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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-KSB

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

     FOR THE FISCAL YEAR ENDED JUNE 30, 2000

                                       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 0-14731

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

                               EMARKETPLACE, INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

           DELAWARE                                             33-0558415
 -------------------------------                          ----------------------
 (State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification Number)

                        255 WEST JULIAN STREET, SUITE 100
                           SAN JOSE, CALIFORNIA 95110
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (408) 295-6500
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant: (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 [ ]

 As of September 21, 2000, there were 16,983,723 shares of the Registrant's
 Common Stock outstanding.
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<PAGE>
                                     PART I

ITEM 1.           DESCRIPTION OF BUSINESS

GENERAL

         eMarketplace, Inc (the "Company" an "eMarketplace") is an Internet
holding company engaged primarily in the development and operation of a network
of Internet properties ("Portfolio Companies") that provide content, commerce
and online services to demographically-targeted audiences. The Company's
strategy is to develop and promote synergistic business relationships among the
Portfolio Companies, and to provide operational and management services. These
services include active strategic direction, operating guidance, merger and
acquisition assistance, board and management recruitment, and innovative
financing. However, because the Company presently employs only two executives,
the amount of services provided to its Portfolio Companies is limited. As the
Company develops its Portfolio companies, is reasonably possible that its
ownership may change through a sale or merger of certain Portfolio Companies

         In April 1999, the Company acquired E-Taxi, Inc. ("E-Taxi") and its
wholly-owned subsidiary, TechStore, LLC ("TechStore"). The acquisition marked
the adoption of a new corporate strategy focused on developing, acquiring and
operating Internet businesses. Until April 1999, the Company was primarily
engaged in the purchase and sale of new and used computer equipment, and through
its Medical Marketplace, Inc. subsidiary, the purchase and sale of used medical
equipment. However, the Company in April 1999 adopted a plan in conjunction with
its new corporate strategy with the acquisition of E-Taxi and TechStore to
divest its ownership interest in Medical Marketplace because the used medical
equipment business no longer conformed to the Company's business strategy.
Effective June 30, 1999, the Company completed its sale of Medical Marketplace.

         The Company was incorporated in July 1983 as Quality Associates, Inc.,
a California corporation, and changed its name to Computer Marketplace in June
1987. In March 1993, Computer Marketplace changed its name to Computer
Marketplace, Inc. and its state of incorporation from California to Delaware. On
August 27, 1999, the Company changed its trading symbol on the OTC Bulletin
Board from "MKPL" to "EMKT" in contemplation of its name change to eMarketplace,
Inc., which was effected on September 17, 1999. eMarketplace and its
subsidiaries shall be referred to as the "Company" or "eMarketplace" in this
Annual Report.


CORPORATE DEVELOPMENTS DURING YEAR

         In August 1999, the Company's subsidiary Office Express, Inc., launched
its web site, www.officeexpress.com. Offering over 20,000 brand name office
products, the site enables online customers to purchase office products and
supplies at highly competitive prices. Products are generally shipped for next
day delivery for most domestic US destinations and the site features advanced
online customer service features, including customer shopping lists, which
allows users to manage lists of frequently purchased items. The website of
Office Express has been combined with TechStore, an online retailer, to create
an online "superstore" featuring over 75,000 consumer technology and related
products for the home in office.

                                       1
<PAGE>

         On November 23, 1999, the Company and its newly formed subsidiary,
TopTeam, Inc. closed on the acquisition of six Internet consulting companies -
Full Moon Interactive Group, Inc., Orrell Communications, Inc., Devries Data
Systems, Inc. Muccino Design Group, Inc., Image Network, Inc., and OnCourse
Network, Inc. (collectively, the "Interactive Architect Firms"). As a result of
the acquisitions, i) TopTeam owned all of the outstanding capital stock of the
Internet Architect Firms; and ii) eMarketplace owned approximately 44.9% of the
total TopTeam shares outstanding, exclusive of eMarketplace's rights to purchase
5.4 million shares of common stock of TopTeam at $5.00 per share (all references
to shares of common stock of TopTeam give effect to a 3-for-2 stock split),
expiring upon the earlier of December 31, 2000, or the effective date of a
TopTeam registration statement. On February 23, 2000, Top Team changed its name
to Full Moon Interactive, Inc. ("Full Moon"). Hereinafter, Top Team and its
subsidiaries will be referred to as Full Moon. On February 28, 2000, Full Moon
engaged Donaldson, Lufkin & Jenrette Securities Corporation to serve as its
exclusive financial advisor with respect to the sale of Full Moon.

         On December 31, 1999, the Company issued a $1.5 million line of credit
to Full Moon. As consideration for this line of credit, the Company received
375,000 shares of Full Moon. This transaction increased eMarketplace's ownership
in Full Moon to approximately 47% of the total number of shares of Full Moon
common stock outstanding.

         On December 27, 1999, the Company entered into a Stock Purchase and
Contribution Agreement, with Pat Boone's Gold Label, Inc., a Delaware
corporation ("Gold Label"), and all of the shareholders of The Gold Label-Honest
Entertainment, Inc. ("Honest Entertainment"), a Tennessee corporation. Under the
terms of the agreement, i) the Company issued 370,000 shares of common to the
Honest Entertainment shareholders in exchange for 1.3 million shares of common
stock of Honest Entertainment; ii) the Company contributed its newly purchased
shares of Honest Entertainment to Gold Label in exchange for 1.3 million shares
of common stock of Gold Label; and iii) the shareholders of Honest Entertainment
contributed all of the remaining outstanding shares of Honest Entertainment (the
shares not purchased by the Company) to Gold Label for 3.1 shares of common
stock of Gold Label, representing a 29.7% ownership interest. In addition, the
Company received a warrant to purchase 200,000 shares of Gold Label at an
exercise price of $500,000. The transaction closed on April 8, 2000, but for
accounting purposes has been recorded as of January 1, 2000. Gold Label is
engaged in the distribution and sale of music and videos through its
goldlabel.com web site.

         In February 2000, the Company capitalized a wholly owned subsidiary,
StarsOnline, Inc., a Delaware corporation, with $250,000 to develop and launch
an Internet based entertainment company.

         On March 24, 2000, the Company retained U.S. Bancorp Piper Jaffray Inc.
as its financial advisor. U.S. Bancorp has agreed to provide the Company with
financial advisery services. The Company engaged U.S. Bancorp to assist it with
capital raising activities.

                                       2
<PAGE>

EMARKETPLACE PORTFOLIO COMPANIES

         FULL MOON INTERACTIVE, INC. was incorporated in Delaware on July 14,
1999, under the name TopTeam, Inc., a wholly-owned subsidiary of eMarketplace,
and was formed as part of eMarketplace's strategic consolidation of businesses
that provide strategic consulting and comprehensive Internet based solutions to
corporate users of information technology. eMarketplace believed that the rapid
growth in demand and complexity for Internet services presented an economic
opportunity for an organization that could assemble the diverse skill sets
necessary to deliver an effective e-business solution. Since the Internet
professional services is a relatively new industry, there are a limited number
of organizations within the industry that have the scope of services and
industry knowledge to deliver an end-to-end solution for its clients.
eMarketplace approached a number of Internet firms and extended offers to
participate in the consolidation to companies who could contribute a skill set
necessary to provide such a complete solution. In November 1999, Full Moon
completed the acquisition of Full Moon Interactive Group, Inc. Orrell
Communications, Inc., Muccino Design Group, Inc., DeVries Data Systems, Inc.,
Oncourse Network, Inc., Image Network, Inc.

         Full Moon is a premier interactive architect and Internet consulting
company. It develops mission-critical interactive systems for Fortune 1000 and
emerging Internet companies by blending the full spectrum of business,
technology, creative and marketing skills required to develop successful
Internet businesses. Its services include, among others, strategic market
consulting and research, web site design, brand management, ancillary
promotional sales, media buying and management, online marketing and software
engineering and technical program management. The firm also provides creative
and design services primarily related to establishing and fostering corporate
image development. Full Moon may be classified as a professional services firm
that derives its revenues from the delivery of services under project
engagements that vary in amount depending on the type and duration of service
being provided.

         Full Moon is vertically concentrated, and delivers comprehensive
solutions to, key industries, including consumer products, entertainment and
media, financial services, emerging growth, and technology companies. Full
Moon's business is geographically concentrated in the Southern and Northern
California and Austin, Texas markets, and it plans to expand into the Chicago,
U.S. East Coast and selected international markets. As of September, 2000 Full
Moon has over 100 clients. Full Moon plans to grow its organization,
infrastructure and processes through a balance of internal growth and strategic
acquisitions.

         TECHSTORE, TOGETHER WITH OFFICE EXPRESS are global Internet retailers
featuring over 75,000 consumer technology and related products for the home and
office. With over 100,000 customers world wide, together the companies offer an
online "superstore" at www.TechStore.com and www. officeexpress.com that
provides one-stop shopping for domestic and international customers, 24-hours a
day, seven days a week. The superstore features computer hardware, software,
electronics, other consumer technology products and office equipment and
supplies. The site has distinguished itself by offering consumers a
user-friendly Web site, low prices, large selection, detailed product
information, real-time availability, online secure ordering, online invoice
history and online order tracking.

                                       3
<PAGE>

         Order Fulfillment

         TechStore is entirely dependent upon a third party for order
fulfillment. Currently, TechStore utilizes fulfillment services offered by
TechData Corporation, a leading full-line distributor of more than 75,000
technology products worldwide. TechData offers fulfillment services via 6
regional distribution centers. TechStore has no long-term contracts or
arrangements with TechData that guarantee the availability, shipping, or quality
of merchandise. TechStore relies upon TechData to ship merchandise directly to
customers. Consequently, TechStore has limited control over the goods shipped,
and at times these shipments have been subject to delays. If the quality of
service provided by the distributor, TechData, falls below a satisfactory
standard or if our level of returns exceeds our expectations, this could have a
harmful effect on our business. The Company believes that it could establish a
similar relationship with other distributors; however, there can be no assurance
that such a distributor could provide the fulfillment, service and pricing
currently offered by TechData to TechStore.

         Office Express is entirely dependent upon a third party for order
fulfillment. Currently OfficeExpress utilizes fulfillment services offered by
United Stationers Supply Co., the nation's largest wholesale distributor of
office, computer, and facilities management products. United Stationers offers
fulfillment services via 40 regional distribution centers. Office Express has no
long-term contracts or arrangements with United Stationers that guarantee the
availability, shipping, or quality of merchandise. The Company believes that it
could establish a similar relationship with other distributors; however, there
can be no assurance that such a distributor could provide the fulfillment,
service and pricing currently offered by United Stationers to Office Express.

         Research and Development/Technology

         TechStore and Office Express are attempting to provide complete
eCommerce integration throughout the entire sales process. To accomplish this
goal, TechStore is utilizing eBusiness software and computer hardware
technologies. A Virtual Private Network (VPN) connection to the distributor,
TechData, allows custom software agents to pull invoice and shipping data for
accounting analysis and customer service applications. TechStore maintains
another secure Internet based connection to Electronic Data Systems Corporation
for credit card processing services. Web and database servers are co-located at
a locally based business grade Internet Service Provider (ISP), MasterLink, that
offers high premises security and extensive redundant power and Internet
backbone connectivity. TechStore depends upon the data and network
communications systems at EDS, MasterLink, as well as TechData and all of their
respective service providers, for uninterrupted operation of the Web site and
other business communications. An interruption of data and network
communications services could have a materially adverse effect on our business.

                                       4
<PAGE>

         E-TAXI was incorporated in April 1998 to develop a vertical Internet
portal for the small office, home office ("SOHO") market. As part of this
strategy, E-Taxi acquired TechStore in April, 1999, immediately prior to the
reverse acquistion of Computer Marketplace. Inc. by E-Taxi. Plans to create a
SOHO portal by E-Taxi have been postponed as a result of the Company's focus on
developing Full Moon. E-Taxi currently holds all of the outstanding capital
stock of TechStore and has no other operations, revenues or expenses.


         STARSONLINE was formed in February 2000 and initially capitalized with
$250,000 to develop and launch an Internet based entertainment company. It
presently has two full-time employees. StarsOnline expects to build a celebrity
portal that enables Internet users to access the official sites of well-known
personalities in television, film, music, fashion, publishing, sports and art.
Many of these official sites will be designed, developed and managed by
StarsOnline in partnership with popular celebrities. Additionally, this full
service vertical portal is expected to provide celebrity-driven content,
products and services in an entertaining and interactive environment.
StarsOnline believes it will be able, therefore, to aggregate and monetize the
affinity audiences of these famous personalities.

         By providing real value to each of the constituencies (consumers,
celebrities, commerce partners) in the star-driven entertainment marketplace,
StarsOnline plans to position itself to capture multiple revenue streams.
StarsOnline intends to generate revenues from sales of authentic and exclusive
celebrity merchandise and memorabilia, strategic sponsorships, targeted
advertising, affinity audience traffic, content syndication, premium
memberships, and special promotions.

         StarsOnline is currently in the start-up stage and has no revenues and
only nominal expenses.

         Our Internet businesses have a very limited operating history on which
to base an evaluation of our business and prospects. Our prospects must be
considered in light of the risks, uncertainties, expenses and difficulties
frequently encountered by companies in their early stages of development,
particularly companies with limited access to capital in new and rapidly
evolving markets such as the Internet market. In view of the rapidly evolving
nature of our business and our limited operating history, we believe that
period-to-period comparisons are not necessarily meaningful and should not be
relied upon as indications of future performance. Please see "Risk Factors That
May Affect Future Results and Safe Harbor Statement"

GOVERNMENT REGULATION

         Our business may face increased government regulation which regulation
may have a material adverse effect on the Company's business and its prospects.

         Taxation. The tax treatment of the Internet and electronic commerce is
currently unsettled. A number of proposals have been made at the federal, state
and local levels and by certain foreign governments that could impose taxes on
the sale of goods and services and certain other Internet activities. Recently,
the Internet Tax Freedom Act was signed into law, placing a three-year
moratorium on new state and local taxes on Internet commerce which moratorium
ends in December, 2002. Our business may be harmed by the passage of laws in the
future imposing taxes or other burdensome regulations on Internet commerce.

