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, 2002

                                       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.)

Post Office Box 11403, San Bernardino, CA                      92423

(Address of principal executive offices)                    (Zip Code)

                  Registrant's telephone number: 310-854-4190

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

    Securities registered pursuant to Section 12(g) of the Act: 142,646,665
                         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, 2002:  $63,498


<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  a  Vote  of  Security  Holders

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

PART  III
Item  9  -  Directors,  Executives  Officers,  Promoters  and Control Persons;
            Compliance  of  Section  16(a)  of  the  Exchange  Act
Item  10 -  Executive  Compensation
Item  11 -  Security  Ownership  of  Certain  Beneficial  Owners  and
            Management  and  Related  Stockholder  Matters
Item  12 -  Certain  Relationships  and  Related  Transactions
Item  13 -  Exhibits  and  Reports  on  Form  8-K
Item  14 -  Controls  and  Procedures


<PAGE>
PART  I

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

OVERVIEW  AND  HISTORY
----------------------
On March 21, 2000, The Cyber Group Network Corporation and Subsidiary was
incorporated in the State of California and subsequently purchased 89.1% of
Hollywood Entertainment Network, Inc., a Nevada Corporation, and subsequently
changed the name Hollywood Entertainment Network, Inc., to The Cyber Group
Network Corporation (the "Company", "CGPN", "Cyber Group"), a Nevada
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, computer security company with one main area of
focus: Computer Security. 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 computer and the
valuable information on the computer from hackers and thieves. With PPIRT, a
customer is able to encrypt files (make them inaccessible without the proper
authorization), thrash files (permanently erase them so that they are
unrecoverable even with computer forensics), and manage passwords. In addition,
PPIRT has the ability to track a lost or stolen computer via the Internet and
remotely recover and destroy files from the lost or stolen computer once it is
connected to the Internet. We made our first shipment of PPIRT to Fry's
Electronics in November 2001. We are continuously striving to penetrate other
retail locations and lure corporate clients throughout the United States.

Subsequent to the year-end of 2001, 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.


<PAGE>
This agreement will allow us to market our products to a larger retail audience.

Our Electronic Snitching Device (E-Snitch) is a hardware solution that will
locate a lost or stolen computer within a range of fifty feet. It has several
capabilities, including retrieving sensitive data from the lost or stolen
computer and destroying sensitive data from the lost or stolen computer. Both of
these functions are accomplished wirelessly and without being connected to the
Internet. The development of the E-Snitch device is in the testing stage.
Adaptive Systems and Specialized Control Systems are the primary contractors
developing the E-Snitch. Our main purpose and objective for this new and
innovative technology is to generate sales via licensing agreements, product
placement in retail stores and /or strategic partnerships.

We are concentrating on developing solid relationships with corporate clients,
government agencies and OEM's to create various distribution channels and
related sales for our software and E-Snitch. We are in the process of
determining which avenue is the most appropriate for the successful sales,
marketing and profitability of our products.

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 has 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 unhackable. 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 five 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, 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.

Memoirs of a High-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. We are not currently
actively marketing this product.


<PAGE>
SpyAmericaOnline.com - Maintains an extensive line of personal and professional
security products to give the end user various levels of protection. We are not
currently actively marketing this product.


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
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. We are not currently actively marketing or maintaining these websites.


DISTRIBUTION
------------
We currently have taken our software off of retail stores shelves and we expect
to be releasing a new and improved version in the second quarter of 2003. 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
government agencies, 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
---------------------
At present we do not anticipate any new product offerings. We want to dedicate
our resources to PPIRT and E-Snitch.


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


<PAGE>
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 fully completed and tested.


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, 2002, we employed three (3) full-time employees of which all
were in management positions.


RISK  FACTORS
-------------
In Note Number 10 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, 2002 and 2001, we incurred a net loss of $1,924,803 and
$4,902,903, respectively.

As of December 31, 2002, we had a negative working capital and stockholders'
deficiency of $852,237. These factors, along with an accumulated deficit of
$11,337,418 at December 31, 2002, 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
----------------------
As of December 31, 2002 and at present, we are not occupying and property.

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. Subsequently, as
of the date of this filing, this matter has been


<PAGE>
dismissed and management has not yet determined if any further action will be
taken.

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


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

March 31, 2002                $ .064            $ .013
June 30, 2002                 $ .024            $ .004
September 30, 2002            $ .006            $.0005
December 31, 2002             $.0014            $.0004


(*) 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.

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, 2002 there were 139 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


<PAGE>
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.


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, 2002 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 10 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 $1,924,803 for the year ended December 31, 2002 and have a negative working
capital and stockholders' deficiency of $852,237. 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:


<PAGE>
(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 testing of 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 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
operations.


RESULTS  OF  OPERATIONS
---------------------
Since inception in March 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 $1,924,803 and $4,902,903 for the years ended December 31, 2002 and
2001, respectively. Our reduction net loss was mainly attributed to our cost
cutting measures of closing our physical offices and operations. 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


<PAGE>
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
expected to be less than $50,000 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, SB-2 filings and joint venture partners. 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.


