<PAGE>

                                  FORM 10-KSB/A
                                 Amendment No. 1

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

[x]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT 0F 1934

     For the fiscal year ended - November 30, 2004

     OR

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

     For the transition period from ________________ to ________________

                         Commission file number 0-26909

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

<TABLE>
<S>                                                          <C>
            Nevada                                                91-0179013
State or other jurisdiction of                                  (IRS Employer
 incorporation or organization                               Identification No.)
</TABLE>

                               1260 Hornby Street
                   Vancouver, British Columbia Canada V6Z 1W2
          (Address of principal executive offices, including zip code)

                                 (604) 669-7827
               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 [x] NO [ ]

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
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 the most recent fiscal year.

     November 30, 2004 - $486,720

The aggregate market value of the Common Stock held by non-affiliates is as
follows: 22,911,722 shares at $0.05 for a total of $1,145,586.

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, 2004 - 28,911,722 shares
of Common Stock.

Documents Incorporated by Reference:

     1.   Form 10-QSB, 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 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. Marshal
Management Inc. is a corporation owned and controlled by William J. Marshall,
the Company's past 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 consists of (1) display board advertising, and
(2) an Internet online travel reservation system through its website,
www.budgethotels.com. During the year ended November 30, 2003, the Company
elected to discontinue its internet kiosks operations

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. These 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 could generate revenues of up to
approximately $60,000. This revenue is not indicative of the average board. It
represents the high end of what a board can be rented out for based on the
location of the board. Additionally, there is no assurance that a board will be
fully occupied during any twelve-month period. Currently, the boards are
approximately 25% utilized. Each board on average over the last four years has
generated approximately $9,000 of revenue per year.

<PAGE>

Costs of Display Board Adverting

The cost of constructing and installing each board is approximately $5,000. Over
the life of the boards, the operating costs (which are included in general and
administrative costs) can significantly add to the 'total' cost of each board.

Marketing

The Company currently operates 78 boards throughout the United States and
Canada. 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 potential customers. Accordingly, the Company
originally intended to establish a network of area representatives who would
sell the Company's product on a commission basis. This plan, formulated at
November 30, 2002, and held in abeyance for approximately one year, was to be
revised and to concentrate on direct sales rather than telemarketing. The plan
has been discontinued.

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

License Agreement with Greyhound Lines, Inc. ("Greyhound")

On October 2, 1997, a License Agreement (the "License Agreement") was executed
between the Company and Greyhound Lines, Inc., a Delaware corporation. 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 License 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.

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; and
(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.

<PAGE>

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

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
railway 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 $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.

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 (Ottawa and Vancouver), and in the
Amtrak rail station in Penn Station in New York, New York.

As at November 30, 2004, the Company operates 78 boards throughout the United
States and 3 in Canada.

<PAGE>

Internet Website "www.budgethotels.com"

The Company owns 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 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 Company paid
Pegasus Systems an initial $10,000 and paid an additional $2,500 per month
unless 2,500 reservations for the month were booked through the Company's
website. This agreement expired on November 30, 2003 and has not been replaced.

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 and publications such as
magazines and newspapers, all of which have more resources than the Company. The
Company competes with other display board advertisers 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
it 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.

Government Regulation

The Company anticipates that its display board advertising will be subject to
regulation by the representative 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 book stores", 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

<PAGE>

precautions in the development of the website "www.budgethotels.com". There is
no assurance that such security precautions will be successful.

Company Offices

The Company's headquarters are located at 1260 Hornby Street, Vancouver, British
Columbia, Canada, V6Z 1W2 and its telephone number is (604) 669-7827.

Employees

The Company currently has no employees or consultants other than the President
of Budgethotels Network Inc. and Info Center Inc.. Independent sales contractors
are paid on a commission 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.

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

     4.   Dependence on Technology Suppliers. While the Company currently relies
          upon certain outside technology suppliers, the Company believes that
          there are numerous other 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 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, or can be
          obtained 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

<PAGE>

          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 President and Director, William P. McLaws, who exercises complete
          control over the daily management of the Company.

     8.   Issuance of Additional Shares: 21,088,278 shares of Common Stock, or
          42.18% 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 additional shares to other persons, other than is
          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.

     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 such persons whether or
          not the corporation would have the power to indemnify such persons
          against the liability insured against. The foregoing could result in
          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 that 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 registered office is located at 1260 Hornby Street, Vancouver,
British Columbia, Canada, V6Z 1W3 and its telephone number is (604) 669-7827.

<PAGE>

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 bee threatened against it officers
and 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.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCLHOLDERS' 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 commissions and may
not necessarily represent actual transactions.

<TABLE>
<CAPTION>
Fiscal Quarter      High Bid [1]   Low Bid [1]
--------------      ------------   -----------
<S>                 <C>            <C>
2004
   Fourth Quarter       $0.05         $0.025
   Third Quarter        $0.05         $0.025
   Second Quarter       $0.10         $ 0.04
   First Quarter        $0.12         $ 0.06

2003
   Fourth Quarter       $0.08         $ 0.03
   Third Quarter        $0.09         $ 0.03
   Second Quarter       $0.14         $ 0.05
   First Quarter        $0.12         $ 0.05
</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, 2004, the Company has identified 502 holders of record of its
Common Stock.