                                       5
<PAGE>

         New Internet laws. Due to the increasing popularity and use of the
Internet, it is possible that a number of laws and regulations may be adopted
with respect to the Internet generally, covering issues such as user privacy,
pricing, and characteristics and quality of products and services. Similarly,
the growth and development of the market for Internet commerce may prompt calls
for more stringent consumer protection laws that may impose additional burdens
on those companies conducting business over the Internet. The adoption of any
additional laws or regulations may decrease the growth of commerce over the
Internet, increase our cost of doing business or otherwise have a harmful effect
on our business.

         Internet access fees. Certain local telephone carriers have asserted
that the increasing popularity and use of the Internet has burdened the existing
telecommunications infrastructure, and that many areas with high Internet use
have begun to experience interruptions in telephone service. These carriers have
petitioned the Federal Communications Commission to impose access fees on
Internet service providers and online service providers. If such access fees are
imposed, the costs of communicating on the Internet could increase
substantially, potentially slowing the increasing use of the Internet, which
could in turn decrease the demand for our services or increase our cost of doing
business and thus have a harmful effect on our business.

         Qualification To Do Business.  We may have to qualify to do business in
other jurisdictions. As our service is available over the Internet in multiple
states and foreign countries, and as we sell to numerous consumers resident in
such states and foreign countries, such jurisdictions may claim that we are
required to qualify to do business as a foreign corporation in each such state
and foreign country. We are qualified to do business in only three states, and
our failure to qualify as a foreign corporation in a jurisdiction where we are
required to do so could subject us to taxes and penalties.

INTELLECTUAL PROPERTY

         Full Moon has filed trademark applications for FULL MOON (TM)
(Application Number 75/749104) and BRANDVENTURING (TM) (Application Number
75/828904) with the United States Patent and Trademark office. eMarketplace does
not hold any other patents or registered trademarks. TechStore, Office Express,
Full Moon, and StarsOnline hold various web domain names relating to their
particular brands, including the "TechStore.com", "OfficeExpress.com",
"Fullmoon.com", and "StarsOnline.com". The regulation of domain names in the
United States and in foreign countries is subject to change in the near future.
Such changes in the United States are expected to include a transition from the
current system of governmental regulation to a system, which is controlled by a
non-profit corporation and the creation of additional top-level domains. We may
not be able to acquire or maintain relevant domain names in all countries in
which we conduct or intend to conduct business. Furthermore, the relationship
between regulations governing domain names and the laws protecting trademarks
and similar proprietary rights is unclear. Therefore, we may be unable to
prevent third parties from acquiring domain names that are similar to, infringe
upon or otherwise decrease the value of or dilute the our brands.

                                       6
<PAGE>

         The Company's proprietary software is protected by copyright and
applicable trade secret law. As part of our confidentiality procedures, we
generally enter into agreements with our employees and consultants and limit
access to and distribution of our software, documentation and other proprietary
information. Notwithstanding these precautions, it might be possible for a third
party to copy or otherwise obtain and use our software or other proprietary
information without authorization or to develop similar software independently.
Policing unauthorized use of our technology is difficult, particularly because
the global nature of the Internet makes it difficult to control the ultimate
destination or security of software or other data transmitted. The laws of other
countries may afford us little or no effective protection of our intellectual
property.

         We may in the future receive, notices from third parties claiming
infringement by our software or other aspects of our business. While we are not
currently subject to any such claim, any future claim, with or without merit,
could result in significant litigation costs and diversion of our management and
other resources and could require us to enter into royalty and licensing
agreements, either or both of which could seriously harm our business. Such
royalty and licensing agreements, if required, may not be available on terms
acceptable to us or at all. In the future, we may also need to file lawsuits to
enforce our intellectual property rights, to protect our trade secrets or to
determine the validity and scope of the proprietary rights of others. Such
litigation, whether it is successful or not, could result in substantial costs
and diversion of resources and could seriously harm our business.

         We rely on a variety of technologies that we license from third
parties, including our database and Internet server software, which we use in
our web site to perform key functions. We cannot assure you that these third
party technology licenses will continue to be available to us on commercially
reasonable terms. Our loss of or inability to maintain or obtain upgrades to any
of these technology licenses could result in delays in completing our
proprietary software enhancements and new development until equivalent
technology could be identified, licensed or developed, and integrated. Any such
delays could seriously harm our business.

COMPETITION

Company-Generally
         We face competition from other capital providers including
publicly-traded Internet companies, venture capital companies and large
corporations. Many of these competitors have greater financial resources and
brand name recognition than we do. These competitors may limit our opportunity
to acquire interests in new Portfolio Companies. If we cannot acquire interests
in attractive companies, our strategy to build a collaborative network of
Portfolio Companies may not succeed.

                                       7
<PAGE>

         Competition for Internet products and services is intense. Traditional
media companies, such as television broadcasters, magazine publishers and radio
stations, are continuously refining their content and strategies to increase
their audiences and advertising and sponsorship revenues. Additionally, the
number of Web sites competing for the attention and spending of users,
advertisers and sponsors is increasing exponentially. Our sites will compete for
users, advertisers and sponsors based on the value of their demographics.

         If our Portfolio Companies are unable to compete successfully, they may
fail. Competition is likely to increase significantly as new companies enter the
market and competitors expand their services. Competitors for our Portfolio
Companies are likely to enjoy substantial competitive advantages, including the
following:

-    larger numbers of users and advertisers;
-    greater brand recognition;
-    more fully-developed electronic commerce opportunities;
-    larger technical, marketing and production staffs; and
-    greater financial, marketing, technical and other resources.

Full Moon
         Full Moon competes in the Internet professional services market, which
is relatively new and intensely competitive. Full Moon expects competition to
intensify as the market evolves. Full Moon believes that the competitors fall
into several categories, including the following:

         - Internet service firms, such as AGENCY.COM, iXL, Organic Online,
           Proxicom, Razorfish and USWeb/CKS;
         - technology integrators, such as Andersen Consulting, Cambridge
           Technology Partners, EDS, IBM, Sapient and Scient; and
         - strategic consulting firms, such as Bain, Booz-Allen & Hamilton,
           Boston Consulting Group, Diamond Technology Partners and McKinsey
           Consulting.

         Many of Full Moon's competitors have longer operating histories, larger
client bases, longer relationships with clients, greater brand or name
recognition and significantly greater financial, technical, marketing and public
relations resources than Full Moon. Full Moon believes that only a few of these
competitors offer an integrated package of professional Internet services.
Several competitors, however, have announced their intention to offer a broader
range of services than they currently provide. Full Moon believes that the
principal competitive factors in the Internet professional services market are:
the provision of integrated services, breadth of service offerings, cost
certainty and a referenceable customer base. Full Moon believes that its service
model allows it to compete favorably in all of the above areas. However, there
are relatively low barriers to entry into the Internet professional services
market. As a result, new market entrants pose a threat to Full Moon's business.
Existing or future competitors may develop or offer services that are comparable
or superior to ours at a lower price, which could have a material adverse effect
on our business, financial condition and results of operations.

                                       8
<PAGE>

TechStore/Office Express
         The e-commerce market is new, rapidly evolving and intensely
competitive. We expect that competition will further intensify in the future.
Barriers to entry are limited, and many traditional retailers are beginning to
launch their own online operations. New technologies and the expansion of
existing technologies may also increase competitive pressures. We currently
compete with a variety of online vendors who specialize in computer hardware and
software products. Moreover, all of the products we sell in our online stores
are available through traditional and catalog retailers. Consequently, we must
compete with companies in the e- commerce market as well as the traditional
retail industry. In the computer hardware, software, peripheral and clearance
product markets, our primary competitors include, but are not limited to:
traditional computer retailers such as CompUSA and MicroCenter; catalogue
retailers such as CDW, Insight and PC Connection; online computer retailers such
as Cyberian Outpost and Egghead.com; and software and hardware manufacturers
that market their products through their own Web sites such as Apple Computer,
Dell Computer and Gateway 2000 Inc. We also expect to experience significant
competitive pressure if any of our distributors were to initiate their own
retail operations. Since our distributors have access to merchandise at very low
costs, they could sell products at lower prices than us and maintain a higher
gross margin on their product sales than we are able to achieve. If this were to
occur, our current and potential customers may decide to purchase directly from
these distributors, which could reduce our market share. We believe that the
primary competitive factors in online retailing include brand recognition,
price, product selection, customer service, value-added services and ease of
use. Although we believe that we compete favorably with respect to these
factors, several of our competitors may have an advantage over us with respect
to specific factors. In addition, many of our current and potential competitors
have longer operating histories, larger customer bases, greater brand
recognition and significantly greater financial, marketing, technical,
management and other resources than we do.

                                       9
<PAGE>

CREDIT FACILITIES

         In connection with TechStore's distribution arrangement with TechData
Corporation, TechStore currently has a line of credit in the amount of $250,000
with Deutsche Financial Services which does not accrue interest ("Deutsche
Line"). The Deutsche Line is personally guaranteed by Bejan Aminifard and Derek
Wall, officers of TechStore.

         At June 30, 2000, Full Moon had $388,000 outstanding under a promissory
note with a commercial bank. The note provided for borrowings up to $400,000 and
beared interest at prime (8.50% at June 30, 2000) plus 1.75%. The note was
payable in full on August 1, 2000. The note was subsequently paid off on July
18, 2000 and replaced with a loan to another bank in the amount of $500,000
which provided for borrowings of up to $500,000 and the loan beared interest at
prime (8.5% at the time of the loan) plus 1.00%. This loan was subsequently paid
off on August 14, 2000 and replaced with an initial line of credit for $900,000
Grand Pacific Financing Corp ("Grand Pacific). The line of credit calls for
borrowings of up to $1,500,000 and is subject to borrowing restrictions based on
the accounts receivable borrowing base. This base shall not exceed the lesser of
(1) 70% of eligible accounts with balances less than 30 days from the invoice
date plus 35% of eligible accounts with balances over 30 days but less than 60
days from invoice date plus 15% of eligible accounts with balances over 60 days
from invoice date; or $1,500,000. The line of credit is due upon the earlier of
(1) February 11, 2001; (2) upon the successful initial public offering of its
equity securities; (3) upon liquidation, dissolution, merger or consolidation or
commencement of proceedings thereof; (4) upon equity or debt financing in excess
of $5,000,000. The line of credit bears interest at prime (9.5% at the time of
the loan) plus 1.00%. As additional consideration for the loan, Full Moon
granted Grand Pacific warrants to purchase 33,000 shares of common stock of Full
Moon at $0.01 per share. This line is secured by all of the assets of Full Moon.

EMPLOYEES

         As of August 31, 2000, the Company had approximately 214 employees, of
which 200 are employed at Full Moon, 10 are employed at Techstore/Office
Express, and 4 are employed at the Company's corporate offices. The Company also
retains the services of independent contractors for software development,
accounting services, and product fulfillment. None of our employees is
represented by a labor union, and we consider our employee relations to be good.
We believe that our future success will depend in part upon our continued
ability to attract, hire and retain qualified personnel.

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS AND SAFE HARBOR STATEMENT

IN ADDITION TO OTHER INFORMATION IN THIS ANNUAL REPORT ON FORM 10-KSB, THE
FOLLOWING IMPORTANT FACTORS SHOULD BE CAREFULLY CONSIDERED IN EVALUATING THE
COMPANY AND ITS BUSINESS BECAUSE SUCH FACTORS CURRENTLY HAVE A SIGNIFICANT
IMPACT ON THE COMPANY'S BUSINESS, PROSPECTS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. INVESTORS ARE FURTHER CAUTIONED THAT THIS FORM 10-KSB CONTAINS
FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES, INCLUDING THE
FOLLOWING: (i) OUR COMPANY'S PLANS, STRATEGIES, OBJECTIVES, EXPECTATIONS AND
INTENTIONS ARE SUBJECT TO CHANGE AT ANY TIME AT THE DISCRETION OF MANAGEMENT AND
THE BOARD OF DIRECTORS; (ii) OUR PLANS AND RESULTS OF OPERATIONS WILL BE
AFFECTED BY OUR ABILITY TO MANAGE OUR GROWTH AND WORKING CAPITAL; (iii) OUR
BUSINESS IS HIGHLY COMPETITIVE AND THE ENTRANCE OF NEW COMPETITORS OR THE
EXPANSION OF THE OPERATIONS BY EXISTING COMPETITORS IN OUR MARKETS COULD
ADVERSELY AFFECT OUR PLANS AND RESULTS OF OPERATIONS; AND (iv) THE RISK FACTORS
IDENTIFIED BELOW ARE NOT REPRESENTED TO BE A COMPREHENSIVE LIST.

                                       10
<PAGE>

RISKS PARTICULAR TO THE COMPANY

WE HAVE INCURRED OPERATING LOSSES AND WE MAY NOT BE PROFITABLE IN THE NEAR
FUTURE

         Since we began operations, we have incurred operating losses. Although
management believes it could reduce the Company's operating losses in the
future, no assurance can be given that management will be successful in
achieving this objective. In addition, any new acquisitions of additional
Portfolio Companies may result in additional operating expenses. Failure to
achieve profitability within the timeframe expected by investors may adversely
affect the market price of our Common Stock. We have incurred net losses of $2.2
million and $728,000 for the years ended June 30, 1998 and 1999, respectively,
although such net losses for such periods resulted from the Company's operations
prior to the implementation of its new business plan. The Company has incurred a
net loss of $10.1 million for the year ended June 30, 2000, $9.1 million of
which was attributed to non-cash expense. The Company expects to use its cash to
fund its operations as a result of the anticipated negative cash flow. Please
See "Management's Discussion and Analysis of Financial Condition and Results of
Operation"

WE HAVE RECEIVED A GOING CONCERN OPINION FROM OUR AUDITORS

         We have received a report from our independent auditors for our fiscal
year ended June 30, 2000, containing an explanatory paragraph that describes the
uncertainty as to our ability to continue as a going concern due to our
historical negative cash flow recurring losses, cash used to fund operations,
and because, as of the balance sheet date we did not have access to sufficient
committed capital to meet our projected operating needs for at least the next
twelve months. In addition, the issuance of a going concern opinion from our
auditors may make it more difficult to raise the capital necessary to operate
our business. Please see "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources"

WE MAY NEED ADDITIONAL FINANCING

         The Company's operations have had recurring losses generate a negative
cash flow during the years ended June 30, 2000 and 1999, which has caused the
Company to use its cash to fund the operations of the Company. Moreover,
management expects a significant use of cash during the upcoming fiscal year as
it funds its operating businesses. The Company will require additional debt or
equity financing during the first half of fiscal year 2001, the amount and
timing depending in large part on our spending program. If additional funds are
raised through the issuance of equity securities, the Company's stockholders may
experience significant dilution. Furthermore, there can be no assurance that
additional financing will be available when needed or that if available, such
financing will include terms favorable to our stockholders or the Company. If
such financing is not available when required or is not available on acceptable
terms, the Company may be unable to pay its debts in a timely manner, develop or
enhance its operating businesses, take advantage of business opportunities or
respond to competitive pressures, any of which could have a material adverse
effect on its business, financial condition and results of operations. Please
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources" and our financial statements for
detailed information on our capital resources and the explanations included in
the report of our independent accountants relating to our ability to continue as
a going concern.