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


                       THE CYBER GROUP NETWORK CORPORATION
                                 AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                        CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2002 AND 2001



<PAGE>


                       THE CYBER GROUP NETWORK CORPORATION
                                 AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)



                                    CONTENTS
                                    --------


PAGE   1 - 1a             INDEPENDENT AUDITORS' REPORT

PAGE        2  CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31,
               2002 AND 2001

PAGE        3  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
               YEARS ENDED DECEMBER 31, 2002 AND 2001 AND FOR THE
               PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER
               31, 2002

PAGES       4  CONSOLIDATED STATEMENTS OF CHANGES IN
               STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM
               MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002

PAGES   5 - 6  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
               YEARS ENDED DECEMBER 31, 2002 AND 2001 AND FOR THE
               PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER
               31, 2002

PAGES  7 - 20  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS OF
               DECEMBER 31, 2002 AND 2001


<PAGE>
                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

To the Board of Directors of:
  The Cyber Group Network Corporation and Subsidiary
  (A Development Stage Company)

We  have audited the accompanying consolidated balance sheets of The Cyber Group
Network Corporation and Subsidiary (the "Company") (a development stage company)
as  of  December  31,  2002 and the related statements of operations, changes in
stockholders'  deficiency  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.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  These  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  consolidated  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, 2002, 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 assuming
that  the  Company will continue as a going concern.  As discussed in Note 10 to
the  consolidated  financial  statements, the Company had a $1,924,803 loss from
operations,  a  working  capital  deficiency  and  a stockholders' deficiency of
$852,237.  These  matters raise substantial doubt about the Company's ability to
continue  as a going concern. Management's plans in regards to these matters are
also described in Note 10.  The consolidated financial statements do not include
any  adjustments  that  might  result  from  the  outcome  of  this uncertainty.



WEINBERG & COMPANY, P.A.

Boca Raton, Florida
May 12, 2003


<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 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
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, 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 the notes 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 the
notes to the financial statements. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


MOORE STEPHENS WURTH FRAZER AND TORBET, LLP
Walnut, California
March 26, 2002


<PAGE>
<TABLE>
<CAPTION>
                         THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                                    (A DEVELOPMENT STAGE COMPANY)
                                     CONSOLIDATED BALANCE SHEETS
                                  AS OF DECEMBER 31, 2002 AND 2001
                                  --------------------------------

                                                ASSETS
                                                ------
                                                                              2002           2001
                                                                          -------------  ------------
<S>                                                                       <C>            <C>
CURRENT ASSETS
  Cash                                                                    $        800   $     8,053
  Accounts receivable, net                                                           -        19,146
  Inventory                                                                          -         2,765
  Prepaid expenses                                                                   -        28,453
                                                                          -------------  ------------
      Total Current Assets                                                         800        58,417

  PROPERTY, PLANT AND EQUIPMENT, NET                                                 -        73,824
  Other receivables, net                                                             -        87,413
  Deposits                                                                           -         1,940
                                                                          -------------  ------------
TOTAL ASSETS                                                              $        800   $   221,594
                                                                          =============  ============


                                LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                                ----------------------------------------

CURRENT LIABILITIES
  Accounts payable                                                        $    230,285   $   104,576
  Accrued expenses                                                              69,511        38,742
  Loans payable                                                                251,317       552,008
  Payable to related party                                                      52,210        52,210
  Due to officers                                                              249,714        28,362
                                                                          -------------  ------------
      Total Current Liabilities                                                853,037       775,898
                                                                          -------------  ------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Preferred stock, $0.001 par value, 50,000,000 shares authorized,
  2,000,000 shares  issued and outstanding                                       2,000         2,000
  Common stock, $0.001 par value, 500,000,000 shares authorized,
  142,646,665 and 24,756,661 shares issued and outstanding, respectively       142,646        24,756
  Additional paid-in capital                                                10,340,535     8,831,555
  Deficit accumulated during development stage                             (11,337,418)   (9,412,615)
                                                                          -------------  ------------

TOTAL STOCKHOLDERS' DEFICIENCY                                                (852,237)     (554,304)
                                                                          -------------  ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                            $        800   $   221,594
                                                                          =============  ============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                         THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                                    (A DEVELOPMENT STAGE COMPANY)
                                CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001 AND FOR THE PERIOD FROM MARCH 21,
          --------------------------------------------------------------------------------
                                2000 (INCEPTION) TO DECEMBER 31, 2002
                                -------------------------------------

                                                                                           For the Period
                                                                                                from
                                                          For the Year     For the Year    March 21, 2000
                                                             Ended            Ended        (Inception) to
                                                          December 31,     December 31,     December 31,
                                                              2002             2001             2002
                                                        ----------------  --------------  ----------------
<S>                                                     <C>               <C>             <C>
REVENUE                                                 $        63,498   $     167,665   $       237,304