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

ITEM 6. MANAGEMENT'S DISCUSSIONS AND ANAYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

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

<PAGE>

OPERATIONS DURING THE FISCAL YEAR ENDED NOVEMBER 30, 2004.

The Company reports a net loss of $0.01 per share as compared to $0.02 per share
in the prior year ended November 30, 2003. In dollar terms, the net loss
decreased by $91,027, or 31.96% mainly due a decrease general and administrative
expense, bad debts expense and a decrease in commission costs offset by a
decrease in advertising revenues.

Sales for the year ended November 30, 2004 were $486,720, a decline of $126,482,
or 20.63%, from the year ended November 30, 2003 due to a decrease of $77,403 in
advertising revenues and a decrease of $49,079 in on-line bookings. The decrease
is due to a reduction in commissioned sales personnel pending development of the
Company's new electronic Info-Center boards, a marketing plan for the new boards
and to a reduction in the number of current boards in day-to-day operations.

Commissions relating to the generation of advertising revenues decreased by
$56,781 or 28.19%, mainly as a result of a reduction in the number of sales
personnel.

The Company's general and administrative costs decreased by $20,140 or 3.85% as
a result of a streamlining of the Company's operations, which included closing
the operations and administrative office in Kelowna, British Columbia, Canada.

The Company recorded a gain of $19,475 as a result of the sale of the assets and
liabilities of its discontinued internet kiosk operation and a gain of $2,176 as
a result of the write-off of a lease payable.

Non-cash charges relating to the depreciation decreased by $33,156.

LIQUIDITY AND CAPITAL RESOURCES

The Company has a cash overdraft of $16,442 at November 30, 2004. Excluding
items relating to the deferral of revenues and related commissions, the Company
had a working capital deficiency of $59,754 as compared to a working capital
deficiency of $100,028 at November 30, 2003. The decrease in working capital
deficiency compared to the previous year resulted primarily from a decrease of
$28,929 in bank loans payable from bank loans of $47,630 to $18,701, a decrease
in payroll taxes payable of $7,249, and a decrease in related party payables of
$24,117. The Company's accumulative deficit at November 30, 2004 was $1,775,648
as compared to $1,581,938 at November 30, 2003.

ITEM 7. AUDITIED CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>

                           BUDGETHOTELS NETWORK, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                           NOVEMBER 30, 2004 AND 2003

<PAGE>

                                    CONTENTS

<TABLE>
<S>                                                                            <C>
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
</TABLE>

<PAGE>

(HLB CINNAMON JANG WILLOUGHBY & COMPANY LOGO)

CHARTERED ACCOUNTANTS
A PARTNERSHIP OF INCORPORATED PROFESSIONALS

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF BUDGETHOTELS NETWORK, INC.:

     We have audited the consolidated balance sheet of Budgethotels Network,
Inc. as at November 30, 2004 and the consolidated statements of operations,
stockholders' deficiency and cash flows for the year ended November 30, 2004.
These consolidated financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

     We conducted our audit in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform an audit to obtain reasonable assurance whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosure in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.

     In our opinion, these consolidated financial statements present fairly, in
all material respects, the financial position of the company as at November 30,
2004 and the results of its operations and cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America.

     The accompanying financial statements have been prepared assuming that the
company will continue as a going concern. As discussed in Note 10 to the
financial statements, the company has suffered recurring losses from operations
and its total liabilities exceeds its total assets. These items raise
substantial doubt about the company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 10. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

     The financial statements as at November 30, 2003 and for the year then
ended were audited by another firm of chartered accountants who expressed an
opinion without reservation on those statements in their report dated February
10, 2004.

                                            "Cinnamon Jang Willoughby & Company"

                                                           Chartered Accountants

Burnaby, BC
February 23, 2005

<PAGE>

MetroTower II - Suite 900 - 4720 Kingsway, Burnaby, BC Canada V5H 4N2.
Telephone: +1 604 435 4317. Fax: +1 604 435 4319.

