<PAGE>
================================================================================

                                   FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

          For the fiscal year ended - November 30, 2002

          OR

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

          For the transition period from                to
                                          -------------    ---------------


                         Commission file number 0-26909

                           BudgetHotels Network, Inc.
          -----------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                      Nevada                             91-0179013
          ------------------------------            ------------------
          State or other jurisdiction of               (IRS Employer
          incorporation or organization             Identification No.)


                              1449 St. Paul Street
                    Kelowna, British Columbia Canada V1Y 2E5
          -------------------------------------------------------------
          (Address of principal executive offices, including zip code)


                                 (250) 868-1171
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


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

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

Name of Exchange on which registered:
     OTC

================================================================================
<PAGE>

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [   ]   NO [ X ]

Check if no disclosure of delinquent filers pursuant to Item 405 of Regulation
S-B is contained herein, and no disclosure will be contained, to the best of
Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [   ]

Issuer's revenues for its most recent fiscal year.
      November 30, 2002 - $690,782.

The aggregate market value of the Common Stock held by non-affiliates is as
follows: 7,865,281 shares at $0.10 for a total of $786,528.

Issuers involved in Bankruptcy Proceedings during the past Five Years.
     Not Applicable.

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date: November 30, 2002 - 15,895,281 shares
of Common Stock

Documents Incorporated by Reference:

1.   Form 10-SB Registration Statement and all amendments thereto, which was
     filed with the Securities and Exchange Commission and all exhibits thereto.

2.   All reports filed with the Securities and Exchange Commission after August
     2, 1999.


<PAGE>

ITEM 1.   BUSINESS.

History

     BudgetHotels Network, Inc. (formerly budgethotels.com, Inc.) (the
"Company") was incorporated under the laws of the State of Nevada on November 5,
1997, as Info Center International Inc. On November 30, 1997, the Company
acquired all of the issued and outstanding shares of common stock of Info
Center, Inc., ("ICI") a corporation incorporated under the laws of the state of
Washington on November 6, 1984. ICI thereafter became a wholly owned subsidiary
corporation of the Company. On February 11, 1999, the Company changed its name
to budgethotels.com, Inc. Info Center, Inc. ("ICI") is a wholly owned subsidiary
corporation of the Company. W.J. Marshall Management Inc. owned all of the
shares of ICI and exchanged those shares for 8,000,000 shares of the Company's
common stock in 1997. W.J. Marshall Management Inc. is a corporation owned and
controlled by William J. Marshall, the Company's President. W.J. Marshall
Management Inc. is a corporation formed to hold title to certain investments of
Mr. Marshall. W.J. Marshall Management Inc. is not a subsidiary corporation of
the Company.


Operations

     The Company's business operations consist of (1) display board
advertising, (2) an Internet online travel reservation system through its
website, www.budgethotels.com, and (3) Internet interactive informational
Kiosks.


Display Board Advertising

     The Company's primary business is to install and maintain illuminated
information boards in transportation terminals, primarily bus and rail stations.
Each board is approximately 4 feet x 5 feet and is made up of approximately 16
to 25 individual windows which are illuminated. The windows are available for
advertisements.

     Advertisements generally promote travel related services located near the
particular transportation terminal, such as hotels, rental cars and restaurants.
Some advertisers, however, promote such services in destination cities. Each
board is equipped with a free of charge direct telephone line to the particular
advertiser.


Advertising

     Advertising rates for the spaces vary, depending upon the location of the
advertisement on the board. Assuming that each board is fully occupied by an
advertiser for a twelve month period, the board will generate revenues of up to
approximately $60,000. There is no assurance, however, that a board will be
fully occupied during any twelve month period. Currently the Company's boards
are, on an average, forty-five percent (45%) filled.

<PAGE>

Internet Kiosks

     Internet Kiosks are free standing computer stations connected to the
internet. The user pays a nominal fee on a per minute basis to source and book
reservations, as well as read personal emails, internet access and other
financial information. Currently 6 Kiosks have been installed.


Costs of Display Board Advertising

     The cost of constructing and installing each board is approximately $8,500.
Operating costs per board are approximately $4,000 and consist of telephone line
charges and rental of the terminal space. Direct sales costs, primarily
commissions paid to advertising personnel, are approximately $2,000.


Marketing

     The Company currently operates 77 boards throughout the United States and
Canada, and is committed to install an additional 9 by the end of the first
quarter of fiscal year 2002. The boards range geographically from Vancouver,
British Columbia, Canada to Miami, Florida. Due to the Company's financial
condition and limited personnel, the Company has primarily marketed advertising
space on its various boards by telephone contact with potential advertisers. The
Company recognizes, however, that the most effective method of selling its
products is through direct and personal contact with its potential customers.
Accordingly, the Company intends to establish a network of area representatives
who will sell the Company's product on a commission basis. Initially, the
Company estimates that there will be six representatives who will cover the
Northeast, Southeast, Midwest, South, Southern California and Pacific Northwest
regions of the United States.

     The Company intends to concentrate its marketing efforts on filling the
vacant spaces on the existing and new boards, as well as targeting strategic
hotels to act as a wholesaler of rooms.


Lease Agreement with Greyhound Lines, Inc.

     On October 2, 1997, a License Agreement (the "License Agreement") was
executed between the Company and Greyhound Lines, Inc., a Delaware corporation
("Greyhound"). The License Agreement grants to the Company the sole right to
install, operate and maintain wall-unit advertising displays with direct dial
phones in Greyhound's leased bus terminal facilities. The License Agreement is
effective beginning on February 15, 1998, and will continue in full force until
February 15, 2003 (the "Initial Term"). After the Initial Term, the License
Agreement may be renewable for two additional five-year terms. The agreement
has been renewed for an additional five years, expiring on February 15, 2008.

     The License Agreement authorizes the Company to install at its sole cost
"approximately 20 square feet in area by 1 foot depth wall-unit with an
illuminated advertising display board with map and direct dial phone" in each of
the Greyhound facilities designated in the License Agreement. The Company must
also service, repair or replace any part of the display boards within 48 hours
after receipt of notice.


<PAGE>

     Pursuant to the terms of the License Agreement, the Company must pay
Greyhound a commission of $367.50 per month for display boards located in the
following areas: (1) Chicago, Illinois; (2) Los Angeles, California; (3) Miami,
Florida; (4) Orlando, Florida; and (5) Washington, D.C. For display boards
located in: (1) Las Vegas, Nevada; (2) Nashville, Tennessee; (3) San Diego,
California; or (4) Seattle, Washington, the Company is obligated to pay
Greyhound a commission of $157.50 per month. The Company will pay Greyhound a
commission of $50.00 per month for display boards located in thirty-six
additional cities. The commission payments will increase 4% for each renewal
term of the License Agreement.

     Pursuant to the terms of the License Agreement, the Company is required to
obtain and maintain the following insurance policies:

1.   Commercial General Liability Insurance with combined single limits of not
     less than $1,000,000 (naming Greyhound as an additional insured);

2.   Contractual Liability Insurance underwriting the indemnification, hold
     harmless, and insurance provisions of the License Agreement with combined
     single limits of not less than $1,000,000 (naming Greyhound as an
     additional insured);

3.   Comprehensive Automobile Liability Insurance providing coverage for owned,
     non-owned, hired, contracted, and leased vehicles of Info Center with
     combined single limits for injury or damage in any one accident of $500,000
     (naming Greyhound as an additional insured); and

4.   Worker's Compensation Insurance in the amounts required by applicable state
     laws governing the Company's operations or evidence that such insurance is
     not required.