COST OF GOODS SOLD                                               17,980          27,738            45,718
                                                        ----------------  --------------  ----------------

GROSS PROFIT                                                     45,518         139,927           191,586
                                                        ----------------  --------------  ----------------

SELLING, GENERAL AND ADMINISTRATIVE                           1,883,318       4,742,768         9,687,603
                                                        ----------------  --------------  ----------------

LOSS FROM OPERATIONS                                         (1,837,800)     (4,602,841)       (9,496,017)
                                                        ----------------  --------------  ----------------

OTHER EXPENSE
  Impairment of property, plant and equipment                    44,113               -            44,113
  Impairment of goodwill                                              -               -           295,000
  Interest expense                                               42,890         300,062         1,502,288
                                                        ----------------  --------------  ----------------
      Total Other Expense                                        87,003         300,062         1,841,401
                                                        ----------------  --------------  ----------------

NET LOSS                                                $    (1,924,803)  $  (4,902,903)  $   (11,337,418)
                                                        ================  ==============  ================

  Net loss per share - basic and diluted                $          (.02)  $        (.56)
                                                        ================  ==============

  Weighted average number of common shares outstanding
    - basic and diluted                                      89,174,416       8,713,108
                                                        ================  ==============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                                 THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                                            (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                         FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
                         -------------------------------------------------------------------

                                                                                                      Deficit
                                                                                                    Accumulated
                                                                                       Additional     During
                                                 Preferred Stock     Common Stock        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 for compensation                    -        -      83,487       83     243,372             -       243,455

Issuance of stock for 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 for 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 for interest expense                -        -      88,889       89      99,911             -       100,000

Net loss, 2000                                        -        -           -        -           -    (4,509,712)   (4,509,712)
                                                 ------  -------  ----------  -------  -----------  ------------  ------------

Balance, December 31, 2000                            -        -   2,594,205    2,594   4,310,552    (4,509,712)     (196,566)

Issuance of common stock for services rendered        -        -  13,350,675   13,350   2,752,503             -     2,765,853
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                 THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                                            (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                         FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
                         -------------------------------------------------------------------

                                                                                                            Deficit
                                                                                                          Accumulated
                                                                                           Additional       During
                                               Preferred Stock         Common Stock          Paid-In      Development
                                               Shares    AMOUNT      Shares      AMOUNT      Capital         Stage
                                              ---------  -------  ------------  ---------  ------------  -------------
<S>                                           <C>        <C>      <C>           <C>        <C>           <C>
Issuance of stock for compensation                    -        -    1,998,841      1,999       592,296              -

Conversion of convertible redeemable
debentures                                            -        -      657,385        657       603,188              -

Interest from beneficial conversion features          -        -            -          -       218,922              -

Issuance of other stock - litigation                  -        -      600,000        600       148,400              -

Issuance of restricted shares                         -        -    5,555,555      5,556        (5,556)             -

Preferred stock issued                        2,000,000    2,000            -          -       211,250              -

Net loss, 2001                                        -        -            -          -             -     (4,902,903)
                                              ---------  -------  ------------  ---------  ------------  -------------

Balance, December 31, 2001                    2,000,000    2,000   24,756,661     24,756     8,831,555     (9,412,615)

Issuance of stock to pay loans                        -        -   30,253,157     30,253       346,023              -

Issuance of stock for compensation                    -        -   20,010,289     20,010       479,275              -

Issuance of stock for services                        -        -   73,214,520     73,215       678,094              -

Stock rescinded                                       -        -   (5,587,962)    (5,588)        5,588              -

Net loss, 2002                                        -        -            -          -             -     (1,924,803)
                                              ---------  -------  ------------  ---------  ------------  -------------

BALANCE, DECEMBER 31, 2002                    2,000,000  $ 2,000  142,646,665   $142,646   $10,340,535   $(11,337,418)
                                              =========  =======  ============  =========  ============  =============


                                                 Total
                                              ------------
<S>                                           <C>
Issuance of stock for compensation                594,295

Conversion of convertible redeemable
debentures                                        603,845

Interest from beneficial conversion features      218,922

Issuance of other stock - litigation              149,000

Issuance of restricted shares                           -

Preferred stock issued                            213,250

Net loss, 2001                                 (4,902,903)
                                              ------------

Balance, December 31, 2001                       (554,304)

Issuance of stock to pay loans                    376,276

Issuance of stock for compensation                499,285

Issuance of stock for services                    751,309

Stock rescinded                                         -

Net loss, 2002                                 (1,924,803)
                                              ------------

BALANCE, DECEMBER 31, 2002                    $  (852,237)
                                              ============
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        5
<PAGE>
<TABLE>
<CAPTION>
                              THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                                         (A DEVELOPMENT STAGE COMPANY)
                        CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                      FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
                      -------------------------------------------------------------------