                                       11
<PAGE>

LIMITED OPERATING HISTORY

         The Company and its Portfolio Companies are among the many companies
that have entered into the relatively new Internet markets. Our Portfolio
Companies are in the early stages of their development. Our business and
prospects must be considered in light of the risk, expense and difficulties
frequently encountered by companies in an early stage of development,
particularly companies in new and rapidly evolving markets such as the Internet.
If we are unable to effectively allocate our resources and help grow our
Portfolio Companies, our stock price may be adversely affected and we may be
unable to execute our strategy of developing a collaborative network of
Portfolio Companies. Our business depends upon the performance of our Portfolio
Companies, which is uncertain. Economic, governmental, industry and internal
company factors outside our control may affect each of our Portfolio Companies.
A significant portion of our assets will be comprised of ownership interests in
our Portfolio Companies. If our Portfolio Companies do not succeed, the value of
our assets will decline.

BUSINESS MODEL IS UNPROVEN

         Our strategy is based on an unproven business model. Our business model
depends on the willingness of companies to join our network of Internet
businesses and the ability of the network to assist our Portfolio Companies. If
we cannot convince companies of the value of our business model, our ability to
attract new companies will be adversely affected and our strategy of building a
collaborative network may not succeed.

         We may be unable to identify companies that complement our strategy,
and even if we identify a company that complements our strategy, we may be
unable to acquire an interest in the company for many reasons, including:

-    a failure to agree on the terms of the acquisition, such as the amount or
     price of our acquired interest;

-    incompatibility between us and management of the company;

-    competition from other acquirors;

-    a lack of capital to acquire an interest in the company; and the
     unwillingness of the company to partner with us.

         If we cannot acquire interests in attractive companies, our strategy to
build a collaborative network of Portfolio Companies may not succeed.

                                       12
<PAGE>

DEPENDENCE ON CONTINUED GROWTH OF THE INTERNET AND INTERNET INFRASTRUCTURE

         The Company's future success is highly dependent upon continued growth
in the use of the Internet generally and, in particular, as a medium for
advertising, marketing, services and commerce. Commercial use of the Internet is
at an early stage of development, and market acceptance of the Internet as a
medium for advertising, information services and commerce is subject to a high
level of uncertainty. The relative effectiveness of the Internet as an
advertising medium as compared to traditional advertising media, for example,
has not been determined. Further, there can be no assurance that the required
infrastructure to support future Internet user and traffic growth or
complementary products or services necessary to make the Internet a viable
commercial marketplace will be developed, or, if they are developed, that the
Internet will become a viable commercial marketplace for products and services
such as those offered by the Company. If commercial use of the Internet fails to
continue to expand, the Company's business, results of operations and financial
condition would be adversely affected.

WE WILL RELY ON MERCHANDISE VENDORS FOR SUPPLY, SHIPPING AND QUALITY OF
PRODUCTS.

         Supply. We rely on vendors to supply us with merchandise. We do not
have any long-term contracts or arrangements with our vendors that guarantee the
availability of merchandise. As a result, we may not be able to obtain
sufficient quality and quantities of merchandise at competitive prices. Also,
the quality of service provided by such parties may fall below the standard
needed to enable us to conduct our business effectively. TechStore and Office
Express cannot assure you that their current vendors will continue to supply
merchandise or that we will be able to establish new vendor relationships that
will ensure that merchandise will be available.

         Customer service--shipping and quality of products (returns).
Currently, TechStore utilizes fulfillment services offered by TechData
Corporation, and Office Express utilized fulfillment services offered by United
Stationers Supply Co. The vendors ship merchandise directly to customers.
Consequently, we will have limited control over the goods shipped by these
vendors, and shipments of goods may be subject to delays. In addition, we may
accept returns from customers for which we will not receive reimbursements from
manufacturers or vendors. If the quality of service provided by such vendors
falls below a satisfactory standard or if our level of returns exceeds
expectations, this could have a harmful effect on our business.

WE RELY ON OTHER THIRD PARTIES IN CONDUCTING OUR OPERATIONS

         In conducting our operations, we depend on several other third parties,
including the following:

         o    Fulfillment. Third parties fulfill all of our sales. Any service
              interruptions experienced by these distribution centers as a
              result of labor problems or otherwise could disrupt or prevent
              fulfillment of customer orders;

                                       13
<PAGE>

         o    Operating software. Our internally-developed software depends on
              operating systems, database and server software that have been
              developed, produced by and licensed from third parties;

         o    Payment processing. We rely on one or two processors of credit
              card transactions. If computer systems failures or other problems
              were to prevent them from processing our credit card transactions,
              we would experience delays and business disruptions; and

         o    Shipping. We use one or two primary delivery services to ship our
              products. Our business would suffer if labor problems or other
              causes prevented these or any other major carriers from delivering
              our products for significant time periods.

OUR SUCCESS IS DEPENDENT ON KEY PERSONNEL

         We believe that our success will depend on continued employment by us
and our Portfolio Companies of senior management and key technical personnel. If
one or more members of our senior management or our Portfolio Companies' senior
management would become unable or unwilling to continue in their present
positions, our business and operations could be disrupted. In addition, we may
be unable to find and hire additional qualified management and professional
personnel to help lead us and our Portfolio Companies. The success of some of
our Portfolio Companies also depends on their having highly trained technical
and marketing personnel. Our Portfolio Companies will need to continue to hire
additional personnel as their businesses grow. A shortage in the number of
trained technical and marketing personnel could limit the ability of our
Portfolio Companies to grow their business.

POTENTIAL FOR CONTINUING OPERATING LOSSES

         Our expenses will increase as we build an infrastructure to implement
our business model. For example, we expect to hire additional employees and
expand our information technology systems. In addition, we plan to significantly
increase our operating expenses to broaden our Portfolio Company support
capabilities, explore acquisition opportunities and alliances with other
companies, and facilitate business arrangements among our Portfolio Companies.
Expenses may also increase due to the potential effect of goodwill amortization
and other charges resulting from completed and future acquisitions. If any of
these and other expenses are not accompanied by increased revenue, our operating
losses will be greater than we anticipate. Please See "Management's Discussion
and Analysis of Financial Condition and Results of Operations" above and our
financial statements for detailed information on our extremely limited operating
history and the qualifications included in the report of our independent
accountants relating to our ability to continue as a going concern. See Item 3.
Legal Proceedings

                                       14
<PAGE>

RISKS INHERENT TO COMPANY'S ACQUISITION STRATEGY

         The Company has in the past, and intends in the future, to expand
through the acquisition of businesses, technologies, products and services, such
as the recent acquisition of Full Moon. Acquisitions may result in the
potentially dilutive issuance of equity securities, the incurrence of additional
debt, the write-off of in-process research and development of software
acquisition and development costs, and the amortization of goodwill and other
intangible assets. Further, acquisitions involve a number of special problems,
including difficulty integrating technologies, operations and personnel and
diversion of management attention in connection with both negotiating the
acquisitions and integrating the assets. There can be no assurance that the
Company will be successful in addressing such problems. In addition, growth
associated with numerous acquisitions places significant strain on the Company's
managerial and operational resources. The Company's future operating results
will depend to a significant degree on its ability to successfully manage growth
and integrate both past and future acquisitions. Furthermore, many of Company's
investments are in early-stage companies, with limited operating histories and
limited or no revenues. Although management believes that it can manage its
acquisitions profitably in the future, there can be no assurance that the
Company will be successful in developing such companies.

UNCERTAINTIES ASSOCIATED WITH SELLING ASSETS

         A significant element of the Company's business plan involves selling,
in public or private offerings, portions of the companies it has acquired and
developed. The Company's ability to engage in any such transactions, the timing
of such transactions and the amount of proceeds from such transactions are
dependent on market and other conditions largely beyond the Company's control.
Accordingly, there can be no assurance that the Company will be able to engage
in such transactions in the future or that when the Company is able to engage in
such transactions they will be at favorable prices. If the Company were unable
to liquidate portions of its portfolio companies at favorable prices, the
Company's business, financial condition and results of operations would be
adversely affected.

MANAGEMENT OF GROWTH

         The Company's growth has placed, and is expected to continue to place,
a significant strain on the Company's managerial, operational and financial
resources. Further, as the number of the Company's users, advertisers and other
business partners grows, the Company is required to manage multiple
relationships with various customers, strategic partners and other third
parties. These requirements will be exacerbated in the event of further growth
of the Company or in the number of its strategic relationships or sponsorship
arrangements. There can be no assurance that the Company's systems, procedures
or controls will be adequate to support the Company's operations or that the
Company management will be able to achieve the rapid execution necessary to
successfully offer its services and implement its business plan.

                                       15
<PAGE>

COMPETITION

         Competition for Internet products and services is intense. Our
Portfolio Companies will compete for their share of a customer's purchasing
budget for services, materials and supplies with other online providers and
traditional distribution channels; dollars spent on consulting services with
many established information systems and management consulting firms; and
advertising budget with online services and traditional off-line media, such as
print and trade associations. Furthermore, our Portfolio Companies' competitors
may develop Internet products or services that are superior to, or have greater
market acceptance than, the solutions offered by our Portfolio Companies. If our
Portfolio Companies are unable to compete successfully against their
competitors, our Portfolio Companies may fail. Many of our Portfolio Companies'
competitors will have greater brand recognition and greater financial, marketing
and other resources than our Portfolio Companies. This may place our Portfolio
Companies at a disadvantage in responding to their competitors' pricing
strategies, technological advances, advertising campaigns, strategic
partnerships and other initiatives.

PROPRIETARY RIGHTS

         Proprietary rights may be important to the success and competitive
position of our Portfolio Companies. Although our Portfolio Companies may seek
to protect their proprietary rights, their actions may be inadequate to protect
any trademarks and other proprietary rights. In addition, effective copyright
and trademark protection may be unenforceable or limited in certain countries,
and the global nature of the Internet may make it impossible for some of our
Portfolio Companies to control the dissemination of their work and use of their
services. Some of our Portfolio Companies may also license content from third
parties and it is possible that they could become subject to infringement
actions based upon the content licensed from those third parties. Our Portfolio
Companies may obtain representations as to the origin and ownership of such
licensed content; however, this may not adequately protect them. Any of these
claims, with or without merit, could subject our Portfolio Companies to costly
litigation and the diversion of their technical and management personnel. If our
Portfolio Companies incur costly litigation and their personnel are not
effectively deployed, the expenses incurred by our Portfolio Companies will
increase and their profits, if any, will decrease.

LEGAL LIABILITY

         Some of our Portfolio Companies may be subject to legal claims relating
to the content on their Web sites, or the downloading and distribution of this
content. Claims could involve matters such as defamation, invasion of privacy
and copyright infringement. Providers of Internet products and services have
been sued in the past, sometimes successfully, based on the content of material.
In addition, some of the content provided by our Portfolio Companies on their
Web sites may be drawn from data compiled by other parties, including
governmental and commercial sources, and rely on our Portfolio Companies
re-entering the data. This data may have errors. If any of our Portfolio
Companies' Web site content is improperly used or if any of our Portfolio
Companies supply incorrect information, it could result in unexpected liability.
Any of our Portfolio Companies that incur this type of unexpected liability may
not have insurance to cover the claim or its insurance may not provide
sufficient coverage. If our Portfolio Companies incur substantial cost because
of this type of unexpected liability, the expenses incurred by our Portfolio
Companies will increase and their profits, if any, will decrease.

                                       16
<PAGE>

SYSTEM FAILURE

         Some of our Portfolio Companies' businesses may depend on the efficient
and uninterrupted operation of their computer and communications hardware
systems. Any system interruptions that cause our Portfolio Companies' Web sites
to be unavailable to Web browsers may reduce the attractiveness of our Portfolio
Companies' Web sites to third party content providers. If third party content
providers are unwilling to use our Portfolio Companies' Web sites, our business,
financial condition and operating results could be adversely affected.
Interruptions could result from natural disasters as well as power loss,
telecommunications failure and similar events. Capacity limits on some of our
Portfolio Companies' technology, transaction processing systems and network
hardware and software may be difficult to project and they may not be able to
expand and upgrade their systems to meet increased use. As traffic on our
Portfolio Companies' Web sites increases, they must expand and upgrade their
technology, transaction processing systems and network hardware and software.
Our Portfolio Companies may be unable to accurately project the rate of increase
in use of their Web sites. In addition, our Portfolio Companies may not be able
to expand and upgrade their systems and network hardware and software
capabilities to accommodate increased use of their Websites. If our Portfolio
Companies are unable to appropriately upgrade their systems and network hardware
and software, the operations and processes of our Portfolio Companies may be
disrupted.

WEB SITE ADDRESSES

         Our Portfolio Companies may be unable to acquire or maintain easily
identifiable Web site addresses or prevent third parties from acquiring Web site
addresses similar to theirs. In these instances, our Portfolio Companies may not
grow as we expect. The acquisition and maintenance of Web site addresses
generally is regulated by governmental agencies and their designees. The
regulation of Web site addresses in the United States and in foreign countries
is subject to change. As a result, our Portfolio Companies may not be able to
acquire or maintain relevant Web site addresses in all countries where they
conduct business. Furthermore, the relationship between regulations governing
such addresses and laws protecting trademarks is unclear.