     As of the date hereof, the Company has installed 69 boards pursuant to the
     aforementioned agreement.


License Agreement with National Railroad Passenger Corporation ("Amtrak")

     Effective August 21, 2001, The Company's subsidiary, Info Center, Inc.
negotiated a license to lease a portion of certain Amtrak owned and non owned
railroad properties for the purposes of providing an advertising display board
with courtesy telephone.

     The term of this agreement is five (5) years and is cancelable only for non
compliance with the parameters of the contract, or non payment of license fees.
The agreement concerns three (3) Amtrak owned, and seven (7) non owned railroad
stations in key United States cities. The agreement allows for additional
locations for display advertising boards if agreed to by the parties.

Info Center, Inc. pays monthly a predetermined license fee ranging from $250 to
$833 in year one, and increasing to between $281 to $938 by year five.
Additionally Info Center, Inc. pays a royalty of five percent (5%) of all gross
sales generated from each location.


<PAGE>

All installation, maintenance and support costs are the responsibility of Info,
Center, Inc. Also Info Center, Inc. is required to maintain a liability policy
of $2,000,000 to protect Amtrak.


Installation of Additional Display Boards

     The Company has also installed display boards for advertising by agreement
with the New York Port Authority (2), New Jersey Transit Commission in Atlantic
City, the Toronto Transit Commission, and Via Rail Canada (Ottawa and
Vancouver), and in the Amtrak rail station in Penn Station in New York, New
York.

     Thus far, the Company has installed 75 boards throughout the United States
and 2 in Canada.


Internet Website "www.budgethotels.com"

     The Company owns and has the copyright to the website www.budgethotels.com
("budgethotels").

     The Company takes hotel reservations on-line and obtains a commission from
the respective hotel for each reservation. The Company receives a commission of
10% on each on-line reservation. As financial transaction security on the
Internet improves, the Company anticipates that on-line hotel reservations will
increase. There is no assurance that the foregoing assumption will prove
accurate.

On November 20, 2000 the Company entered into an Agreement with Pegasus Systems
Inc. of Dallas, Texas under which approximately 37,000 hotels on the Pegasus
system became accessible to visitors to the Company's website. The Agreement
runs to November, 2003. The Company paid to Pegasus Systems an initial sum of
$10,000.00 and pays an additional sum of $2,500.00 per month unless 2,500
reservations for the month are booked through the Company's website.


Competition

     The Company competes with many other board providers and Internet travel
services, most of whom have more financial resources than the Company and there
can be no assurance that in the future, the Company will be able to compete
successfully with other display board advertisers or Internet website
advertisers. The Company is a small participant within the display board
advertising arena and the Internet website arena. The Company competes with
professional advertising agencies, television, radio, publications such as
magazines and newspapers, all of whom have more resources than the Company. The
Company competes with other display board providers on the basis of price,
availability of advertising space, size of space and the location of space. The
Company competes with other Internet providers on the basis of price and the
amount of space allocated to a particular client. The Company intends to market
its services as discussed in "Item 1. Description of Business - Marketing" and
does not believe that its methods of marketing will adversely affect its
competitive position.


<PAGE>

Government Regulation

     The Company anticipates that its display board advertising will be subject
to regulation by the respective local and state authorities, as well as federal
authorities, with regard to the content of each display board. Further, the
content of the display boards will also be regulated by the respective
transportation (airport, bus, port or train) authorities. Advertisements subject
to regulation may include socially objectionable advertisements relating to such
matters as alcoholic beverages, tobacco products, drug or sex paraphernalia,
"striptease" or topless establishments, "adult bookstores," nude modeling
studios, escort services and massage parlors.

     The Company believes that the lack of financial security on the Internet is
hindering economic activity thereon. To ensure the security of transactions
occurring over the Internet, U.S. federal regulations require that any computer
software used within the United States contain a 128-bit encoding encryption,
while any computer software exported to a foreign country contain a 40-bit
encoding encryption. There is uncertainty as to whether the 128-bit encoding
encryption required by the U.S. is sufficient security for transactions
occurring over the Internet. Accordingly, there is a danger that any financial
(credit card) transaction via the Internet will not be a secure transaction.
Accordingly, risks such as the loss of data or loss of service on the Internet
from technical failure or criminal acts are now being considered in the system
specifications and in the security precautions in the development of the website
"www.budgethotels.com." There is no assurance that such security precautions
will be successful.


Company's Offices

     The Company's headquarters are located 1449 St. Paul Street, Suite 202,
Kelowna, British Columbia, Canada V1Y 2E5 and its telephone numbers are (250)
868-1171 and (800) 548-4432. Additionally a sales office is maintained at 1260
Hornby Street, Vancouver, British Columbia, Canada.


Employees

     The Company currently has 10 employees and consultants other than its
Officer and Director. The employees are paid on both a commission and salary
basis depending upon their duties. The Company intends to hire additional
employees as working capital permits, and as required.


RISK FACTORS

     1. Going Concern. The Company has experienced operating losses and its
ability to continue as a going concern in the future is dependent upon achieving
profitability, and/or securing sufficient additional capital at terms
economically acceptable to the Company.

     2. Company with Limited History of Earnings. The Company has a limited
operating history and is subject to all of the risks inherent in a developing
business enterprise including lack of cash flow and service acceptance.

<PAGE>

     3. Development and Market Acceptance of Services. The Company's success and
growth will depend upon the Company's ability to market its services. The
Company's success will depend in part upon the market's acceptance of, and the
Company's ability to deliver and support its services.

     4. Dependence on Technology suppliers. While the Company currently relies
upon certain outside technology suppliers, the Company believes that there are
numerous outside technology suppliers that perform the same services.
Accordingly, the Company believes that if current technology suppliers could not
or would not furnish future services to the Company, the Company could obtain
such services from other sources without interruption of its operations.

     5. Liquidity; Need for Additional Financing. The Company believes that it
does not have the cash it needs for at least the next twelve months based upon
its internally prepared budget and expansion plans. Further, the Company's cash
requirements are not easily predictable and there is a possibility that its
budget estimates will prove to be inaccurate. If the Company is unable to
generate a positive cash flow, it will be required to curtail operations
substantially and seek additional capital. There is no assurance that the
Company will be able to obtain additional capital if required, or if capital is
available, to obtain it on terms favorable to the Company. The Company may
suffer from a lack of liquidity in the future which could impair its short-term
marketing and sales efforts and adversely affect its results of operations.

     6. Competition. Most of the Company's competitors have substantially
greater financial, technical and marketing resources than the Company. In
addition, the Company's services compete indirectly with numerous other
suppliers of web pages and search engines. As the market for the Company's
services expands, the Company expects that additional competition will emerge
and that existing competitors may commit more resources to those markets.

