SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, D.C. 20549

                             FORM 10-KSB
                              (Mark one)
         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                   SECURITIES EXCHANGE ACT OF 1934

                          December 31, 2002

       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 0-12493

                            DATAMEG CORP.
        (Exact Name of Registrant As Specified In Its Charter)

             NEW YORK                          13-3134389
       (State or other jurisdiction of            (IRS Employer
     incorporation or organization)          Identification No.)

        20 Park Plaza, Suite 463, Boston, MA          02116
             (Address of Principal Office)           Zip Code

                            (617) 948-2680
         (Registrant's Telephone Number, Including Area Code)

         1000 St. Albans Rd, Suite 210, Raleigh, NC 27609
         Former Name, Former Address and Former Fiscal Year,
                     if Changed Since Last Report

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

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

Indicate by check mark whether the registrant has filed all documents
  and reports required to be filed by Section 12, 13 or 15(d) of the
  Securities Exchange Act of 1934 subsequent to the distribution of
   securities under a plan confirmed by a court.  Yes ____  No ____

                 APPLICABLE ONLY TO CORPORATE ISSUERS

  Indicate the number of shares outstanding of each of the issuer's
     classes of common stock, as of the latest practicable date:

                Common stock par value $0.01 per share
          124,911,990 shares outstanding at December 31, 2002

                            DATAMEG CORP.
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INDEX

                                                                                   Page
Part I.

Item 1.   Business..................................................................4-9

Item 2.   Properties..................................................................9

Item 3.   Legal Proceedings........................................................9-10

Item 4.   Submission of Matters to a Vote of Security Holders........................10

Part II.

Item 5.   Market for Registrant's Common Equity
          and Related Stockholder Matters............................................10

Item 6.   Managements Discussion and Analysis or Plan of Operation.................10-11

Item 7.   Financial Statements

          Consolidated Balance Sheets - December 31, 2001 (audited)
            and December 31, 2002 (audited).........................................F-2

          Consolidated Statements of Operations
            For the Year Ended December 31, 2001 (audited);
            For the Year Ended Ended December 31, 2002(audited);
            and Cumulative From Inception (January 13, 1999)
            to December 31, 2002 (unaudited)........................................F-3

          Consolidated Statements of Stockholders' Equity (Deficit)
            From Inception (January 13, 1999) to December 31, 1999 (audited);
            For the Year Ended December 31, 2000 (audited);
            For the Year Ended December 31, 2001 (audited);and
            For the Year Ended December 31, 2002 (audited)..........................F-4

          Consolidated Statements of Cash Flows -
            For the Year Ended  December 31, 2001 (audited);
            For the Year Ended December 31, 2002 (audited); and
          From Inception (January 13, 1999) to December 31, 2002 (unaudited)........F-5

          Notes to Financial Statements .....................................F-6 - F-22


Item 8.   Changes in and Disagreements with Accountants on Accounting
          And Financial Disclosures..................................................16

Part III.

Item 9.  Directors and Executive Officers of the Registrant..........................17

Item 10.  Executive Compensation.....................................................18

Item 11.  Security Ownership of Certain Beneficial Owners and
          Management and Related Stockholder Matters.................................19

Item 12.  Certain Relationships and Related Transactions.............................20

Item 13.  Exhibits, Financial Statement Schedules and Reports on Form 8-K............21

Item 14.  Controls and Procedures....................................................22

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SIGNATURES      PART 1

ITEM 1.   BUSINESS

CERTAIN INFORMATION IN THIS ANNUAL REPORT MAY CONTAIN "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMEDED.  ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT ARE
"FORWARD-LOOKING STATEMENTS" FOR THE PURPOSES OF THESE PROVISIONS, INCLUDING ANY
PROJECTIONS OF EARNINGS, REVENUES OR OTHER FINANCIAL ITEMS, ANY STATEMENTS OF
THE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE ECONOMIC CONDITIONS OR
PERFORMANCE AND ANY STATEMENTS OF ASSUMPTIONS UNDERLYING ANY OF THE FOREGOING.
IN SOME CASES, "FORWARD-LOOKING STATEMENTS" CAN BE IDENTIFIED BY THE USE OF
TERMINOLOGY SUCH AS "MAY," "WILL," "BELIEVES," "PLANS," "ANTICIPATES,"
"ESTIMATES," "POTENTIAL," OR "CONTINUE," OR THE NEGATIVE THEREOF OR OTHER
COMPARABLE TERMINOLOGY.  ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
REFLECTED IN ITS "FORWARD- LOOKING STATEMENTS" ARE REASONABLE, IT CAN GIVE NO
ASSURANCE THAT SUCH EXPECTATIONS OR ANY OF ITS "FORWARD-LOOKING STATEMENTS" WILL
PROVE TO BE CORRECT, AN ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED OR ASSUMED IN THE COMPANY'S "FORWARD-LOOKING STATEMENTS." THE
COMPANY'S FUTURE FINANCIAL CONDITION AND RESULTS, AS WELL AS ANY OTHER "FORWARD-
LOOKING STATEMENTS," ARE SUBJECT TO INHERENT RISKS AND UNCERTAINTIES, SOME OF
WHICH ARE SUMMARIZED IN ITEM 7, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND ITEM 7A "QUANTITATIVE  AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK."

OVERVIEW

We are a New York corporation and were incorporated in October 1982 as The Viola
Group, Inc..  In August 2000 we exchanged 90% of our common stock for 100% of
the stock of DataMEG Corporation, a Virginia corporation that was incorporated
in January 1999.  We subsequently changed our name to DataMEG Corp and are the
successor in business operations to DataMEG Corporation, which exists as a
wholly owned subsidiary of ours.

We are a development stage technology company focused on developing new
technologies, software applications, and products primarily serving the
telecommunications sector.  We are developing a high-speed data transmission
processor that will attempt to use cable network systems as the communication
medium to interface between the transmission source and the receiving entity.
We refer to this process as a Communications Acceleration System ("CAS"). CAS
uses our proprietary Tone Frequency Modulation technology that allows for data
transmissions over cable, as well as other existing communications mediums such
as ISDN, T1, POTS and DSL lines.

Besides DataMEG Corporation, we have two other subsidiaries: CAS Communications,
Inc., of which we own 40% and North Electric Company, Inc. which we wholly own.
CAS Communications was formed in August 2001 to commercialize our CAS
technology. We executed a merger agreement with North Electric Company, Inc. in
Raleigh, North Carolina on December 10, 2001 which was finalized in April 2002.
North Electric Company, Inc. focuses on bringing products to the
telecommunications sector that serve to address specific industry needs and will
partner or collaborate as appropriate to leverage or maximize the value
proposition implicit in these products.

Our principal executive offices are located at 20 Park Plaza, Suite 463, Boston,
MA 02116.

Development of CAS Technology

We have been developing our proprietary Communication Acceleration System (CAS)
technology since inception in January 1999. CAS is a high-speed data processor
that is designed to utilize cable networks as its primary transmission medium.
The project work is now being performed at CAS Communications, Inc. They have
filed for patent protections pertaining to the technology, now referred to the
Multi Phase Poly Tone System (MPTC), as well as foreign patent protection
applications. We expect these filings to result in patent grants some time in
the future.

The basis of the CAS technology and its proprietary developments include the use
of multiple tone-pair configurations, narrowly spaced in the voice frequency
range. The transmission configuration is comprised of the use of short-duration
tones, sent and received as data "pointers" to a set data encryption table,
rather than sending the data directly.

CAS Market Analysis:

Description of Primary Industry:

The desire of most users of devices that require some form of communication
media for the transmission of data is "Bandwidth on Demand".  With the current
increases in Internet utilization and e- commerce, many communications
organizations and computer component manufacturing concerns are in search of the
panacea for providing quick and easy access for Web surfing, e-mailing with
mammoth attachments through the Internet, while providing an economically viable
solution to remote users and the "last mile" phenomenon.

While some users have speedy access at work, through T1 or frame-relay lines,
other users must opt for technologies such as Integrated Service Digital
Networks  ("ISDN") or satellite-dish access for swifter transmission of data and
Web surfing. Others are using Cable and Digital Subscriber Lines ("DSL"), which
are currently faster than traditional analog modems.   Cable has made
substantial in-roads in the consumer marketplace while DSL is attracting more
business users and households not wired for cable.  However, the type of access
available may be limited by geographical location.

TeleChoice which tracks the DSL industry, estimates that the number of
DSL lines in use in the US is 16 million.  Management believes that this method
has experienced significant growth since this reporting.  The Gartner Group
estimates that 55% of U.S. households will still dial up via modem to connect to
the Internet in 2004. International Data Corporation predicts worldwide sales of
analog modems will be 86.3 million units in 2001, a growth rate of 13.5% over
2000 projections.  Furthermore, other research firms place the number of those
accessing the Internet globally at around 259 million users, 110 million of
which reside in the U.S.  It is important to note that over 120 million-
residence access lines are in the U.S. and these residences will continue to
come on line seeking improved speed, accessibility, and arguably, most important
of all, affordability. A March 2000 report by Angus Reid Group of Toronto
projects 1 billion internet users by 2005.

Competing Access Technologies

CABLE.  According to PC World magazine, cable access is in about 20
percent of the 100 million subscribers of cable TV services. The need to install
two-way fiber-optic networks is the current limiting factor for increased
subscribers to this service.  In addition, questions about service, security and
scalability keep it from making further in-roads in areas with already
established networks.  This service provides good downstream results when
compared to other access methods; however, upstream transmissions are performed
at a slower speed.  Cable services cost on average $40 per month. This is
inexpensive in comparison to the other choices because users share a node with
other users.   This node can be shared with between 500-5000 users.  Therefore,
if many users are on-line simultaneously, speed may be less than desired.
However, with shared node access, a concern of users is that others may access
one's PC.  Furthermore, competitive issues as well as single choice of Internet
Service Provider may be of concern.

Digital Subscriber Lines (DSL).  DSL is delivered over the same copper wire as
phone service.  Some DSL versions can run at speeds over 100 times faster than
standard dial-up.  The ubiquity of phone wires makes DSL a good choice for many
users.  The drawback is that most users cannot get DSL yet.  Many of the
deliverers (phone companies) of DSL are still learning how to deploy it.   DSL
is not a standard process as with Cable because it comes in many forms.  There
is IDSL (ISDN DSL) to HDSL (high bit-rate DSL).   Most variations are a form of
ADSL: the "A" stands for "asymmetric" which means that it sends data faster
downstream than upstream to your PC.   This technology has its roots in phone-
line origin and is primarily offered by phone companies.  The benefit to this
technology is that one can talk and transmit, simultaneously.  Pricing for this
service ranges from $50 to $800 per month, with one of the major Bell companies
charging $190 per month.  Furthermore, the DSL modem will cost approximately $99
per installation.

ISDN.  ISDN was once the fastest access for the masses; however, it never caught
on.  Its top speed of 128 kbps provides quicker access than traditional dial-up
speeds.  This service is provided by phone service providers.  We believe that
one reason for the lack of acceptance of ISDN is the manner in which its use is
charged, the more you use it, the greater the cost.  This service is available
to 90 percent of the country, a figure that cable and DSL may never match.   The
service is known for complex installations and newly developed methods provide
better connectivity.

Satellites.  Satellites are available to anyone who can mount a disk with clear
view of the southern sky.  This is good news for those who live in remote places
where other services are not available.  The speeds at which data is transmitted
(400kps) are acceptable to these remote users.  However, upstream transmissions
have oftentimes caused difficulties for the user.  Cost for this service is
approximately $50 per month plus the installation of the disk.

Drivers for Increased Bandwidth:

Technology and technological advancements are crucial drivers of our economy and
they are shaping our society in many ways. Advancements effect everything from
personal relationships to how we choose to spend our leisure time. It has been
stated that the delivery of many products and services to consumers will undergo
dramatic changes during the next decade. Retail space and news circulation, to
name a few, are on the verge of trying to re-invent themselves.

With more businesses moving towards e-commerce distribution channels, the need
for improved access speeds is vital to the delivery of goods and services to the
e-marketplace.  On-line transactions and information transfer are being driven
by an insatiable desire of network users, and improved speed will likely
increase the number of transactions and increase the benefits derived by
companies employing e-commerce.

It is this new technological frontier driven by the rapid development of the e-
commerce marketplace, with a strong desire for quick data access, improved phone
services and video applications, which underpins DataMEG's CAS development and
marketability.

Industry Characteristics and Trends:

Management finds the current environment for the telecommunications industry to
be very intriguing.  Within the domestic and international marketplace,
telecommunications service providers are using their enormous capital budgets to
bolster competition in the industry and among opposing technologies.

Improvements to advanced technology networks (ATN), dense wavelength divisions
multiplexing and improved MHz processors, are some examples.  Fiber optic lines
are being installed and mergers of complementary product-lines searching for
synergies within product offerings are changing the landscape for high-speed
data transmission. However, each new gain achieved that promises improvements is
questioned from an operational and cost standpoint as witnessed by the recent
market value corrections and concerns by debt rating agencies of financial
leverage levels of many of the telecom giants.   As for fiber lines, some
pundits have stated that "we might have enough from our viewpoint now, but
perhaps not the way we will live in the future."

The current landscape is divided into two market segments: wired and wireless.
Within these two segments competition among wired phone, wireless and cable are
commonplace.  Access to customers, through the often-described "last mile", is
causing competitive pressure and much inter-industry competition.

Within each segment there exists proponents for different digital standards as
the industry evolves into a broadband platform. Many providers of network
capabilities are studying their options for upgrading or developing new
networks, such as data networking based on Internet Protocol (IP), in an attempt
to bring broadband access to its existing and prospective customers.

It is this environment of uncertainty, stemming from lack of digital standards
and the constant development of new technologies, which favors technologies that
are proven and currently operational.

The growth of Internet traffic has demanded that communication service providers
replace their voice networks with more efficient, data-oriented cell or packet-
based networks.  However, many billions have already been invested in existing
networks, the implication of major shifts in direction arguably is not a
feasible option.  To further compound this dilemma, data networks, in general,
have not achieved the same level of reliability as voice networks.  Therefore,
equipment providers are racing to develop converged or unified networks that may
improve efficiency and reliability.

On the retail side, the drive for improving broadband access is that consumers
are spending more time at home on the Internet, and they are demanding faster
and more affordable access speed.  The two primary broadband product solutions
are cable modems and digital subscriber line technologies.  Their primary
function is to boost network capacity.  Both of these technologies are geared
towards the booming residential and business markets that are starving for
bandwidth between users and Internet service providers. The outlay for these
services typically starts at $40 per month.  As these services face further
competition, this should drive the cost down somewhat in the future.

Forrester Research, predicts that one-quarter of all US homes-about 16 million
households-will use broadband connections to the Internet by 2002.  The
distribution calls for 80% of the future residential market to use cable modems
and digital subscriber line technology to capture the remainder.

Cable modems promise connection speeds of up to 30 Mbps. These modems are sold
separately or can be packaged into set-up boxes. A drawback of this technology
is that the cable networks are not yet equipped to handle two-way traffic.  Only
about 30-40% of the infrastructure has been upgraded to support two-way traffic.
Until upgrades are complete, cable modems will be limited to specific markets.
The rollout of digital cable boxes to replace the analog boxes is fast underway.
These boxes provide subscribers with better quality services.  Two of the
leading manufacturers of digital cable boxes (RoadRunner and At Home Corp.) have
signed multibillion-dollar, five-year deals with major cable companies to
manufacture affordable digital set-top boxes.