                                                                                                    For the Period
                                                                                                         from
                                                                   For the Year     For the Year    March 21, 2000
                                                                      Ended            Ended        (Inception) to
                                                                   December 31,     December 31,     December 31,
                                                                       2002             2001             2002
                                                                 ----------------  --------------  ----------------
<S>                                                              <C>               <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                       $    (1,924,803)  $  (4,902,903)  $   (11,337,418)
  Adjustments to reconcile net loss to net cash used
    in operating activities:
  Depreciation and amortization                                           29,711          99,313           151,395
  Provision for doubtful accounts                                        134,084          87,413           221,497
  Impairment of property, plant and equipment                             44,113               -            44,113
  Impairment of goodwill                                                       -               -           295,000
  Amortization of discount on convertible redeemable debentures                -          59,429            87,535
  Interest from beneficial conversion feature                                  -         218,922         1,151,213
  Issuance of stock for services rendered                                751,309       2,765,853         4,795,362
  Issuance of stock as compensation                                      499,285         594,295         1,337,035
  Issuance of stock as donations                                               -               -            29,950
  Issuance of preferred shares for services                                    -         213,250           213,250
  Issuance of stock options for services rendered                              -               -           220,000
  Issuance of stock options as compensation                                    -               -           237,750
  Issuance of stock as interest expense                                        -               -           100,000
  Issuance of other stock -litigation                                          -         149,000           149,000
  Changes in operating assets and liabilities:
    Accounts receivable                                                  (27,525)        (17,506)          (46,671)
    Receivable from related party                                              -           9,250                 -
    Other receivables                                                          -        (174,827)         (174,827)
    Prepaid expenses                                                      28,453         (28,453)                -
    Inventory                                                              2,765          (2,765)                -
    Deposits                                                               1,940             836                 -
    Accounts payable and accrued expenses                                156,478         (42,597)          299,784
    Payable to related party                                                   -               -            52,210
    Due to officers                                                      221,352          14,368           249,714
                                                                 ----------------  --------------  ----------------
        Net Cash Used In Operating Activities                            (82,838)       (957,122)       (1,924,108)
                                                                 ----------------  --------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment                                    -         (10,394)         (125,506)
  Purchase of license rights                                                   -               -           (70,000)
  Proceeds used in business acquisition                                        -               -          (295,000)
                                                                 ----------------  --------------  ----------------
        Net Cash Used In Investing Activities                                  -         (10,394)         (490,506)
                                                                 ----------------  --------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from loan payable                                              75,585         552,019           627,604
  Proceeds from issuance of convertible debt                                   -         375,001         1,787,810
                                                                 ----------------  --------------  ----------------
        Net Cash Provided By Financing Activities                         75,585         927,020         2,415,414
                                                                 ----------------  --------------  ----------------

NET INCREASE (DECREASE) IN CASH                                           (7,253)        (40,496)              800

CASH - BEGINNING OF YEAR                                                   8,053          48,549                 -
                                                                 ----------------  --------------  ----------------

CASH - END OF YEAR                                               $           800   $       8,053   $           800
                                                                 ================  ==============  ================
</TABLE>

          See accompanying notes to consolidated financial statements.


                                        6
<PAGE>
<TABLE>
<CAPTION>
                         THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                                    (A DEVELOPMENT STAGE COMPANY)
                   CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                 FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
                 -------------------------------------------------------------------

                                                                                For the Period
                                                                                     from
                                                 For the Year    For the Year   March 21, 2000
                                                     Ended           Ended      (Inception) to
                                                   December        December      December 31,
                                                   31, 2002        31, 2001          2002
                                                ---------------  -------------  ---------------
<S>                                             <C>              <C>            <C>
SUPPLEMENTAL DISCLOSURE CASH FLOW INFORMATION:
----------------------------------------------

Cash paid for income taxes                      $             -  $       1,922  $         1,922
                                                ===============  =============  ===============

Cash paid for interest                          $             -  $           -  $             -
                                                ===============  =============  ===============
</TABLE>

SUPPLEMENTAL  DISCLOSURE  OF  NON-CASH  INVESTING  AND  FINANCING  ACTIVITIES:
------------------------------------------------------------------------------

During the year ended December 31, 2002, the Company issued 30,253,157 shares of
common stock with a fair value of $376,276 to settle certain loans payable.



          See accompanying notes to consolidated financial statements.


                                        7
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


NOTE  1   BUSINESS  ACTIVITY
-------   ------------------

          On  March 21, 2000, The Cyber Group Network Corporation and Subsidiary
          was incorporated in the State of California and subsequently purchased
          89.1% Hollywood Entertainment Network, Inc., a Nevada Corporation, and
          subsequently  changed  the name Hollywood Entertainment Network, Inc.,
          to  The Cyber Group Network Corporation (the "Company", "CGPN", "Cyber
          Group"),  a  Nevada  Corporation.  The Company is a technology driven,
          Internet based, computer security company with one main area of focus:
          Computer  Security.  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.