     7. Reliance Upon Directors and Officer. The Company is primarily dependent,
at the present, upon the personal efforts and abilities of its sole Officer and
co Director, William Marshall, who exercises complete control over the daily
management of the Company.

     8. Issuance of Additional Shares. 34,104,719 shares of Common Stock or
68.21% of the 50,000,000 authorized shares of Common Stock of the Company are
not issued. The Board of Directors has the power to issue such shares, subject
to shareholder approval, in some instances. Although the Company presently has
no commitments, contracts or intentions to issue any additional shares to other
persons, other than as described in this registration statement, the Company may
in the future attempt to issue shares to acquire products, equipment or
properties, or for other corporate purposes. Any additional issuance by the
Company, from its authorized but not issued shares, would have the effect of
diluting the interest of existing shareholders.


<PAGE>

     9. Indemnification of Officers and Directors for Securities Liabilities.
The laws of the State of Nevada provide that the Company could indemnify any
Director, Officer, agent and/or employee as to those liabilities and on those
terms and conditions as are specified in the Corporation Act of the State of
Nevada. Further, the Company may purchase and maintain insurance on behalf of
any such persons whether or not the corporation would have the power to
indemnify such person against the liability insured against. The foregoing could
result in substantial expenditures by the Company and prevent any recovery from
such Officers, Directors, agents and employees for losses incurred by the
Company as a result of their actions. Further, the Company has been advised that
in the opinion of the Securities and Exchange Commission, indemnification is
against public policy as expressed in the Securities Act of 1933, as amended,
and is, therefore, unenforceable.

     10. Cumulative Voting, Preemptive Rights and Control. There are no
preemptive rights in connection with the Company's Common Stock. Shareholders
may be further diluted in their percentage ownership of the Company in the event
additional shares are issued by the Company in the future. Cumulative voting in
the election of Directors is not provided for. Accordingly, the holders of a
majority of the shares of Common Stock, present in person or by proxy, will be
able to elect all of the Company's Board of Directors.

     11. No Dividends Anticipated. At the present time the Company does not
anticipate paying dividends, cash or otherwise, on its Common Stock in the
foreseeable future. Future dividends will depend on earnings, if any, of the
Company, its financial requirements and other factors.


ITEM 2.   DESCRIPTION OF PROPERTIES.

     The Company does not own any real or personal property.

     The Company's headquarters are located at 1449 St. Paul Street, Suite 202,
Kelowna, British Columbia, Canada V1Y 2E5 and its telephone number is (250)
868-1171. The Company leases these premises from Cedar Grove Realty on a month
to month basis at a cost of approximately $750.


ITEM 3.   LEGAL PROCEEDINGS.

     The Company is not a party to any pending or threatened litigation and to
its knowledge, no action, suit or proceedings has been threatened against its
officers and its directors.


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

     The Company has not held a shareholders' meeting during the past year,
therefore, no matters were submitted for a vote of shareholders.


<PAGE>

                                     PART II

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

     The Company's Common Stock is quoted on the Bulletin Board operated by the
National Association of Securities Dealers, Inc. under the symbol "BUDH." The
Company's shares began trading in August 1998. The following table sets forth
the high and low bid prices for the Common Stock for the quarters indicated, as
reported by the Bloomberg Reporting Service. Such market quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
necessarily represent actual transactions:

<TABLE>
<CAPTION>

          Fiscal Quarter              High Bid[1]     Low Bid[1]
          --------------              -----------     ----------
          <S>                         <C>             <C>
          2002
               Fourth Quarter           $0.11          $0.05
               Third Quarter            $0.09          $0.04
               Second Quarter           $0.11          $0.05
               First Quarter            $0.22          $0.05

           2001
               Fourth Quarter           $0.15          $0.05
               Third Quarter            $0.20          $0.10
               Second Quarter           $0.18          $0.06
               First Quarter            $0.25          $0.03





</TABLE>

[1]  These quotations reflect inter-dealer prices, without retail mark-up,
     mark-down or commissions and may not represent actual transactions.

     As of November 30, 2002, the Company has identified 482 holders of record
of its Common Stock.

     The Company has not paid any dividends since its inception and does not
anticipate paying any dividends on its Common Stock in the foreseeable future.


<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

        The following should be read in conjunction with the consolidated
        statements and the notes thereto:

OPERATIONS DURING THE FISCAL YEAR ENDED NOVEMBER 30, 2002.

The Company reports a net loss of $0.02 per share as compared to $0.01 per share
in the prior year ended November 30, 2001. In dollar terms the net loss
increased by $241,171 mainly due to increased management costs and the expensing
of certain costs related to the development of the Company's web sites.

Sales for the year ended November 30, 2002 were $690,782, a decline of $22,225
or 3.12% from the year ended November 30, 2001. A decrease of $22,287 in
advertising revenue was offset by an increase in internet revenues of $7,062.
Commissions relating to the generation of advertising revenues increased by
$18,907 as a result of the need to re-book hotels that canceled rather than
renewed following the September 11, 2001 terror attacks. Re-bookings carry a
higher commission rate than renewals.

The Company's general and administrative expenses increased materially ($191,925
or 29.34%). Most of these increased costs related to increased management costs
and the development of the Company's web sites.

Non-cash charges relating to the depreciation of the Company's Property and
Equipment also increased by $2,326.

The Company believes the changing demographics and travel patterns of its
customer base offers significant opportunities to increase its core revenues,
without materially increasing operating costs. The Company also intends to sell
its less profitable operations for cash and is cautiously optimistic that
profitability can be achieved.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash overdraft at November 30, 2002 is $99,790. Excluding items
relating to the deferral of revenues and commissions, the Company had a working
capital deficiency of $50,776 as compared to positive working capital of $86,319
at November 30, 2001. The adverse change in working capital compared to the
prior year has resulted primarily from a reduction in accounts receivable of
$42,499 and a reduction in advances to shareholder of $69,380 offset by an
increase in assets held for resale of $38,084. The Company's accumulated deficit
at November 30, 2002 was $1,297,201 as compared to $953,553 at November 30,
2001.
<PAGE>
ITEM 8    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

          There were no changes in accountants during the year ended November
          30, 2002. In addition, there were no disagreements with accountants on
          accounting and financial disclosure.


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

          The following persons were directors and/or officers of the Company
          during the year ended November 30, 2002:

William J. Marshall, Chief Executive Officer, Chief Financial Officer and
Director:

          Mr. Marshall is a businessman who has spent many years developing the
          Company's business. Mr. Marshall has been a Director of the Company
          for * years, Chief Financial Officer for * years and Chief Executive
          Officer for * years. In addition, Mr. Marshall served as Company
          President for * years until being replaced September 15, 2002 by Mr.
          J. Lewis Dillman. Mr. Marshall is not a Director of any other public
          companies.

J. Lewis Dillman, President and Director.

          Mr. Dillman is a businessman involved in natural resource companies
          for the past thirteen years. Mr. Dillman became a Director, as well as
          President, of the Company on September 15, 2002. He is also a Director
          of two other publicly traded companies: Abington Ventures, Inc. and
          Zappa Resources Ltd. Both companies, publicly traded in Canada, are
          involved in gold exploration.

Ken Cloak, Former Director.