In the area of switches-the most basic element of communications networks-these
computers (switches) which simply convert telephone conversation to digital form
and then reconvert them back to analog form are experiencing a decline in
demand.  These switches were in hot demand as upgrades were made to the
telephone networks.  With much of this digital upgrading done, most of the
service providers are investing in new forms of switches that are better able to
handle the vast traffic flowing through their networks. The constant argument
against alternative technologies is the quality of service.  Voice equipment is
known for its reliability to "five nines"-99.999% efficiency rating.  Voice
networks are almost always available versus data networks, which post almost
21,000 minutes of unavailable time per year.

It is our view that the major challenge facing this industry is to satisfy the
insatiable need for increased capacity within the system as well as improve the
quality and breadth of services.  We believe that the entire industry is
benefiting from the product replacement cycle underway and with new technologies
and processes being sustained, improvements are commonplace.

The global drive underway is to upgrade the telephone networks from analog to
digital technology.  Digital is being used more and more in copper and wireless
networks.  Consumers have been benefiting from this move towards digital mobile
phones more so than from digital lines in their homes.  It has been stated that
two-thirds of wireless subscribers use digital phones, while only 10 percent of
the access lines in the public network have been converted.  This area is slated
for much capital expenditure for many years to come.

Market size for CAS:

The increase in traffic on the Internet has been incredible. According to
International Data Corp (IDC), the total number of Internet users reached almost
110 million in the U.S. alone in 2000 (259 million users worldwide).  Concurrent
with this growth has been a desire for dependable and economical high-speed
access.  Over 50% of U.S. households now have a personal computer and U.S.
consumers account for 30% of PC's shipped each year.  Meanwhile the number of
Internet host computers or servers has expanded to approximately 43 million from
3.2 million in 1994.  Internet service providers have contributed to traffic
growth.  Unlimited access has put a strain on the telephone networks that are
not yet prepared for an average subscriber being on-line for 55 minutes per day.
With high-speed access, this time may be reduced.

Furthermore, Nokia states that there were over 300 million wireless users in
1998 and they predict that this amount will hit one billion by the year-end
2004.  With these users demanding Internet access too, market potential is great
for broadband services.

The target market for CAS intellectual property is the high- speed data service
subscribers which can not be served by the current DSL technology. This target
market is defined as impaired and/or extended copper loops as well as digital
loop carriers (DLC). This market is more than 50% of the 200 million lines in
the U.S. as identified in a DSL Forum report, "DSL Anywhere: A paper designed to
provide options for Service Providers to extend the reach of DSL into previously
un-served areas". At the end of 2000, approximate 1% of U.S. lines (2.1 million)
were DSL subscribers.

The market is large and growing rapidly as evidenced by these
estimates for various industry sources:

        -       TeleChoice, which tracks the DSL industry, estimates
                that the number of DSL lines in use in the US is 4.5
                million lines by year end 2001.

        -       The Gartner Group estimates that 55% of U.S.
                households will still dial up via modem to connect to
                the internet in 2004.

        -       IDC predicts worldwide sales of analog modems will be
                86.3 million units in 2001, a growth rate of 13.5%
                over 2000 projections.

Furthermore, other research firms place the number of residences accessing the
internet globally at around 259 million users, 110 million of which reside in
the U.S.  It is important to note that over 120 million-residence access lines
are in the U.S. and these residences will continue to come on line seeking
improved speed, accessibility, and arguably, most important of all,
affordability. A recent report (March 2000) by Angus Reid Group of Toronto
projects 1 billion internet users by 2005.

Many subscribers are currently not eligible for DSL service because they are
served by Digital Loop Carriers (DLCs). This number is estimated at 35% of lines
currently deployed, and the number of lines served by DLCs is expected to grow
to greater than 50% over the next three years.

Competition

A number of solutions have been developed in the past 12-18 months to offer DSL
to subscribers who are not currently DSL-eligible. These solutions are
attempting to solve the more difficult problems of long loops (conditioned or
non-conditioned), Digital Loop Carriers, and impaired loops. Some of the
progressive companies that are making headway in this market using various
technologies are Elastic Networks, Catena Networks, OCCAM Networks, MuLOGIC,
Paradyne, and Alcatel.

Paradyne, with their ReachDSL product uses a modified CAP (Carrierless Amplitude
Phase) technology. They also reduce the high frequencies used to help eliminate
the crosstalk and make the signals less sensitive to high frequency line
attenuation. Elastic Networks with their Etherloop product uses a packet based
transmission. The technology measures noise and cross talk on the line and
adapts transmission power and frequency to minimize the effects of impairments.

Based on the telecommunications industry market analysis we have performed,
there is a large un-served market opportunity for a technology to address
impaired and/or extended copper loops, as well as DLC loops. Research has shown
that DSL businesses are under great price pressure due to the "loss leader"
approach taken by service providers in the DSL market industry. Any solution to
these issues must provide superior technological and cost / price advantages to
DSL and other competitive transmission solutions, to offset their 1-2 year
advantage relating to time in the market.


Capitalization:

Initial capitalization of the company came in two forms, cash from the founders
and the sale of securities to private  organizations and individuals.  There
have been four rounds of securities sales thus far and one split of 1.45 to 1
which accounts for a total outstanding share balance of 14,917,472 prior to the
share exchange with the Viola Group, Inc., of which 13,050,000 shares were held
by the three founders.

In August 2000, the DataMEG Corporation (the "Subsidiary") consummated a
share exchange with a public company, the Viola Group, Inc. that has since
changed its name to DataMEG Corp. (the "Parent"). In the share exchange the
Subsidiary exchanged all its outstanding shares for 90% of the issued and
outstanding voting common stock of the Parent. As a result of the transaction,
the pre-exchange stockholders of the Parent owned in the aggregate, 3,300,007
shares as of the date of the share exchange. The pre-exchange stockholders of
the Subsidiary owned, as a result of the share exchange, 90% of the issued and
outstanding common stock of the Parent, equaling approximately 29,700,627 shares
as of the date of the share exchange. In addition, the Subsidiary was required
to pay consulting fees totaling $250,000 to an officer of the Parent and assume
tax liabilities totaling approximately $30,000. As a result of the merger, the
Subsidiary became the operating company.

On September 13, 2001 the Company created CAS Communications, Inc. ("CASCO"), a
new entity to be used for the licensing, distribution, and manufacture
outsourcing of the Company's CAS technology.  The Company continues to own the
intellectual property but the CASCO received an exclusive license.  CASCO issued
6,666,666 shares to a minority owner and 20,000,000 shares to the Company, which
represent 75% ownership of CASCO with the minority owner owning the remaining
25%, which is reflected in the accompanying consolidated balance sheet as
minority interest in consolidated subsidiary.

The Company executed a merger agreement with North Electric Company, Inc
("NECI") in Raleigh, North Carolina on December 10, 2001 and the terms of the
agreement required the Company to issue 15,000,000 shares of restricted common
stock to NECI shareholders and pay $400,000 to NECI's majority shareholder.
Furthermore, under the merger agreement, the merger would become effective on
the first date on which: (a) a Registration Statement is effective and (b) the
Company had raised a pre-determined amount of funding and (c) the Company
continued to fund NECI operations at a fixed monthly amount. On March 3, 2002
the Company and NECI signed an amendment to the merger agreement, which
effectively waived all of the above noted conditions to the final merger and the
15,000,000 shares were issued and articles of merger in the state of North
Carolina were filed in April 2002.

As a result of this transaction, NECI became a wholly owned subsidiary of the
Company.  In addition, the purchase consideration included the payment of
$150,000 in cash and the issuance of 1,430,000 shares of the Company's common
stock to NECI, prior to the merger, to support NECI's operations prior to the
merger.    The acquisition has been accounted for under the purchase method.
The total purchase price of approximately $1,090,000 includes cash of $150,000,
common stock valued at approximately $483,000 and liabilities assumed of
approximately $457,000.  Of the purchase price, approximately $13,000 was
allocated to property and equipment and miscellaneous current assets,
approximately $207,000 was allocated to goodwill and approximately $870,000 was
allocated to in-process research and development.  The in-process research and
development was charged to research and development expenses as of the date of
the merger.  The consolidated statement of operations for 2002 includes the
operations of NECI from April 24, 2002 through December 31, 2002.  None of the
goodwill will be recorded for income tax purposes.

North Electric Company, Inc.focuses on bringing products to the
telecommunications sector that serve to address specific industry needs and will
partner or collaborate as appropriate to leverage or maximize the value
proposition implicit in these products.As a result of the acquisition, the
Company acquired goodwill of approximately $207,000, much of this was due to a
projection of the value of NECI in the future based upon discounting future cash
flows expected to be received as NECI is able to market its software products.

NECI is a development stage enterprise that commenced operations during October
2001.  Had the purchase occurred on January 1, 2002, the net loss reported in
the consolidated statement of operations would have increased by approximately
$625,000 to approximately $3,465,000.  Net loss per common share, basic and
diluted, would have been approximately 47,601,381  per share. Most of the
increase in expenses would be attributable to increased research and development
expenses.

The company operates under the name of DataMEG Corp. and trades under the symbol
DTMG on the OTC-BB.

DataMEG Corp. continued to finance its operations in 2002 primarily
through issuance of capital stock in lieu of compensation to vendors and through
equity financings. The Company has been successful to date with cash infusions
from capital stock sales and other debt obligations. DataMEG Corp.'s ongoing
ability to access capital may or may not diminish depending on market
conditions. DataMEG Corp. believes that the current cash, cash equivalents may
not be sufficient to meet anticipated cash needs for working capital and capital
expenditures for the next twelve months. Management continues to prioritize the
securing of financing that optimizes both the Company and shareholder interests.

During 2002 the fourth quarter of 2002, the Company entered into several stock
purchase agreements with certain investors to purchase shares of the Company's
common stock.  The purchase price was discounted based upon market conditions at
time of issuance of the stock and subsequent The Company is holding advances in
the amount of $35,000 for which stock was not issued.   Management believes that
the investors defaulted on the stock purchase agreements and the investors
believe that the Company has defaulted on the stock purchase agreements. The
investors are claiming losses in excess of $160,000.  Although the Company has
recorded a liability to issue stock in the amount of $50,000, the final
settlement between all parties cannot be readily determined at this time.

Furthermore, on December 18, 2001 the Company entered into a short-term loan
agreement with an investor  for $120,000. Principal and interest on the loan
were due April 15, 2002.  The loan was secured by approximately 3.4 million
shares of the Company's stock owned and pledged by the Company's President On
May 17, 2002, the investor filed suit against the Company and the Company's
Presidentfor the principal, accrued interest, legal fees and related damages. A
liability in the amount of the principle and the interest was recorded in the
balance sheet of the Company.  This liability was satisfied in full by the
receipt of the pledged shares in August 2002.  The Company issued the Company's
President 3,272,727 shares of common stock in August 2002 to reimburse him for
the loss of the pledged stock.

On February 13, 2002, the Company entered into a stock sale agreement with an
investor whereby the Company agreed to sell 5,000,000 shares of Company stock.
The investor advance the Company $192,500 against the discounted market value of
the shares at at a The projected re-sale proceeds of the stock was below the
amount previously advanced and the investor filed a breach of contract suit on
May 13, 2002 for the return of an undetermined balance of the advance.  The
investor received a judgement in the amount of $253,859 and applied proceeds
from the sale of the stock issued in February 2002 of $111,471 for a balance of
$142,388 as of December 31, 2002. In addition, the Company  agreed to issue the
investor an additional 10,000,000 shares of common stock of which the net
proceeds will be applied to the current balance.

ITEM 2.   PROPERTIES

We lease approximately 500 square feet of general office space at 20
Park Plaza, Boston, MA 02116 which is  used as our principal executive offices.
The lease term is month to month and provides for monthly rent of $ 1,200.

Our wholly owned subsidiary, NECI, leases approximately 2500 square feet of
space at One Springfield Place, 6131 Falls of the Neuse, Raleigh, NC 27609. The
lease is a sub-lease and the term is for twenty (20) months beginning April 1,
2003 and expiring November 30, 2004 and with monthly rents of $2,383.33.

ITEM 3.   LEGAL PROCEEDINGS

On September 13, 2001 the Company signed an agreement with an effective
date of October 11, 2001, with Quantum Advanced Technologies, Inc. (QAT) whereby
both the Company and QAT settled any litigation and created a new entity to be
used for the licensing, distribution, and manufacture outsourcing of the
Company's CAS technology. The Company will continue to own the intellectual
property but the new entity will receive exclusive license. The Company will own
75% of the new entity and intends to distribute the shares to the Company's
shareholders on a pro-rata basis and QAT will own the remaining 25%. As partial
consideration, QAT will receive options to purchase 2,000,000 of the Company's
shares at an exercise price equal to the closing bid price on the day prior the
term sheet's execution ($1.13).  The proceeds from the exercise of these granted
warrants will flow into the Company over time in an effort to address its
working capital requirements.

On October 29,2001, the Company signed a Promissory Note with the law
firm Hunton & Wiliiams due December 31,2001 acknowledging monies owed Hunton &
Williams amounting to $568,382. On January 7, 2002 the Company received a Notice
of Default relating to the Promissory Note.

During 2002 the fourth quarter of 2002, the Company entered into several stock
purchase agreements with certain investors to purchase shares of the Company's
common stock.  The purchase price was discounted based upon market conditions at
time of issuance of the stock and subsequent The Company is holding advances in
the amount of $35,000 for which stock was not issued.   Management believes that
the investors defaulted on the stock purchase agreements and the investors
believe that the Company has defaulted on the stock purchase agreements.  The
investors are claiming losses in excess of $160,000.  Although the Company has
recorded a liability to issue stock in the amount of $50,000, the final
settlement between all parties cannot be readily determined at this time.

Furthermore, on December 18, 2001 the Company entered into a short-term loan
agreement with an investor  for $120,000. Principal and interest on the loan
were due April 15, 2002.  The loan was secured by approximately 3.4 million
shares of the Company's stock owned and pledged by the Company's President On
May 17, 2002, the investor filed suit against the Company and the Company's
Presidentfor the principal, accrued interest, legal fees and related damages. A
liability in the amount of the principle and the interest was recorded in the
balance sheet of the Company.  This liability was satisfied in full by the
receipt of the pledged shares in August 2002.  The Company issued the Company's
President 3,272,727 shares of common stock in August 2002 to reimburse him for
the loss of the pledged stock.

On February 13, 2002, the Company entered into a stock sale agreement with an
investor whereby the Company agreed to sell 5,000,000 shares of Company stock.
The investor advance the Company $192,500 against the discounted market value of
the shares at at a The projected re-sale proceeds of the stock was below the
amount previously advanced and the investor filed a breach of contract suit on
May 13, 2002 for the return of an undetermined balance of the advance.  The
investor received a judgement in the amount of $253,859 and applied proceeds
from the sale of the stock issued in February 2002 of $111,471 for a balance of
$142,388 as of December 31, 2002. In addition, the Company  agreed to issue the
investor an additional 10,000,000 shares of common stock of which the net
proceeds will be applied to the current balance.



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

In December 2003, the Company desired to amend their certificate of
incorporation with the state of New York to increase the number of authorized
shares of common stock and preferred stock from 130,000,000 to 185,000,000.  In
order to do so they submitted the matter to a vote of a majority of
shareholders. The number of shareholders contacted was twenty-four and all
shareholders contacted consented to the increase in the number of authorized
common and preferred shares.  The Company filed a certificate of amendment of
the certificate of incorporation with the state of New York and was accepted on
December 31, 2002.