RISKS RELATED TO THE INTERNET INDUSTRY

SECURITY CONCERNS

         Concern regarding the security of confidential information transmitted
over the Internet may prevent potential customers from engaging in online
transactions. If our Portfolio Companies that depend on such transactions do not
add sufficient security features to their future product releases, our Portfolio
Companies' products may not gain market acceptance or there may be additional

                                       17
<PAGE>

legal exposure to them. Despite the measures some of our Portfolio Companies may
take, the infrastructure of each of them is potentially vulnerable to physical
or electronic break-ins, viruses or similar problems. If a person circumvents
the security measures imposed by any one of our Portfolio Companies, he or she
could misappropriate proprietary information or cause interruption in operations
of the Portfolio Company. Security breaches that result in access to
confidential information could damage the reputation of any one of our Portfolio
Companies and expose the Portfolio Company affected to a risk of loss or
liability. Some of our Portfolio Companies may be required to make significant
investments and efforts to protect against or remedy security breaches.
Additionally, as e-commerce becomes more widespread, our Portfolio Companies'
customers will become more concerned about security. If our Portfolio Companies
are unable to adequately address these concerns, they may be unable to sell
their goods and services.

RAPID TECHNOLOGY CHANGE

         The markets in which our Portfolio Companies will operate are
characterized by rapid technological change, frequent new product and service
introductions and evolving industry standards. Significant technological changes
could render their existing Web site technology or other products and services
obsolete. The e-commerce market's growth and intense competition exacerbate
these conditions. If our Portfolio Companies are unable to successfully respond
to these developments or do not respond in a cost-effective way, our business,
financial condition and operating results will be adversely affected. To be
successful, our Portfolio Companies must adapt to their rapidly changing markets
by continually improving the responsiveness, services and features of their
products and services and by developing new features to meet the needs of their
customers. Our success will depend, in part, on our Portfolio Companies' ability
to license leading technologies useful in their businesses, enhance their
existing products and services and develop new offerings and technology that
address the needs of their customers. Our Portfolio Companies will also need to
respond to technological advances and emerging industry standards in a
cost-effective and timely manner.

GOVERNMENT REGULATIONS AND LEGAL UNCERTAINTIES

         Because of the Internet's popularity and increasing use, new laws and
regulations may be adopted. These laws and regulations may cover issues such as
the collection of and use of data from Web site visitors and related privacy
issues, pricing, content, copyrights, online gambling, distribution and the
quality of goods and services. The enactment of any additional laws or
regulations may impede the growth of the Internet and e-commerce, which could
decrease the revenue of our Portfolio Companies and place additional financial
burdens on our business and the businesses of our Portfolio Companies. Laws and
regulations directly applicable to e-commerce or Internet communications are
becoming more prevalent. For example, Congress recently enacted laws regarding
online copyright infringement and the protection of information collected online
from children. Although these laws may not have a direct adverse effect on our
business or those of our Portfolio Companies, they add to the legal and
regulatory burden faced by our Portfolio Companies.

                                       18
<PAGE>

RISKS RELATED TO THE MARKET

VOLATILE MARKET PRICE FOR COMMON STOCK

         The market price for our common stock is likely to be highly volatile.
The trading prices of many technology and Internet-related company stocks have
reached historical highs within the last year and have reflected relative
valuations substantially above historical levels. During the same period, the
stocks of these companies have also been highly volatile and have recorded lows
well below such historical highs. We cannot assure you that our common stock
will trade at the same levels of other Internet stocks or that Internet stocks
in general will sustain their current market prices. The following factors may
add to our common stock price's volatility:

-    actual or anticipated variations in our quarterly operating results and
     those of our Portfolio Companies;

-    changes in our financial estimates and those of our Portfolio Companies by
     securities analysts;

-    conditions or trends in the Internet industry in general and Internet media
     properties in particular;

-    announcements by our Portfolio Companies and their competitors of
     technological innovations;

-    announcements by us or our Portfolio Companies or our competitors of
     significant acquisitions, strategic partnerships or joint ventures;

-    changes in the market valuations of our Portfolio Companies and other
     Internet companies;

-    our capital commitments;

-    additions or departures of our key personnel and key personnel of our
     Portfolio Companies; and

-    sales of our common stock.


         Many of these factors are beyond our control. These factors may
decrease the market price of our common stock, regardless of our operating
performance.

THE SIGNIFICANT CONTROL OVER STOCKHOLDER VOTING MATTERS WHICH MAY BE EXERCISED
BY OUR EXECUTIVE OFFICERS AND DIRECTORS WILL DEPRIVE YOU OF THE ABILITY TO
INFLUENCE CORPORATE ACTIONS

         Our executive officers and directors and their affiliates beneficially
own approximately 50% of the Company's Common Stock as of September 21, 2000. As
a result, these stockholders, if they act together, will be able to control all
matters requiring stockholder approval, including the election of directors and
approval of significant corporate transactions. This concentration of ownership
may have the effect of delaying, preventing or deterring a change in control of
the Company, could deprive our stockholders of an opportunity to receive a
premium for their Common Stock as part of a sale of the Company and might affect
the market price of our Common Stock.

                                       19
<PAGE>

FUTURE SALES BY EXISTING SECURITY HOLDERS COULD DEPRESS THE MARKET PRICE OF OUR
COMMON STOCK

         If our existing stockholders sell a large number of shares of our
Common Stock, the market price of the Common Stock could decline significantly.
Moreover, the perception in the public market that our existing stockholders
might sell shares of Common Stock could depress the market price of the Common
Stock. Approximately 16.8 shares are outstanding as of September 21, 2000 of
which approximately 2.9 million shares are in the public float and approximately
14.0 million shares will be available for resale in the public market without
registration, subject to compliance with Rule 144. Many of our existing
stockholders have the right to include their shares of Common Stock in a
registration statement with the Securities and Exchange Commission should the
Company elect to file a registration statement with the Commission (other than
on Forms S-4 or S-8). If we register their shares of Common Stock, they can
freely sell those shares in the public market, which may adversely effect the
market for, and trading price of our Common Stock.

FLUCTUATIONS IN QUARTERLY RESULTS MAY ADVERSELY AFFECT OUR STOCK PRICE

         We expect that our quarterly results could fluctuate significantly due
to many factors, including:

-    the operating results of our Portfolio Companies;
-    intense competition;
-    management of our growth and the growth of our Portfolio Companies; and
-    divestitures of interests in our Portfolio Companies.

         We believe that period-to-period comparisons of our operating results
are not meaningful. Additionally, if our operating results in one or more
quarters do not meet investors' expectations, the price of our common stock
could decrease.

PENNY STOCK REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF OUR
SHARES.

         The Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define a "penny stock" to be any equity security
that has a market price (as defined) of less than $5.00 per share, subject to
certain exceptions. Since our Common Stock is not listed on The Nasdaq Stock
Market, such securities are not exempt from the definition of "penny stock."
Therefore, our Common Stock may be subject to rules that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with

                                       20
<PAGE>

assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000
together with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
"penny stock" and have received the purchaser's written consent to the
transaction prior to the purchase. Also, for any transaction involving a "penny
stock", unless exempt, the rules require the delivery, prior to the transaction,
of a risk disclosure document mandated by the Commission relating to the penny
stock market. The broker-dealer must also disclose the commission payable to
both the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market maker. The
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell the Company's securities and may
affect the ability of purchasers in this Offering to sell the Company's
securities in the secondary market (assuming the Shares are registered or an
exemption from the registration requirements is available) and the price at
which such purchasers can sell any such securities.

UNCERTAINTY ELIGIBILITY OF THE COMMON STOCK FOR LISTING ON THE NASDAQ SMALLCAP
MARKET

         In the event the Company files an application with the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") to
list the Company's Common Stock for quotation on the NASDAQ SmallCap Market, no
assurance can be given that such application will be approved. As of September
21, 2000, the Company failed to satisfy the initial listing requirements for the
NASDAQ SmallCap Market. In addition, it should be noted that the Company's
shares of Common Stock were delisted from The NASDAQ SmallCap Market in July
1998 because of the failure to satisfy the continued listing requirements. It
should be noted that the initial listing requirements applicable to an
application which may be submitted by the Company are more rigorous than the
continued listing requirements.

ABSENCE OF DIVIDENDS

         The Company has never declared or paid, nor does it intend or pay in
the foreseeable future, cash dividends on its Common Stock, but intends instead
to retain any future earnings to finance expansion and operations.


ITEM 2.           DESCRIPTION OF PROPERTY

         In July 1999, the Company relocated its executive offices from Corona,
California to San Jose, California. The Company closed its office in Corona and
entered into a month-to-month lease arrangement for the Company's executive
offices located at 255 West Julian Street, Suite 100, San Jose, CA with Crown
Services, Inc. ("Crown"), pursuant to which the Company reimburses Crown
$5,421.56 per month, the direct rental cost for approximately 3,200 square feet
of office space. Robert M. Wallace, the Company's Chairman of the Board, is the
Chairman and a principal stockholder of Crown.

         In April 1998 TechStore entered into a month-to-month lease agreement
with Bejan Aminifard, the Chief Executive Officer of TechStore, pursuant to
which TechStore leases 1,200 square feet for its executive offices located at 14
Commercial Boulevard, Novato, California for $1,400 per month. In April 2000,
TechStore terminated this lease. TechStore entered into a lease agreement with
Attest Systems, Inc. for general office space located at 10 Commercial Blvd.,
Suite 202, Novato, CA, whereby TechStore agreed to pay approximately $6,000 per
month for approximately 3,000 square feet.

         In May 2000, Full Moon entered into a lease agreement for its
principal offices located at 911 Wilshire Blvd, Los Angeles, CA, with Dames &
Moore, pursuant to which Full Moon leases approximately 30,000 square feet of
office space at a monthly cost of approximately $39,000 for the initial year and
approximately $45,000 for the remaining 6 1/2 years.

                                       21
<PAGE>

ITEM 3.           LEGAL PROCEEDINGS

         The Company is not a party to any material legal proceedings nor are
any material legal proceedings threatened against the Company; provided,
however, that the Company and its subsidiaries have received numerous requests
for payment of outstanding accounts payables. Given the Company's current
financial condition, the failure to make payments could have a material adverse
effect on the Company's business and its prospects.

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

         None

                                       22
<PAGE>

                                     PART II

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

         The Company's securities commenced trading on The Nasdaq SmallCap
Market system upon the effectiveness of the Company's Initial Public Offering on
June 22, 1993. As of that date, the Company's Common Stock, the Class A Warrants
and the Class B Warrants began trading under the symbols "MKPL" and "MKPLW" and
"MKPLZ", respectively. The Common Stock is presently quoted and traded on the
OTC Bulletin Board as a result of the Company's failure to satisfy the continued
listing requirements of The Nasdaq SmallCap Market in July, 1998. The Class A
Warrants and Class B Warrants were delisted from The Nasdaq SmallCap Market as
of the close of business on December 18, 1996 and expired in June 1998. The
Company also had Class D Warrants which were registered for trading on the OTC
Bulletin Board under the symbol "MKPLH" which expired on April 15, 1999. On
August 27, 1999, the Company changed its trading symbol to "EMKT" to reflect the
Company's name change to eMarketplace, Inc. As of September 21, 2000, there were
approximately 152 holders of record of the Company's common stock and
approximately 800 beneficial owners.

         The following table indicates the high and low bid prices for the
Company's Common Stock for each of the quarters in the period from July 1, 1999,
through June 30, 2000, based upon information supplied by the Nasdaq system and
the OTC Bulletin Board. Prices represent quotations between dealers without
adjustments for retail markups, markdowns or commissions, and may not represent
actual transactions.

                FOR THE PERIOD FROM JULY 1, 1999 TO JUNE 30, 2000
                                QUOTED BID PRICE
<TABLE>
<CAPTION>

2000 FY             1st Quarter          2nd Quarter          3rd Quarter        4th Quarter
-------           (ended  9/30/99)    (ended  12/31/99)    (ended  3/31/00)    (ended  6/30/00)
                  ----------------    -----------------    ----------------    ---------------
<S>                    <C>                  <C>                <C>                  <C>
Common Stock:
         High          $8.75                $8.25              $9.6875              $8.25
         Low           $5.00                $5.00              $6.125               $3.00

1999 FY             1st Quarter          2nd Quarter         3rd Quarter         4th Quarter
-------           (ended  9/30/98)    (ended  12/31/98)    (ended  3/31/99)    (ended  6/30/99)
                  ----------------    -----------------    ----------------    ---------------
Common Stock:
         High          $1.50                $ .875             $1.56                $6.375
         Low           $ .875               $ .688             $ .875               $1.375

</TABLE>

         On September 21, 2000, the closing bid price of the Common Stock as
reported on OTC Bulletin Board was $0.75. eMarketplace has no dividend policy,
and does not intend to pay any dividends in the foreseeable future.

                                       23
<PAGE>

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

FORWARD LOOKING STATEMENTS

 Statements in this "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and elsewhere in this document as well as statements
made in press releases and oral statements that may be made by the Company or by
officers, directors or employees of the Company acting on the Company's behalf
that are not statements of historical or current fact constitute "forward
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other unknown factors that could cause the actual
results of the Company to be materially different from the historical results or
from any future results expressed or implied by such forward-looking statements.
In addition to statements which explicitly describe such risks and
uncertainties, readers are urged to consider statements labeled with the terms
"believes", "belief", "expects", "intends", "anticipates" or "plans" to be
uncertain forward-looking statements. The forward looking statements contained
herein are also subject generally to other risks and uncertainties that are
described from time to time in the Company's reports and registration statements
filed with the Securities and Exchange Commission.

As of June 30, 2000, the Company has had recurring losses and difficulty meeting
its financial obligations as they became due. Cash used in operations for the
period ended June 30, 2000 was $4.1 million.

In view of these matters, the continuation of the Company as a going concern is
dependent upon continued operations of the Company, which in turn is dependent
upon the Company's ability to meet its financing requirements, the success of
its future operations and the reduction of its cost. Management is in the
process of seeking additional debt and equity financing and has implemented cost
reductions. The Company is also in the process of analyzing potential equity
investments. Management believes that actions presently being taken to revise
the Company's operating and financial requirements provide the opportunity for
the Company to continue as a going concern. There can be no assurances that
management will be successful in the implementation of its plans. The financial
statements do not include any adjustments in the event the Company is unable to
continue as a going concern.