          Mr. Cloak is a commercial real estate sales person who served as a
          director until August 2002 at which time he retires and was
          temporarily replaced by William J. McLaws.

William J. M cLaws, Former Director.

          Mr. McLaws is a a businessman who served as a Director during the
          period between the resignation of Ken Cloak until September 15, 2000
          at which time he was replaced by J. Lewis Dillman.
<PAGE>
ITEM 10   EXECUTIVE COMPENSATION


                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                                    Long Term
                                                                   Compensation
                                                            -------------------------
                               Annual Compensation                    Awards            Payouts
                        --------------------------------    -------------------------   --------
                                                                           Securities
                                                                           Underlying
Name and                                                     Restricted     Options/     LTIP         Other
Principle Position      Year    Salary     Bonus   Other    Stock Awards      SARs      Payouts    Compensation
------------------      ----   --------    -----   -----    ------------   ----------   --------   ------------
<S>                     <C>    <C>          <C>     <C>          <C>           <C>        <C>         <C>
Wm. J Marshall          2002   $123,000     Nil     Nil          N/A           N/A        N/A             N/A
 CEO

J Lewis Dillman         2002    $12,500     Nil     Nil          N/A           N/A        N/A             N/A
 President

Ken Cloak               2002        Nil     Nil     Nil          N/A           N/A        N/A         $11,000
 Former Director
</TABLE>



          Mr. Cloak received 100,000 144 Stock for services rendered.

ITEM 11   SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

          As at November 30, 2002, the Company had 482 holders of record holding
          a total of 15,895,281 common shares. 7,585,889 shares (48%) are held
          by WJM Management Ltd, the principal of whom is Wm J. Marshall, the
          Company's CEO. No dividends have been declared and/or paid.

          The Company has no debt instruments and is planning no share
          offerings.

ITEM 12   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

          Except as noted in Item 11, above, there are no other related parties
          and there have been no transactions with related parties.
<PAGE>


















                           BUDGETHOTELS NETWORK, INC.
                                AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                                NOVEMBER 30, 2002





<PAGE>





                                 C O N T E N T S


Independent Auditors' Report.................................................. 3

Consolidated Balance Sheet.................................................... 4

Consolidated Statements of Operations......................................... 6

Consolidated Statements of Stockholders' Equity (Deficit)..................... 7

Consolidated Statements of Cash Flows......................................... 8

Notes to the Consolidated Financial Statements................................ 9


<PAGE>


                          INDEPENDENT AUDITORS' REPORT


The Board of Directors
Budgethotels Network, Inc. and Subsidiaries
Kelowna, British Columbia


We have audited the accompanying consolidated balance sheet of Budgethotels
Network, Inc. and Subsidiaries as of November 30, 2002 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the years ended November 30, 2002 and 2001. 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 consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated 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 consolidated financial position of
Budgethotels Network, Inc. and Subsidiaries as of November 30, 2002, and the
consolidated results of their operations and their cash flows for the years
ended November 30, 2002 and 2001, 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 9 to the
financial statements, the Company has suffered recurring losses from operations
and its total liabilities exceeds its total assets. This raises substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 9. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



HJ & Associates, LLC
Salt Lake City, Utah
February 17, 2003


<PAGE>



                  BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet

                                     ASSETS



<TABLE>
<CAPTION>
                                                          November 30,
                                                              2002
<S>                                                    <C>
CURRENT ASSETS
   Cash                                                $             --
   Accounts receivable (Note 2)                                  98,933
   Other receivables                                              1,674
   Assets held for resale (Note 12)                              38,084
   Prepaid commissions (Note 2)                                  29,073
                                                       ----------------
     Total Current Assets                                       167,764
                                                       ----------------
PROPERTY AND EQUIPMENT (Net) (Notes 2 and 3)                    130,620
                                                       ----------------
     TOTAL ASSETS                                      $        298,383
                                                       ================
</TABLE>




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



                                       4
<PAGE>




                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                     Consolidated Balance Sheet (Continued)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>
                                                                November 30,
                                                                    2002
<S>                                                         <C>
CURRENT LIABILITIES
   Cash overdraft                                           $          99,790
   Accounts payable                                                    40,786
   Accrued expenses                                                     2,996
   Interest payable - related party (Note 11)                           1,151
   Leases payable - current portion (Note 8)                            9,298
   Note payable - current portion (Note 10)                             3,540
   Related party payable (Note 11)                                     31,906
   Unearned revenue (Note 2)                                          285,234
                                                            -----------------
     Total Current Liabilities                                        474,701
                                                            -----------------

LONG-TERM LIABILITIES

   Leases payable - noncurrent portion (Note 8)                         7,802
   Note payable - non current portion (Note 10)                         7,822
                                                            -----------------
     Total Long-Term Liabilities                                       15,624
                                                            -----------------
     TOTAL LIABILITIES                                                490,325
                                                            -----------------
</TABLE>


COMMITMENTS AND CONTINGENCIES (Note 4)

STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>

<S>                                                         <C>
   Preferred stock; 1,000,000 shares authorized of
   $0.01 par value, no shares issued and outstanding                      --
   Common stock; 50,000,000 shares authorized of
   $0.001 par value, 15,895,281 shares issued and
   outstanding                                                         15,895
   Additional paid-in capital                                       1,089,365
   Accumulated deficit                                             (1,297,201)
                                                            -----------------
     Total Stockholders' Equity (Deficit)                            (191,941)
                                                            -----------------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)   $         298,384
                                                            =================
</TABLE>

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


                                       5
<PAGE>



                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations


<TABLE>
<CAPTION>
                                                  For the Years Ended
                                                      November 30,
                                        ----------------------------------------
                                               2002                   2001
                                        ------------------    ------------------

<S>                                     <C>                   <C>
REVENUE

   Net sales                            $         690,782     $         713,007
   Commission expense                              94,787                75,880
                                        -----------------     -----------------

     Gross Margin                                 595,995               637,127
                                        -----------------     -----------------
EXPENSES
   General and administrative                     845,973               654,048
   Bad debt                                        27,087                22,927
   Depreciation                                    56,233                53,907
                                        -----------------     -----------------
     Total Expenses                               929,293               730,882
                                        -----------------     -----------------
     Loss From Operations                        (333,298)              (93,755)
                                        -----------------     -----------------
OTHER EXPENSES
   Interest expense                               (10,350)               (8,722)
                                        -----------------     -----------------
     Total Other Expenses                         (10,350)               (8,722)
                                        -----------------     -----------------
NET LOSS                                $        (343,648)    $        (102,477)
                                        =================     =================
BASIC LOSS PER SHARE                    $           (0.02)    $           (0.01)
                                        =================     =================
WEIGHTED AVERAGE NUMBER OF SHARES
 OUTSTANDING                                   15,100,994            13,635,534
                                        =================     =================
</TABLE>


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



                                       6
<PAGE>


                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
            Consolidated Statements of Stockholders' Equity (Deficit)


<TABLE>
<CAPTION>

                                              Common Stock                    Additional
                                           ----------------------------        Paid-in         Accumulated
                                              Shares           Amount          Capital           Deficit
                                           ------------     -----------      -----------     ------------

<S>                                         <C>            <C>              <C>             <C>
Balance, November 30, 2000                   13,214,000     $    13,214      $   834,171     $    (851,076)