PART II.

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Stockholder Matters

The following table sets forth the ranges of high and low sales prices
of DataMEG Corp. Common Stock for each quarter since June 30, 2000.

                                                         High        Low
                                                        ------      ------
July 01, 2000 through September 18,2000
VIOL                                                    $4.000      $1.375

September 19, 2000 through September 30, 2000
DTMG                                                    $2.562      $1.437

October 1, 2000 through December 31, 2000               $4.562      $0.531

January 1, 2001 through March 31, 2001                  $4.500      $2.000

April 1, 2001 through June 30, 2001                     $2.656      $0.400

July 1, 2001 through September 30, 2001                 $1.900      $0.300

October 1, 2001 through December 31, 2001               $0.510      $0.100

January 2, 2002 through March 31, 2002                  $0.120      $0.050

April 1, 2002 through June 30, 2002                     $0.060      $0.010

July 1, 2002 through September 30, 2002                 $0.050      $0.020

October 1, 2002 through December 31, 2002               $0.050      $0.020


ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

6A. SELECTED FINANCIAL INFORMATION

<table>
<caption>

                                                  <c>                <c>            <c>
                                                      Year             Year           Cumulative
                                                      End              End          Since Inception
                                                      2001             2002       (January 13, 1999)
                                                -------------      -----------    ------------------
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
REVENUE:                                        $           -     $          -      $           -

OPERATING EXPENSES:
        Research and development                $     612,154     $  1,232,209      $   2,507,289
        General and administrative              $   2,037,602     $  1,383,288      $  10,589,098
                Total Operating expenses        $   2,649,756     $  2,615,497      $  10,480,890

        Loss from operations                    $  (2,649,756)    $ (2,649,756)     $ (13,096,387)

OTHER INCOME (EXPENSES):                        $  (   87,121)    $  ( 236,740)    $ (    323,205)

NET LOSS BEFORE BENEFIT FOR
        INCOME TAXES AND MINORITY INTEREST:     $  (2,736,877)    $  (2,852,237)    $ (13,419,592)

        Benefit for income taxes                $       -         $       -         $      -

MINORITY INTEREST                               $       -         $      13,012     $      13,012

NET LOSS                                        $  (2,736,877)    $  (2,839,225)    $ (13,406,580)

Net loss per common share
        (basic and diluted)                     $       (0.08)    $       (0.04)    $       (0.29)
Weighted average number of common
        shares outstanding                         33,245,571        69,930,236        46,396,017

</table>

                                                       As of December 31,
                                                      2001            2002
BALANCE SHEET DATA:                             ------------      -----------
Total assets                                    $    159,923      $   222,103
Working capital (deficit)                       $( 1,097,880)     $(2,374,366)
Total stockholders' equity (deficit)            $(   945,556)     $(2,149,237)

6B.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
   RESULTS OF OPERATIONS

CERTAIN INFORMATION IN THIS ANNUAL REPORT MAY CONTAIN "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMEDED.  ALL STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACT ARE
"FORWARD-LOOKING STATEMENTS" FOR THE PURPOSES OF THESE PROVISIONS, INCLUDING ANY
PROJECTIONS OF EARNINGS, REVENUES OR OTHER FINANCIAL ITEMS, ANY STATEMENTS OF
THE PLANS AND OBJECTIVES OF MANAGEMENT FOR FUTURE ECONOMIC CONDITIONS OR
PERFORMANCE AND ANY STATEMENTS OF ASSUMPTIONS UNDERLYING ANY OF THE FOREGOING.
IN SOME CASES, "FORWARD-LOOKING STATEMENTS" CAN BE IDENTIFIED BY THE USE OF
TERMINOLOGY SUCH AS "MAY," "WILL," "BELIEVES," "PLANS," "ANTICIPATES,"
"ESTIMATES," "POTENTIAL," OR "CONTINUE," OR THE NEGATIVE THEREOF OR OTHER
COMPARABLE TERMINOLOGY.  ALTHOUGH THE COMPANY BELIEVES THAT THE EXPECTATIONS
REFLECTED IN ITS "FORWARD- LOOKING STATEMENTS" ARE REASONABLE, IT CAN GIVE NO
ASSURANCE THAT SUCH EXPECTATIONS OR ANY OF ITS "FORWARD-LOOKING STATEMENTS" WILL
PROVE TO BE CORRECT, AN ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED OR ASSUMED IN THE COMPANY'S "FORWARD-LOOKING STATEMENTS." THE
COMPANY'S FUTURE FINANCIAL CONDITION AND RESULTS, AS WELL AS ANY OTHER "FORWARD-
LOOKING STATEMENTS," ARE SUBJECT TO INHERENT RISKS AND UNCERTAINTIES, SOME OF
WHICH ARE SUMMARIZED BELOW.

OVERVIEW

Management's discussion and analysis of financial condition and results
of operations except for the historical information contained herein. We wish to
caution you that certain matters discussed in this Report on Form 10-K
constitute forward-looking events or statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
stated or implied due to a number of factors, including without limitation those
discussed under the caption "Factors That May Effect Future Results".

DataMEG Corp., formerly The Viola Group, Inc., a New York Corporation
and its wholly-owned subsidiary, DataMEG Corporation (the "Company") is a
development stage enterprise. The Company is a technology development enterprise
focused on introducing to the marketplace a technology it has developed, which
it has termed Communications Acceleration System (CAS). CAS is a high-speed data
transmission processor that uses, primarily, Plain Old Telephone Service (POTS)
as the communication medium to interface between the transmission source and the
receiving entity.

In August 2000, the DataMEG Corporation (the "Subsidiary") consummated a
share exchange with a public company, The Viola Group, Inc. which has since
changed its name to DataMEG Corp. (the "Parent"). In the share exchange the
Subsidiary exchanged all its outstanding shares for 90% of the issued and
outstanding voting common stock of the Parent. As a result of the transaction,
the pre-exchange stockholders of the Parent owned in the aggregate, 3,300,007
shares as of the date of the share exchange. The pre-exchange stockholders of
the Subsidiary owned, as a result of the share exchange, 90% of the issued and
outstanding common stock of the Parent, equaling approximately 29,700,627 shares
as of the date of the share exchange. In addition, the Subsidiary was required
to pay consulting fees totaling $250,000 to an officer of the Parent and assume
tax liabilities totaling approximately $30,000. As a result of the merger, the
Subsidiary became the operating company.

On September 13, 2001 the Company created CAS Communications, Inc. ("CASCO"), a
new entity to be used for the licensing, distribution, and manufacture
outsourcing of the Company's CAS technology.  The Company continues to own the
intellectual property but the CASCO received an exclusive license.  CASCO issued
6,666,666 shares to a minority owner and 20,000,000 shares to the Company, which
represent 75% ownership of CASCO with the minority owner owning the remaining
25%, which is reflected in the accompanying consolidated balance sheet as
minority interest in consolidated subsidiary.

The Company executed a merger agreement with North Electric Company, Inc
("NECI") in Raleigh, North Carolina on December 10, 2001 and the terms of the
agreement required the Company to issue 15,000,000 shares of restricted common
stock to NECI shareholders and pay $400,000 to NECI's majority shareholder.
Furthermore, under the merger agreement, the merger would become effective on
the first date on which: (a) a Registration Statement is effective and (b) the
Company had raised a pre-determined amount of funding and (c) the Company
continued to fund NECI operations at a fixed monthly amount. On March 3, 2002
the Company and NECI signed an amendment to the merger agreement, which
effectively waived all of the above noted conditions to the final merger and the
15,000,000 shares were issued and articles of merger in the state of North
Carolina were filed in April 2002.

As a result of this transaction, NECI became a wholly owned subsidiary of the
Company.  In addition, the purchase consideration included the payment of
$150,000 in cash and the issuance of 1,430,000 shares of the Company's common
stock to NECI, prior to the merger, to support NECI's operations prior to the
merger.    The acquisition has been accounted for under the purchase method. The
total purchase price of approximately $1,090,000 includes cash of $150,000,
common stock valued at approximately $483,000 and liabilities assumed of
approximately $457,000.  Of the purchase price, approximately $13,000 was
allocated to property and equipment and miscellaneous current assets,
approximately $207,000 was allocated to goodwill and approximately $870,000 was
allocated to in-process research and development.  The in-process research and
development was charged to research and development expenses as of the date of
the merger.  The consolidated statement of operations for 2002 includes the
operations of NECI from April 24, 2002 through December 31, 2002.  None of the
goodwill will be recorded for income tax purposes.

North Electric Company, Inc.focuses on bringing products to the
telecommunications sector that serve to address specific industry needs and will
partner or collaborate as appropriate to leverage or maximize the value
proposition implicit in these products.As a result of the acquisition, the
Company acquired goodwill of approximately $207,000, much of this was due to a
projection of the value of NECI in the future based upon discounting future cash
flows expected to be received as NECI is able to market its software products.

NECI is a development stage enterprise that commenced operations during October
2001.  Had the purchase occurred on January 1, 2002, the net loss reported in
the consolidated statement of operations would have increased by approximately
$625,000 to approximately $3,465,000.  Net loss per common share, basic and
diluted, would have been approximately 47,601,381  per share. Most of the
increase in expenses would be attributable to increased research and development
expenses.

These financial statements are those of the Subsidiary, with adjustments to
reflect the changes in equity structure resulting from the share exchange,
creation of CASCO and the merger with NECI.

The Company operates under the name of DataMEG Corp. and trades under the symbol
DTMG on the OTC-BB.

As of December 31, 2002, the Company had issued options to consultants to
purchase approximately 5,924,520 shares of common stock at prices ranging from
$.0126 to $5.00 per share for persons who had performed services for the
Company. Of these options, as of December 31, 2002, 224,520 options have expired
and none have been exercised. In January 2003, a consultant exercised 3,000,000
of the above referenced stock options and shares were issued subsequently.

>From DataMEG Corporation's inception in January 1999 through December 2002,
operating activities consisted primarily of research and development, product
design, and development and testing of the CAS technology and NECI technology.
During this period, DataMEG Corporation has focused on developing this
technology using its internal resources, primarily, its Senior Technology
Officer and other external product development- engineering firms. Since
inception, DataMEG Corporation has incurred operating losses, and as of December
31, 2002, had an accumulated deficit of $13.4 million.   DataMEG Corporation has
not realized any operating revenue nor has it achieved profitability on a
quarterly or on an annual basis. While DataMEG Corp is developing and plans to
introduce future products, there can be no assurance that it will be successful
in these efforts.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

The Company continued its policy through the fourth quarter of 2002 of
conserving capital by rigorously controlling general and administrative expenses
and directing both financial and human resources towards validating, both
technically and commercially, the CAS and NECI technology. Management also
pursued efforts on stabilizing its financial condition through efforts to access
both private and public sources of funding.  These efforts are reflected in the
annual results and further discussion in the Current Developments section that
follows.

Revenues for the three months ended and year to date December
31, 2002 were $0 (zero) as well as for the corresponding periods in
the prior year.

Cost of Revenues for the three months ended and year to date December 31, 2002
were $0 (zero) as well as for the corresponding periods in the prior year.

Net loss for the three months ended December 31, 2001 was approximately $760,000
compared to a loss of approximately $407,000 for the three months ended
September 30, 2001. The increase in the net loss was primarily attributable to
increases in expenses relating to R&D and compensation to employees and
consultants.

Research and development expenses were approximately $173,000 for the three
months ended December 31, 2001 compared to approximately $204,333 for the same
period ended in the prior year. The decrease in expenses was primarily due to
decreased costs associated with non-recurring engineering costs incurred in 2001
and beginnng of 2002 . Research and development costs in 2002 were for prototype
expenses for the design and development and third party evaluation of the CAS
technology and in-process R&D related to North Electric Company, Inc. for
product development scheduled for a first release in mid- 2003.  Research and
development is essential to DataMEG Corp. and its subsidiaries' future success
and it expects that the amounts for research and development expenses will
remain constant in future periods until product releases generate sufficient
revenue to move the company from development stage status.

In 2002, the Company entered into agreements with several vendors to provide
contract accounting services, temporary operations management services corporate
legal services and research and development.  The Company agreed to issue most
of the vendors unrestricted shares of stock in lieu of cash compensation and for
reimbursed expenses.  The Company issued approximately 35,553,000 shares in the
period January through December of 2002 and recorded a charge to the Statement
of Operations for consulting fees, legal fees and accounting fees in the amount
of $702,000 for the year ended December 31, 2002.  It is anticipated that there
will be additional fees related to accounting, operations management corporate
legal services and research and development in the future.

Compensation paid and accrued to officers and other key employees employees was
approximately $170,000 for the three months ended December 31, 2002 as compared
to $246,000 for the same periods in the prior year. The decrease in compensation
is due the to decrease in salary and wages awarded to the President of the
Company in 2002. A liability of approximately $305,000 has been recorded related
to salaries and wages due to officers and a key employee at December 31, 2002.
At December 31, 2002, the Company was indebted to officers and stockholders in
the amount of $63,680 for expenses incurred on behalf of the Company. As of
December 2002, no officer, employees or stockholders were indebted to the
Company.

General and administrative expenses were approximately $445,000 for the three
months ended December 31, 2001 compared to approximately $240,000 for the same
period in the prior year. The increase in expenses reflects the increase of
costs related to rent, consulting fees, compensation, accounting, legal and
other various expenses as previously noted.


DataMEG Corp. continued to finance its operations in the fourth quarter of 2002
primarily through issuance of capital stock in lieu of compensation to vendors.
The Company has been successful to date with cash infusions from capital stock
sales and other debt obligations. DataMEG Corp.'s ongoing ability to access
capital may or may not diminish depending on market conditions. DataMEG Corp.
believes that the current cash, cash equivalents may not be sufficient to meet
anticipated cash needs for working capital and capital expenditures for the next
twelve months. Management continues to prioritize the securing of financing that
optimizes both Company and shareholder interests.

YEAR END DECEMBER 2002 COMPARED TO YEAR END DECEMBER 2001

Revenues for the year ended December 31, 2002 were $0 (zero) as well as for the
corresponding period in the prior year. No revenues were reported for the three-
month period ending December 31, 2002 as well as for the corresponding period in
the prior year.

Cost of Revenues for the year ended December 31, 2002 were $0 (zero) as well as
for the corresponding period in the prior year. None were reported for the
three-month period ending December 31, 2002 as well as for the corresponding
period in the prior.

Research and development expenses were approximately $1,232,000 for the year
ended December 31, 2001 compared to approximately $612,000 for the same period
in the prior year. The increase in expenses was primarily due to increased costs
associated with non- recurring engineering costs and an increase in prototype
expenses for the design and development of the CAS technology and in-process
research and development related to North Electric Company, Inc. and its product
development efforts.

Compensation paid and accrued to officer and other key employees was $640,358
for the year ended December 31, 2002 compared to $494,000 for the same period
the prior year. As of December 31, 2002, the Company was indebted to an officers
and stockholders for expenses incurred on behalf of the Company and unpaid
compensation in the amount of $63,680. As of December 31, 2002, no officer or
stockholder was indebted to the Company. 12,200,000 shares of common stock was
issued  to officers and employees for compensation and for reimbursements of
amounts paid on behalf of DataMEG Corp. for approximately $131,000.