HLB Cinnamon Jang Willoughby & Company is a member of (HLB INTERNATIONAL LOGO).
A world-wide organziation of accounting firms and business advisors.
<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                         NOVEMBER 30, 2004   NOVEMBER 30, 2003
                                                         -----------------   -----------------
<S>                                                      <C>                 <C>
                                            ASSETS

CURRENT ASSETS
   Cash                                                     $        --         $    15,857
   Accounts receivable                                           80,718              53,851
   Prepaid commissions                                               --              32,149
                                                            -----------         -----------
      TOTAL CURRENT ASSETS                                       80,718             101,857
PROPERTY AND EQUIPMENT (NET)                                         --              54,221
                                                            -----------         -----------
TOTAL ASSETS                                                $    80,718         $   156,078
                                                            ===========         ===========

                             LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Accounts payable                                         $   102,470         $    80,215
   Bank overdraft                                                16,442                  --
   Bank loans                                                    18,701              47,630
   Payroll taxes payable                                          1,975               9,224
   Lease payable - current portion                                   --               7,667
   Related party payable                                            883              25,000
   Unearned revenue                                             179,957             175,637
                                                            -----------         -----------
      TOTAL CURRENT LIABILITIES                                 320,428             345,373
LONG TERM LIABILITIES
   Leases payable                                                    --                 705
                                                            -----------         -----------
                                                                320,428             346,078
                                                            -----------         -----------
COMMITMENTS AND CONTINGENCIES  (Note 5)
GOING CONCERN (Note 10)
STOCKHOLDERS' DEFICIENCY
   Preferred Stock; 1,000,000 shares authorized at
      $0.01 par value
   Issued and outstanding; Nil shares
   Common Stock; 50,000,000 shares authorized at
      $0.001 par value
   Issued and  outstanding; 28,911,722  for  November
   30, 2004 and  21,486,722  for November 30, 2003               28,912              21,487
   Additional paid-in capital                                 1,507,026           1,370,451
   Accumulated deficit                                       (1,775,648)         (1,581,938)
                                                            -----------         -----------
      TOTAL STOCKHOLDERS' DEFICIENCY                           (239,710)           (190,000)
                                                            -----------         -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY              $    80,718         $   156,078
                                                            ===========         ===========
</TABLE>

Director: ___________________________   Director: ______________________________

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

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                         FOR THE YEARS ENDED
                                                -------------------------------------
                                                NOVEMBER 30, 2004   NOVEMBER 30, 2003
                                                -----------------   -----------------
<S>                                             <C>                 <C>
REVENUE
   Sales                                           $   486,720         $   613,202
   Commission expense                                  142,499             199,280
                                                   -----------         -----------
TOTAL NET REVENUE                                      344,221             413,922
                                                   -----------         -----------
EXPENSES
   General and administrative expense                  502,875             523,015
   Bad debts expense - net                               8,285              42,372
   Depreciation                                         48,422              81,578
   Impairment expense                                       --               3,786
                                                   -----------         -----------
      Total Expenses                                   559,582             650,751
                                                   -----------         -----------
      Loss from Operations                            (215,361)           (236,829)
                                                   -----------         -----------
OTHER EXPENSES (INCOME)
   Gain on sale of domain name                              --             (49,500)
   Gain on write-off of lease payable                   (2,176)                 --
   Gain on disposal of Internet 2U                     (19,475)                 --
   Loss on disposition of debt                              --              50,000
   Interest expense                                         --              17,346
                                                   -----------         -----------
      TOTAL OTHER EXPENSES (INCOME)                    (21,651)             17,846
                                                   -----------         -----------
      LOSS BEFORE DISCONTINUED OPERATIONS
         (NOTE 14)                                    (193,710)           (254,675)
                                                   -----------         -----------
Discontinued operations
      Loss from discontinued operations                     --              30,062
                                                   -----------         -----------
      TOTAL LOSS FROM DISCONTINUED
         OPERATIONS                                         --              30,062
                                                   -----------         -----------
      NET LOSS                                     $  (193,710)        $  (284,737)
                                                   ===========         ===========
BASIC LOSS PER SHARE
   Continuing operations                           $     (0.01)        $     (0.02)
   Discontinued operations                                  --                  --
                                                   -----------         -----------
      TOTAL LOSS PER SHARE                         $     (0.01)        $     (0.02)
                                                   ===========         ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING       25,992,665          17,581,428
                                                   ===========         ===========
</TABLE>

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

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
                                         COMMON STOCK       ADDITIONAL
                                     --------------------     PAID IN    ACCUMULATED
                                       SHARES      AMOUNT     CAPITAL      DEFICIT
                                     ----------   -------   ----------   -----------
<S>                                  <C>          <C>       <C>          <C>
Balance, November 30, 2002           15,895,281   $15,895   $1,089,365   $(1,297,201)
Common stock issued for
   fixed assets at $0.08 per share      150,000       150       11,850            --
Common stock issued for
   services at $0.10 per share        2,941,441     2,942      171,736            --
Common stock issued to extinguish
   debt at $0.04 per share            2,500,000     2,500       97,500            --
Net loss for the year ended
   November 30, 2003                         --        --           --      (284,737)
                                     ----------   -------   ----------   -----------
BALANCE, NOVEMBER 30, 2003           21,486,722    21,487    1,370,451    (1,581,938)
Common stock issued for
   services at $0.075 per share         100,000       100        7,400            --
Common stock issued for
   services at $0.02 per share          250,000       250        4,750            --
Common stock issued to extinguish
   debt at $0.01 per share            1,000,000     1,000        9,000            --
Common stock issued for cash          6,075,000     6,075      115,425            --
Net loss for the year ended
November 30, 2004                            --        --           --      (193,710)
                                     ----------   -------   ----------   -----------
BALANCE, NOVEMBER 30, 2004           28,911,722   $28,912   $1,507,026   $(1,775,648)
                                     ==========   =======   ==========   ===========
</TABLE>