Common stock issued for cash
   at $0.075 per share                          100,000             100            7,400                --

Common stock issued for
   services at an average of $0.10
   per share                                    527,780             528           52,250                --

Common stock issued for
   assets at an average of
   $0.09 per share                              212,450             212           18,962                --

Net loss for the year ended
 November 30, 2001                                   --              --               --          (102,477)
                                           ------------     -----------    -------------     -------------
Balance, November 30, 2001                   14,054,230          14,054          912,783          (953,553)

Common stock issued for cash
 at $0.10 per share                             100,000             100            9,900                --

Common stock issued for services
 at an average of $0.10 per share             1,741,051           1,741          166,682                --

Net loss for the year ended
 November 30, 2002                                   --              --               --          (343,648)
                                           ------------     -----------    -------------     -------------
Balance, November 30, 2002                   15,895,281     $    15,895    $   1,089,365     $  (1,297,201)
                                           ============     ===========    =============     =============
</TABLE>





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


                                       7
<PAGE>



                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                            For the Years Ended
                                                                                 November 30,
                                                                     -----------------------------------
                                                                           2002                  2001
                                                                     --------------        -------------
<S>                                                                 <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                          $    (343,648)        $   (102,477)
   Adjustments to reconcile net loss to net cash
    used by operating activities:
     Depreciation                                                           56,233               53,907
     Bad debt                                                               27,087               22,927
     Common stock issued for services                                      168,423               52,778
   Changes in assets and liabilities
     (Increase) decrease in accounts receivable                            (30,449)              40,924
     (Increase) decrease in assets held for resale                           7,777                   --
     (Increase) decrease in prepaids and other receivables                  68,195              (20,241)
     Increase (decrease) in accounts payable                                22,352                1,554
     Increase (decrease) in accrued expenses                                 1,492                2,655
     Increase (decrease) in unearned revenue                                (1,850)             (70,268)
                                                                     -------------         ------------
       Net Cash (Used) by Operating Activities                             (24,388)             (18,241)
                                                                     -------------         ------------
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of subsidiary                                                       --               (3,686)
   Purchase of property and equipment                                      (18,223)             (58,468)
                                                                     -------------         ------------
       Net Cash (Used) in Investing Activities                             (18,223)             (62,154)
                                                                     -------------         ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Change in cash overdraft                                                 (3,127)              75,383
   Proceeds from related party payable                                      31,906                   --
   Proceeds from note payable                                               14,645                   --
   Payments on note payable                                                 (3,283)                  --
   Payments on leases payable                                               (7,530)              (2,488)
   Proceeds from sales of common stock                                      10,000                7,500
                                                                     -------------         ------------
       Net Cash Provided by Financing activities                            42,611               80,395
                                                                     -------------         ------------
NET DECREASE IN CASH                                                            --                   --

CASH AT BEGINNING OF YEAR                                                       --                   --
                                                                     -------------         ------------
CASH AT END OF YEAR                                                  $          --         $         --
                                                                     =============         ============
SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR
   Interest                                                          $          --         $        983
   Income taxes                                                      $          --         $         --

NON-CASH INVESTING AND FINANCING ACTIVITIES
   Common stock issued for services rendered                         $     168,423         $     52,788
   Common stock issued for assets                                    $          --         $     19,174
   Fixed assets acquired through capital leases                      $      10,339         $     16,779
   Fixed assets acquired through assumption of liabilities           $          --         $     15,509
   Assets held for resale acquired through barter transaction        $      45,861         $         --
</TABLE>





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



                                       8
<PAGE>


                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 1 -  COMPANY BACKGROUND

          The consolidated financial statements include those of Budgethotels
          Network, Inc. (BHI) (formerly known as budgethotels.com, inc.) and its
          wholly-owned subsidiaries, Info Center, Inc. (Info), R 403 Enterprises
          LTD (R 403) and Internet 2U.net, Inc. (Internet2U). Collectively, they
          are referred to herein as "the Company".

          BHI was incorporated under the laws of the State of Nevada on November
          5, 1997 as Info Center International, Inc. BHI was incorporated for
          the purpose of acquiring Info. In February 1999, the Company changed
          its name from Info Center International, Inc. to budgethotels.com,
          inc. In August 2001, the Company changed its name from
          budgethotels.com, inc. to Budgethotels Network, Inc. BHI maintains and
          operates an internet website for the purpose of making hotel
          reservations.

          Info, a wholly-owned subsidiary, was formed under the laws of the
          State of Washington on November 6, 1984. Info has been in the business
          of operating billboards, signboards and illuminated signs for the
          purpose of placing advertisements.

          On November 30, 1997, the Company completed an Agreement and Plan of
          Share Exchange whereby BHI issued 8,000,000 shares of its common stock
          in exchange for all of the outstanding common stock of Info. The share
          exchange was accounted for as a transfer under common control as WJ
          Marshall Management Inc. was the controlling shareholder of Info and
          BHI prior to the share exchange. Accordingly, there was no adjustment
          to the carrying value of the assets or liabilities of Info. BHI has
          been in the business of operating billboards for the purpose of
          placing advertisements.

          R 403, a wholly-owned subsidiary, was incorporated under the laws of
          the Province of British Columbia, Canada on October 6, 1999. R 403 was
          dormant until 2000. R 403 was incorporated by the Company to manage
          and operate billboards, signboards and illuminated signs for the
          purpose of placing advertisements in Canada.

          Internet2U, a wholly-owned subsidiary, was incorporated under the
          State of Nevada on November 12, 1999. Internet2U operates kiosk
          machines in bus terminals in which it provides the customer with
          internet access in the terminal.

          On April 26, 2001, the Company acquired Internet2U by purchasing
          Internet2u from the BHI president, the sole shareholder of Internet2U.
          The Company acquired all of the issued and outstanding stock of
          Internet2U in exchange for cash of $10. The Company was also required
          to pay $3,686 to the president of BHI for the loan that he had made to
          Internet2U. Internet2U had fixed assets of $19,195 and a cash
          overdraft of $15,509 at the time of purchase.


                                       9
<PAGE>


                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          A summary of the significant accounting policies consistently applied
          in the preparation of the accompanying consolidated financial
          statements follows:

          a. Accounting Method

          The Company's consolidated financial statements are prepared using the
          accrual method of accounting. The Company has elected a November 30
          year end.

          b. Property and Equipment

          Property and equipment are recorded at cost. Major additions and
          improvements are capitalized. The cost and related accumulated
          depreciation of equipment retired or sold are removed from the
          accounts and any differences between the undepreciated amount and the
          proceeds from the sale are recorded as a gain or loss on sale of
          equipment. Depreciation is computed using the straight-line method
          over the estimated useful lives as follows:


<TABLE>
<CAPTION>
                                                               Useful
                              Description                      Lives
                     -------------------------------    --------------------
<S>                                                           <C>
                     Advertising boards                        7 years
                     Office furniture and equipment            7 years
                     Computer Software                         3 years
                     Website                                   3 years
                     Computers                                 3 years
                     Leasehold improvements                    Life of Lease
</TABLE>

          c.   Accounts Receivable

          Accounts receivable are shown net of the allowance for doubtful
          accounts of $ 13,809 at November 30, 2002.

          d.   Provision For Taxes

          Deferred taxes are provided on a liability method whereby deferred tax
          assets are recognized for deductible temporary differences and
          operating loss and tax credit carryforwards and deferred tax assets
          are recognized for taxable temporary differences. Temporary
          differences are the differences between the reported amounts of assets
          and liabilities and their tax bases. Deferred tax assets are reduced
          by a valuation allowance when, in the opinion of management, it is
          more likely than not that some portion or all of the deferred tax
          assets will not be realized. Deferred tax assets and liabilities are
          adjusted for the effects of changes in tax laws and rates on the date
          of enactment.