General and administrative expenses were approximately $1,393,000 for the year
ended December 31, 2002 compared to approximately $2,038,000 for the same period
in the prior year. The net decrease in general and administrative expenses was
primarily attributable to a reduction in professional fees, consulting fees.

Net loss for the year ended December 31, 2002 was approximately $2,876,910
compared to a loss of approximately $2,737,000 for the year ended December 31,
2001. The increase in the net loss was primarily attributable to increases in
research and development expense,consulting fees and interest expense.

Cash used in operating activities for the year ended December,2002 was
approximately $523,000. Cash used in investing activities was approximately
$149,000 for the year ended December 31, 2002. Cash provided by financing
activities was approximately $675,000 for the year ended December 31, 2002

CURRENT DEVELOPMENTS

The Company executed a merger agreement with North Electric Company, Inc. in
Raleigh, North Carolina on December 10, 2001 which will be finalized in April
2002.  Under the merger agreement, the merger would become effective on the
first date on which: (a) a Registration Statement is effective and (b) we had
raised a pre- determined amount of funding and (c) we continued to fund North
Electric Company, Inc.'s operations at a fixed monthly amount. On March 1,2002
the Company and North Electric Company, Inc. signed a final unconditional merger
agreement, which, effectively waived all of the above noted conditions to final
merger.

North Electric Company, Inc., is a communications networking- solutions company
located in North Carolina's Research Triangle. North Electric Company, Inc.'s
mission is to develop software technologies and products that integrate and
leverage the recent proliferation of next generation networking technologies
within the communications industry.  This group will focus on bringing products
to the telecommunications sector that serve to address specific industry needs
rather than displace a competing product.  Time to market, critical mass for the
market served and an immediately exploitable client base will be key criteria in
evaluating any investment in product development. A more complete overview of
North Electric Company, Inc. follows.

Description of Primary Industry

The last decade has seen many new networking technologies conceived and promoted
by various industry participants: Equipment vendors, network operators, and
standards organizations.  We have seen the evolution of the network from
monolithic, fixed bandwidth time- division multiplexed (TDM) architectures to a
packet-based (IP) network infrastructure that makes more efficient use of
network resources.  Dynamic routing protocol and traffic engineering evolutions
(MPLS) and innovative connection control mechanisms (Softswitch) are enhancing
packet networks to provide new carrier class services while lowering capital and
operating costs. This, coupled with increased bandwidth availability, has
launched a whole new class of network services such as high-speed data
networking access (DSL and Cable Modem), packetized voice (VoIP), virtual
private networking (VPN), and guaranteed Quality of Service (QoS) data
connections.

Next-generation networks introduce new capabilities and the opportunity for new
products and services. However, for carriers and service providers, new networks
introduce a whole new set of problems. Many of the new network services, while
having merit from a technological perspective, have been failures from a
business execution standpoint. Many of these non - starts have been created by
the gap between the availability of innovative communications systems
technologies and the lack of a dependable operating infrastructure within which
the carriers can profitably deploy these technologies. Network management,
service level agreements, and network monitoring are essential to reliable
carrier-class communications that enterprise customers depend on for mission-
critical business communications.

North Electric Company, Inc.'s strategy is to identify and provide solutions for
some of the most challenging aspects of deploying, monitoring, and managing
these advanced networks and network services. The company is in discussions with
some of the largest test equipment suppliers in this sector in order to
establish a long term operating, supplier, and financial relationships.

Through North Electric Company, Inc., our focus will be on creating solutions by
selecting, integrating, and augmenting emergent and legacy technologies to
enable both carriers and users of the communications networks to successfully
deploy and guarantee the performance of these product technologies in the course
of their business operations. We are developing solutions to real problems
facing network operators and providers as they deploy services in the "new
network".

Market Size

The global market for next-generation communications networking products is
large and growing rapidly, as evidenced by these estimates from various industry
analysts:

Worldwide revenues for next generation voice products are forecasted to total $6
billion in 2004.  The voice services market is expected to grow to US$41 billion
by 2005.  The market for voice over broadband equipment will reach $646 million
by 2004, representing a 63% CAGR over the forecast period.  The North American
network edge switching and routing market reached $7.6 billion in 2000, and is
expected grow at a CAGR of 44% to $33 billion by 2004.  IP-centric network edge
equipment will account for almost 60% of equipment vendor revenues by 2004 vs.
some 37% in 2000.  VoIP is rapidly emerging as an alternative to the traditional
telephone network, with gateway and gatekeeper revenues projected to increase
from $3.7 billion last year to $12.3 billion in 2006.  Enhanced and high-end
bundled services and applications delivered into the home will create phenomenal
growth in the residential gateway market, with revenues forecast to increase
from $267 million last year to $7.1 billion by 2006 Enterprises migrating voice
from traditional networks to data networks will create a $16.5 billion dollar
global IP-PBX market by 2006.  The market for service creation devices, which
enable service providers to offer IP- based value-added network services, is
expected to grow at a projected CAGR of over 90% during the 2000-2004 period.
Web based VoIP communications service revenues will increase from $208 million
this year to $16.5 billion by the end of 2004.

 North American voice over packet industry will reach $33.9 billion by 2004.
VoDSL market revenues will increase to $7.2 billion in 2005, a compound annual
growth rate of 156 percent.

The IP virtual private network (VPN) services market for U.S.- based carriers
will grow rapidly, from $1.28 billion in 2000 to almost $10 billion in 2005, for
a CAGR of 51% in that time period.

One example of dynamic routing protocol and traffic engineering is MPLS. MPLS is
a standards-approved technology for speeding up network traffic flow and making
it easier to manage. MPLS involves setting up a specific path for a given
sequence of packets, identified by a label put in each packet, thus saving the
time needed for a router to look up the address to the next node to forward the
packet to.

As of October 2001, the following organizations had publicly announced MPLS
deployments:

                                 AT&T
                        Ardent Communications
                               Aventel
                           British Telecom
                           Cable & Wireless
                             China Unicom
                               Concert
                             CoreExpress
                                Digex
                                Equant
                      France Telecom  Global One
                           Global Crossing
                               Infonet
                           InternetConnect
                               Iteroute
                            Japan Telecom
                               Level 3
                        Masergy Communications
                                 NTT
                               Swisscom
                            UUNET/Worldcom

This burgeoning deployment of next-generation networking technologies will
require a commensurate growth in Operations Support Systems ("OSS") deployed to
enable carriers to install, manage, operate, troubleshoot, and monitor these new
networks. Reflecting that necessity, total North American OSS spending is
predicted to grow from $20B in 2000 to $55B in 2004 (28% CAGR).

Within that total OSS expenditure, a major segment is the Service Assurance (SA)
sector. SA systems provide the functionality to monitor the performance and
health of installed networks, alert the network operator to potential or current
problems, and enable the operator to troubleshoot and repair network failures.
Collectively these functions enable the carrier to offer high-quality service to
their subscribers with guarantees about the availability, performance, and
robustness of the services. SA is the sector of the OSS market that North
Electric Company is focused on serving as our starting point for building the
business.

The North American SA market sector is estimated as $3.2 billion in 2002,
growing at an average rate of 23% in ensuing years to reach a size of $7 billion
by 2006; the global market is roughly estimated to be twice the size of the
North American market. North Electric Company estimates the portion of the
market associated with the next-generation network technologies and services on
which we are focused will grow to be approximately 15% of the SA sector over the
next 5 years. This means that our addressable segment of the market will be
approximately $2 billion by 2006.

Competition

The competitive environment in the current communications industry is very
robust, with many players from many different backgrounds wrestling for their
piece of the pie. In this context, North Electric Company faces a broad range of
competitive threats.

North Electric Company's competition can be best understood by considering
several axes defining the OSS/SA industry space:

 ENTERPRISE VS. CARRIER - Different companies dominate the market serving
enterprise or large business customers from those who serve the public network
operators or carriers. North Electric Company's focus is in the carrier market
segment, but on new technologies and service types which are typically first
implemented and proven in the enterprise arena. Therefore, we expect to see
competitive threats from both carrier SA players seeking to expand their
established business into the next-generation technology areas and from
enterprise SA players seeking to take their next-generation expertise from the
enterprise into the carrier domain.

        DATACOM VS. TELECOM - Different companies dominate the telecom, or
telephone networking, sector of the communications networking business, and the
datacom, or data/computer networking sector. North Electric Company's target
market is the convergence of telecom and datacom environments in the next-
generation networking world. Therefore we expect to see specialists in IP
network test and monitor capabilities seeking to grow their market by adding on
functionality in the carrier network infrastructure areas, and we expect to see
telecom infrastructure SA players trying to expand upward into the packet-
oriented data communications areas.

        TEST EQUIPMENT VS. OSS SYSTEM - The market for OSS equipment has
generally been divided between the test equipment vendors, who make specialized
pieces of gear designed to test particular functions in a piece of networking
equipment, and the OSS vendors, who make systems to provide integrative
overviews of the network status. North Electric Company is developing a hybrid
TEST-OSS system enabling automation of the test equipment deployed around the
network for the purpose of fault identification and localization. This puts us
in the path of potential expansion from both the established test equipment
vendors, seeking to move up the food chain into systems-level products, and the
incumbent OSS vendors, striving to broaden their integrated control of the
network beyond provisioning and monitoring to include test functionality.

        DATA PLANE VS. CONTROL PLANE VS. MANAGEMENT PLANE - Communications
networks are structured into three parallel domains of functionality: The data
plane, where user data flows between network ports, the control plane, which
uses signaling between network entities to control connections and services, and
the management plane, which provides the administrative oversight of the network
via non-realtime supervisory communications channels and processes. North
Electric Company is spanning these domains with a systems approach that
integrates critical functionality in each area to facilitate the profitable
deployment of next-generation networking technologies. We may thus expect to
encounter potential competition from any of the current participants in the
individual domains.

        North Electric Company's strategy for competing in this
complex environment is simple:

        1)      Stay focused on our clearly defined target sector

        2)      Move quickly and decisively to capitalize on our vision

        3)      Partner or collaborate as appropriate to leverage our value
                proposition

Positioning and Near Term Opportunities

        A major sub-segment of the OSS market is the Service Assurance (SA)
sector. SA systems provide the functionality to monitor the performance and
health of installed networks, alert the network operator to potential or current
problems, and enable the operator to troubleshoot and repair network failures.
Collectively these functions enable the carrier to offer high-quality service to
their subscribers with guarantees about the availability, performance, and
robustness of the services. SA is the sector of the OSS market that North
Electric Company, Inc. is focused on serving as our starting point for building
the business.

        The North American SA market sector is estimated as $3.2 billion in
2002, growing at an average rate of 23% in ensuing years to reach a size of $7
billion by 2006; the global market is roughly estimated to be twice the size of
the North American market. North Electric Company estimates the portion of the
market associated with the next-generation network technologies and services on
which we are focused will grow to be approximately 15% of the SA sector over the
next 5 years. This means that our addressable segment of the market will be
approximately $2 billion by 2006.

6c. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FACTORS THAT MAY EFFECT FUTURE RESULTS

        While DataMEG Corp is developing and plans to introduce future products,
there can be no assurance that it will be successful in these efforts.

        DataMEG Corp has limited meaningful historical financial data upon which
to base projected revenues and planned operating expenses and upon which
investors may evaluate DataMEG Corp and its prospects. In addition, DataMEG Corp
operating expenses are largely based on anticipated revenue trends from
prospective joint development of applications of CAS and its success in
developing those products in development stage as a result of the merger with
North Electric Company, Inc. A high percentage of DataMEG Corp's expenses are
and will continue to be fixed such as compensation, research and development and
sunk administrative expenses. Investors should consider the risks and
difficulties frequently encountered by companies like DataMEG Corp in a new and
rapidly evolving market. DataMEG Corp's ability to sell products, and the level
of success, if any, DataMEG Corp achieves, depends, among other things, on the
level of demand for the CAS technology, which is in a new and rapidly evolving
market.

        Any failure of DataMEG Corp to generate revenues would prevent it from
achieving and/or maintaining profitability. DataMEG Corp has incurred losses
since inception and expects to continue to incur losses in the future. As of
December 31, 2001, DataMEG Corp had an accumulated deficit of $13.5 million.
DataMEG Corp has not achieved profitability on a quarterly or annual basis, and
DataMEG Corp anticipates that it will continue to incur net losses.

        There can be no assurances that DataMEG Corp's revenues will grow or
that DataMEG Corp will generate sufficient revenues to achieve or sustain
profitability. DataMEG Corp has fixed expenses and expects to continue to incur
these expenses and in addition, DataMEG Corp may need to increase sales and
marketing, product development, administrative and other expenses. As a result,
DataMEG Corp will need to generate significantly higher revenues to achieve
and/or maintain profitability.

        DataMEG Corp is dependent on the CAS technology and its future
applications, its success in developing those products in development stage as a
result of the merger with North Electric Company, Inc. and future growth in
revenues depends on the commercial success and acceptability of this line of
communication products. There can be no assurances that DataMEG Corp will be
successful in completing the development or introduction of these CAS products
and those of North Electric Company, Inc Failure of current or planned products
to operate as expected could delay or prevent their adoption.

        If DataMEG Corp does not respond rapidly to technological changes,
DataMEG Corp's product concepts could become obsolete. The market for
communication products is likely to be characterized by rapid technological
change, frequent new product introductions and changes in customer requirements.
DataMEG Corp may be unable to respond quickly or effectively to these
developments. DataMEG Corp may experience design, manufacturing, marketing and
other difficulties that could delay or prevent DataMEG Corp's development,
introduction or marketing of new products and applications relating to its
product lines.

        The introduction of new products by competitors, market acceptance of
products based on new or alternative technologies or the emergence of new
industry standards, could render DataMEG Corp's existing or future products
obsolete. In developing DataMEG Corp's products, DataMEG Corp has made, and will
continue to make, assumptions about the standards that may be adopted by users.
If the standards adopted are different from those which DataMEG Corp have chosen
to support, market acceptance of its products may be significantly reduced or
delayed and its business will be seriously harmed. In addition, the introduction
of products incorporating new technologies and the emergence of new industry
standards could render DataMEG Corp's existing application premises obsolete.

        Despite DataMEG Corp's efforts to protect its proprietary rights,
unauthorized parties may attempt to copy or otherwise obtain and use DataMEG
Corp's products or technology. Monitoring unauthorized use of DataMEG Corp's
products is difficult and DataMEG Corp cannot be certain that the steps DataMEG
Corp has taken will prevent unauthorized use of DataMEG Corp's technology,
particularly in foreign countries where the laws may not protect proprietary
rights as fully as in the United States. If competitors are able to use DataMEG
Corp's technology, DataMEG Corp's ability to compete effectively could be
harmed.

        DataMEG Corp could become subject to litigation decisions regarding
intellectual property rights, which could seriously harm DataMEG Corp's business
and require DataMEG Corp to incur significant costs. In recent years, there has
been significant litigation in the United States involving patents and other
intellectual property rights.

        Any acquisitions DataMEG Corp makes could disrupt its business and
seriously harm DataMEG Corp's financial condition. DataMEG Corp intends to
consider investments in complementary companies, products or technologies. While
we have no current agreements to do so, we may buy businesses, products or
technologies in the future.  In the event of any future purchases, DataMEG Corp
could: issue stock that would dilute DataMEG Corp's current stockholders'
percentage ownership; incur debt; assume liabilities; incur amortization
expenses related to goodwill and other intangible assets; or incur large and
immediate write-offs.

