        -----------------------------
                                        Richard Serrano
                                        President, Board of Director

                                        -----------------------------
                                        R. Scott Crammer
                                        Chief Executive Officer
                                        Board of Director

                                        -----------------------------
                                        Danette Garrett
                                        Chief Financial Officer
                                        Board of Director

                                        -----------------------------
                                        Hector Berrellez
                                        Board of Director


                                       41
<PAGE>