                                       10
<PAGE>



                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          d.   Provision For Taxes (Continued)

          Net deferred tax assets consist of the following components as of
          November 30, 2002 and 2001:

<TABLE>
<CAPTION>
                                                     2002               2001
                                              --------------      --------------
<S>                                           <C>                 <C>
          Deferred tax assets:
            NOL Carryover                     $      232,197      $      136,203
                                              --------------      --------------
                                                     232,197             136,203

          Deferred tax liabilities:                       --                  --

          Valuation allowance                       (232,197)           (136,203)
                                              --------------      --------------
          Net deferred tax asset              $           --      $           --
                                              ==============      ==============
</TABLE>

          The income tax provision differs from the amount of income tax
          determined by applying the U.S. federal income tax rate to pretax
          income from continuing operations for the years ended November 30,
          2002 and 2001 due to the following:

<TABLE>
<CAPTION>
                                                     2002               2001
                                              --------------      --------------
<S>                                           <C>                 <C>
          Book income                         $     (126,955)     $      (36,735)
          Stock for services/Options expense          65,685              20,585
          Depreciation                                (3,805)              1,254
          Meals & Entertainment                          175                  10
          Other                                           --              (4,000)
          Valuation allowance                         64,900              18,886
                                              --------------      --------------
                                              $           --      $           --
                                              ==============      ==============
</TABLE>

          At November 30, 2002, the Company had net operating loss carryforwards
          of approximately $580,000 that may be offset against future taxable
          income from the year 2002 through 2022. No tax benefit has been
          reported in the December 31, 2002 consolidated financial statements
          since the potential tax benefit is offset by a valuation allowance of
          the same amount.

          Due to the change in ownership provisions of the Tax Reform Act of
          1986, net operating loss carryforwards for Federal income tax
          reporting purposes are subject to annual limitations. Should a change
          in ownership occur, net operating loss carryforwards may be limited as
          to use in future years.

          e.   Principles of Consolidation

          The consolidated financial statements include those of Budgethotels
          Network. and its wholly-owned subsidiaries, Info Center, Inc, R403 and
          Internet2U.net, Inc.


                                       11
<PAGE>



                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          All material intercompany accounts and transactions have been
          eliminated.

          f.   Cash Equivalents

          For the purposes of the Statement of Cash Flows, the Company considers
          all highly liquid investments with an original maturity of three
          months or less to be cash equivalents.

          g.   Basic Loss Per Share

<TABLE>
<CAPTION>
                                        For the Year Ended
                                         November 30, 2002
                                     ---------------------------
                                            (Denominator)
                                              Weighted
                          (Numerator)          Average           Basic
                             Loss             Number of         Loss Per
                           Amounts              Shares            Share
                          ------------      -------------      ----------
<S>                       <C>                 <C>              <C>
                          $  (343,648)        15,100,994       $    (0.02)
                          ===========       ============       ==========
</TABLE>

<TABLE>
<CAPTION>
                                        For the Year Ended
                                         November 30, 2001
                                     ---------------------------
                                            (Denominator)
                                              Weighted
                          (Numerator)          Average           Basic
                             Loss             Number of         Loss Per
                           Amounts              Shares            Share
                          ------------      -------------      ----------
<S>                       <C>                 <C>              <C>

                          $   (102,477)       13,635,534       $   (0.01)
                          ============       ============      =========
</TABLE>

          The basic loss per share of common stock is based on the weighted
          average number of shares issued and outstanding at the date of the
          consolidated financial statements. Common stock equivalents are not
          presented as they are antidilutive in nature.

          h.   Estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          Actual results could differ from those estimates.



                                       12
<PAGE>


                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          i.   Revenue Recognition

          The Company's revenues are derived principally from the sale of
          advertisements located in bus and train terminals. The Company
          amortizes revenues over the life of the contract with the customer
          which range from three months to one year. Deferred revenue primarily
          comprises billings in excess of recognized revenue and payments
          received in advance of revenue recognition.

          The Company pays commissions to its sales people in full from the
          initial sales proceeds. The commissions are capitalized as a prepaid
          expense and amortized over the estimated life of the contracts.
          Prepaid commissions at November 30, 2002 were $29,073.

          The Company also earns revenue through the sale of hotel reservations.
          This is a commission the Company receives as it facilitates the
          booking of hotel rooms at various places through the Company's
          website. Deferred revenues reflect the amounts that are associated
          with reservations that have been made, through the Company's website,
          for dates after the fiscal year end of November 30, 2002.

          In accordance with EITF 99-17, barter transactions have been valued
          based on similar cash transactions which have occurred within six
          months prior to the date of the barter transaction.


          j.   Newly Issued Accounting Pronouncements

          In April 2002, the FASB issued Statement No. 145 "Rescission of FASB
          Statements No. 4, 44, and 62, Amendment of FASB Statement No. 13, and
          Technical Corrections" (SFAS 145). SFAS 145 will require gains and
          losses on extinguishments of debt to be classified as income or loss
          from continuing operations rather than as extraordinary items as
          previously required under Statement of Financial Accounting Standards
          No. 4 (SFAS 4). Extraordinary treatment will be required for certain
          extinguishments as provided in APB Opinion No. 30. SFAS 145 also
          amends Statement of Financial Accounting Standards No. 13 to require
          certain modifications to capital leases be treated as a sale-leaseback
          and modifies the accounting for sub-leases when the original lessee
          remains a secondary obligor (or guarantor). SFAS 145 is effective for
          financial statements issued after May 15, 2002, and with respect to
          the impact of the reporting requirements of changes made to SFAS 4 for
          fiscal years beginning after May 15, 2002. The adoption of the
          applicable provisions of SFAS 145 did not have an effect on our
          consolidated financial statements.

          In June 2002, the FASB issued Statement No. 146, "Accounting for Costs
          Associated with Exit or Disposal Activities." SFAS 146 nullifies
          Emerging Issues Task Force Issue No. 94-3 "Liability Recognition for
          Certain Employee Termination Benefits and Other Costs to Exit an
          Activity (including Certain Costs Incurred in a Restructuring)." SFAS
          146 applies to costs associated with an exit activity that does not
          involve an entity newly acquired in a business combination or with a
          disposal activity covered by SFAS 144. SFAS 146 is effective for exit
          or disposal activities that are initiated after December 31, 2002,
          with earlier application encouraged. We are currently reviewing SFAS
          146 and intend to implement it no later than January 1, 2003.