                 The accompanying notes are an integral part of
                    these consolidated financial statements
<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                    FOR THE YEARS ENDED
                                                           -------------------------------------
                                                           NOVEMBER 30, 2004   NOVEMBER 30, 2003
                                                           -----------------   -----------------
<S>                                                        <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                                    $(193,710)          $(284,737)
   Adjustments  to reconcile net loss to cash  provided
      (used) by operating activities:
   Depreciation                                                   48,422              81,578
   Bad debts                                                          --              42,372
   Common stock issued for services                               12,500             174,678
   Common stock issued to extinguish debt                         10,000                  --
   Impairment loss on fixed assets                                    --              15,262
   Loss on disposition of debt                                        --              50,000
   Gain on sale of domain name                                        --             (49,500)
   Changed in assets and liabilities:                                 --
      Decrease (increase) in accounts receivable                 (26,866)              2,709
      Decrease (increase) in assets held  for resale                  --              38,084
      Decrease (increase) in prepaid commissions                  32,149                 971
      Decrease (increase) in prepaids and other
         receivables                                                  --              (2,372)
      Increase (decrease) in accounts receivable                  22,258              39,429
      Increase (decrease) in accrued liabilities                  (7,250)              8,171
      Increase (decrease) in related party payables              (24,118)                 --
      Increase (decrease) in unearned revenue                      4,320            (109,597)
                                                               ---------           ---------
         NET CASH PROVIDED (USED) BY OPERATING
            ACTIVITIES                                          (122,295)              7,048
                                                               ---------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES
   Proceeds from sale of domain name                                  --              49,500
   Disposal of property and equipment                              5,799              (8,441)
                                                               ---------           ---------
         NET CASH PROVIDED (USED) BY INVESTING
            ACTIVITIES                                             5,799              41,059
                                                               ---------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES
   Bank indebtedness                                              16,442                  --
   Proceeds from related parties                                      --              50,000
   Payment on note payable -  related party                           --             (10,000)
   Payments on bank loan                                         (28,929)                 --
   Payments on note payable                                           --             (63,522)
   Payments on leases payable                                     (8,374)             (8,728)
   Common stock issued for cash                                  121,500                  --
                                                               ---------           ---------
         NET CASH PROVIDED (USED) BY FINANCING
            ACTIVITIES                                           100,640             (32,250)
                                                               ---------           ---------
NET INCREASE (DECREASE) IN CASH                                  (15,857)            115,857
CASH AT BEGINNING OF YEAR                                         15,857                  --
                                                               ---------           ---------
CASH AT  END OF YEAR                                           $      --           $  15,857
                                                               =========           =========
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
   INTEREST                                                    $      --           $  18,345
NON-CASH FINANCING ACTIVITIES:
   Common stock issued for services                            $  12,500           $ 174,678
   Common stock issued for assets                                     --              12,000
   Common stock issued for extinguishment of debt                 10,000             100,000
</TABLE>

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

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

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, until November 30, 2003, 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, formerly 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.

     The Company acquired Internet2U on April 26, 2001 and used the purchase
     method of accounting for the transaction. Since the purchase was from a
     related party (the President of the Company at the time), the assets
     acquired were recorded at the predecessor's cost. The Company acquired
     fixed assets of $19,195 for a payment of $3,865 to the President, the
     assumption of the cash overdraft, and $10, for a total of $19,205. The
     excess purchase price was expensed. The Company discontinued the operations
     of Internet 2 U in December 2003.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

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. Basis of Presentation

     The Company's consolidated financial statements are denominated in U.S.
     dollars.

     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>
          Description             Useful Lives
          -----------            -------------
<S>                              <C>
Advertising display 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
     $13,004 at November 30, 2004 (2003 - $Nil).

     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.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

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, 2004 and 2003:

<TABLE>
<CAPTION>
                               2004        2003
                            ---------   ---------
<S>                         <C>         <C>
Deferred tax assets:
   NOL Carryover            $ 357,580   $ 309,300
Deferred tax liabilities:
   Depreciation                    --      (7,800)
Valuation allowance          (357,580)   (301,500)
                            ---------   ---------
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, 2004 and 2003 due to
     the following:

<TABLE>
<CAPTION>
                                       2004        2003
                                     --------   ---------
<S>                                  <C>        <C>
Book income                          $(74,481)  $(107,506)
Stock for services/Options expense      8,483       2,380
Depreciation                               --       2,980
Valuation allowance                    65,998     102,146
                                     --------   ---------
                                     $     --   $      --
                                     ========   =========
</TABLE>

     At November 30, 2004, the Company had net operating loss carryforwards of
     approximately $940,578 that may be offset against future taxable income
     from the year 2004 through 2024. No tax benefit has been reported in the
     November 30, 2004 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
     Inc. and its wholly-owned subsidiaries, Info Center, Inc and R403
     Enterprises Ltd.