NOTE  2   SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
-------   ----------------------------------------------

          (A) PRINCIPLES OF CONSOLIDATION
          -------------------------------

          The  consolidated  financial  statements  include  the accounts of The
          Company  and  its  wholly  owned  subsidiary,  Cyber Crime Corporation
          ("Cyber  Crime").  Cyber  Crime did not have any operations during the
          years  ended December 31, 2002 and 2001. Any intercompany balances and
          transactions  are  eliminated  in  consolidation.

          (B)  DEVELOPMENT  STAGE  ENTERPRISE
          -----------------------------------

          As  of  December  31,  2002,  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.

          (D)  REVENUE  RECOGNITION
          -------------------------

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

          (E)  CASH
          ---------

          Cash  consists  of  cash  on  deposit  held by financial institutions.

          (F)  INVENTORY
          --------------

          The  Company  does  not maintain significant inventory levels. Rather,
          software  is  manufactured  once  orders  are placed with the Company.



          (G)  PROPERTY,  PLANT  AND  EQUIPMENT
          -------------------------------------


                                        8
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          Property,  plant  and equipment are recorded at cost, less accumulated
          depreciation.  Depreciation is provided using the straight-line method
          over  the  estimated useful life of three years. Maintenance and minor
          replacements  are  charged to expense as incurred. Gains and losses on
          disposals  are  included  in  the  results  of  operations.

          (H)  IMPAIRMENT  OF  LONG-LIVED  ASSETS
          ---------------------------------------

          Beginning  January  1, 2002, the Company reviews long-lived assets for
          impairment  under Statement of Financial Accounting Standards No. 144,
          "Accounting  for  the  Impairment  or  Disposal of Long-Lived Assets."
          Long-lived  assets  to  be  held  and used are reviewed for impairment
          whenever events or changes in circumstances indicate that the carrying
          amount  of  an  asset may not be recoverable. The carrying amount of a
          long-lived  asset  is  not  recoverable  if  it exceeds the sum of the
          undiscounted  cash  flows expected to result from the use and eventual
          disposition  of  the  asset.  Long-lived  assets to be disposed of are
          reported  at  the  lower of carrying amount or fair value less cost to
          sell.  During the year ended December 31, 2002, the Company determined
          that  the property, plant, and equipment were impaired and recorded an
          impairment  charge  of  $44,113.

          (I)  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.

          (J)  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.



          (K)  ADVERTISING
          ----------------


                                        9
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          The  Company  expenses  advertising  costs  as incurred. CGPN incurred
          approximately  $245,000,  $97,000 and $175,000 in advertising expenses
          during  the  fiscal years ended December 31, 2002 and 2001 and for the
          period  from  March  21,  2000(inception)  to  December  31,  2000,
          respectively.

          (L)  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.

          (M)  BASIC  AND  DILUTED  LOSS  PER  SHARE
          ------------------------------------------

          For  the  fiscal  years  ended  December 31, 2002 and 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 years ended December 31,
          2002  and  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  (See  Note  7).

          (N)  USE  OF  ESTIMATES
          -----------------------

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles  in  the  United  States  of  America
          requires 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.

          (O)  CONCENTRATION  OF  CREDIT  RISK
          ------------------------------------


                                       10
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          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,  2002 and 2001, the
          Company  did  not  have  any  uninsured  cash.

          For  the  year  ended  December  31, 2002, two customers accounted for
          approximately  39%  and 63% of the Company's sales. For the year ended
          December 31, 2001, one customer accounted for approximately 14% of the
          Company's  sales.  As  of  December  31,  2001,  one  of the Company's
          customers  accounted  for 100% of the total gross accounts receivable.

          (P)  RECENT  ACCOUNTING  PRONOUNCEMENTS
          ---------------------------------------

          In  April  2002,  the  Financial  Accounting Standards Board ("'FASB")
          issued  Statements of Financial Accounting Standards ("SFAS") No. 145,
          "Rescission  of  FASB  Statements No. 4, 44, and 64, Amendment of FASB
          Statement  No.  13,  and Technical Corrections." SFAS No. 145 rescinds
          the  provisions  of  SFAS  No. 4, which requires companies to classify
          certain  gains  and  losses from debt extinguishments as extraordinary
          items,  eliminates  the provisions of SFAS No. 44 regarding transition
          to the Motor Carrier Act of 1980 and amends the provisions of SFAS No.
          13  to  require  that  certain  lease modifications be treated as sale
          leaseback  transactions.  The  provisions  of  SFAS No. 145 related to
          classification  of debt extinguishments are effective for fiscal years
          beginning  after  May  15,  2002, with earlier application encouraged.