                                       13
<PAGE>


                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 2 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

          j.   Newly Issued Accounting Pronouncements (Continued)

          In October 2002, the FASB issued Statement No. 147 "Acquisitions of
          Certain Financial Institutions - an amendment of FASB Statements No.
          72 and 144 and FASB Interpretation No. 9" (SFAS 147). SFAS 147 removes
          acquisitions of financial institutions from the scope of both
          Statement 72 and Interpretation 9 and requires that those transactions
          be accounted for in accordance with FASB Statements No. 141, Business
          Combinations, and No. 142, Goodwill and Other Intangible Assets. Thus,
          the requirement in paragraph 5 of Statement 72 to recognize (and
          subsequently amortize) any excess of the fair value of liabilities
          assumed over the fair value of tangible and identifiable intangible
          assets acquired as an unidentifiable intangible asset no longer
          applies to acquisitions within the scope of this Statement. In
          addition, this Statement amends FASB Statement No. 144, Accounting for
          the Impairment or Disposal of Long-Lived Assets, to include in its
          scope long-term customer-relationship intangible assets of financial
          institutions such as depositor- and borrower-relationship intangible
          assets and credit cardholder intangible assets. Consequently, those
          intangible assets are subject to the same undiscounted cash flow
          recoverability test and impairment loss recognition and measurement
          provisions that Statement 144 requires for other long-lived assets
          that are held and used. SFAS 147 is effective October 1, 2002. The
          adoption of the applicable provisions of SFAS 147 did not have an
          effect on our consolidated financial statements.

NOTE 3 -  PROPERTY AND EQUIPMENT

          Property and equipment, at cost, consists of the following:

<TABLE>
<CAPTION>
                                                              November 30,
                                                                  2002
                                                           -----------------
<S>                                                       <C>

                  Advertising boards                       $         137,929
                  Office furniture and equipment                      49,907
                  Computer software                                    4,837
                  Website                                            109,209
                  Computers                                           36,704
                  Leasehold improvements                              12,714
                                                           -----------------
                                                                     351,300
                  Accumulated depreciation                          (220,680)
                                                           -----------------

          Net property and equipment                       $         130,620
                                                           =================
</TABLE>

          Depreciation expense for the years ended November 30, 2002 and 2001
          was $56,233 and $53,907, respectively.


                                       14
<PAGE>



                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 4 -  COMMITMENTS AND CONTINGENCIES

          On November 1, 2002, the Company entered into a new employment
          agreement with the Company's president. The terms of the new agreement
          are that the Company's president is to be paid on a commission basis.
          The Company president is to receive 10% of all cash brought in that
          the Company receives from revenue. The terms of this contract do not
          have an expiration date.

          In July 2000, the Company entered into an agreement for consulting
          services. The agreement runs from July 1, 2000 through October 31,
          2003. The monthly payment for the consulting agreement is $1,000.

          The Company leases certain office equipment used in their operations
          under non-cancelable operating leases. The lease terms expire
          beginning in January 2003 and ending in November 2003. The monthly
          rental payment for the leases is $790.

          The Company leases office space located in Kelowna, British Columbia
          on a month-to-month basis. The monthly lease payment on the office is
          $732.

          Minimum future payments on the leases and contracts as of November 30,
          2002 are as follows:

<TABLE>
<CAPTION>
                       Year Ended
                      November 30,                     Amount
                    --------------               ------------------
<S>                   <C>                       <C>
                       2003                      $          16,321
                                                 =================
</TABLE>

NOTE 5 -  LICENSING AGREEMENT

          In October 1997, the Company entered into a licensing agreement with
          Greyhound Lines, Inc. (Greyhound), whereby the Company is granted the
          right to install, operate and maintain its advertising boards in all
          of Greyhounds owned and leased bus terminal facilities. The agreement
          is for a period of 15 years (three 5 year terms) beginning in February
          1998. The cost to the Company ranges from $50 to $367 per month for
          each location where an advertising board is placed.

NOTE 6 -  COMMON STOCK

          On July 5, 2002, the Company sold 100,000 shares of its common stock
          for cash at $0.10 per share, for a total of $10,000.

          During the year ended November 30, 2002, the Company issued 1,741,051
          S-8 registered shares for services rendered at an average of $0.10 per
          share for a total of $168,423.

          On October 1, 2001, the Company issued 108,900 shares of common stock
          for assets at $0.10 per share, for a total of $10,890.

          On October 1, 2001, the Company issued 27,780 shares of common stock
          for services at $0.10 per share, for a total of $2,778.



                                       15
<PAGE>

                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 7 -  DILUTIVE INSTRUMENTS

          a.   Stock Options

          The Company applied Accounting Principles board ("APB") Option 25,
          "Accounting for Stock Issued to Employees," and related
          interpretations in accounting for all stock option plans. Under APB
          Option 25, compensation cost is recognized for stock options granted
          to employees when the option price is less than the market price of
          the underlying common stock on the date of grant.

          FASB Statement 123, "Accounting for Stock-Based Compensation" (SFAS
          No. 123"), requires the Company to provide proforma information
          regarding net income and net income per share as if compensation costs
          for the Company's stock option plans and other stock awards had been
          determined in accordance with the fair value based method prescribed
          in SFAS No. 123. The company estimates the fair value of each stock
          award at the grant date by using the Black-Scholes option pricing
          model with the following weighted average assumptions used for grants,
          respectively; dividend yield of zero percent for all years; expected
          volatility of 5.09 and 5.82 percent for 2000 and 2001, respectively;
          risk-free interest rates of 6.2 and 5.45 percent and expected lives of
          1 year for 2000 and 2001 respectively.


<TABLE>
<CAPTION>
                                                        For the Years Ended
                                                           November 30,
                                                       ---------------------------
                                                          2002             2001
                                                       -------------   -----------
<S>                                                    <C>             <C>
          Net loss:
              As reported                              $   (343,648)   $   102,477)
              Pro Forma                                $   (343,648)   $  (103,538)

          Net loss per share:
              As reported                              $      (0.02)   $     (0.01)
              Pro Forma                                $      (0.02)   $     (0.01)
</TABLE>

          A summary of the status of the stock options outstanding as of
          November 30.


<TABLE>
<CAPTION>
                                                            2002                          2001
                                                   -------------------------  -----------------------------
                                                                Weighted                       Weighted
                                                                Average                        Average
                                                                Exercise                      Exercise
                                                    Shares        Price         Shares          Price
                                                   ---------    ------------  -----------  ----------------
<S>                                                <C>          <C>             <C>            <C>
          Outstanding at beginning of year         1,400,000    $  0.02         1,601,250      $   0.26
          Granted                                  1,442,120       0.08           100,000          0.08
          Exercised                               (1,442,120)      0.08                --            --
          Forfeited                                 (400,000)      0.25          (301,250)         0.25
                                                  ----------                  -----------
          Outstanding at end of year               1,000,000       0.26         1,400,000          0.22
                                                  ==========                  ===========

          Exercisable at end of year               1,000,000                    1,000,000
                                                  ==========                  ===========
          Weighted-average fair value per
            option of options granted during
            the year                                            $  0.08                        $   0.08

</TABLE>


                                       16

<PAGE>

                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 7 -  DILUTIVE INSTRUMENTS (Continued)

          a.   Stock Options (Continued)