OVERVIEW

         eMarketplace, Inc. (the "Company or eMarketplace") consists of
eMarketplace, Inc. and its wholly owned or controlled subsidiaries: Full Moon
Interactive, Inc. ("Full Moon or FMI"), E-Taxi,Inc.("E-Taxi"), TechStore,Inc.
("TechStore"), OfficeExpress,Inc. ("OfficeExpress") and StarsOnline,
Inc.("StarsOnline") .

         FULL MOON is an Internet consulting firm, which provides e-business
solutions to its customers desiring to initiate or enhance their presence on the
Internet. Its services include, among others, strategic market consulting and
research, web site design, brand management, ancillary promotional sales, media
buying and management, online marketing and software engineering and technical
program management. The firm also provides creative and design services
primarily related to establishing and fostering corporate image development. FMI
is a professional services firm who derives its revenues from the delivery of
services under project engagements that vary in amount depending on the type and
duration of service being provided.

         TECHSTORE, TOGETHER WITH OFFICEEXPRESS are global Internet retailers
featuring over 75,000 consumer technology and related products for the home and
office. With over 100,000 customers world wide, together the companies offer an
online "superstore" at www.techstore.com and www. officeexpress.com that
provides one-stop shopping for domestic and international customers, 24 hours a
day, seven days a week. The superstore features computer hardware, software,
electronics, other consumer technology products and office equipment and
supplies.

                                       24
<PAGE>

         E-TAXI was incorporated in April 1998 to develop a vertical Internet
portal for the small office, home office ("SOHO") market. As part of this
strategy, E-Taxi acquired TechStore in April 1999, immediately prior to the
reverse acquisition of Computer Marketplace, Inc. by E-Taxi. Plans to create a
SOHO portal by E-Taxi have been postponed as a result of the Company's focus on
developing Full Moon. E-Taxi currently has no other operations, revenues or
expenses.

         STARSONLINE was formed in February 2000 and initially capitalized with
$250,000 to develop and launch an Internet based entertainment company.
StarsOnline expects to build a celebrity portal that enables Internet users to
access the official sites of well-known personalities in television, film,
music, fashion, publishing, sports and art. Many of these official sites will be
designed, developed and managed by StarsOnline in partnership with popular
celebrities. Additionally this full service vertical portal is expected to
provide celebrity-driven content, products and services in an entertaining and
interactive environment. StarsOnline believes it will be able, therefore, to
aggregate and monetize the affinity audiences of these famous personalities.

         By providing real value to each of the constituencies (consumers,
celebrities, commerce partners) in the star-driven entertainment marketplace,
StarsOnline expects to position itself to capture multiple revenue streams.
StarsOnline expects to generate revenues from sales of authentic and exclusive
celebrity merchandise and memorabilia, strategic sponsorships, targeted
advertising, affinity audience traffic, content syndication, premium
memberships, and special promotions.

         StarsOnline is currently in the start-up stage and has no revenues and
only nominal expenses.

         Our Internet businesses have a very limited operating history on which
to base an evaluation of our business and prospects. Our prospects must be
considered in light of the risks, uncertainties, expenses and difficulties
frequently encountered by companies in their early stages of development,
particularly companies with limited access to capital in new and rapidly
evolving markets such as the Internet market. In view of the rapidly evolving
nature of our business and our limited operating history, we believe that
period-to-period comparisons are not necessarily meaningful and should not be
relied upon as indications of future performance. Please see "Risk Factors That
May Affect Future Results and Safe Harbor Statement".


RESULTS OF OPERATIONS

FISCAL YEAR ENDED JUNE 30, 2000

         The fiscal year 2000 historical financial statements reflect the
operations of TechStore for the entire period and the operations of Full Moon
from November 2000, the month of acquisition of the Interactive Architect Firms.
The fiscal year 1999 historical results, reflects the operations of TechStore
from April 1999, the month of acquisition by E-Taxi. Therefore, any comparison
of fiscal 2000 results to fiscal 1999 would not be meaningful and have been
excluded from the following discussion.

                                       25
<PAGE>

NET LOSS

         The Company recorded a net loss of $10.1 million for the year ended
June 30, 2000, because the cost of revenues and expenses were not sufficient to
cover revenues generated. Contributing to the net loss were non-cash expenses of
approximately $9.1 million, consisting of $3.0 million of depreciation and
amortization, a $3.5 million impairment loss related to the goodwill associated
with the acquisition of TechStore, $1.7 million in stock-based compensation and
a $1.0 million increase in the allowance for doubtful accounts. It also includes
one-time transaction costs related to terminated acquisitions and dispositions
of $357,000. Offsetting these items is $1.5 million of minority interest
attributable to the minority shareholders of Full Moon and $188,000 of non-cash
income due to the conversion of a capital lease. Excluding these non-cash items
and one-time transaction costs, $631,000 of the loss was attributable to Full
Moon and $111,000 was attributable to TechStore and Office Express combined. The
balance of approximately $100,000 is attributable to corporate administration.

REVENUE

         Total revenue for the year ended June 30, 2000 was $28.7 million, which
consists $12.3 million of online retailing revenue by TechStore and Office
Express, and $16.4 million of revenue generated by Full Moon. Revenue is
expected to increase in fiscal 2000 with the inclusion of the results of
operations of Full Moon for a full twelve months.

         TechStore and Office Express utilize vendor drop-shipments directly to
customers, and therefore do not maintain inventory. Because TechStore and Office
Express assume the risk of ownership in all transactions, revenues are recorded
on a gross rather than net basis (see "Notes to Consolidated Financial
Statements: Significant Accounting Policies" on page 59).


COST OF SALES

         Total cost of sales for the year ended June 30, 2000 was $20.4 million
or 71.1% of revenue. Cost of sales includes the cost of products sold, credit
card processing fees and freight costs for product sales, and time & materials
for Internet consulting services.

         Online retailing by TechStore and Office Express had cost of sales of
$11.5 million, or 93.5% of revenue for the year ended June 30, 2000. The Company
expects margins for this segment to remain low in the near future as it uses
competitive pricing as a means to obtain increased market share.

         TechStore is entirely dependent upon a third party for order
fulfillment. Currently, TechStore utilizes fulfillment services offered by
TechData Corporation, a leading full-line distributor of more than 75,000
technology products worldwide. TechData offers fulfillment services via six
regional distribution centers. TechStore has no long-term contracts or
arrangements with TechData that guarantee the availability, shipping, or quality
of merchandise.

         TechStore relies upon TechData to ship merchandise directly to
customers. Consequently, TechStore has limited control over the goods shipped,
and at times these shipments have been subject to delays. If the quality of
service provided by the distributor, TechData, falls below a satisfactory
standard or if our level of returns exceeds our expectations, this could have a
harmful effect on our business. The Company believes that it could establish a
similar relationship with other distributors; however, there can be no assurance
that such a distributor could provide the fulfillment, service and pricing
currently offered by TechData to TechStore.

                                       26
<PAGE>

         Office Express is also entirely dependent upon a third party for order
fulfillment. Currently OfficeExpress utilizes fulfillment services offered by
United Stationers Supply Co., the nation's largest wholesale distributor of
office, computer, and facilities management products.

         Full Moon's cost of sales was $8.9 million, or 54.1% of revenue for the
year ended June 30, 2000. Full Moon's cost of sales as a percentage of revenue
increased by less than one percentage point, from 53.2% for the three months
ended October 31, 1999.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Total selling, general and administrative expenses for the year ended
June 30, 2000, were $13.7 million or 47.6% of revenue. Selling, general and
administrative expenses consist of salaries and other personnel related
expenses, facilities related expenses, legal and other professional fees, bad
debt expense, advertising costs, travel expenses and depreciation. The fiscal
year ended June 30, 2000 included $1.7 million in non-cash expenses related to
the amortization of deferred compensation and stock-based compensation, $1.0
million of bad debt expense and $345,000 of depreciation. The Company expects to
incur approximately $80,000 per quarter for three more quarters for the
amortization of the deferred compensation associated with warrants.

         TechStore and Office Express had combined SG&A of $959,000, or 7.8% of
combined revenues for the year ended June 30, 2000. For the combined companies,
SG&A includes of $98,000 in occupancy expense, $15,000 of office expense,
$54,000 of depreciation expense, $390,000 in salaries and $284,000 of
advertising.

         Full Moon's SG&A was $10.0 million, or 60.9% of revenue for year ended
June 30, 2000. Full Moon's SG&A includes $472,000 in rent expense, $692,000 in
professional fees (which includes approximately $357,000 in transaction costs
related to terminated acquisitions and dispositions), $4.4 million in salaries,
$317,000 of contract labor, $650,000 in travel, $305,000 in depreciation and
$256,000 in recruiting expenses. It also includes non-cash expenses of $1.6
million, consisting of a $1.0 million increase in its reserve for doubtful
accounts and $584,000 of stock-based compensation. Excluding stock-based
compensation of $584,000 and acquisition and disposition cost of $357,000, Full
Moon's SG&A was $9.0 million, or 55.2% of revenue. On a comparable basis, SG&A
as a percent of revenue was 36.3% for the three months ended October 31, 1999.
The increase subsequent to the acquisition is primarily due to the company
increasing infrastructure to meet demand for its services.

                                       27
<PAGE>

PRODUCT DEVELOPMENT EXPENSES

         Product development expenses were $30,000 for the year ended June 30,
2000. Product development expenses consist of personnel and related expenses
associated with the development of the Company's web site.


AMORTIZATION OF GOODWILL AND OTHER ACQUIRED INTANGIBLES

         During fiscal 2000, the Company incurred $2.6 million in amortization
expenses associated with the acquisition of TechStore and Full Moon. The
intangible assets associated with these acquisitions, consisted of $15.9 million
in goodwill, $140,000 in acquired technology $160,000 in established workforce
and $280,000 in trademarks, which are being amortized over their estimated
useful lives of four to ten years. The Company also recorded a $3.5 million
write-down of goodwill in the fourth quarter due to an impairment in the
carrying value of TechStore. The undiscounted cash flows of TechStore failed to
support the recoverability of the assets of TechStore including the carrying
value of goodwill. (See "Notes to Consolidated Financial Statements:
Intangibles" on page 64).

         In the event that the Company continues to acquire other companies,
amortization of goodwill will continue to have an impact on the Company's
results of operations in the future. Based on acquisitions completed as of June
30, 2000, and assuming no further impairment of the value of the Company's
subsidiaries resulting in a write-down of goodwill, future amortization of
goodwill and identifiable intangibles will reduce net income from operations by
approximately $1.9 million in fiscal years 2001, 2002, and 2003, $1.1 million in
fiscal year 2004, and $500,000 in 2005.

INTEREST INCOME AND EXPENSE

         Interest expense, net of interest income, was $116,000 for the year
ended June 30, 2000. Interest expense related primarily to interest on loans to
the Company and interest income resulted primarily from interest earned on notes
to related parties.

FISCAL YEAR ENDED JUNE 30, 1999

         Because the Company had no revenues and only nominal expenses for the
period from inception (April 14, 1998) to June 30, 1998 (total operating
expenses were $8,0700, any comparison of fiscal 1999 results to fiscal 1998
would not be meaningful and have been excluded from the following discussion.
The fiscal year 1999 results include E-taxi for the entire twelve-month period,
including the results of TechStore from the date of acquisition of April 1999.

                                       28
<PAGE>

NET LOSS

         The Company recorded a net loss of $728,000 for the year ended June 30,
1999 because the cost of revenues and expenses were not sufficient to cover
revenues generated.

REVENUE

         Total revenue for the year ended June 30, 1999 was $2.2 million, which
consists almost exclusively of revenue from the sale of computer hardware and
software and consumer electronics by the Company's wholly owned subsidiary,
TechStore, through its web site.

COST OF REVENUE

         Total cost of revenue for the year ended June 30, 1999 was $2.1 million
or 93.3% of revenue. Cost of revenue includes the cost of product sold, credit
card processing fees and freight costs.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Total selling, general and administrative expenses for the year ended
June 30, 1999 were $454,000 or 20.5% of revenue. Selling, general and
administrative expenses consist of salaries and other personnel related
expenses, facilities related expenses, legal and other professional fees,
advertising costs and travel expenses. The fiscal year ended June 30, 1999 also
included $87,000 in non-cash expenses associated with stock issued to three
directors for services rendered and stock options issued to an accounting
consultant.

PRODUCT DEVELOPMENT EXPENSES

         Product development expenses were $19,000 for the year ended June 30,
1999. Product development expenses consist of personnel and related expenses
associated with the development of the Company's web site.

AMORTIZATION OF GOODWILL AND OTHER ACQUIRED INTANGIBLES

         During the fourth quarter of fiscal 1999, the Company incurred $404,000
in amortization expenses associated with the acquisition of TechStore and the
reverse merger between the Company and E-Taxi. The intangible assets associated
with these acquisitions, consisting in total of $10.0 million in goodwill,
$140,000 in acquired technology $160,000 in established workforce and $280,000
in trademarks, have and estimated useful lives of four to five years

INTEREST INCOME AND EXPENSE

         Interest income, net of interest expense, was $2,000 for the year ended
June 30, 1999. Interest expense related primarily to interest on loans to the
Company and interest income resulted primarily from interest earned on the $1.4
million proceeds on the private placement completed by E-Taxi in April 1999.

                                       29
<PAGE>

VARIABILITY OF PERIODIC RESULTS AND SEASONALITY

         Results from any one period cannot be used to predict the results for
other fiscal periods. Revenues fluctuate from period to period, however,
management does not see any seasonality or predictability to these fluctuations.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2000, the Company had a cash balance of $772,000 and
working capital of $800,000. The primary source of working capital to the
Company during the year ended June 30, 2000, was net proceeds of approximately
$3.0 million received in connection with the Private Placement of the Company's
Common Stock during the quarter ended December 31, 1999, approximately $860,000
from the sale of stock by Full Moon to an investor (net of commissions), $1.1
million in proceeds from the issuance of notes payable, approximately $366
million of net borrowings on lines of credit and $1.3 million in net proceeds
from the issuance of Common Stock for warrant and option exercises. Of the $6.1
million generated through financing activities, approximately $4.1 million was
used to fund current operations, and approximately $2.5 million used in
investing activities. Investing activities consisted primarily of $1.0 million
of capital expenditures and $1.3 million for the procurement of notes receivable
in exchange for cash to related parties. Additionally, approximately $862,000
was used to retire debt of the Interactive Architect Firms at the closing of the
acquisition, and approximately $163,000 was used to repay loans assumed in
previous acquisitions.