          In  July  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for
          Restructuring Costs." SFAS No. 146 applies to costs associated with an
          exit  activity  (including  restructuring)  or  with  a  disposal  of
          long-lived  assets.  Those  activities  can  include  eliminating  or
          reducing  product  lines,  terminating  employees  and  contracts  and
          relocating  plant  facilities  or  personnel.  Under SFAS No. 146, the
          Company  will record a liability for a cost associated with an exit or
          disposal  activity when that liability is incurred and can be measured
          at  fair  value.  SFAS  No.  146  will require the Company to disclose
          information about its exit and disposal activities, the related costs,
          and  changes  in  those  costs  in the notes to the interim and annual
          financial statements that include the period in which an exit activity
          is  initiated  and  in  any  subsequent  period  until the activity is
          completed.  SFAS  No.  146  is  effective  prospectively  for  exit or
          disposal  activities  initiated  after December 31, 2002, with earlier
          adoption encouraged. Under SFAS No. 146, a company cannot restate it's
          previously  issued  financial  statements  and  the  new  statement
          grandfathers  the  accounting  for  liabilities  that  a  company  had
          previously  recorded  under  Emerging  Issues  Task  Force Issue 94-3.

          In  December  2002,  the  FASB  issued  SFAS  No. 148, "Accounting for
          Stock-Based  Compensation-Transition  and Disclosure - an amendment of
          FASB Statement No. 123." SFAS No. 148 amends SFAS No. 123, "Accounting
          for  Stock  Based  Compensation"  and provides alternative methods for
          accounting  for  a  change  by registrants to the fair value method of
          accounting  for  stock-based  compensation. Additionally, SFAS No. 148
          amends  the  disclosure  requirements  of  SFAS  No.  123  to  require
          disclosure  in  the  significant  accounting  policy  footnote of both
          annual  and  interim  financial statements of the method of accounting
          for  stock  based-compensation  and  the related pro-forma disclosures


                                       11
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          when the intrinsic value method continues to be used. The statement is
          effective  for  fiscal  years  beginning  after December 15, 2002, and
          disclosures are effective for the first fiscal quarter beginning after
          December  15,  2002.

          Management  does  not  expect  the impact from these pronouncements to
          have  a  material  impact  on  the  Company's  consolidated  financial
          position  or  results  of  operations.

          (Q)  RECLASSIFICATION
          ---------------------

          Certain  prior  year balances have been reclassified to conform to the
          current  year's  presentation.

NOTE  3   PROPERTY  AND  EQUIPMENT
-------   ------------------------

          Property  and  equipment as of December 31, 2002 and 2001 consisted of
          the  following:

                                                              2002     2001
                                                              -----  --------

          Furniture and fixtures                              $   -  $ 50,813
          Office equipment                                        -    16,209
          Computer hardware and software                          -    58,485
                                                              -----  --------
                                                                  -   125,507
          Less accumulated depreciation                           -    51,683
                                                              -----  --------

                Total                                         $   -  $ 73,824
                                                              =====  ========

          During  the  year  ended  December 31, 2002, operations of the Company
          ceased  to  exist  and  the property, plant and equipment became of no
          use.  Before  the operations ceased, the Company recorded depreciation
          expense  of $29,711 and then recorded an impairment charge of $44,113.

          Depreciation  expense for the 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.

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 2001, 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 the year
          ended  December  31,  2001.


                                       12
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


NOTE  5   CONVERTIBLE  REDEEMABLE  DEBENTURES
-------   -----------------------------------

          (A)  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. Total funds raised in 2000 under these debentures
          were  $954,132.

          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 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.

          (B)  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.

          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


                                       13
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          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  March 21, 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
-------   -------------------------------

          (A)  LEASES
          -----------

          The  Company leased its facility under an operating lease that expired
          in  August  2002.  Rent expense was approximately $17,000, $68,000 and
          $22,000  during  the fiscal years ended December 31, 2002 and 2001 and
          for  the  period from March 21, 2000 (inception) to December 31, 2000,
          respectively.  As  of December 31, 2002, the Company no longer has any
          lease  commitments.

          (B)  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 years, the Company did not
          make  all  of the payments due under this contract. As of December 31,
          2002,  the  Company  owed  the  consultant approximately $60,000. As a
          result,  the  consultant  agreed  to  accept  the  payments  for  this
          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.


                                       14
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          (C)  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  was  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 had the ability to
          receive a maximum of 50% of her base salary in performance and company
          based incentive bonuses. The employee was also eligible to participate
          in  the  employee  stock option plan. On October 1, 2002, the employee
          left  the  Company  and  this agreement was terminated. The accrual of
          salary  owed  to  that  date  is  approximately  $50,000.

          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.  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.


                                       15
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          (D)  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 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.  The  Company  originally  recorded  a non-current
          receivable  related  to  this  lawsuit  in  the amount of $174,827. At
          December  31, 2001, the Company reserved $87,414 of the balance, as of
          December  31, 2002, the Company has determined that the collectability
          is  unlikely  and has fully written off this receivable. This case has
          since been dismissed and the Company has not yet made a final decision
          if  it  will  pursue  further  action  on  this  issue.

          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

          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.



          (A)  COMMON  STOCK
          ------------------

          During the year ended December 31, 2002, the Company issued 30,253,157
          shares of common stock with a fair value of $376,276 to settle certain
          loans  payable.