          A further summary about fixed options outstanding at November 30, 2002
          is as follows:

<TABLE>
<CAPTION>
                                                Options Outstanding                   Options Exercisable
                              --------------------------------------------------      -------------------
                                                  Weighted-
                                                   Average       Weighted-                      Weighted-
                                                  Remaining       Average                        Average
                   Exercise         Number       Contractual     Exercise         Number        Exercise
                    Prices        Outstanding       Life           Price        Exercisable      Price
                 -------------  -------------  -------------   -------------  ---------------   -----------
<S>             <C>                <C>           <C>          <C>               <C>            <C>
                 $        0.08        100,000     1.4 years    $        0.08        100,000     $      0.08
                          0.25        800,000     0.5 years             0.25        800,000            0.25
                          0.50        100,000     2.0 years             0.50        100,000            0.50
                                -------------                                 -------------
                  0.08 to 0.50      1,000,000     2.8 years             0.22      1,000,000            0.21
                                =============                                 =============
</TABLE>

          On April 1, 2000, the Company issued options to employees to purchase
          93,750 shares of common stock at $0.25 per share, which equaled the
          trading price of the shares at the date of issuance.

          On June 1, 2000, the Company issued options to employees to purchase
          232,500 shares of common stock at $0.25 per share, which exceeded the
          trading price of the shares at the date of issuance.

          On November 1, 2000, the Company issued options to employees to
          purchase 1,200,000 shares of common stock at $0.25 per share, which
          exceeded the trading price of the shares at the date of issuance.
          400,000 options vest immediately, 400,000 vest on November 1, 2001 and
          400,000 vest on November 1, 2002.

          On April 3, 2001, the Company issued options to an employee to
          purchase 100,000 shares of common stock at $0.08 pr share, which
          equaled the trading price of the shares at the date of issuance.

          There are no warrants outstanding to acquire any additional shares of
          common stock of the Company.


                                       17
<PAGE>



                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 8 - LEASES PAYABLE

<TABLE>
<S>                                                                                            <C>
          Lease payable at November 30, 2002 consisted of the following:

          Lease payable to Qualica Financial Group, bearing 16.49% interest, due
          April 1, 2004, monthly payments of $296, secured by fixed assets.                     $            4,220

              Lease payable to Qualica Financial Group, bearing 12.80% interest,
               due August 1, 2004, monthly payments of $276, secured
               by fixed assets.                                                                              4,953

              Lease payable to Qualica Financial Group, bearing 15.50% interest,
                due February 1, 2005, monthly payments of $361, secured by
                fixed assets                                                                                 7,927
                                                                                                ------------------
                     Total                                                                                  17,100
                                                                                                ------------------
                     Less current maturities                                                                 9,298
                                                                                                ------------------

                     Long-term debt                                                             $            7,802
                                                                                                ==================
</TABLE>

          Aggregate maturities required on long-term debt at November 30, 2002
          are as follows:

<TABLE>
<CAPTION>
                     Year                                                                          Amount
                     -----                                                                -------------------
<S>                                                                                      <C>
                     2003                                                                  $            9,298
                     2004                                                                               7,446
                     2005                                                                                 356
                                                                                           ------------------

                     Total                                                                 $           17,100
                                                                                           ==================
</TABLE>

NOTE 9 -  GOING CONCERN

          The Company's consolidated financial statements are prepared using
          generally accepted accounting principles applicable to a going concern
          which contemplates the realization of assets and liquidation of
          liabilities in the normal course of business. The Company has incurred
          losses from operations which have resulted in an accumulated deficit
          of $1,297,201 at November 30, 2002 and has failed to produce positive
          cash flows from operations for the years ended November 30, 2002 and
          2001, which together raises substantial doubt about the Company's
          ability to continue as a going concern. The accompanying consolidated
          financial statements do not include any adjustments relating to the
          recoverability and classification of asset carrying amounts or the
          amount and classification of liabilities that might result from the
          outcome of this uncertainty. Management believes that the Company will
          generate sufficient advertising revenue and commissions through its
          licensing agreements and hotel reservation internet website to cover
          all operating expenses in the future, although no assurance of this
          can be given.



                                       18
<PAGE>


                   BUDGETHOTELS NETWORK, INC. AND SUBSIDIARIES
                 Notes to the Consolidated Financial Statements
                           November 30, 2002 and 2001

NOTE 10-  NOTE PAYABLE

<TABLE>
<S>                                                                                             <C>
          Note payable to Canada Trust, due January 31, 2006, Canada Trust prime
          rate plus 2% interest, monthly payments of $309, unsecured.                             $    11,362
                                                                                                  -----------
          Total                                                                                        11,362
          Less current maturities                                                                       3,540
                                                                                                  -----------
          Long-term debt                                                                                7,822
                                                                                                  ===========
</TABLE>

          Aggregate maturities required on long-term debt at November 30, 2002
          are as follows:

<TABLE>
<CAPTION>
                            Year                                                                      Amount
                         ----------                                                               ------------
<S>                         <C>                                                                  <C>
                            2003                                                                 $       3,540
                            2004                                                                         3,768
                            2005                                                                         4,054
                                                                                                 -------------
                            Total                                                                $      11,362
                                                                                                 =============
</TABLE>

NOTE 11-  RELATED PARTY PAYABLE

          A shareholder of the Company advanced $25,000 to the Company, interest
          is imputed at 8.00% and is due on demand at November 30, 2002, the
          Company had accrued $822 of interest.

          A shareholder of the Company advanced $6,906 to the Company, interest
          is imputed at 8.00% and is due on demand at November 30, 2002, the
          Company had accrued $329 of interest.

NOTE 12-  ASSETS HELD FOR RESALE

          Assets held for resale consist of hotel rooms which the Company took
          as payment for advertising contracts. The Company intends to sell the
          hotel rooms on their website. The value of the hotel rooms at November
          30, 2002 was $38,084. See Note 2 (i) for a discussion of the Company's
          accounting for Barter transactions.


NOTE 13-  SUBSEQUENT EVENTS

          The Company has issued 47,790 shares of common stock for services
          rendered at an average of $0.09 per share for a total of $4,652.

          The Company has sold one of its domain names for $50,000. The Company
          president is to receive 10% of the proceeds as per the Company's
          president employment agreement.


                                       19






<PAGE>
                            CERTIFICATION 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 BudgetHotels Network, Inc. (the
"Company") on Form 10-KSB for the period ended November 30, 2003 as filed with
the Securities and Exchange Commission on the date here of (the "report"), I,
William J. Marshall, 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 this Report fairly presents, in all material
     respects, the financial condition and results of operations of the Company.

     Dated this 28 day of February, 2003.


                                              /s/ William J. Marshall
                                              ----------------------------------
                                              (Signor)
                                              Chief Executive Officer and
                                              Chief Financial Officer
<PAGE>
                                  CERTIFICATION


     I, William J. Marshall, certify that:

1.   I have reviewed this annual report on Form 10-KSB of BudgetHotels Network,
     Inc.;

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

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

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

     Dated this 28 day of February, 2003.


                                             /s/ William J. Marshall
                                             Principal Executive Officer and
                                             Principal Financial Officer