         The Company's operations generated a negative cash flow during the year
ended June 30, 2000 and 1999, and management expects a significant use of cash
during the upcoming fiscal year as it funds its operating businesses. The
Company will require additional debt or equity financing during the first half
of fiscal year 2001, the amount and timing depending in large part on our
spending program. If additional funds are raised through the issuance of equity
securities, the Company's stockholders may experience significant dilution.
Furthermore, there can be no assurance that additional financing will be
available when needed or that if available, such financing will include terms
favorable to our stockholders or the Company. If such financing is not available
when required or is not available on acceptable terms, the Company may be unable
to pay its debts in a timely manner, to develop or enhance its operating
businesses, take advantage of business opportunities or respond to competitive
pressures, any of which could have a material adverse effect on its business,
financial condition and results of operations. The Company also could breach
payment obligations to third parties or otherwise fail to satisfy business
obligations of the Company. Please see "Notes to Consolidated Financial
Statements: Debt" and "Risk Factors That May Affect Future Results
and Safe Harbor Statement"

         The Company's principle commitments at June 30, 2000 consist of monthly
operating rental payments, compensation of employees and accounts and notes
payable.

ABSENCE OF DIVIDENDS

The Company has never declared or paid, nor does it intend to pay in the
foreseeable future, cash dividends on its Common Stock, but intends instead to
retain any future earnings to finance expansion and operations.

                                       30
<PAGE>

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company has considered the provisions of Financial Reporting
Release No. 48 "Disclosure of Accounting Policies for Derivative Financial
Instruments and Derivative Commodity Instruments, and Disclosure of Quantitative
and Qualitative Information about Market Risk Inherent in Derivative Financial
Instruments, Other Financial Instruments and Derivative Commodity Instruments."
The Company had no holdings of derivative financial or commodity instruments at
June 30, 2000. However, the Company is exposed to financial market risks,
including changes in interest rates. All of the Company's revenue, operating
expenses and capital spending is transacted in U.S. dollars. The Company's
investments portfolio comprises amounts invested in short term cash deposits and
therefore the Company believes that the fair value of its investment portfolio
or related income would not be significantly impacted by increases or decreases
in interest rates due mainly to the short-term nature of the Company's
investment portfolio. However, a sharp increase in interest rates could have a
material adverse effect on the fair value of The Company's investment portfolio.
Conversely, sharp declines in interest rates could seriously harm interest
earnings of the Company's investment portfolio. At June 30, 2000 all of the
Company's had no cash equivalents mature or short-term investments.


ITEM 7.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         See financial statements following Item 13 of this Annual Report on
Form 10-KSB.


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

         None.

                                       31
<PAGE>

                                    PART III

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

The following table sets forth certain information regarding the executive
officers and directors of the Company:


Name                        Age         Position
----                        ---         --------

Robert Wallace              52          Chairman of the Board, Chief Executive
                                        Officer, and Principal Accounting
                                        Officer

Brian P. Burns, Jr.         35          Vice President of Administration and
                                        Corporate Development


Bejan Aminifard             26          Chief Executive Officer of TechStore and
                                        Chief Operating Officer of Office
                                        Express

Derek Wall                  30          President of TechStore and Chief
                                        Executive Officer of Office Express

Fred H. Walti, II           47          Chief Executive Officer of Full Moon

John Davis                  52          Chief Operating Officer of Full Moon

Robert Wilson               56          Chief Financial Officer of Full Moon

M. Mitchell Stevko          39          Director

Thomas E. Evans, Jr.        60          Director


ROBERT WALLACE has been Chairman of the Board since April 1999 and Chief
Executive Officer since March 2000. Since April 1999 he has served as Chairman,
President and Secretary of E-Taxi, Inc. In addition, Mr. Wallace is the founder
and has been the Chairman and President of Gateway Advisors, Inc., a financial
advisory firm, since its inception in 1987. Previously, Mr. Wallace served as a
director of, among other companies, International Family Entertainment, Inc. and
Media Arts Group, Inc. Gateway Advisors, Inc. has been retained by the Company
as its financial advisor.

BRIAN P. BURNS, JR. has served as Vice President of Administration and Corporate
Development since December 1999. Prior to this position, Mr. Burns was employed
as a Vice President of Gateway Advisors, from February 1999 until December 1999.
From August 1996 until September 1998, Mr. Burns was employed by Neurex
Corporation, a biopharmaceutical company, in a variety of positions, most
recently as Associate General Counsel. On June 17, 1999 and prior to his current
employment, Mr. Burns consented, without admitting or denying the allegations of
a civil action by the SEC (No. 1:99CV01546) (the "Action"), to an order
enjoining him from future violations of Section 10(b) of the Securities and
Exchange Act of 1934 and requiring him to pay a civil penalty and disgorge any
profits. The Action alleged that Mr. Burns and the other defendants violated
certain provisions of the Federal securities laws. The Action did not allege
that Mr. Burns received any pecuniary benefit from the alleged conduct; however,
he was required to disgorge a portion of the profits realized by the other
defendants, who were unable to pay.

                                       32
<PAGE>

BEJAN AMINIFARD is the founder and has been the Chief Executive Officer of
TechStore since its inception in November 1997. Prior to this, Mr. Aminifard was
employed by Eversys Corporation as an applications programmer, from June 1996
until June 1997. Prior to that, Mr. Aminifard was a student at the University of
California - Berkeley, where he received his Bachelor of Arts degree in
Cognitive Sciences in May 1996.

DEREK WALL has served as President of TechStore since April 1998. From January
1997 until March 1998, Mr. Wall served as Senior Vice President of Sales for
Dita Eyewear Inc., a high fashion optical company. Prior to that, he served as
Chief Executive Officer of Purged Sled Company Inc., a manufacturer and
distributor of snowboard equipment, from June 1993 until September 1995.

THOMAS E. EVANS, JR. has been a director since February 1994. Since February
2000 he has held the position of Executive Vice President of Fidelity National
Title Insurance. From July 1995 until February 2000 he held the position of
President of the Orange County Division, of Fidelity National Title Insurance.
Mr. Evans is a member of the Board of Governors of the California Land Title
Association and served as its President in 1995. Mr. Evans served from 1984 to
1992 as a director of Fidelity National Financial, Inc. which is listed on the
New York Stock Exchange.

L. WAYNE KILEY served as President and Chief Executive Officer of the Company
from March 1984 until March 1, 2000, and a director from June 1993 until March
31, 2000. Mr. Kiley was also President of Medical Marketplace from its inception
through August 1998. From 1978 to 1983, he was self-employed independent real
estate developer in Tucson, Arizona.

M. MITCHELL STEVKO served as Director of the Company from February 2000 until
August 2000. Since 1997, Mr. Stevko has served as a Managing Director of U.S.
Bancorp Piper Jaffray Inc., an investment banking firm that currently serves as
a financial advisor to the Company. From 1995 until 1997, he served as a
Managing Director with Pacific Growth Equities, an investment banking and
institutional brokerage firm.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934

         Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission ("SEC") initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten percent (10%)
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.

         To the Company's knowledge, based solely on its review of the copies of
such reports furnished to the Company during the year ended June 30, 2000, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent (10%) beneficial owners were satisfied, except that Mr.
Evans Kiley and Mr. Wallace failed to file timely Form 4's, Mr. Burns failed to
file timely a Form 3, and Mr. Stevko a Form 3 and a Form 4.

                                       33
<PAGE>

ITEM 10.          EXECUTIVE COMPENSATION

The following table shows all the cash compensation paid by the Company to the
current Chief Executive Officer, former Chief Executive Officer, and five (5) of
the Company's officers who received in excess of $100,000 in annual salary and
bonus during the fiscal years ended June 30, 2000, 1999, and 1998:

<TABLE>
<CAPTION>

                                         Annual                    Awards
                                      Compensation              Compensation
                (a)                       (b)          (c)           (d)          (g)           (i)
         Name and Principal                                                    Number of
       Position-Compensation              Year        Salary        Bonus       Options      All Other
       ---------------------              ----        ------        -----       -------      ---------
<S>                                       <C>        <C>           <C>          <C>           <C>
Robert M. Wallace (1),                    2000       $180,000      $    --           --       $   --
Chairman and CEO                          1999       $     --      $    --           --       $   --
                                          1998       $     --      $    --           --       $   --

L. Wayne Kiley (2),                       2000       $     --      $    --       20,000       $   --
Former President, Chief Executive         1999       $     --      $    --      100,000       $   --
Officer and Director                      1998       $269,228      $    --           --       $   --

Bejan Aminifard (3),                      2000       $120,673      $57,160           --       $6,000
Chief Executive Officer-TechStore         1999       $ 15,625      $    --           --       $   --
                                          1998       $     --      $    --           --       $   --

Derek Wall (3),                           2000       $108,253      $23,160       35,000       $8,477
President-TechStore                       1999       $ 15,625      $    --           --       $   --
                                          1998       $     --      $    --           --       $   --

Thomas Mason (4),                         2000       $     --      $    --           --       $   --
Vice President                            1999       $     --      $    --           --       $   --
                                          1998       $178,800      $    --           --       $   --

Brian Hintergardt (5),                    2000       $     --      $    --           --       $   --
Chief Executive Officer --                1999       $120,000      $    --           --       $   --
Medical Marketplace                       1998       $ 20,168      $    --       41,666       $   --

Mauri Lathouwers, Jr. (5),                2000       $     --      $    --           --       $   --
Vice President -                          1999       $120,000      $    --           --       $3,900
Medical Marketplace                       1998       $     --      $    --           --       $   --
</TABLE>
-------------------
(1)      Mr. Wallace employment with the Company began on January 1, 2000. In
         addition to the compensation set forth above, Mr. Wallace received
         certain grants of stock options and Performance Units under the Full
         Moon 1999 Stock Plan. (See -- Employment Agreements).

(2)      Mr. Kiley's employment with the Company terminated on March 1, 2000.
         Mr. Kiley did not receive a salary for the years ended June 30, 1999
         and 2000. However, the exercise price of certain options were reduced
         to $.60 per share during the fiscal year ended June 30, 1999.

(3)      The employment of Mr. Aminifard and Mr. Wall with the Company began in
         April 1999. (See - Employment Agreement). During the fiscal year ended
         June 30, 2000, the Company granted 10,000 shares of common stock of
         Office Express to each of Mr. Aminifard and Mr. Wall as compensation
         for their assistance with the launch of Office Express.

                                       34
<PAGE>


(4)      Mr. Mason's employment with the Company terminated in May, 1998.

(5)      Mr. Hintergardt and Mr. Lathouwers employment with Medical Marketplace
         terminated as of June 30, 2000.

         The following table sets forth certain information with respect to
options granted during the last fiscal year to the Company's Chief Executive
Officer and the other executive officers named in the above Summary Compensation
Table.

1.      OPTION/SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>
               Number of Securities        Percent of Total      Exercise or
                   Underlying            Options/SARS Granted    Base Price    Expiration
Name              Options/SARS          to Employees in Fiscal    ($/Sh)          Date
----              ------------          ----------------------    ------          ----
<S>                 <C>                          <C>               <C>          <C>
Robert M. Wallace       --                       --                 --             --
Bejan Aminifard         --                       --                 --             --
Derek Wall          35,000                       3.8%              7.38         2-4-2010
L.Wayne Kiley       20,000                       2.2%              4.00         2-4-2010
</TABLE>

         The following table sets forth certain information with respect to
options exercised during the last fiscal year by the Company's Chief Executive
Officer and the executive officers named in the Summary Compesation Table, and
with respect to unexercised options held by such persons at the end of the last
fiscal year.
<TABLE>
<CAPTION>

             AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
                        FISCAL YEAR-END OPTION/SAR VALUE

              Shares Acquired                  Number of Securities         Value of Unexercised in
                    on            Value       Underlying Unexercised       the Money Options/SARs at
Name             Exercise #      Realized $   Options/SARS at FY-End(#)          FY-End ($)(1)
----             ----------      ----------   -------------------------          -------------

                                              Exercisable  Unexercisable   Exercisable  Unexercisable
                                              -----------  -------------   -----------  -------------

<S>                <C>             <C>          <C>                         <C>
Brian Hintergardt  11,333          $35,500      30,333         --           $40,040          --

Derek Wall             --              --        7,000       28,000              --          --

L. Wayne Kiley    133,167       $1,137,039     657,667         --        $1,578,401          --
</TABLE>

(1)      Based upon a closing price on June 30, 2000 of $3.00 per share as
         reported by the OTC Bulletin Board.


                                       35
<PAGE>

         During the year ended June 30, 1999, the Company issued a total of
300,000 options to L. Wayne Kiley, then a director and the Company's Chief
Executive Officer, and Joe Achten, then a director of the Company, in exchange
for loans of $100,000 by Mr. Achten and $50,000 by Mr. Kiley made to the
Company. The exercise price of the 200,000 options issued to Mr. Achten is $.50
per share and the exercise price of the 100,000 options issued to Mr. Kiley is
$.60 per share. The options are exercisable until December 31, 2002. See
"Certain Relationships and Related Transactions."

         During the year ended June 30, 2000, the Company issued 20,000 options
to L. Wayne Kiley, then a director of the Company; 20,000 options to Tom Evans,
a current director of the Company; and 50,000 to Mitchell Stevko, then a
director of the Company under the Company's 1999 Stock Plan. The options were
granted with an excercise price of $4.00 per share and vest over a four year
period, commencing on grant date of February 4, 2000.

         During the year ended June 30, 2000, Full Moon issued a total of
450,000 options to Robert M. Wallace, the Chairman and Chief Executive Officer
of the Company and Chairman of Full Moon. The exercise price of the options is
$2.67 per share and the options are exercisable until July 31, 2009. In
addition, Full Moon issued 225,000 Performance Units to Mr. Wallace, which will
vest in the event certain Performance Objectives related to Full Moon are
achieved. See "Employee Agreements".