     All material inter-company accounts and transactions have been eliminated.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     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, 2004
--------------------------------------------
                 (Denominator)
                   Weighted
 (Numerator)        Average       Basic Loss
Loss Amounts   Number of Shares    Per Share
------------   ----------------   ----------
<S>            <C>                <C>
 $(193,710)       25,992,665        $(0.01)
 ---------        ----------        ------
</TABLE>

<TABLE>
<CAPTION>
    For the Year ended November 30, 2003
--------------------------------------------
                 (Denominator)
                   Weighted
 (Numerator)        Average       Basic Loss
Loss Amounts   Number of Shares    Per Share
------------   ----------------   ----------
<S>            <C>                <C>
 $(284,737)       17,581,425        $(0.02)
 ---------        ----------        ------
</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.

     i. Accounting for the Impairment or Disposal of Long-lived Assets

     The Company has implemented SFAS 144 Accounting for the Impairment or
     Disposal of Long-lived Assets to account for the impairment and disposal of
     long-lived assets. As a result of the implementation, the Company recorded
     impairment expense of $15,282 during the year ended November 30, 2003.
     $11,476 of the impairment loss in 2003 was included in discontinued
     operations. No impairment expense was recorded during the year ended
     November 30, 2004.
<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     j. Web Site Development Costs

     The costs of web site development during the planning stage, as defined
     under EITF No. 00-2 (Accounting for Web Site Development Costs) are
     expensed as incurred. Computer software and web site development costs
     incurred during the application and infrastructure development, including
     external direct costs of materials and services in developing software,
     creating graphics and web site content, payroll and interest costs are
     capitalized and amortized over the estimated useful life, beginning when
     the software is ready for use and after all substantial testing has been
     completed and the web site is operational.

     k. 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, 2004 were $Nil.

     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, 2004.

     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.

     l. Translation of Foreign Currencies

     Amounts in foreign currencies are translated into U.S. dollars as follows:

     i) Current assets and current liabilities at the exchange rate prevailing
     at the end of the year;

     ii) Inventory, capital assets and investments in shares and joint ventures
     at the exchange rate prevailing on the date of acquisition;

     iii) Income and expenses at the average annual rate.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

     m. Accounting for Stock-Based Compensation

     The Company accounts for common stock issuances for services based on the
     more readily determinable value of the services received or the fair value
     of the common stock given up. In most cases, the Company values the
     services at the closing value of the common stock on the date of
     authorization of the issuance. The Company's policy is to issue the common
     stock after the services have been provided.

     n. 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.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 3 - BANK LOANS

     The Company has three credit facilities, bearing interest at rates from
     prime plus 2% to 6.25%. The loans are unsecured and are due on demand.

NOTE 4 - PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                     2004        2003
                                  ---------   ---------
<S>                               <C>         <C>
Advertising display boards        $ 138,646   $ 138,646
Office furniture and equipment       28,401      32,706
Computer software                        --       5,222
Website                             125,203     125,203
Sales manuals                            --          --
                                  ---------   ---------
                                    292,250     314,491
Accumulated depreciation           (292,250)   (260,270)
                                  ---------   ---------
Net property and equipment        $      --   $  54,221
                                  =========   =========
</TABLE>

     Depreciation expense for the years ended November 30, 2004 and 2003 was
     $48,422 and $81,578, respectively. Impairment expense for the years ended
     November 30, 2004 and 2003 was $Nil and $15,282, respectively.

NOTE 5 - COMMITMENTS AND CONTINGENCIES

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

NOTE 6 - LICENSING AGREEMENTS

     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.

     In August 2001, the Company negotiated a license with National Railroad
     Passenger Corporation ("Amtrak"), whereby the Company is granted the right
     to lease a portion of Amtrak owned and non owned railroad properties for
     the purposes of installing, operating and maintaining its advertising
     display boards. The license is for a period of 5 years. The cost to the
     Company ranges from $250 to $833 per month in year one, increasing to $281
     to $933 in year five.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 7 - COMMON STOCK

     During the year ended November 30, 2004, the Company issued 100,000 and
     250,000 S-8 registered shares for services rendered at a price of $0.075
     and $0.02 per share, respectively, for a total of $12,500.

     During the year ended November 30, 2004, the Company issued 1,000,000
     shares of common stock at $0.01 per share in payment of advances totaling
     $10,000 from a related party.

     During the year ended November 30, 2004, the Company issued 6,075,000
     shares of common stock at $0.02 per for cash totaling $121,500.

     During the year ended November 30, 2003, the Company issued 2,941,441 S-8
     registered shares for services rendered at prices ranging between $0.04 and
     $0.10 per share for a total of $174,678 and 150,000 S-8 registered shares
     for fixed assets at $0.08 per share for a total of $12,000.