        DataMEG Corp's operation of any acquired business will also involve
numerous risks, including: problems combining the purchased operations,
technologies or products; unanticipated costs; diversion of management's
attention from DataMEG Corp's core business; adverse effects on existing
business relationships with suppliers and customers; risks associated with
entering markets in which DataMEG Corp has no or limited prior experience; and
potential loss of key employees, particularly those of the purchased
organizations.

        An active public market for DataMEG Corp's common stock may not be
sustained. The market for technology stocks has been extremely volatile. The
following factors could cause the market price of DataMEG Corp's common stock to
fluctuate significantly: DataMEG Corp's loss of a major supplier, manufacture or
customer; the addition or departure of key personnel; variations in DataMEG
Corp's quarterly operating results; announcements by DataMEG Corp or its
competitors of significant contracts, new products or product enhancements,
acquisitions, distribution partnerships, joint ventures or capital commitments;
DataMEG Corp's sales of common stock or other securities in the future; changes
in market valuations of communication technology  companies; changes in market
valuations of networking and telecommunications companies; and fluctuations in
stock market prices and volumes.

SUMMARY

DataMEG Corp. has been diligent in its development of the CAS technology and in
its efforts to restructure the business to provide additional technology and
product opportunities for the Company. The completed merger with NECI and the
creation of CAS Communications, Inc. along with the transference of the CAS
technology development project to CAS Communications, Inc. illustrates a
consistent and coherent effort on the part of DataMEG Corp. management to
position the Company with multiple opportunities for growth.

ITEM 7.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                         DataMEG Corp. and Subsidiaries
                        (A Development Stage Enterprise)

                       Consolidated Financial Statements
                              For the Years Ended
                           December 31, 2001 and 2002


                         DataMEG Corp. and Subsidiaries
                        (A Development Stage Enterprise)
                       Consolidated Financial Statements
                 For the Years Ended December 31, 2001 and 2002



CONTENTS                                                PAGE
-----------                                         ----------
Consolidated Financial Statements:

Auditor's report                                        F-1

Balance sheets                                          F-2

Statements of operations                                F-3

Statements of stockholder's equity (deficit)            F-4,5

Statements of cash flows                                F-6,7

Notes to Consolidated Financial Statements              F-8-17
===============================================================

NDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS DATAMEG CORP. (A DEVELOPMENT STAGE
ENTERPRISE), Boston, MA

We have audited the accompanying consolidated balance sheets of DATAMEG CORP.
AND SUBSIDIARIES, (a development stage enterprise), (the "Company") as of
December 31, 2001 and 2002, and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for years 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 audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of DATAMEG CORP. AND
SUBSIDIARIES, as of December 31, 2001 and 2002 and the results of its operations
and its cash flows for the years then ended, in conformity with accounting
principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note O to the
financial statements, the Company has suffered a significant loss from
operations and has a net capital deficiency, which raises substantial doubt
about its ability to continue as a going concern. Management's plans regarding
those matters also are described in Note O.  The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


/s/
Hoffman, Fitzgerald & Snyder, P.C.
McLean, Virginia
April 14, 2003

<PAGE>F-1
=================================================================




                         DataMEG Corp. and Subsidiaries
                        (A Development Stage Enterprise)
                          Consolidated Balance Sheets



                                                 December 31,  December 31,
                                                    2001          2002


ASSETS

CURRENT ASSETS:
 Cash                                          $      6,932   $     9,319
   Total current assets                               6,932         9,319

PROPERTY AND EQUIPMENT, net                          13,231         6,038

OTHER ASSETS:
 Due from shareholders                                 -             -
 Goodwill                                              -          206,746
 Patents                                            127,274          -
 Deposits                                            12,486          -
   Total other assets                               139,760       206,746
                                                ------------  ------------
                                                $   159,923   $   222,103


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
 Capital lease obligation                       $    10,838   $     8,302
 Promissory note                                    568,382       701,743
 Accounts payable and accrued expenses              478,167       818,752
 Accrued salaries and wages                             -         538,248
 Due to stockholders and officers                    21,616        63,680
 Convertible subordinated debentures                 25,000        25,000
 Liability for stock to be issued                       809       227,960
   Total current liabilities                      1,104,812     2,383,685
                                                 -----------   ----------
   Total liabilities                              1,104,812     2,383,685

COMMITMENTS AND CONTINGENCIES                          -             -

MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY            667       (12,345)

STOCKHOLDERS'  EQUITY (DEFICIT):
 Class A convertible preferred stock, $.01 par
  value, 5,000,000 shares authorized at December 31,
  2001 and 8,000,000 shares authorized at December
  31, 2002; 2,000,000 shares outstanding at
  December 31,2002                                     -           20,000
 Class B convertible preferred stock, $.10 par
  value, none authorized at December 31, 2001
  and 150,000 shares authorized at December 31,
  2002; 75,000 shares issued and outstanding at
  December 31,2002                                     -            7,500
 Common stock, $.01 par value; 75,000,000 authorized
  at December 31, 2002 and 125,000,000 shares
  authorized at December 31, 2002; 40,639,821 shares
  and 124,911,990 shares issued and outstanding at
  December 31,2001 and December 31, 2002             406,398     1,249,120
 Common stock subscriptions receivable                  (56)          (56)
 Additional paid-in capital                       9,185,817     9,899,273
 Common stock warrants                                 -           25,000
 Stock options                                      169,890       103,906
 Deferred compensation                                 -          (47,400)
 Deferred financing costs                          (140,250)       -
 Accumulated deficit during development stage    (10,567,35)  (13,406,580)
   Total stockholders' equity (deficit)            (945,556)   (2,149,237)
                                                  ----------   -----------
                                                $   159,923   $   222,103


The accompanying notes are an integral part of these consolidated financial
statements.

<PAGE>F-2


                         DataMEG Corp. and Subsidiaries
                        (A Development State Enterprise)
                     Consolidated Statements of Operations

<table>
<caption>

                                       <c>                      <c>                   <c>

                                                                                                  Cumulative
                                           Year Ended                Year Ended               from inception
                                           December 31,            December 31,           (January 13, 1999)
                                              2001                         2002            December 31, 2002
                                                                                               (unaudited)


REVENUE                                   $         -               $         -                $           -

COST OF REVENUES                                    -                         -                            -
 Gross Profit                                       -                         -                            -

OPERATING EXPENSES
 General and administrative                 2,037,602                 1,383,288                   10,589,098
 Research and development                     612,154                 1,232,209                    2,507,289
  Total operating expense                   2,649,756                 2,615,497                   13,096,387

 Loss from operations                      (2,649,756)               (2,615,497)                 (13,096,387)

OTHER INCOME (EXPENSES):
 Interest income                                  210                        15                          225
 Interest expense                             (12,323)                 (109,481)                    (129,678)
 Loss on acquisition fee                      (73,950)                        -                      (73,950)
 Loss on disposal of property
  and equipment                                (1,058)                        -                       (1,058)
 Loss on impairment of a
  tangible asset                                    -                  (127,274)                    (127,274)
 Realized gains on sale                             -                         -                        8,530
  Total other income (expenses)               (87,121)                 (236,740)                    (323,205)

LOSS BEFORE BENEFIT FOR
 INCOME TAXES AND MINORITY
 INTEREST                                  (2,736,877)               (2,852,237)                 (13,419,592)

 Benefit for income taxes                           -                         -                            -

LOSS BEFORE MINORITY INTEREST              (2,736,877)               (2,852,237)                 (13,419,592)

MINORITY INTEREST                                   -                    13,012                        13,012

NET LOSS                              $    (2,736,877)               (2,839,225)                 (13,406,580)

Net loss per common share
 (basic and diluted)                  $         (0.08)                    (0.04)                       (0.18)

Weighted average number of
 common shares outstanding                 33,245,571                68,868,382                   75,841,165



The accompanying notes are an integral part of these consolidated financial statements.

</table>

<PAGE>F-3



                         DataMEG Corp. and Subsidiaries
                        (A Development Stage Enterprise)
           Consolidated Statements of Stockholders' Equity (Deficit)

<table>
<caption>

                                                     <c>          <c>        <c>           <c>                <c>


                                                         Preferred                              Common
                                                          Stock      Series A   Series B         Stock
                                                          Shares     Preferred  Preferred       Shares           Common
                                                        Outstanding  Stock       Stock        Outstanding         Stock


Balance, January 13, 1999                                       -          -          -               -                -

Stock issuances                                                 -          -          -       2,182,803           21,828
Stock issuances in lieu of cash for compensation                -          -          -      27,471,040          274,710
Net loss (comprehensive net loss)                               -          -          -               -                -
Balance, December 31,  1999                                     -          -          -      29,653,843          296,538

Stock issuances                                                 -          -          -          46,784              468
Stock issuances in lieu of cash for compensation                -          -          -       1,905,000           19,050
Conversion of debentures                                        -          -          -          38,000              380
Stock options, exercised for cash                               -          -          -         174,588            1,746
Stock options granted                                           -          -          -               -                -
Post share exchange adjustment                                  -          -          -         117,180            1,172
Share exchange                                                  -          -          -       3,300,007           33,000
Net loss (comprehensive net loss)                               -          -          -               -                -
Balance, December 31,  2000                                     -          -          -      35,235,402          352,354

Stock issuances                                                 -          -          -          33,308              333
Stock issuances in lieu of cash for compensation                -          -          -       5,300,515           53,005
Conversion of debentures                                        -          -          -           7,996               80
Stock subscription receivables reductions                       -          -          -               -                -
Stock options granted and exercised                             -          -          -          62,500              626
Stock optons expired                                            -          -          -               -                -
Net loss (comprehensive net loss)                               -          -          -               -                -
Balance, December 31, 2001                                      -          -          -      40,639,821          406,398

Common Stock issuances                                          -          -          -      43,219,442          432,195
Common stock issuances in lieu of compensation                  0          0          0      35,552,727          355,527
Stock options granted and expired                               0          0          0               -                -
Common stock warrants                                           0          0          0               -                -
Preferred Stock issuances                               4,150,000     40,000     15,000               -                -
Preferred stock conversions to common stock            (2,075,000)   (20,000)   ( 7,500)      5,500,000           55,000
Net Loss (comprehensive net loss)                               -          -          -               -                -
Balance, December 31, 2002                              2,075,000  $  20,000 $    7,500     124,911,990    $   1,249,120


The accompanying notes are an integral part of these consolidated financial statements.

</table>

<PAGE>F-4

                         DataMEG Corp. and Subsidiaries
                        (A Development Stage Enterprise)
           Consolidated Statements of Stockholders' Equity (Deficit)
                                  (continued)

<table>
<caption>

                                                     <c>              <c>              <c>         <c>


                                                                          Common                     Common
                                                                           Stock           Common     Stock options
                                                          Additional     Subscriptions      Stock     Granted and
                                                         Paid-in Capital  Receivable      Warrants   not exercised


Balance, January 13, 1999                                         -             -             -      $          -

Stock issuances                                           1,026,079             -             -                 -
Stock issuances in lieu of cash for compensation           (162,210)      (31,300)            -                 -
Net loss (comprehensive net loss)                                 -             -             -                 -
Balance, December 31,  1999                                 863,869       (31,300)            -                 -

Stock issuances                                             695,232             -             -                 -
Stock issuances in lieu of cash for compensation          4,607,338      (622,696)            -                 -
Conversion of debentures                                     94,610             -             -                 -
Stock options, exercised for cash                            15,713        (2,566)            -                 -
Stock options granted                                             -             -             -           152,341
Post share exchange adjustment                               (1,172)            -             -                 -
Share exchange                                              (61,900)            -             -                 -
Net loss (comprehensive net loss)                                 -             -             -                 -
Balance, December 31,  2000                               6,213,690      (656,562)            -           152,341

Stock issuances                                              92,067             -             -                 -
Stock issuances in lieu of cash for compensation          2,852,524             -             -                 -
Conversion of debentures                                     19,920             -             -                 -
Stock subscription receivables reductions                         -       656,195             -                 -
Stock options granted and exercised                           5,635             -             -            19,530
Stock optons expired                                          1,981             -             -            (1,981)
Net loss (comprehensive net loss)                                 -             -             -                 -
Balance, December 31, 2001                                9,185,817           (56)            -      $    169,890

Common Stock issuances                                      244,526             -             -                 -
Common stock issuances in lieu of compensation               346070             0             0                 0
Stock options granted and expired                           150,360             -             -           (65,984)
Common stock warrants                                             -             -        25,000                 -
Preferred Stock issuances                                         -             -             -                 -
Preferred stock conversions to common stock                 (27,500)            -             -                 -
Net Loss (comprehensive net loss)                                 -             -             -                 -
Balance, December 31, 2002                                9,899,273           (56)       25,000      $    103,906


The accompanying notes are an integral part of these consolidated financial statements.

</table>

<PAGE>F-5


                         DataMEG Corp. and Subsidiaries
                        (A Development Stage Enterprise)
           Consolidated Statements of Stockholders' Equity (Deficit)
                                  (continued)

<table>
<caption>

                                                     <c>              <c>                    <c>                  <c>

                                                                         Deficit Accum-
                                                                         ulated During
                                                           Deferred      Deferred               Development
                                                         Compensation    Financing Cos          Stage                Total


Balance, January 13, 1999                            $           -               -        $            -     $           -

Stock issuances                                                  -               -                     -         1,047,907
Stock issuances in lieu of cash for compensation                 -               -                     -            81,200
Net loss (comprehensive net loss)                                -               -           (1,046,928)        (1,046,928)
Balance, December 31,  1999                                      -               -           (1,046,928)            82,179

Stock issuances                                                  -               -                     -           695,700
Stock issuances in lieu of cash for compensation                 -               -                     -         4,003,692
Conversion of debentures                                         -               -                     -            94,990
Stock options, exercised for cash                                -               -                     -            14,893
Stock options granted                                            -               -                     -           152,341
Post share exchange adjustment                                   -               -                     -                 -
Share exchange                                                   -               -                     -           (28,900)
Net loss (comprehensive net loss)                                -               -           (6,783,550)        (6,783,550)
Balance, December 31,  2000                                      -               -           (7,830,478)        (1,768,655)

Stock issuances                                                  -               -                     -            92,400
Stock issuances in lieu of cash for compensation                 -        (140,250)                    -         2,765,279
Conversion of debentures                                         -               -                     -            20,000
Stock subscription receivables reductions                        -               -                     -           656,195
Stock options granted and exercised                              -               -                     -            25,791
Stock optons expired                                             -               -                     -                 -
Net loss (comprehensive net loss)                                -               -           (2,736,877)        (2,736,877)
Balance, December 31, 2001                                       -        (140,250)         (10,567,355)          (945,556)

Common Stock issuances                                           -         140,250                     -           816,971
Common stock issuances in lieu of compensation                   -               0                     0           654,197
Stock options granted and expired                                0               0                     -            84,376
Common stock warrants                                            0               0                     -            25,000
Preferred Stock issuances                                        0               0                     -            55,000
Preferred stock conversions to common stock                      0               0                     -                 -
Net Loss December 31, 2002                                       -               -           (2,839,225)        (2,839,225)
Balance, December 31, 2002                               $( 47,400)              -        $ (13,406,580)     $  (2,149,237)


The accompanying notes are an integral part of these consolidated financial statements.