         During the year ended June 30, 2000, Full Moon issued options to
purchase (A) 300,000 shares of common stock of Full Moon at an exercise price of
$2.67 per share, and (B) 60,000 shares of common stock of Full Moon at an
exercise price of $5.00 per share to Brian P. Burns, Jr., Vice President of
Administration and Corporate Development of the Company and Corporate Secretary
of Full Moon. See "Employee Agreements".

1999 STOCK PLAN

         As of April 13, 1999 the Board of Directors of the Company and as of
July 12, 1999 a majority of the shares of the Company's voting stock outstanding
approved the adoption of the Company's 1999 Stock Plan (hereinafter called the
"1999 Plan"). The 1999 Plan has been adopted for the purpose of attracting and
retaining persons of ability as directors, employees or consultants or advisors
of the Company and its subsidiaries, motivating and rewarding good performance,
encouraging such employees to continue to exert their best efforts on behalf of
the Company and its subsidiaries and to provide opportunities for stock
ownership by such employees in order to increase their proprietary interest in
the Company.

         The maximum number of shares of Common Stock with respect to which
awards may be granted pursuant to the 1999 Plan is initially 1,700,000 shares.
Shares issuable under the 1999 Plan may be either treasury shares or authorized
but unissued shares. The number of shares available for issuance will be subject
to adjustment to prevent dilution in the event of stock splits, stock dividends
or other changes in the capitalization of the Company.

                                       36
<PAGE>

         Subject to compliance with Rule 16b-3 of the Securities Exchange Act of
1934, the Plan shall be administered by the Board of Directors of the Company
(the "Board") or, in the event the Board shall appoint and/or authorize a
committee, such as the Compensation Committee, of two or more members of the
Board to administer the Plan, by such committee. The administrator of the Plan
shall hereinafter be referred to as the "Plan Administrator". Except for the
terms and conditions explicitly set forth herein, the Plan Administrator shall
have the authority, in its discretion, to determine all matters relating to the
options to be granted under the Plan, including, without limitation, selection
of whether an option will be an incentive stock option or a nonqualified stock
option, selection of the individuals to be granted options, the number of shares
to be subject to each option, the exercise price per share, the timing of grants
and all other terms and conditions of the options.

         Upon a Change in Control of the Company, any award carrying a right to
exercise that was not previously exercisable shall become fully exercisable, the
restrictions, deferral limitations and forfeiture conditions applicable to any
other award granted shall lapse and any performance conditions imposed with
respect to awards shall be deemed to be fully achieved.

         Awards under the 1999 Plan may not be transferred, pledged, mortgaged,
hypothecated or otherwise encumbered other than by will or under the laws of
descent and distribution, except that the Committee may permit transfers of
awards for estate planning purposes if, and to the extent, such transfers do not
cause a participant who is then subject to Section 16 of the Exchange Act to
lose the benefit of the exemption under Rule 16b-3 for such transactions.

         The Board may amend, alter, suspend, discontinue or terminate the 1999
Plan at any time, except that any such action shall be subject to stockholder
approval at the annual meeting next following such Board action if such
stockholder approval is required by federal or state law or regulation or the
rules of any exchange or automated quotation system on which the Common Stock
may then be listed or quoted, or if the Board of Directors otherwise determines
to submit such action for stockholder approval. In addition, no amendment,
alteration, suspension, discontinuation or termination to the 1999 Plan may
materially impair the rights of any participant with respect to any award
without such participant's consent. Unless terminated earlier by action of the
Board of Directors, the 1999 Plan shall terminate ten (10) years after adoption
by the stockholders.

        TYPES OF AWARDS

        STOCK OPTIONS. Options granted under the 1999 Plan may be "incentive
stock options" ("Incentive Options") within the meaning of Section 422 of the
Code or stock options which are not incentive stock options ("Non-Incentive
Options" and, collectively with Incentive Options, hereinafter referred to as
"Options") will be granted, the number of shares subject to each Option granted,
the prices at which Options may be exercised (which in the case of an Incentive
Option shall not be less than the Fair Market Value of shares of Common Stock on
the date of grant), whether an Option will be an Incentive Option or a
Non-Incentive Option, the time or times and the extent to which Options may be
exercised and all other terms and conditions of Options will be determined by
the Committee.

        RESTRICTED AND DEFERRED STOCK. An award of restricted stock or deferred
stock may be granted under the 1999 Plan. Restricted stock is subject to
restrictions on transferability and other restrictions as may be imposed by the
Committee at the time of grant. In the event that the holder of restricted stock
ceases to be employed by the Company during the applicable restrictive period,
restricted stock that is at the time subject to restrictions shall be forfeited
and reacquired by the Company. Except as otherwise provided by the Committee at
the time of grant, a holder of restricted stock shall have all the rights of a
stockholder including and receive other distribution, without limitation, the
right to vote restricted stock and the right to recover dividends thereon. An
award of deferred stock is an award that provides for the issuance of stock upon
expiration of a deferral period established by the Committee. Except as
otherwise determined by the Committee, upon termination of employment of the
recipient of the award during the applicable deferral period, all stock that is
at the time subject to deferral shall be forfeited. Until such time as the stock
which is the subject of the award is unissued, the recipient of the award has no
rights as a stockholder.

                                       37
<PAGE>

        PERFORMANCE UNITS. Performance Units may be granted by the Committee to
individuals or groups of individuals participating under the 1999 Plan.
Performance Units are tied to the successful completion of certain performance
driven Company goals during a given period of time and will be assigned a dollar
value by the Committee. Upon the satisfactory attainment of the goal identified
by the Committee during the period prescribed for its completion, the
participant or participants reaching such goal shall be entitled to a payment in
settlement of each Performance Unit earned by such participant. Certain
adjustments to the amount of the cash payment, if any, to be made incident to a
grant of Performance Units may be made by the Committee in the event a
participant ceases to be employed by the Company during the performance period
or upon the occurrence of a significant event that causes the attainment of the
prescribed goal more or less likely to occur during the performance period. Each
Performance Unit may be paid in whole shares of Common Stock, including
restricted stock and deferred stock, or cash, or in any combination of Common
Stock and cash.

EMPLOYMENT AGREEMENTS

         In October 1996, the Company amended its employment agreement with L.
Wayne Kiley, the Company's Chairman of the Board, President and Chief Executive
Officer. Pursuant to such amendment, (i) the employment agreement's expiration
date of October 16, 1997 was extended to October 16, 1999, (ii) in exchange for
termination of certain options, Mr. Kiley was granted the right to purchase a
number of shares of Common Stock for a period of four (4) years, at a price
equal to seventy five percent (75%) of the closing bid price of the Company's
shares of Common Stock on the date of grant equal to 2.5%, 3% and 3.5% of the
shares outstanding, should the Company report annual earnings before the payment
of interest and taxes of $625,000, $875,000 and $1,000,000, respectively, (iii)
Mr. Kiley will be paid a cash bonus equal to 5% of any profit realized by the
Company from the sale of assets outside the ordinary course of business, and
(iv) an insurance policy covering the life of Mr. Kiley whereby Mr. Kiley's
estate will be paid $2,000,000 in exchange for the redemption of the shares of
the Company's capital stock beneficially owned by Mr. Kiley. The Agreement
contained other customary terms and conditions including termination for cause,
non-competition on confidentiality provisions. On April 9, 1999 (and clarified
as of October 12, 1999), the Company, Quality Associates, Inc. and Mr. Kiley
entered into a settlement agreement (the "Settlement Agreement") whereby Mr.
Kiley waived all rights to, certain debts and liabilities owed to Mr. Kiley and
Quality Associates ("Liabilities") in the amount of $65,000, and accrued and
unpaid salary in the amount of $314,000, in exchange for the repricing of
691,000 options outstanding, resulting in a compensation charge of $205,000, an
amount equal to the difference between the fair market value of the repriced
options and the Liabilities forgiven under the Settlement Agreement.

         Effective March 31, 1999, E-Taxi entered into an employment agreement
for a five (5) year term with Bejan Aminifard covering his employment as Chief
Executive Officer of TechStore. Pursuant to such employment agreement, Mr.
Aminifard is to receive an annual salary of $75,000 per annum, which may be
increased annually in the discretion of the Board of Directors. The employment
agreement also provides for an automobile allowance of $500 per month,
disability insurance and for bonuses and other incentive compensation as the
Board deems appropriate. In connection with such employment agreement, E-Taxi
entered into a restricted stock agreement with Mr. Aminifard that provided
grants of shares of common stock, so long as TechStore achieves for the twelve
(12) months ended March 31, 2000, certain (i) revenue targets; and (ii) earnings
before the payment of interest, taxes, and depreciation ("EBITD") targets, such
targets commencing with revenue of not less than $18,500,000 and EBITD of not
less than ($185,000) ("Restricted Stock"). Based upon the operating performance
of TechStore, Mr. Aminifard did not earn the Restricted Stock.

                                       38
<PAGE>

         Effective March 31, 1999, E-Taxi entered into an employment agreement
for a five (5) year term with Derek Wall covering his employment as President of
TechStore. Pursuant to such employment agreement, Mr. Wall is to receive an
annual salary of $75,000 per annum, which may be increased annually in the
discretion of the Board of Directors. The employment agreement also provides for
an automobile allowance of $500 per month, disability insurance and for bonuses
and other incentive compensation as the Board deems appropriate. In connection
with such employment agreement, E-Taxi entered into a restricted stock agreement
with Mr. Wall that provided grants of shares of common stock, so long as
TechStore achieves for the twelve (12) months ended March 31, 2000, certain (i)
revenue targets; and (ii) earnings before the payment of interest, taxes, and
depreciation ("EBITD") targets, such targets commencing with revenues of not
less than $18,500,000 and EBITD of not less than ($185,000) ("Restricted
Stock"). Based upon the operating performance of TechStore, Mr. Wall did not
earn the Restricted Stock.

         As of January 1, 2000, the Company entered into an employment agreement
with Robert M. Wallace, pursuant to which Mr. Wallace has agreed to serve as the
Company's Chairman and Chief Executive Officer for a period of five (5) years.
Mr. Wallace's base salary is $180,000 per annum ("Base Salary") and he is
entitled to receive an annual cash bonus of up to 100% of his then current Base
Salary upon the achievement of certain performance targets established by the
Company's Board of Directors. Mr. Wallace is entitled to receive the following
success fees upon the accomplishment of the following objectives: (A) a cash
success fee equal to 200% of his Base Salary upon the sale of not less than
$15,000,000 of the Company's Common Stock; (B) a cash success fee equal to 25%
of his annual salary upon the achievement of each of the following market
capitalization tranches of the Company's Common Stock: $90,000,000,
$120,000,000, and $150,000,000, based upon the closing price for ten (10)
consecutive trading days; (C) a cash success fee equal to 100% of his Base
Salary upon the listing of the Company's Common Stock on NASDAQ Stock Market,
the American Stock Exchange, or the New York Stock Exchange; (D) in the event of
Sale of the Company (which is defined as the sale of all or substantially all of
the assets or capital stock, or a merger or consolidation of the Company with
any other corporation or entity), Mr. Wallace shall receive a success fee
calculated according to the following fee schedule: i) an amount equal to 1.0%
of the purchase price for any Sale up to $100 million; ii) an amount equal to
2.0% of the purchase price for any Sale between $100 million and $200 million;
OR iii) an amount equal to 2.5% of the purchase price for any Sale in excess of
$200 million. The employment agreement with Mr. Wallace contains other customary
provisions including severance arrangements and confidentiality provisions.
Under the terms of his Agreement, Mr. Wallace is permitted to devote a portion
of his time to other business matters.

         As of January 1, 2000, Full Moon entered into an employment agreement
with Robert M. Wallace, pursuant to which Mr. Wallace has agreed to serve as
Full Moon's Chairman for a period of five (5) years. Mr. Wallace's base salary
is $180,000 per annum ("Base Salary") and he is entitled to receive an annual
cash bonus upon the achievement of certain performance targets established by
Full Moon's Board of Directors. Mr. Wallace is entitled to receive the following
success fees upon the accomplishment of the accompanying highly significant
corporate objectives: (A) a cash success fee equal to 200% of his Base Salary
upon the closing or consummation of interactive architects acquisitions
resulting in combined Full Moon revenues of not less than $25,000,000, measured
by revenues for the calendar year ended December 31, 1999, provided such
acquisitions possess reasonably acceptable operating margins; and (B) in the
event of sale of Full Moon (which is defined as the sale of all or substantially
all of the assets or capital stock, or a merger or consolidation of Full Moon
with any other corporation or entity), Mr. Wallace shall receive a success fee
calculated according to the following fee schedule: i) an amount equal to 1.0%
of the purchase price for any sale up to $100 million; ii) an amount equal to
1.5% of the purchase price for any sale between $100 million and $200 million;
or iii) an amount equal to 2.0% of the purchase price for any sale in excess of
$200 million. In addition, upon the achievement of each of the following
Performance Objectives, the Company shall grant Mr. Wallace 112,500 Performance
Units (as such terms are defined in the Full Moon 1999 Stock Plan): (A) Full
Moon completes, in whole or cumulatively in any 12 month period during the term
of the agreement, a private sale of its capital stock generating gross proceeds
of not less than $10,000,000, including, but not limited to, the exercise of
rights to purchase common stock of the Company; and (B) Full Moon completes an
initial public offering of its common stock generating gross proceeds of not
less than $25,000,000. The employment agreement with Mr. Wallace contains other
customary provisions including severance arrangements and confidentiality
provisions. Under the terms of his Agreement, Mr. Wallace can devote a portion
of his time to other business matters.