     During the year ended November 30, 2003, the Company issued 2,500,000
     shares of common stock at $0.04 per share in payment of advances totaling
     $50,000 from a related party. The Company incurred a loss on disposition of
     this debt in the amount of $50,000.

NOTE 8 - 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 148, "Accounting for Stock-Based Compensation" (SFAS No.
     148"), requires the Company to provide pro-forma 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. 148. 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 5.82 and 77.00 percent for 2003 and
     2004 respectively; risk-free interest rates of 5.45 and 4.00 percent and
     expected lives of 1 year for 2003 and 2004 respectively.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 8 - DILUTIVE INSTRUMENTS (Continued)

     a. Stock Options (Continued)

<TABLE>
<CAPTION>
                       For the Years ended
                           November 30
                      ---------------------
                         2004        2003
                      ---------   ---------
<S>                   <C>         <C>
Net loss:
   As reported        $(193,710)  $(284,737)
   Pro-forma          $(331,585)  $(284,737)
Net loss per share:
   As reported        $   (0.01)  $   (0.02)
   Pro-forma          $   (0.01)  $   (0.02)
</TABLE>

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

<TABLE>
<CAPTION>
                                           2004                    2003
                                   --------------------   ---------------------
                                               Weighted                Weighted
                                                Average                 Average
                                               Exercise                Exercise
                                     Shares      Price      Shares       Price
                                   ---------   --------   ----------   --------
<S>                                <C>         <C>        <C>          <C>
Outstanding at beginning of year     200,000    $ 0.50     1,000,000     $0.26
Granted                            2,850,000     0.036     3,091,000      0.07
Exercised                           (350,000)    0.036    (3,091,441)     0.07
Forfeighted                         (200,000)     0.50      (800,000)     0.26
                                   ---------    ------    ----------     -----
Outstanding at end of year         2,500,000       Nil       200,000      0.50
Exercisable at year end            2,500,000                 100,000
                                   ---------    ------    ----------     -----
Weighted average fair value per
   option of options granted
   during the year                              $0.036                   $0.50
</TABLE>

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 8 - DILUTIVE INSTRUMENTS (Continued)

     a. Stock Options (Continued)

     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. The options have expired, unexercised.

     During the year ended November 30, 2004, the Company issued options to
     employees to purchase 350,000 shares of common stock at an exercise price
     range from $0.02 to $0.075 per share. All options granted were exercised as
     payment for services rendered.

     During the year ended November 30, 2004 the Company has granted Michael R.
     Jones the options to purchase 2,500,000 shares at $0.065 per share expiring
     the earlier of three years from the date of grant or ninety days after the
     termination of employment as president of the Company's subsidiary, Info
     Center Inc.

     During the year ended November 30, 2003, the Company issued options to
     employees to purchase 2,941,401 shares of common stock at an exercise price
     range from $0.035 to $0.10 per share. All options granted were exercised as
     payment for services rendered.

     During the year ended November 30, 2003, the Company issued options to
     employees to purchase 150,000 shares of common stock at an exercise price
     of $0.08 per share. All options were exercised as payment for fixed assets.

     b. Stock Purchase Warrants

     There are 10,075,000 warrants outstanding as of November 30, 2004 to
     acquire additional shares of common stock of the Company at $0.04 per
     share. 3,700,000 warrants have a life of one year and the balance have a
     life of two years.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 9 - LEASES PAYABLE

     There were no leases payable at November 30, 2004. Leases payable at
     November 30, 2003 consisted of the following:

<TABLE>
<CAPTION>
                                                                     2004    2003
                                                                     ----   ------
<S>                                                                  <C>    <C>
Lease payable to Qualica Financial Group, bearing 16.49%
   interest, due April 1, 2004, monthly payments of $296, secured
   by fixed assets.                                                   $--   $1,419
Lease payable to Qualica Financial Group, bearing 12.80%
   interest, due August 1, 2004, monthly payments of $276, secured
   by fixed assets.                                                    --    2,359
Lease payable to Qualica Financial Group, bearing 15.50% interest,
   due February 1, 2005, monthly payments of $361, secured by
   fixed assets.                                                       --    4,594
                                                                      ---   ------
Total                                                                  --    8,372
   Less current maturities                                             --    7,667
                                                                      ---   ------
   Long-term debt                                                     $--   $  705
                                                                      ===   ======
</TABLE>

NOTE 10 - 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 $1,775,648 at
     November 30, 2004 and has failed to produce positive cash flows from
     operations for the years ended November 30, 2004 and 2003, 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.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 11 - RELATED PARTY PAYABLE

     During the year ended November 30, 2004, a shareholder of the Company who
     had advanced $10,000 to the Company was issued 1,000,000 of common stock as
     repayment.

     Accounts payable includes a balance of $60,699 (2003 - $Nil) due to an
     officer of the Company.