</table>

<PAGE>F-6


                         DataMEG Corp.and Subsidiaries
                        (A Development Stage Enterprise)
                     Consolidated Statements of Cash Flows


<table>
<caption>

                                                                        <c>               <c>                    <c>
                                                                                                                Cummulative
                                                                           For the           For the           from inception
                                                                            Year Ended        Year Ended     (January 13, 1999 to
                                                                           December 31,       December 31,       December 31,
                                                                               2001              2002               2002)
                                                                                                                 (unaudited)


CASH FLOWS FROM OPERATING ACTIVITIES:
        Net loss                                                             (2,736,877)       (2,839,225)        (13,406,580)
        Adjustments to reconcile net loss to net
                cash provided by (used in) operating activities:
                Depreciation and amortization                                     24,041            12,120             66,498
                Stock issued for purchase of in process
                         research and development                                                  870,600            870,600
                Stock issued, or to be issued, in lieu of
                        cash for professional services                         1,563,608           333,363          6,281,398
                Stock issued to officers for reimbursement
                        of corporate expenses or compensation                    693,778           111,000          1,602,781
                Stock options issued in lieu of cash for
                        professional services                                     17,549            84,376            254,266
                Property and equipment given in lieu of cash
                        for professional services                                 15,475                 -             15,475
                Realized gains on sales of investments                                 -                 -            (8,530)
                Loss on acquisition fee                                           73,950                 -             73,950
                Loss on disposal of property and equipment                         1,058                 -              1,058
                Loss on impairment of patent                                           -           127,274            127,274
                Minority interest                                                      -          ( 13,012)          ( 13,012)
                Stock issued in lieu of deferred financing costs                       -           140,250            140,250
                Changes in assets and liabilities                                                                           -
                        affecting operations:                                                                               -
                                Deposits                                               -            19,986             19,986
                                Accounts payable and accrued                                                                -
                                        expenses                               (219,203)           299,942            778,048
                                Accrued salaries and wages                             -           149,431            149,431
                                Liability to isssue stock                              -            24,000             24,000
                                Short-term note payable                                -            10,909             10,909
                                Capital lease obligations                              -             2,236              2,236
                                Promissory note                                  568,382           133,361            701,743
                                Due to stockholders and officers                  21,616            12,486             34,102
                                        Net cash provided by (used in)
                                               operating activities               23,377          (522,872)        (2,276,353)

CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchases of property and equipment                                        (533)                 -           (39,454)
        Payments for intangible assets                                          (15,580)                 -          (127,274)
        Payments for security deposits                                           (1,250)                 -           (12,486)
        Investment in subsidiary                                                       -         (149,312)          (149,312)
        Purchases of investments                                                       -                 -           (20,000)
        Sales of investments                                                           -                 -            28,530
                                        Net cash used in investing
                                                activities                      (17,363)         (149,312)          (319,996)

CASH FLOWS FROM FINANCING ACTIVITIES:
        Proceeds from loan from shareholder                                            -                 -            26,000
        Repayment of loan from shareholder                                             -                 -           (26,000)
        Proceeds from short-term loan                                                  -           120,000            120,000
        Repayment of capital lease obligations                                     (300)             (300)           (32,002)
        Net proceeds from issuance of stock                                        1,203           484,871          2,397,680
        Proceeds from stock to be issued                                               -            45,000             45,000
        Proceeds from issuance of warrants                                             -            25,000             25,000
        Proceeds from issuance of debentures                                           -                 -            139,990
                                        Net cash provided by financing
                                                activities                           903           674,571          2,605,668

NET CHANGE IN CASH                                                                 6,917             2,387              9,319

CASH, BEGINNING OF PERIOD                                                             15             6,932                  -

CASH, END OF PERIOD                                                                6,932             9,319              9,319

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
                Financing of property and equipment
                        with capital lease                                             -                 -             42,540

                Issuance of stock in exchange for notes
                        receivable                                                     -                 -            656,251

                Issuance of stock in exchange for notes payable                        -           130,909            245,899

                Stock issued as a reduction of the liability for
                        stock to be issued                                     1,208,096                 -          1,208,096


                Stock issued in lieu of pre-paid financing                       140,250                 -            140,250

                Stock issued in exchange for deferred compensation                     -            47,400             47,400

                Stock issued in purchase of subsidiary                                 -           483,658            483,658


SUPPLEMENTAL DISCLOSURE OF CASHFLOW INFORMATION:
                Interest paid                                                          -                 -              6,612



The accompanying notes are an integral part of these consolidated financial statements.

</table>

<PAGE>F-7

NOTES TO FINACIALS


A.      BASIS OF PRESENTATION AND ORGANIZATION

DataMEG Corp., a development stage enterprise, (the "Company"), was incorporated
in the State of Virginia in January 1999.   The Company is a technology
development enterprise focused on introducing to the marketplace a technology it
is developing, which it has termed Communications Acceleration System (CAS). CAS
is a high-speed data transmission processor that uses, primarily, Plain Old
Telephone Service (POTS) as the communication medium to interface between the
transmission source and the receiving entity.

In August 2000, the DataMEG Corporation (the "Subsidiary") consummated a share
exchange with a public shell company, the Viola Group, Inc. that has since
changed its name to DataMEG Corp. (the "Parent"). In the share exchange the
Subsidiary exchanged all of its outstanding shares for 90% of the issued and
outstanding voting common stock of the Parent. As a result of the transaction,
the pre-exchange stockholders of the Parent owned in the aggregate, 3,300,007
shares as of the date of the share exchange. The pre-exchange stockholders of
the Subsidiary owned, as a result of the share exchange, 90% of the issued and
outstanding common stock of the Parent, equaling approximately 29,700,627 shares
as of the date of the share exchange. In addition, the Subsidiary was required
to pay consulting fees totaling $250,000 to an officer of the Parent and assume
tax liabilities totaling approximately $30,000. As a result of the merger, the
Subsidiary became the operating company.  These financial statements reflect
those of the Subsidiary, with adjustments to reflect the changes in equity
structure resulting from the share exchange.  All references in the accompanying
financial statements to the number of common shares have been restated to
reflect the share exchange.

On September 13, 2001 the Company created CAS Communications, Inc. ("CASCO"), a
new entity to be used for the licensing, distribution, and manufacture
outsourcing of the Company's CAS technology.  The Company continues to own the
intellectual property but CASCO received an exclusive license.  CASCO issued
6,666,666 shares to a minority owner and 20,000,000 shares to the Company, which
represents 75% ownership of CASCO with the minority owner owning the remaining
25%, which is reflected in the accompanying consolidated balance sheet as
minority interest in consolidated subsidiary.

The Company executed a merger agreement with North Electric Company, Inc
("NECI") in Raleigh, North Carolina on December 10, 2001 and the terms of the
agreement required the Company to issue 15,000,000 shares of restricted common
stock to NECI shareholders and pay $400,000 to NECI's majority shareholder.
Furthermore, under the merger agreement, the merger would become effective on
the first date on which: (a) a Registration Statement is effective and (b) the
Company had raised a pre-determined amount of funding and (c) the Company
continued to fund NECI operations at a fixed monthly amount. On March 3, 2002
the Company and NECI signed an amendment to the merger agreement, which
effectively waived all of the above noted conditions to the final merger except
for the 15,000,000 sharesthat were issued and articles of merger in the state of
North Carolina were filed in April 2002.

<PAGE>F-8

As a result of this transaction, NECI became a wholly owned subsidiary of the
Company.  In addition, the purchase consideration included the payment of
$150,000 in cash and the issuance of 1,430,000 shares of the Company's common
stock to NECI, prior to the merger, to support NECI's operations prior to the
merger.    The acquisition has been accounted for under the purchase method.
The total purchase price of approximately $1,090,000 includes cash of $150,000,
common stock valued at approximately $483,000 and liabilities assumed of
approximately $457,000.  Of the purchase price, approximately $13,000 was
allocated to property and equipment and miscellaneous current assets,
approximately $207,000 was allocated to goodwill and approximately $870,000 was
allocated to in-process research and development.  The in-process research and
development was charged to research and development expenses as of the date of
the merger.  The purchase price allocation was based upon an independently
performed valuation.  The value allocated to in-process research and development
was based upon an analysis of discounted estimated future cash flows.
Technological feasibility of the in-process research and development had not
been established and had no alternative future use.  Management believes the
replacement cost for the in-process research and development would not be
substantially less than the $870,000.  The consolidated statement of operations
for 2002 includes the operations of NECI from April 24, 2002 through December
31, 2002.  None of the goodwill will be recorded for income tax purposes.

NECI focuses on developing technology to bring products to the
telecommunications sector that serve to address specific industry needs. As a
result of the acquisition, the Company acquired goodwill of approximately
$207,000.This was due to the value of NECI  based upon discounting future cash
flows expected to be received as NECI is able to market its software products.

NECI is a development stage enterprise that commenced operations during October
2001.  Had the purchase occurred on January 1, 2002, the net loss reported in
the consolidated statement of operations would have increased by approximately
$625,000 to approximately $3,465,000.  Net loss per common share, basic and
diluted, would have been approximately $0.05 per share. Most of the increase in
expenses would be attributable to increased research and development expenses.

The Company operates under the name of DataMEG Corp. and trades under the symbol
DTMG on the OTC-BB.

<PAGE>F-9

B.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation - The accompanying consolidated financial statements
present the consolidation of the financial statements of DataMEG Corp., its
wholly-owned subsidiary, DataMEG Corporation, its majority-owned subsidiary,
CASCO and its wholly-owned subsidiary, NECI.  Material inter-company
transactions and balances have been eliminated in the consolidation.

Basis of accounting  - The accounts of the Company are maintained on the accrual
basis of accounting whereby revenue is recognized when earned, and costs and
expenses are recognized when incurred.

Use of estimates - Management uses estimates and assumptions in preparing
financial statements in accordance with generally accepted accounting
principles. Those estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities, and
the reported revenues and expenses. Actual results could vary from those
estimates.

Property and equipment - Property and equipment are stated at cost. Depreciation
and amortization is determined using the straight-line method over estimated
useful lives ranging from three to seven years.

Intangible assets - Intangible assets as of December 31, 2001 consisted of costs
related to CAS patents. As of December 31, 2002, management determined that the
pending patents were no longer utilized in the current CAS research and
development efforts. The pending patents were written off and the Company
realized a loss on impairment of patents in the amount of $127,274. As of
December 31, 2002 intangible assets consisted of goodwill related to the NECI
merger in April 2002.  Goodwill is evaluated on an annual basis to determine if
an impairment has occurred.  At December 31, 2002 based upon an independently
performed valuation of the NECI  reporting unit, there has been no impairment of
goodwill.

Advertising - Advertising costs are charged to operations as incurred. For the
years ended December 31, 2001 and 2002, there were no advertising costs charged
to operations.

Research and development - The company expenses research and development costs
as incurred.

Software development costs - Statement of Financial Accounting Standard ("SFAS")
No. 86, "Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed", requires capitalization of certain software development
costs subsequent to the establishment of technological feasibility and readiness
of general release. Costs incurred by the Company between the completion of
technological feasibility and general release have been insignificant and have
been charged to expense in the accompanying consolidated financial statements.

Fair value of financial instruments - The carrying value of cash, notes
receivable and notes payable approximate fair value because of the relatively
short maturity of these instruments.

Income Taxes  - The Company, a C-corporation, accounts for income taxes under
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes." Under this method, deferred tax assets and liabilities are determined
based on differences between the financial reporting and tax basis of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. The principal differences are net operating losses, start-up
costs and the use of accelerated depreciation methods to calculate depreciation
expense for income tax purposes.

<PAGE>F-10

Stock-based compensation - The Company follows guidance provided in SFAS No.
123, "Accounting for Stock-Based Compensation", which encourages companies to
recognize expense for stock-based awards based on their estimated fair value on
the grant date. SFAS No. 123 permits companies to account for stock-based
compensation based on provisions prescribed in SFAS No. 123 or based on the
authoritative guidance in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees". The Company elected in the past to
account for its stock based compensation in accordance with APB 25, which uses
the intrinsic value method. The Company has accounted for all other issuances of
equity instruments in accordance with SFAS No. 123. In January 2002, the Company
adopted SFAS No. 123 for all stock options, including those to employees.  This
adoption has resulted in a change in accounting principle, which has been
reported using the prospective method as provided in SFAS No. 148.

Net loss per common share - The Company reports basic and diluted earnings per
share ("EPS") according to the provisions of SFAS No. 128, "Earnings Per Share."
SFAS No. 128 requires the presentation of basic EPS and, for companies with
complex capital structures, diluted EPS. Basic EPS excludes dilution and is
computed by dividing net income (loss) available to common stockholders by the
weighted average number of common shares outstanding during the period. Diluted
EPS is computed by dividing net income (loss) available to common stockholders,
adjusted by any convertible preferred dividends; the after-tax amount of
interest recognized in the period associated with any convertible debt; and any
other changes in income or loss that would result from the assumed conversion of
those potential common shares, by the weighted number of common shares and
common share equivalents (unless their effect is anti-dilutive) outstanding.

Capital Structure - SFAS No. 129, "Disclosure of Information about Capital
Structure," requires a summary presentation of the pertinent rights and
privileges of the various securities outstanding. The Company's outstanding
stock is comprised of 124,119,990 shares of voting common stock, 2,000,000
shares of non-voting Class A convertible preferred stock and 75,000 shares of
non-voting Class B convertible preferred stock. One investor holds the
outstanding preferred shares. The Class A preferred stock shall be convertible
into shares of common stock of the Company at a rate of one share of common
stock for each share of preferred stock with 2,000,000 of the shares being
convertible upon meeting certain agreed-upon product development benchmarks. If
those benchmarks are attained before June 2003, then the shares of preferred
stock shall be convertible into shares of common stock at a rate of two shares
of common stock for each share of preferred stock. The Class B preferred stock
shall be convertible into shares of common stock of the Company at a rate of
twenty shares of common stock for each share of preferred stock with 75,000
shares being convertible upon meeting certain agreed-upon product development
benchmarks.   The benchmarks related to the conversion rate of both classes of
preferred stock have been met as of June 2002. On December 31, 2002, the Company
filed a certificate of amendment with the State of New York to increase the
number of authorized shares from 130,000,000 to 185,000,000, of which
175,000,000 are to be common stock and 10,000,000 are to be preferred stock.

<PAGE>F-11

Comprehensive Income - SFAS No. 130, "Reporting Comprehensive Income,"
establishes standards for reporting comprehensive income and its components.
Comprehensive income is defined as the change in equity during a period from
transactions and other events from non-owner sources. Entities that do not have
items of other comprehensive income in any period presented are not required to
report comprehensive income, accordingly the Company has not made any such
disclosure in the statements presented herein.

Segment Information - SFAS No. 131, "Disclosure about Segments of an Enterprise
and Related Information." requires public enterprises to report certain
information about operating segments, including products and services,
geographic areas of operations, and major customers. The Company has determined
that it does not have any separately reportable business segments for the years
ended December 31, 2001 and 2002.

Derivatives Instruments and Hedging Activities - In June 1998, the FASB issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." It
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts and for
hedging activities.  It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value.    Management's adoption of this standard did not have a material
effect on the Company's financial position or results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS:

Business Combinations - In June 2001, the FASB issued SFAS No. 141, "Business
Combinations."  It supersedes preexisting accounting and reporting standards for
business combinations.  It requires that all business combinations defined
within the scope of the Statement be accounted for using only the purchase
method as opposed to the pooling-of-interest method, a previously approved
alternative for accounting and reporting business combinations.  The provisions
of this Statement apply to all business combinations initiated after June 30,
2001 or for which the acquisition is July 1, 2001 or later.  Management has
adopted this standard and applied it to the NECI merger.