          During  the  years ended December 31, 2002 and 2001 and for the period
          from  March  21,  2000  (inception)  to December 31, 2000, the Company
          issued  73,214,520,  13,350,675  and  608,519


                                       16
<PAGE>
          shares  of  common  stock  (reflective  of reverse split) for services
          rendered  valued at $751,309, $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  years ended December 31, 2002 and 2001 and for the period
          from  March  21,  2000  (inception)  to December 31, 2000, the Company
          issued  20,010,289,  1,998,841  and  83,487  shares  of  common  stock
          (reflective  of  reverse  split)  as  compensation  totaling $499,285,
          $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 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 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 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
          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, respectively, and
          recorded compensation expense, respectively, and recorded compensation
          expense  of  $226,349,  which is included in the issuance of stock for
          compensation in the statements of changes in stockholders' deficiency,
          and  $237,750,  respectively.

          During  the year ended December 31, 2001, the Company issued 5,555,555
          shares  of  common  stock  to  the  former  CEO for inventions per his
          employment  agreement.  In early 2002, the Company rescinded 5,587,962
          shares  from  the  former  CEO  due to complications incurred with the
          former CEO. No expense was recorded in relation to these transactions.

          During  the  year  ended December 31, 2001, the Company issued 600,000
          shares  of  common  stock with a fair value of $149,000 in relation to
          the  litigation  discussed  in  Note  6  (D).

          (B)  STOCK  OPTIONS
          -------------------


                                       17
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          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  year  ended December 31, 2001. There were no
          stock  options  issued  during  the  year  ended  December  31,  2002.


                                                                        2001
                                                                    ------------

          Net Loss
            As reported                                            $(4,902,903)
            Pro forma                                                (4,810,654)
          Basic loss per common share
            As reported                                                   (0.56)
            Pro forma                                                     (0.55)



          The  reported and basic loss per common share amounts was 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 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.

          (C)  OTHER  STOCK  OPTIONS
          --------------------------

          During  the 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


                                       18
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


          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  year  ended  December  31,  2001:

<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>

          There  were no stock options issued during the year ended December 31,
          2002.




NOTE  8   RELATED  PARTY  TRANSACTIONS
-------   ----------------------------

          During  the  years  ended December 31, 2002 and 2001, the Company made
          certain  advances  to  and  had  loans from its former Chief Executive
          Officer  and  other  related  individuals. As of December 31, 2002 and
          2001,  the  total  net loans due to related parties recorded in due to
          officers  on  the  balance  sheet  totaled  $249,714  and  $28,362,
          respectively.

          As  of December 31, 2002 and 2001, the Company had a loan payable to a
          related  party  totaling  $52,210.



NOTE  9   INCOME  TAXES
-------   -------------

          As  of December 31, 2002, the Company had approximately $11,337,000 in
          net  operating  loss  carryforwards  that may be offset against future
          taxable  income.  No  provision  for  income taxes for the years ended
          December  31,  2002  and  2001  or  for the period from March 21, 2000
          (inception) to December 31, 2000 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.


                                       19
<PAGE>
               THE CYBER GROUP NETWORK CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
       FOR THE PERIOD FROM MARCH 21, 2000 (INCEPTION) TO DECEMBER 31, 2002
       -------------------------------------------------------------------


NOTE  10  GOING  CONCERN
--------  --------------

          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
          year  ended December 31, 2002, CGPN incurred net losses of $1,924,803.
          As  of December 31, 2002, the Company had a working capital deficiency
          and  a  stockholders' deficiency of $852,237. In addition, the Company
          was  in  the  development stage as of December 31, 2002. These factors
          raise  substantial  doubt about the Company's ability to continue as a
          going  concern.

          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.


                                       20
<PAGE>



                                       21
<PAGE>
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 as of 12/31/02:

Name                     Age              Position            Appointed
----------------------  ------  -------------------------  -----------------
Thomas Hobson            42          Chairman - Director   March 21, 2000

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

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

Danette Garrett          28          Board of Director,    October 8, 2001
                                     CFO                   November 9, 2001-
                                                           October 1,2002
                                     COO                   March 8, 2002-
                                                           October 1,2002

Hector Berrellez         55          Board of Director     November 8, 2001




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


                                       22
<PAGE>
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
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.


                                       23
<PAGE>
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.


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.


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


SUMMARY  COMPENSATION  TABLE

                                       ANNUAL
                                    COMPENSATION
                             ---------------------------
NAME AND PRINCIPAL                                                OTHER
     POSITION         YEAR    SALARY         BONUS            COMPENSATION
--------------------  -----  --------  -----------------  ---------------------
Gregory D. Evans (1)   2002  $200,000  $         100,000  500,000 plus options
Former CEO

Danette Garrett  (2)   2002  $150,000  $30,000 - $75,000      2,000,000 options
CFO

R. Scott Cramer  (3)   2002  $ 60,000
CEO

Richard Serrano  (3)   2002  $ 50,000
President


                                       24
<PAGE>
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.