NOTE 12 - SEGMENT INFORMATION

     The Company generates revenues from two segments, as listed below. The
     Company has no customers who comprise over 5% of revenues or receivables
     and derives approximately 8% of its revenues from Canada, with the balance
     being derived from the United States.

     November 30, 2004:

<TABLE>
<CAPTION>
                                     Reservation
                    Display Boards      System       Total
                    --------------   -----------   ---------
<S>                 <C>              <C>           <C>
Total Assets          $  73,531       $  7,187     $  80,718
Total Revenues        $ 446,283       $ 40,437     $ 486,720
Net Income (Loss)     $(177,752)      $(15,958)    $(190,710)
</TABLE>

     November 30, 2003:

<TABLE>
<CAPTION>
                                     Reservation
                    Display Boards      System       Total
                    --------------   -----------   ---------
<S>                 <C>              <C>           <C>
Total Assets          $  68,307        $87,771     $ 156,078
Total Revenues        $ 523,686        $89,516     $ 613,202
Net Income (Loss)     $(325,633)       $70,958     $(254,675)
</TABLE>

NOTE 13 - FINANCIAL INSTRUMENTS

     Fair Value Disclosures -

     The carrying value of cash, accounts receivable, accounts payable, bank
     overdraft and bank loans approximate their fair values due to the
     relatively short periods to maturity of the instruments.

     Foreign Currency Risk -

     The Company operates in the United States of America and Canada, which
     gives rise to the risk that cash flows may be adversely affected by
     exchange rate fluctuation. The Company does not participate in future
     contracts for foreign exchange hedges.

<PAGE>

                           BUDGETHOTELS NETWORK, INC.
                 Notes to the Consolidated Financial Statements
                           November 30, 2004 and 2003

NOTE 14 - DISPOSAL OF SUBSIDIARY AND DISCONTINUED OPERATIONS

     In December 2003, the Company discontinued the Internet 2U Division. The
     following is a summary of the discontinued operations for the years ended
     November 2004 and 2003. No income tax benefit has been attributed to the
     discontinued operations.

<TABLE>
<CAPTION>
                                        For the Years Ended
                                            November 30
                                        -------------------
                                          2004     2003
                                          ----   --------
<S>                                     <C>      <C>
REVENUES                                   $--   $  7,178
COST OF SALES                               --      6,518
                                           ---   --------
   GROSS MARGIN                             --        660
                                           ---   --------
EXPENSES
   Interest expense                         --        999
   Impairment expense                       --     11,476
   General and administrative expense       --     18,427
                                           ---   --------
   TOTAL EXPENSES                           --     30,722
                                           ---   --------
LOSS FROM OPERATIONS                        --    (30,062)
                                           ---   --------
NET OPERATIONS LOSS FROM DISCONTINUED      $--   $(30,062)
                                           ===   ========
</TABLE>

     During the year ended November 30, 2004 the Company sold its 100% interest
     in Internet 2 U for proceeds of $1. The carrying value of the liabilities
     of Internet 2 U at the date of sale was as follows:

<TABLE>
<S>                 <C>
Bank indebtedness   $14,881
Lease payable         4,594
                    -------
                    $19,475
                    =======
</TABLE>

NOTE 15 -SUBSEQUENT EVENT

     On February 24, 2005 the Company signed a letter of intent to sell 88.2% of
     the common shares of the Company to Edentify, Inc. (the "Purchaser").
     Pursuant to the letter of intent dated February 24, 2005 the Purchaser will
     deposit $75,000 into an escrow account for the benefit of the Company, and
     will pay an additional $75,000 to the Company within 45 days of execution
     of definitive agreements for the transaction.

     In accordance with the terms of the letter of intent, the Company must
     execute a reverse 10-for-1 split of the Company's common stock, such that
     after the split the Company's common stock will consist of 2,841,172 common
     shares. Additionally, prior to the date of closing the Company must execute
     a distribution agreement with its subsidiary InfoCenter, Inc., to the
     effect that all of the issued and outstanding shares of InfoCenter, Inc.
     owned by Budgethotels Network Inc. will be distributed to the shareholders
     of the Budgethotels Network Inc. as of a record date immediately prior to
     closing on the reverse acquisition Budgethotels Network Inc. through a
     registration statement on Form SB-2 or otherwise by November 30, 2005.

<PAGE>

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

     During the year ended November 30, 2004, the Company changed accountants
     from HJ & Associates LLP, Certified Public Accountants, of Salt Lake City,
     Utah to HLB Cinnamon Jang & Willoughby, Chartered Accountants, of Burnaby,
     British Columbia. This change was a result of management's decision to
     appoint a local auditor to reduce costs and audit travel.

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

     The following persons were directors and/or officers of the Company during
     the year ended November 30, 2004:

William P. McLaws, Chief Executive Officer, President, Chief Financial Officer
and Director

     Mr. McLaws is a businessman who initially served as a temporary Director
     between August 2002 and September 15, 2002. He again became a Director on
     January 6, 2004, at which time he became Chief Executive Officer, President
     and Chief Financial Officer.