Goodwill and Other Intangible Assets - In June 2001, the FASB issued SFAS No.
142, "Goodwill and Other Intangible Assets."  It supersedes preexisting
accounting and reporting standards for intangible assets.  It requires that
intangible assets that are acquired individually or with a group of other assets
(but not those acquired in a business combination) that have indefinite useful
lives should no longer be amortized on an annual basis but instead be annually
evaluated for impairment.  It also removes the constraint of an arbitrary
ceiling of 40 years for the amortization of intangible assets with finite lives.
Required disclosures include information about goodwill and intangible assets.
The provisions of this statement are required to be applied starting with fiscal
years beginning after December 15, 2001.  Impairment losses for goodwill and
indefinite-lived intangible assets that arise due to the initial application of
this Statement are to be reported as resulting from a change in accounting
principle.    Management implemented this Statement on January 1, 2002.  As a
result of the NECI merger in April 2002, goodwill has been recognized and the
above standards have been applied.

<PAGE>F-12

Impairment or Disposal of Long-Lived Assets - In August 2001, the FASB issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."
It supersedes and amends preexisting accounting and reporting standards for the
impairment or disposal of long-lived assets.  This statement resolves
implementation issues related to the impairment loss recognized by removing
goodwill from its scope, gives additional guidance in measuring that loss, and
establishes a "primary-asset" approach to determine the unit of accounting for a
long-lived asset to be held and used.  It also requires that a long-lived asset
to be abandoned, exchanged for a similar productive asset, or distributed to
owners in a spin-off, be considered held and used until disposed of.
Furthermore, the statement requires that one accounting model be used for long-
lived assets to be disposed of by sale, whether previously held and used or
newly acquired, and by broadening the presentation of discontinued operations to
include more disposal transactions.  The effective date of SFAS No. 144 is for
fiscal years beginning after December 15, 2001, and interim periods within those
fiscal years and the provisions are generally to be applied prospectively.
Management's adoption of this standard did not have a material effect on the
Company's financial position or results of operations.

Stock-Based Compensation Transitions - In December 2002, the FASB issued SFAS
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure -
an amendment of FASB Statement No. 123".  This statement provides alternative
methods for a voluntary change to the fair value based method of accounting for
stock-based employee compensation and changes the related disclosure
requirements. Management's adoption of this standard did not have a material
effect on the Company's financial position or results of operations for the year
ended December 31, 2002.

C.      PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31:

                                     2001                 2002
                                    ------               ------
Equipment                          $52,008              $56,173
Furniture                            1,640                2,827
Computer software                        -                    -
                                    53,648               59,000

Less: accumulated depreciation     (40,417)             (52,962)

Property and equipment, net        $13,231              $ 6,038

Depreciation expense totaled $24,041 and $12,120 for the years ended December
31, 2001 and 2002, respectively.

<PAGE>F-13


D.      CONVERTIBLE SUBORDINATED DEBENTURES

In July 2000, the Company issued convertible subordinated debentures totaling
approximately $140,000. The terms of the debentures require interest payable at
twelve percent per annum payable quarterly with a maturity date of one year from
the date of advance unless mutually extended. The debentures are subordinate and
junior to existing liabilities of the Company and any subsequent borrowings from
banks or insurance companies. The debentures were able to be converted to common
stock at a price of $2.50 per share at any time prior to maturity. During
November and December 2000, approximately $115,000 of the convertible
subordinated debentures were converted resulting in the issuance of 38,000
shares of restricted common stock and stock to be issued in the amount of
$20,000 as of December 31, 2000.  The remaining convertible subordinated
debentures total $25,000 at December 31, 2001 and 2002.  Interest accrued
related to the unconverted subordinated debentures was $10,255 at December 31,
2001 and was $13,297 at December 31, 2002. The Company is in default related to
payments of interest and principal at December 31, 2002.

E.      DUE TO STOCKHOLDERS

As of December 31, 2001 and 2002, the Company was indebted to officers and
stockholders in the amount of $21,616 and $63,680, respectively.  As of December
31, 2002, the Company was indebted to officers and stockholders in the amount of
$63,680 for expenses incurred on behalf of the Company.

F.      LIABILITY FOR STOCK TO BE ISSUED

In 2001, the Company entered into two transactions whereby the Company was
required at December 31, 2001 to issue 8,085 shares of common stock.  The value
of the shares of stock is based upon purchase price of shares purchased or the
market value of the shares at the date of commitment for a total liability at
December 31, 2001 and 2002 of $809.

In 2002, the Company entered into transactions with a vendor for which the
Company is required to issue 330,000 shares.  The shares were issued in February
2003 and the value of the shares was approximately $24,000.

In 2002, the Company entered into several financing transactions with investors
in which the Company is required to issue stock for the value of advanced
fundings received or for the balance of judgements rendered in 2002.  The final
number of shares required to be issued in satisfaction of these agreements and
judgements will be based upon the market value of the stock at the time of
issuance and is under negotiation as of December 31, 2002.  The total amount of
advanced fundings under these arrangements and judgements  is recorded as a
liability to issue stock in the approximate amount of $203,000.

<PAGE>F-14

G.      PROMISSORY NOTE

On October 29, 2001, the Company signed a confessed judgment promissory note
with a law firm acknowledging monies owed amounting to $568,382, which had been
previously accrued. The balance of thepromissory note accrued interest at a rate
of 9% and matured on December 31, 2001.  On January 7, 2002 the Company received
a notice of default relating to the Promissory Note and as of January 1, 2002
the outstanding balance was increased five percent (5%) and began to accrue
interest at an annual rate of 15%. The balance including accrued interest and
legal fees was approximately $702,000 as December 31, 2002.

H.      INCOME TAXES -

The benefit for income taxes for the years ended December 31 are as follows

The benefit for income taxes for the years ended December 31 are as follows:

                                   2001               2002

Current                         $       -          $       -
Deferred                                -                  -

Total benefit for income taxes  $       -          $       -


A reconciliation of income tax at the statutory rate to the Company's effective
rate is as follows for 2001 and 2002:
                                              2001             2002

Computed at the expected statutory rate   $(931,000)      $(970,000)
State income tax-net federal tax benefit   (164,000)       (171,000)
Add: Purchased in-process R&D                     -         348,000
Less: Key man life insurance premiums        (3,000)              -
Less: valuation allowance change          1,098,000         793,000
                                          ----------       ---------
Total benefit income taxes               $       -         $      -
                                         ===========       =========

Deferred tax assets and liabilities at December 31, 2000 and 2001 were as
follows:
                                         2001              2002
Deferred tax assets:
 Net operating loss carryforwards   $    99,000          $  694,000
    Start-up costs                    4,104,000           4,285,000
    Depreciation and amortization        11,000              28,000
                                     ----------          -----------
Gross deferred tax assets             4,214,000           5,007,000

   Valuation allowance               (4,214,000)         (5,007,000)
                                    =============      ==============
Net deferred tax assets            $         -           $       -


The net increase in the valuation allowance for the years ended December 31,
2001 and 2002 was $1,098,000 and $ 793,000, respectively.  The Company has
available at December 31, 2002 approximately $1,250,000 for the parent, $430,000
for NECI and $52,000 for CASCO of unused operating loss carryforwards that may
be applied against future taxable income that expire in 2019 through 2022.

<PAGE>F-15


I.              RESEARCH AND DEVELOPMENT COSTS

Total research and development cost were approximately $612,000 and $1,232,000
for the years ending December 31, 2001 and 2002, respectively. Research and
development expense for the year ending December 31 2002 includes approximately
$870,000 of in-process research and development expenses related to the NECI
merger.

J.      RELATED PARTY TRANSACTIONS As of December 31, 2001 and 2002 the Company
had  amounts payable to various officers and stockholders (see Note E).

During 2001 and 2002, the Company's President assumed personal liability and
pledged personal assets as part of several financing agreements (see Note L and
Note P).

K.      CONCENTRATION OF CREDIT RISK

Financial instruments which potentially subject the Company to concentrations of
credit risk consist primarily of cash. The Company maintains its cash account
with a commercial bank located in Virginia. Cash balances are insured by the
Federal Deposit Insurance Corporation, up to $100,000 per financial institution.
At December 31, 2001 and 2002, the Company had no uninsured cash balances.

L.      COMMITMENTS AND CONTINGENCIES Commitments

During 1999, the Company entered into an agreement with a consultant for
services rendered over the period October 1999 through June 2000.  The agreement
with the consultant may call for additional consideration totaling 4% of
outstanding stock in warrants, contingent upon the consummation of the share
exchange. The Company believes that no such additional compensation is due to
the consultant under the terms of the agreement.  No amount has been recorded
related to the possible requirements to issue warrants.

During October 2001, the Company entered into an agreement with a consultant to
provide certain operations management services to the Company.  This agreement
guaranteed monthly compensation in the amount of $16,667 for twelve months from
October 1, 2001 and granted 300,000 stock options at a strike price of $0.24.
Of the 300,000 stock options, 100,000 of these options vested on October 1,
2001, 100,000 options vested on January 1, 2002 and the remaining 100,000
options vested on February 1, 2002.  In 2002, the consultant waived his rights
to consulting fees for the six months ended June 30, 2002 and is no longer with
the Company.

<PAGE>f-16

November 1, 2002, the Company's subsidiary, CASCO, entered into an agreement
with an engineering firm to perform consulting services  at a projected cost of
$36,000 plus incidental expenses which is payable either in cash or comparable
value in equity in the Company.  The project was completed in March 2003 and a
billing reconciliation is pending.

On April 18, 2002, the Company's subsidiary, CASCO, entered into an agreement
with a consultant to find a qualified company willing to construct a prototype
implementing the CAS technology and secure financing for this project.  The
consultant was given an option to obtain 20% of the existing equity of CASCO
which would dilute the ownership held by DataMEG Corp. The option can be
exercised upon successful completion of the efforts called for under the
agreement.

Lease commitments:

The Company leases office space in Boston, Massachusetts on a month to month
basis with a monthly rent of $1,200.

The Company is leasing office space in Raleigh, North Carolina under a short-
term lease agreement.  This lease agreement will expire in March 2003 and
carries a monthly rent of $7,500.

The Company leases communications equipment totaling $8,302 held under capital
lease agreements, which expired in January through July 2001 in which the
Company is under default. The assets and liabilities under capital leases are
recorded at the lower of the present value of the minimum lease payments or the
fair value of the asset.  The assets are amortized over their estimated useful
lives.  Amortization of assets under capital leases is included in depreciation
and amortization expense.

The minimum lease payments due under terms of non-cancelable operating which
have initial or remaining terms in excess of one year as of December 31, 2002
are as follows:

<PAGE>F-17

For the years ending December 31st              Operating
                                                Leases
-------------------------------------          ---------
                            2003                $22,500
                         2004 and after         $0
                                              -----------
                                                $22,500

Total rent expense for all operating leases was $41,280 and $110,587 for the
years ending December 31, 2001 and 2002, respectively.

Contingencies

In October 2001, as partial consideration to a settlement with a CASCO
shareholder, the shareholder received warrants to purchase 2,000,000 of the
Company's shares at an exercise price of $1.13 per share. As of the grant date,
management estimates the amount of any liabilities, which may be associated with
the warrants granted as part of the settlement agreement, are immaterial. As of
December 31, 2002 none of the warrants has been exercised. During 2002, the
Company entered into several stock purchase agreements with certain investors to
purchase shares of the Company's common stock.  The purchase price was
discounted based upon market conditions at the time of issuance of the stock and
the immediately following several days. The Company is holding advances in the
amount of $35,000 for which stock was not issued.   Management believes that the
investors defaulted on the stock purchase agreements and the investors believe
that the Company has defaulted on the stock purchase agreements.  The investors
are claiming losses in excess of $160,000.  Although the Company has recorded a
liability to issue stock in the amount of $50,000, the final settlement between
all parties cannot be readily determined at this time.

On December 18, 2001 the Company entered into a short-term loan agreement with
an investor  for $120,000. Principal and interest on the loan were due April 15,
2002.  The loan was secured by approximately 3.4 million shares of the Company's
stock owned and pledged by the Company's President.  On May 17, 2002, the
investor filed suit against the Company and the Company's President for the
principal, accrued interest, legal fees and related damages.  A liability in the
amount of the principal, interest and legal fees was recorded in the balance
sheet of the Company.  This liability was reduced by the receipt of the pledged
shares and has a current balance of approximately $59,000 at December 31,
2002.The Company issued the Company's President 3,272,727 shares of common stock
in August 2002 to replace the pledged stock lost.

<PAGE>F-18

On February 13, 2002, the Company entered into a stock sale agreement with an
investor whereby the Company agreed to sell 5,000,000 shares of Company stock.
The investor advanced the Company $192,500 against the discounted market value
of the shares. The projected re-sale proceeds of the stock was below the amount
previously advanced and the investor filed a breach of contract suit on May 13,
2002. The investor received a judgement in the amount of $253,859 and applied
proceeds from the sale of the stock issued in February 2002 of $111,471 leaving
a a balance due to the investor of $142,388 as of December 31, 2002. The Company
agreed to issue the investor an additional 10,000,000 shares of common stock of
which the net proceeds will be applied to the current balance.

In December 2002, the Company entered into an agreement to sell 5,000,000
warrants for its common stock for a premium of $25,000.  The warrant agreement
states that the purchase price is dependent upon market value at the time off
issuance and that a significant decrease in market value could result in a
forfeit of part of all of the warrant premium.

In December 2001, the Company entered into a merger agreement with NECI.  As
part of the conditions of the merger, the Company agreed to pay   a seller
$400,000. In March 2002, in order to move forward with the merger, an amendment
to the merger agreement was signed which waived all unfulfilled provisions of
the original merger agreement. The  seller  has asserted that the provision for
payment of the $400,000 was not waived under the amended merger agreement. On
the advice of legal counsel, management believes that the amount is not owed and
therefore no liability has been recorded related to this assertion.

M.      STOCK OPTIONS

In July 2000, the Company adopted a stock incentive plan for employees. The
maximum number of shares which may be awarded under the plan is 3,000,000. Any
person deemed eligible by the Stock Incentive Committee may receive shares or
options under the plan; option awards may be in the form of an incentive option
or a nonqualified stock option. Stock options issued under the plan vest over
several years, unless accelerated by the Stock Incentive Committee.

<PAGE>F-19

In addition in 2001 and 2002, the Company granted options to consultants to
purchase 5,720,000 change to consultants only number shares of common stock at
prices ranging from $0.0126 to $2.25 per share.  The fair value of the stock
options granted to consultants has been recorded as an expense in the amount of
$19,530 and $84,376 for the year ended December 31, 2001 and 2002, respecitively
All the options are unexercised and unexercised options expire between February
2003 and October 2008.

A summary of option activity, for both employees and consultants, for the two
years ended December 31, is as follows:



<table>
<caption>

                              <c>                          <c>              <c>
                                                        Price Per Share
                                                        ---------------
                                  Number of  Shares          Range        Weighted Average
                                  -----------------     ---------------   ----------------
Outstanding, January 1, 2001            209,192         $0.10   - $5.00        $2.55
        Options granted                 320,000         $0.24   - $2.25        $0.37
        Options exercised             (       -)                -                  -
        Options expired               (  11,390)        $3,00   - $5,00        $3.36
Outstanding, December 31, 2001          517,802         $0.24   - $3.46        $1.18
        Options granted               5,400,000         $0.0126 - $0.10        $0.03
        Options exercised             (       -)                -                  -
        Options expired               ( 217,802)        $3.46   - $1.73        $2.48
                                      ---------         ---------------       ------
Outstanding, December 31, 2001        5,700,000         $0.0126 - $0.24       $ 0.04
                                      ---------         ---------------       ------

At December 31, 2002 the weighted average remaining life of outstanding stock
options was approximately 19 months.