     (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
          expired on November 9, 2006. Subsequent to this agreement, Ms. Garrett
          has resigned her position and this agreement has been terminated.

     (3)  Employment start date of March 8, 2003.


STOCK  OPTIONS  GRANTED  IN  FISCAL  YEAR  2001
-----------------------------------------------
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.


                                       25
<PAGE>
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.

                                 Shares Beneficially  Percentage of Shares
Name and Address                        Owned              Outstanding
---------------------------  -----------------------  ---------------------
Thomas Hobson                              3,500,000                   2.4%
Chairman
Post Office Box 11403
San Bernardino, CA 92423

Danette Garrett*                           6,000,000                   4.2%
CFO/Director
Post Office Box 11403
San Bernardino, CA 92423

R. Scott Cramer                            4,294,772                   3.0%
CEO / Director
Post Office Box 11403
San Bernardino, CA 92423

Gregory Evans*                             6,111,805                   4.3%
Former CEO & Former Director
Post Office Box 11403
San Bernardino, CA 92423

Richard Serrano                                    0                   0.0%
Post Office Box 11403
San Bernardino, CA 92423

Hector Berrellez*                                  0                   0.0%
Post Office Box 11403
San Bernardino, CA 92423

Total ownership by officers,
Directors and beneficial owners           19,406,577                  13.9%

*  We  were not able to make contact with these individuals nor could we confirm
these  amounts  in  a  Form 3 filings. As a result, these amounts are estimates.


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.


                                       26
<PAGE>
ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K
------------------------------------------------
The Company filed Form 8-K on April 23, 2003 for a change of accountants. It
should be noted that the change of accountants was because the former
accountants resigned for non-payment and lack of communication and no adverse
opinions or qualified opinions were rendered by the former accountants in
relation to the Company, there were no disagreements with the former accountants
and there have been no disputes regarding accounting principles.

It should be further noted that during the Company's two most recent fiscal
years, and the subsequent interim period prior to engaging Weinberg, Cyber Group
did not consult Weinberg with respect to the application of accounting
principles to a specified transaction, either completed or proposed, or the type
of audit opinion that might be rendered on Cyber Group's financial statements,
or any other matters or reportable events listed in Items 304(a)(2)(i) and (ii)
of Regulation S-K.




ITEM  14.  CONTROLS  AND  PROCEDURES
------------------------------------

Disclosure controls and procedures are designed to ensure information required
to be disclosed in our periodic reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported, within the time periods specified in the rules and
forms of the Securities and Exchange Commission. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in the periodic reports filed
under the Securities Exchange Act of 1934 is accumulated and communicated to
management, including the Chief Executive Officer and Principal Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure.

Within the 90 days prior to filing data of this Report, we have not conducted an
evaluation of the effectiveness of the design and operation of our disclosures
controls and procedures pursuant to Securities and Exchange Act Rule 13a-14.
This evaluation will be conducted before the issuance of our first quarter
10QSB.


                                       27
<PAGE>
                            CERTIFICATION PURSUANT TO
                            -------------------------
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
                  ---------------------------------------------

     I,  R.  Scott  Cramer,  certify  that:

     1.     I  have  reviewed  this  annual  report  on  Form  10-KSB  of
The  Cyber  Group  Network  Corporation;

     2.     Based  on  my  knowledge, this quarterly report does not contain any
untrue  statement  of a material fact or omit to state a material fact necessary
to  make  the  statements  made,  in light of the circumstances under which such
statements  were made, not misleading with respect to the period covered by this
quarterly  report;

     3.     Based on my knowledge, the financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

     4.     The registrant's other certifying officers and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  we  have:

     a) designed such disclosure controls and procedures to ensure that material
information  relating  to  the  registrant, is made known to us by others within
those entities, particularly during the period in which this quarterly report is
being  prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
procedures  as  of  a  date  within  90  days  prior  to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and

     c)  presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date;

     5.     The  registrant's  other  certifying  officers and I have disclosed,
based  on our most recent evaluation, to the registrant's auditors and the audit
committee  of  registrant's  board  of  directors  (or  persons  performing  the
equivalent  function):

     a)  all  significant  deficiencies  in  the design or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

     b)  any  fraud,  whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

     6.     The  registrant's  other certifying officers and I have indicated in
this  quarterly report whether or not there were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.


By:  /s/  R.  Scott  Cramer
    -----------------------

     R. Scott Cramer
     Chief Executive Officer


Dated: May 14, 2003


                                       28
<PAGE>
                           CERTIFICATIONS PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of The Cyber Group Network Corporation (the
"Company") on Form 10-KSB for the period ending December 31, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned, Chief Executive Officer, certifies, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:

(1)  The Report fully complies with the requirements of section 3(a) or 15(d) of
     the Securities and Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Company.



By:  /s/  R.  Scott  Cramer
    ---------------------------

     R. Scott Cramer
     Chief Executive Officer


Dated: May 14, 2003


                                       29
<PAGE>