Robert L. Chalmers, Director

     Mr. Chalmers is a self-employed, independent businessman. He became a
     direcrtor in January, 2004.

ITEM 10. EXECUTIVE COMPENSATION

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                 Long Term
                                                               Compensation
                                                       ----------------------------
                                                                  Awards
                                                       ----------------------------           Payouts
                           Annual Compensation                          Secuirites    ----------------------
     Name and        -------------------------------    Restricted      Underlying      LTIP        Other
Principal Position   Year   Salary   Bonus    Other    Stock Awards   Options/ SaRs   Payouts   Compansation
------------------   ----   ------   -----   -------   ------------   -------------   -------   ------------
<S>                  <C>    <C>      <C>     <C>       <C>            <C>             <C>       <C>
Wm. P McLaws
   President,CEO     2004     Nil     Nil    $47,750        N/A            N/A          N/A          N/A
Robert L. Chalmers
   Director          2004     Nil     Nil    $   Nil        N/A            N/A          N/A          N/A
</TABLE>

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

As at November 30, 2004, the Company had 502 holders of record holding a total
of 28,911,722 common shares. 4,000,000 shares (13.83%) are beneficially held by
Wm. P. Mclaws, the CEO of the Company, and 2,000,000 shares are beneficially
held by M. Jones, the President of Info Center.

<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

In addition to the transactions noted in Item 11 above, the Company repaid
advances of $25,000 by issuing 1,000,000 share of common stock at $0.01 per
share and making a cash payment of $15,000

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

(a)(1)(2) Financial Statements and Schedules - See index to financial statements
on page F-1 of this Annual Report.

(a)(3) Exhibits - See exhibit index below.

Unless otherwise indicated filed herewith are the following exhibits:

<TABLE>
<CAPTION>
Exhibit
  No.     Description of Document
-------   -----------------------
<S>       <C>
3.1(a)    Certificate of Incorporation attached as an exhibit to the Company's
          Form 10 filed with the Securities and Exchange Commission on March 24,
          2000

3.2       By-laws attached as an exhibit to the Company's Form 10 filed with the
          Securities and Exchange Commission on March 24, 2000
</TABLE>

ITEM 14. CONTROLS AND PROCEDURES

The Company has carried out an evaluation under the supervision of the Company's
management, including the Company's Chief Executive Officer and Principal
Accounting Officer, of the effectiveness of our disclosure controls and
procedures, as defined in Rules 13a-15 and 15d-15 under the Securities and
Exchange Act of 1934, as amended.

All management decisions are made directly by the Company's Board of Directors
and President. All deposits are in the form of checks, which are deposited by
the Company's bookkeeper. Payments by the Company are made by check, which are
issued directly under the direction of the Company's President and other
receipts and expenditures are made only in accordance with authorizations of the
Company's management and directors. The Company's bookkeeper is responsible for
recording the day-to-day sales and accounts receivable transactions of the
Company's wholly owned subsidiaries. We believe that the Company maintains
sufficient records, particularly given the low number of transactions, in
reasonable detail to accurately and fairly reflect the transactions and
disposition of our assets. In addition, we believe that transactions are
recorded as necessary to permit proper preparation of financial statements in
accordance with generally accepted accounting principles. An independent
accounting office records all other transactions and provides a preliminary
consolidated trial balance. The Company employs an accounting consultant,
familiar with the requirements set forth in Rule 13a-15 and 15d-15 of the
Exchange Act, to review these records on a quarterly basis. This accounting
consultant reports directly to the President of the Company with respect to his
findings on the sufficiency and accuracy of these records and further assists in
the preparation of our financial statements for inclusion in our reports filed
on Form 10-QSB and Form 10-KSB.

Based on that evaluation, the Chief Executive Officer and Principal Accounting
Officer have concluded, as of the date of filing of this report, that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in
Securities and

<PAGE>

Exchange Commission rules and forms. We further believe that the controls and
procedures discussed above are effective as of the date of the financial
statements provided in this report and such controls and procedures provide
reasonable assurance regarding the prevention or timely detection of
unauthorized acquisition, use or disposition of those of our assets that could
have a material effect on our financial statements.

There was no change in our internal controls over financial reporting during the
fourth fiscal quarter of 2004 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting.

ITEM 15. PRINCIPAL ACCOUNTING FEES AND SERVICES.

As noted in Item 14, above, the Company employs the services of a bookkeeper to
record day-to-day sales and receivable transactions, an independent accounting
office to record all other transactions and an accounting consultant to review
the records and prepare, and file, the quarterly Form 10-QSB and annual Form
10-KSB. These documents are review by the Company's independent auditors.

                                   SIGNATURES

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

                                        BUDGETHOTELS NETWORK, INC.
                                        (registrant)


Date: as of November 28, 2004           By: /s/ William P. McLaws
                                            ------------------------------------
                                        William P. McLaws, Chief Executive
                                        Officer, President, Chief Financial
                                        Officer and a member of the Board of
                                        Directors.