The Company accounted for the fair value its options granted to employees in
2001 in accordance with APB 25.There were no options granted to employees in
2001. During 2002, the Company changed its method of accounting to follow the
standards of SFAS No. 123.

</table>

<PAGE>F-20

The fair value of options to  consultants in 2001 and for all stock options
granted in 2002 is estimated on the date of the grant using a type of Black-
Scholes option-pricing model with the following assumptions used for grants
during the year ended December 31, 2002: dividend yield of 0%, volatility of
2.397, terms varied based on the negotiated term of the options agreement, and
risk-free interest rates varied based on the Treasury bond yield with a term
comparable to the length of the term listed in the options agreement.

N.      NET LOSS PER COMMON SHARE

As required by SFAS No. 128, the following is a reconciliation of the basic and
diluted EPS calculations for the periods presented:


<table>
<caption>

                                  <c>                     <c>                   <c>

                                     For the year            For the year          Cumulative from
                                     ended December 31,      ended December 31,    inception
                                     2001 (audited)          2002 (audited)        (January 13,1999) to
                                                                                   December 31, 2002
                                                                                   (unaudited)

Net loss  (numerator)                  $ (2,736,877)     $   (2,839,225)          $ (13,444,265)
Weighted average Shares (denominator)     33,245,571         68,992,736              75,841,165
Basic and diluted net loss per share   $        (.08)    $        (0.04)          $       (0.18)

</table>

As required by the Securities and Exchange Commission (SEC) Staff Accounting
Bulletin No. 98, the above calculation of EPS is based on SFAS No. 128,
"Earnings Per Share." Thus, options granted as of September 30, 2001 and 2002
are not included in the calculation of diluted EPS as their inclusion would be
anti-dilutive

<PAGE>F-21

O.       OPERATING LOSSES

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern.  The Company has sustained substantial costs in
implementing its action plan. In addition, the Company used substantial amounts
of working capital in funding these costs. At December 31, 2002, current
liabilities exceed current assets by $2,374,366. In view of these matters, the
ability of the Company to continue as a going concern is dependent upon the
Company's ability achieve its business objectives and the success of its future
operations.

P.      SUBSEQUENT EVENTS

During December 2002, the Company entered into a promissory note with an
investor whereby the investor would lend $62,000 to the company.  As collateral
for the note, the President of the company pledge approximately 3.3 million
shares of personally owned DataMEG Corp. common stock.  No amounts were funded
during 2002 but the funds were advanced during 2003.  The Company did not repay
the loan when due and is under default under the promissory note.  In March 2003
issued approximately 3.3 million shares to the President to replace the pledged
stock lost.

In January 2003, the Company announced an 11 per ten stock split that will be
payable to shareholders of record as of Wednesday, January 8, 2003 and is to be
paid in May 2003.  Thenumber of shares issued and outstanding on January 8, 2003
was 135,000,000 with a 10% dividend of 13,500,000 shares, the adjusted issued
and outstanding number of shares would be 148,500,000.

During 2003 a consultant completed the required services under a contract with
CASCO and received stock which gave them a 20% equity position in CASCO.  Also
during 2003, the other minority shareholder of CASCO contributed licensing
rights to certain technology and was granted a 15% additional equity position in
CASCO.  As a result, as of March 2003 the Company has decreased its ownership of
CASCO from 75% to 40% and the President of the Company has been removed as the
president and CEO of CASCO.

On April 14, 2003, the Company signed a letter of intent to acquire a 49% equity
position in  a another technology company.  The Company anticipates negogiating
a term sheet and definitive purchase agreement  upon completion of due
diligence. In February 2003, the Company signed a sub-lease agreement for office
space in Raleigh, North Carolina.  The term of the lease is for 20 months
beginning in April 2003 and ending in November 2004. The terms of the lease call
for a base monthly payment of $2,383.

<PAGE>F-22


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

        There were no changes in or disagreements with accountants on
accounting and financial disclosures in 2002.

PART III.

<PAGE>F-18

ITEM 9. DIRECTORS,EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF THE
REGISTRANT

DIRECTOR AND EXECUTIVE OFFICER

        Andrew Benson, President & Sole Director, and Sole Nominee since
September 19, 2000

        Mr. Benson was formerly the President & CEO of Video Sentry Corporation,
a business that developed and manufactured the SentryVision CCTV System. Mr.
Benson holds a patent for this product and technology invention. Video Sentry
Corporation was founded and incorporated in 1990. The Company introduced its
line of SentryVision systems into the marketplace in 1992, ultimately launched
an IPO in October 1994.

        VideoSentry Corporation was merged with Knogo North America in February
1997, forming a new corporation named Sentry Technology Corporation. Mr. Benson
worked with Sentry Technology Corporation as a consultant through 1997 and into
1998, until he resigned his position in December 1998. Mr. Benson joined
Georgetown Ventures LLC, who funded the formation of DataMEG Corporation in
January 1999.

CAS COMMUNICATIONS, INC.

ANTHONY HOBBS-BOIARDI




JOHN P. CAIRNS

        Educated at Villanova in Mathematics, Mr. Cairns entered the military in
1962 where for 5 years as an Avionics Technician he honed his skills before
entering the commercial workforce.  Mr. Cairns brings 38 years of engineering,
scientific and development experience to DataMEG. working with organizations
like Control Data, CATV Systems and Solar Energy Systems, Mr. Cairns developed
technology and holds Five (5) patents for technology ranging from Computer
Restricted Access to Hybrid Waveforms.  Mr. Cairns is the inventor of "CAS" and
its underlying technology "Tone Frequency Modulation".

        During the past five years, no Director, executive officer, nominee, or
significant employee has been convicted in a criminal proceeding or been a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding, has been or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.

<PAGE>F-19

NORTH ELECTRIC COMPANY, INC.

        REX HESTER, CHAIRMAN & CEO, NORTH ELECTRIC COMPANY, INC. Mr. Hester has
over 30 years experience in product management, sales and marketing, consulting,
and business and strategic planning. After twenty-one years of service with ITT
in various senior management capacities, Mr. Hester left the company and co-
founded Protocol Technologies, Inc (PTI) to design, develop, and market a
product family called MGTS (Message Generator / Traffic Simulator). MGTS was a
very successful product offering for SS7 network performance test, equipment
test and acceptance. PTI was sold to Tekelec, Inc (TKLC: Nasdaq) in 1988 and the
MGTS technology became the core of both Tekelec's Eagle STP product family and
the foundation for several of Tekelec's protocol performance test and monitor
products. Since the sale of PTI, Mr. Hester has consulted in the area of Mergers
and Acquisitions for several large telecommunications companies. Mr. Hester also
has a patent application involving next generation communication networks

        DAN FERENCE, PRESIDENT & COO, NORTH ELECTRIC COMPANY, INC. Mr. Ference
has over 27-years experience in the communications industry with various voice
and data products and technologies including almost 20-years managing R & D
programs.  From May 1994 to June 2001, Mr. Ference was Vice President of Fujitsu
Network Communications' Raleigh, NC Development Center, where he was responsible
for overall Development Center Operations and the Network Management and related
Network Element development programs. Prior to this, his career included serving
at: Bell Laboratories in various design and management capacities; ITT Network
Systems as Technical Director responsible for all transmission and switching
development; CIT - Alcatel, as Vice President of Engineering Planning & Services
responsible for all systems engineering and advanced technology activities
associated with their advanced digital switch product and Nortel, Inc. as
Assistant Vice President of Switching Development responsible for various
aspects of their DMS Digital Switch Development. Mr. Ference holds a BS degree
from Penn State University and an MS degree from Ohio State University both in
Electrical Engineering.

<PAGE>F-20

ITEM 11.  EXECUTIVE AND SIGNIFICANT PAST AND CURRENT EMPLOYEE COMPENSATION

<table>
<caption>

             <c>     <c>           <c>        <c>            <c>             <c>              <c>             <c>
                                SUMMARY COMPENSATION TABLE
                                --------------------------
                                                                       Long-term
                                                                      Compensation
                                                                --------------------------       -------
                                                                         Awards                  Payouts
---------       ----    ---------     -----      ------         --------------------------       -------         ---------
Name and        Year    Salary In     Bonus      Other          Restricted      Securities       LTIP            All Other
Principal               Cash and      ($)        Annual         Underlying       Options/        Payouts          Compen-
Position                Stock                    Compen-          Stock           SARS           ($)              sation
                        ($)                      sation          Awards          (#)(1)                            ($)
                                                 ($)                ($)
---------       ----    ---------     -----      ------         --------------------------       -------         ---------

Andrew          1999      280,500         0           0                0                0              0                0
Benson,
President       2000      432,000         0           0                0          187,500              0                0
& Sole
Director        2001      237,865         0           0                0                0              0                0

                2002      340,358
---------       ----    ---------     -----      ------         --------------------------       -------         ---------

Reggie          1999      240,500         0           0                0                0              0                0
Phillips
(2)             2000      432,000         0           0                0          187,500              0                0

                2001      180,727         0           0                0                0              0                0

                2002        0             0           0                0                0              0                0
---------       ----    ---------     -----      ------         --------------------------       -------         ---------

John            1999       53,063         0           0                0                0              0                0
Cairns
                2000      120,000         0           0                0          187,500              0                0

                2001      159,274         0           0                0                0              0                0

                2002       40,000         0           0                0                0              0                0
---------       ----    ---------     -----      ------         --------------------------       -------         ---------

Rex
Hester,         2002     130,000                  0           0                0                0              0                0
CEO
NECI
---------      -----   ----------    ------     -------         ---------------------------     --------        -----------

Dan
Ference         2002     130,000
President
NECI            ----    ---------    ------     -------         ---------------------------     --------        -------------


</table>


        -       All options were used to acquire unrestricted stock in
                salary in cash and unrestricted stock and no options
                remained outstanding at December 31. 2000.  The
                options do not represent any additional compensation
                beyond that which is disclosed in the column "Salary
                In Cash and Unrestricted Stock."

        -       Mr. Phillips resigned from DataMEG Corporation on
                March 31, 2001 and he is no longer a significant
                shareholder.

        -       An accrued liability related to unpaid officers and key
                employee salaries was recorded in the approximate amount of
                $305,000 at December 31, 2002.

        -       Salary for President was incurred as follows:
                        Quarter 1, 2002         60,932
                        Quarter 2, 2002         14,394
                        Quarter 3, 2002        200,000
                        Quarter 4, 2002         65,032
                            Total 2002         340,358


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following table sets forth information with respect to the
beneficial ownership of the Company's Common Stock as of December 31,
2002, by:

         (i) each person who is known by the Company to beneficially
             own 5% or more of the Company's outstanding Common Stock;

        (ii) the Company's President  and Chief Executive Officer
             ("CEO");

       (iii) each director and director  nominee; and

        (iv) all directors, director nominees and executive officers
             of the Company as a group. The Company is not aware of
             any beneficial owner of more than 5% of the outstanding
             Common Stock other than as set forth in the following
             table.  Unless otherwise indicated, the address of each
             named beneficial owner is c/o DataMeg Corporation, 20 Park
             Plaza, Suite 463, Boston, MA 02116

<PAGE>F-21

 NAME AND ADDRESS                NUMBER OF SHARES      PERCENT OF CLASS
OF BENEFICIAL OWNER             BENEFICIALLY OWNED       OUTSTANDING
-----------------------         ------------------     ----------------
Andrew Benson                       16,708,722                  13%
Rex Hester                             600,000                  .4%
Daniel Ference                       1,600,000                  1.3%
Anthony Hobbs-Boiardi/QAT               0                        0%
John Cairns                          3,503,657                   3%

All directors,  director
Nominees, key employees
And beneficial owners
as a group (3 persons)             ------------               ------
                                    22,412,379                  49%

Changes in Control

        Agreement regarding control of the DataMeg Board of Directors

        The Agreement and Plan of Share Exchange provides that promptly upon
compliance with the requirements of Section 14(f) of the Securities Exchange Act
of 1934 and Rule 14(f)-1 promulgated thereunder, two designees of Andrew Benson,
DTMG-VA's founder, will be appointed to serve the vacant unexpired terms of
office of former Directors of the Company's Board of Directors.  The effect of
the forgoing would be to put designees of DTMG-VA, the acquired corporation, in
control of the Company's Board of Directors, without a vote of the stockholders.
Rule 14(f)-1 requires the dissemination of certain information regarding the
director designees who will take control of the Company's Board to all Company
stockholders ten (10) days prior to their taking office, however, it does not
empower stockholders to vote on such matter.  Mr. Benson has nominated himself
as his designee to the Company's Board of Directors.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        As of December 31, 2002, the Company was indebted to an officers and a
stockholder in the amount of $63,680 for expenses incurred on behalf of the
Company.

        As of December 31, 2002, there were no amounts due from the Director,
Director nominee or significant current or past employees.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

EXHIBIT
NUMBER             DESCRIPTION

--------------------------------------------------------------------
99.01            Certification of CEO and CF0 Section 906


Reports filed on Form 8-K:   NONE


ITEM 14 CONTROLS AND PROCEDURES.

(a)     Within 90 days prior to the filing date of this report, with the
participation of the Company's management, the Company's President and Chief
Executive Officer and Vice President - Finance and Chief Financial Officer,
evaluated the effectiveness of the Company's disclosure controls and procedures
in accordance with Rule 13a-14 of the Securities Exchange Act of 1934 (the
"Exchange Act"). Based upon that evaluation, the President and Chief Executive
Officer and Vice President - Finance and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective in providing
reasonable assurance that information required to be disclosed by the Company in
reports that it files under the Exchange Act is recorded, processed, summarized
and reported within the time period specified in the Commission's rules and
procedures.

(b)     Changes in Internal Controls. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of the evaluation.


SIGNATURE

        Pursuant to the requirements of Section 13 of the Securities
Exchange Act of 1934, the registrant has fully caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                           DATAMEG CORP.


        Date: April 15, 2003       By: /s/ Andrew Benson
                                           ----------------------------
                                           Andrew Benson
                                           President and Sole Director
                                           (principal executive officer)
CERTIFICATION

        I, Andrew Benson, certify that:

1.      I have reviewed this annual report on Form 10-KSB of Human BioSystems;

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

3.      Based on my knowledge, the financial statements, and other financial
information included in this 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 annual report;

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

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

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

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


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

Date: April 15, 2003


By: /s/ Andrew Benson
----------------------------
Andrew Benson
President and Sole Director
(principal executive officer)



Exhibit 99.01 - Certification of CEO and CF0 Section 906

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL
OFFICER 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 DataMEG Corp.(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"), I, Andrew Benson, Chief
Executive Officer and Chief Financial Officer of the Company, certify, 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 13(a) or 15(d)
      of the Securities Exchange Act of 1934; and

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

IN WITNESS WHEREOF, the undersigned has executed this certification as of the
April 15, 2003


By: /s/ Andrew Benson
----------------------------
Andrew Benson
President and Sole Director
(principal executive officer)