                                       39
<PAGE>

         As of December 31, 1999, the Company entered into an employment
agreement with Brian P. Burns, Jr., pursuant to which Mr. Burns has agreed to
serve as Vice President - Administration and Corporate Development for a period
of five (5) years. Mr. Burns Base Salary is $100,000 per annum ("Base Salary")
and he is entitled to receive an annual cash bonus of up to 100% of his then
current Base Salary upon the achievement of certain performance targets
established by the Company's Board of Directors. Mr. Burns has also received
options to purchase a total of 250,000 shares of Common Stock of the Company at
an exercise price of $2.50 per share, 50,000 shares of which vested immediately,
50,000 vested on February 1, 2000, and the remaining amounts vest exercisable in
forty-eight equal, monthly installment amounts, beginning February 29, 2000. In
the event of a sale of Full Moon, the Company's subsidiary, (which is defined as
the sale of all or substantially all of the assets or capital stock, or a merger
or consolidation of Full Moon with any other corporation or entity or an initial
public offering of its common stock), the Company shall grant Mr. Burns fully
vested options, at an exercise price of $2.50 per shares, according to the
following schedule: (A) 50,000 stock options for any sale valued between $40
million and $100 million; or (B) 100,000 stock options for any sale valued
between $100 million and $200 million; or (C) 150,000 stock options for any sale
valued in excess of $200 million. In addition, Mr. Burns is entitled to receive
a cash bonus equal to 50%, 100% or 200% of his Base Salary based upon a Sale as
set forth above. The employment agreement with Mr. Burns contains other
customary provisions including severance arrangements and confidentiality
provisions. Under the terms of his employment, Mr. Burns can devote a portion of
his time to other business matters.

         As of January 1, 2000, Full Moon entered into an employment agreement
with Brian P. Burns, Jr., pursuant to which Mr. Burns has agreed to serve as
Full Moon's Corporate Secretary for a period of five (5) years. Mr. Burns base
salary is $36,000 per annum ("Base Salary") and he is entitled to receive an
annual cash bonus of up to 100% of his then current Base Salary upon the
achievement of certain performance targets established by the Full Moon's Board
of Directors. Mr. Burns has also received options to purchase a total of (A)
300,000 shares of common stock of Full Moon at an exercise price of $2.67 per
share, 60,000 shares of which vest immediately, and the remainder of which vest
in four equal amounts on July 31, 2000, 2001, 2002 and 2003; and (B) 60,000
shares of common stock of Full Moon at an exercise price of $5.00 per share,
12,000 shares of which vest immediately, and the remainder of which vest in four
equal amounts on January 1, 2001, 2002, 2003 and 2004. The employment agreement
with Mr. Burns contains other customary provisions including severance
arrangements and confidentiality provisions. Under the terms of his employment,
Mr. Burns can devote a portion of his time to other business matters.

         As of November 23, 1999, Full Moon entered into an employment agreement
with Fred H. Walti, pursuant to which Mr. Walti has agreed to serve as Full
Moon's President and Chief Executive Officer for a period of five (5) years. Mr.
Walti's base salary is $170,000 per annum ("Base Salary") and he is entitled to
receive an annual cash bonus of up to 50% of his then current Base Salary upon
the achievement of certain performance targets established by Full Moon's Board
of Directors. Mr. Walti has also received options to purchase a total of 250,000
shares of Full Moon common stock at an exercise price of $7.50 per share, 50,000
shares of which vest immediately and the remainder of which vest in four equal
amounts on November 23, 2000, 2001, 2002 and 2003. The employment agreement with
Mr. Walti contains other customary provisions including severance arrangements
and confidentiality provisions.

         As of November 23, 1999, Full Moon entered into an employment agreement
with Robert Wilson, pursuant to which Mr. Wilson has agreed to serve as Full
Moon's Chief Financial Officer for a period of five (5) years. Mr. Wilson's base
salary is $125,000 per annum ("Base Salary") and he is entitled to receive an
annual cash bonus of up to 25% of his then current Base Salary upon the
achievement of certain performance targets established by Full Moon's Board of
Directors. Mr. Wilson has also received options to purchase a total of 125,000
shares of Full Moon common stock at an exercise price of $7.50 per share, 25,000
shares of which vest immediately and the remainder of which vest in four equal
amounts on November 23, 2000, 2001, 2002 and 2003. The employment agreement with
Mr. Wilson contains other customary provisions including severance arrangements
and confidentiality provisions.

                                       40
<PAGE>

         As of January 7, 2000, Full Moon entered into an employment agreement
with John Davis, pursuant to which Mr. Davis has agreed to serve as Full Moon's
Chief Operating Officer for a period of five (5) years. Mr. Davis' base salary
is $150,000 per annum ("Base Salary") and he is entitled to receive an annual
cash bonus of up to 100% of his then current Base Salary upon the achievement of
certain performance targets established by Full Moon's Board of Directors. Mr.
Davis has also received (A) options to purchase a total of 300,000 shares of
Full Moon common stock at an exercise price of $5.00 per share, 60,000 shares of
which vest immediately and the remainder of which vest in four equal amounts on
January 7, 2001, 2002, 2003 and 2004; and (B) 100,000 Performance Units, vesting
over the term of the agreement upon the achievement of Performance Objectives
established by the Board. In connection with the execution of the employment
agreement, Full Moon advanced Mr. Davis $50,000 which will be amortized in four
(4) equal annual installments or sooner, if Mr. Davis voluntarily terminates his
employment. The employment agreement with Mr. Davis contains other customary
provisions including severance arrangements and confidentiality provisions.

                                       41
<PAGE>

ITEM 11.          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information, as of September 15,
2000, with respect to the beneficial ownership of the outstanding Common Stock
by (i) any holder of more than five percent (5%) of the outstanding shares of
the Company's Common Stock; (ii) each of the Company's named executive officers
and directors; and (iii) the directors and named executive officers of the
Company as a group:
<TABLE>
<CAPTION>

         Name and Address of             Shares of Common Stock
         Beneficial Owner(1)              Beneficially Owned(2)           Percent of Class(3)
         -------------------             ----------------------           -------------------
<S>                                           <C>                                <C>
         Robert M. Wallace (4)                6,076,800 (5)                      35.8%
         L. Wayne Kiley (6)                     990,184 (7)                       5.8%
         Thomas Evans (8)                        53,388 (9)                        *
         Bejan Aminifard (10)                 1,824,500                          10.7%
         Derek Wall (11)                        357,975 (12)                      2.1%
         Brian P. Burns, Jr. (13)               251,250 (14)                      1.5%
         All Officers and Directors           8,563,913 (5)(9)(12)(14)           50.4%
          as a Group (5 persons)
</TABLE>

 *       Represents less than 1% of the total number of shares of the Company's
         Common Stock outstanding,

(1)      Unless noted otherwise, the address for such person is c/o
         eMarketplace, Inc., 255 West Julian Street, Suite 100, San Jose, CA
         95110,

(2)      Unless noted otherwise, all shares indicated as beneficially owned are
         held of record by and the right to vote and transfer such shares lies
         with the person indicated. A person is deemed to be a beneficial owner
         of any securities of which that person has the right to acquire
         beneficial ownership within sixty (60) days.

(3)      Calculated based upon 16,983,723 shares of common stock outstanding.

(4)      Mr. Wallace is the Chairman of the Board of the Company, Full Moon, and
         E-Taxi, Inc., a wholly-owned subsidiary of the Company ("E-Taxi").

(5)      Includes (i) 24,000 shares of the Issuer's common stock owned by
         Gateway Advisors, Inc. ("Gateway Advisors"), a company majority owned
         and controlled by Mr. Wallace, and (ii) 102,800 shares of Common Stock
         held by the Gateway Advisors Profit Sharing Plan.

(6)      Mr. Kiley is a former director and former Chief Executive Officer of
         the Company.

                                       42
<PAGE>

(7)      Includes (i) 249,184 shares of Common Stock owned jointly with Mr.
         Kiley's wife, (ii) 657,667 shares of Common Stock issuable upon the
         exercise of stock options at an exercise price $.60 per share, and
         (iii) 53,333 shares of Common Stock held by the Kiley Children's Trust,
         a trust maintained for the benefit of Mr. Kiley's children.

(8)      Mr. Evans is a director of the Company.

(9)      Includes 30,389 shares of Common Stock issuable upon the exercise of
         options at exercise prices of $1.00 per share, $1.68 per share, and
         $4.00 per share.

(10)     Mr. Aminifard is the Chief Executive Officer of TechStore.

(11)     Mr. Wall is the President of TechStore.

(12)     Includes 7,000 shares of Common Stock issuable upon the exercise of
         options at an exercise price of $7.375 per share.

(13)     Mr. Burns is the Company's Vice President of Administration and
         Corporate Development.

(14)     Includes 131,250 shares of Common Stock issuable upon the exercise of
         options at an exercise price of $2.50 per share.

(15)     Includes 171,639 shares issuable upon the exercise of stock options.


ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         On April 1, 1998, TechStore, a subsidiary of the Company, entered into
a month-to-month lease agreement for office space owned by Bejan Aminifard, an
officer and a 10% stockholder of the Company. The lease is for the operations of
TechStore and Office Express located at 14 Commercial Boulevard, Suite 127 and
129, Novato, CA. The lease payments are approximately $1,500 per month and
require the tenant to maintain the premises at its expense. The lease was
terminated on March 31, 2000. The Company believes the rent paid to Mr.
Aminifard was at or below current market rates.

         On October 1, 1998, E-Taxi entered into a Consulting Agreement with
Gateway Advisors, Inc., a financial advisory firm principally owned and
controlled by Robert Wallace, Chairman of the Board. Pursuant to the Consulting
Agreement, Gateway agreed to, among other things (i) conduct a search for
acquisition candidates; (ii) conduct market research and analysis; (iii)
evaluate, negotiate, and structure the acquisition of target companies. In
exchange for its services, Gateway is paid a quarterly fee of $30,000, plus
reimbursement for any expenses associated with its consultancy. By its terms,
the Consulting Agreement expired on September 30, 1999.

         In November and December 1998 and January 1999, the Company borrowed a
total of $67,000 from L. Wayne Kiley, the Company's Chief Executive Officer and
former Chairman of the Board. In exchange for the loans, the Company (i) issued
to Mr. Kiley promissory notes in the aggregate principal amount of $67,000
bearing interest at a rate of 10% per annum which are due three (3) days
following written demand for payment, (ii) granted Mr. Kiley a security interest
in the Company's assets, and (iii) issued to Mr. Kiley options to purchase
100,000 shares of the Company's common stock exercisable at any time prior to
December 31, 2002 at an exercise price of $.60 per share. The Company repaid the
loans in connection with the exercise of options held by Mr. Kiley in the fiscal
quarter ended March 31, 2000.

                                       43
<PAGE>

         In each of January and April 1999, Joseph Achten, a former Director of
the Company, loaned the Company $50,000 (for a total of $100,000) to fund the
Company's the working capital needs of the Company. Under promissory notes
executed by the Company (the "Notes"), $50,000 was to be repaid in each of July
and September 1999 and all amounts under the Notes accrued interest at 10% per
annum. Mr. Achten has exercised his right to demand repayment of the Loan which
as of September 28, 2000 the Company had failed to repay. As additional
consideration for the loans the Company issued to Mr. Achten options to purchase
200,000 shares of the Company's common stock exercise at any time prior to
December 31, 2002 at an exercise price of $.50 per share.

         As of April 9, 1999, the Company and Gateway Advisors, Inc. ("Gateway
Advisors"), a company owned and controlled by Robert M. Wallace (the Company's
current Chairman of the Board), entered into a Financial Advisory Agreement,
pursuant to which Gateway Advisors agreed to provide certain business
development and financial advisory services for a period of two (2) years in
exchange for the issuance by the Company of 1,500,000 Common Stock Purchase
Warrants. In April 2000, the Board approved an amendment to the warrant
permitting the exercise payment to be in the form of a promissory note. Each
warrant entitles the holder to purchase one (1) share of the Company's Common
Stock at an exercise price of $2.50 per share until April 7, 2000. On April 7,
2000, Gateway Advisors exercised its remaining 1,175 million shares under the
warrant by diluting a promissory note to the Company. In December 1999, the
Board of Directors awarded a cash bonus of $300,000 to Gateway Advisors for its
services.

         In July 1999, the Company relocated its executive offices from Corona,
California to San Jose California. It closed its office in Corona and entered
into a month-to-month lease arrangement for the Company's executive offices
located at 255 West Julian Street, Suite 100, San Jose, CA with Crown Services,
Inc. ("Crown"), pursuant to which the Company reimburses Crown $5,421.56 per
month, the direct rental cost for approximately 3,200 square feet of office
space. Robert M. Wallace, the Company's Chairman of the Board, is the Chairman
and a stockholder of Crown.

         Under a Purchase Agreement, by and among the Company, Medical
Marketplace, Brian Hintergardt and Mauri Lathouwers, two officers of the
Company, effective as of June 30, 1999, the Company sold 100% of its interest in
Medical Marketplace for $65,000 in cash and notes. In connection with the sale
of the capital stock of Medical Marketplace, the Company received $40,000 in
cash and a promissory note in the aggregate principal amount of $25,000. The
note is secured by the assets and stock of Medical Marketplace and bears
interest at a rate of 8% per annum. Interest and principal shall be paid
quarterly commencing on January 1, 2000 in eleven (11) payments of two thousand
eighty five dollars ($2,085) (with the twelfth and final payment being in the
amount of $2,065) plus interest on the outstanding balance. In addition, in the
event that (i) the Company receives not less than $225,000 in proceeds from a
specified account receivable (the "Specified Receivable") or (ii) all
liabilities of Medical Marketplace have terminated to the satisfaction of
Seller, the obligations to the Company under the Note shall be deemed satisfied
in full.

         On February 29, 2000, in connection with a loan of $800,000, the
Company received a promissory note from Gateway Advisors, Inc. (a company owned
and controlled by Robert M. Wallace, the Company's Chairman of the Board) in the
amount of $800,000, and bearing interest at 11% per annum. The principal amount
and accrued interest were due and payable on April 1, 2000. The indebtedness was
secured by a pledge agreement executed by Gateway Advisors, Inc. and Brian P.
Burns, an officer of the Company, in favor of the Company whereby Gateway
Advisors, Inc. pledged certain warrants issued by the Company to Gateway
Advisors, Inc. The loan was repaid in full to the Company on August 29, 2000.

                                       44
<PAGE>

         From time to time, TechStore engages the information technology
services of Strategy LLC., a Russian limited liability company ("Strategy").
Bejan Aminifard, the Chief Executive Officer of TechStore is an officer,
director, and principal owner of Strategy. During the course of the fiscal year
ended June 30, 1999, TechStore paid strategy $35,500 for its technology
services.

         On January 19, 2000, Full Moon engaged U.S. Bancorp Piper Jaffray Inc.
as its financial advisor in connection with a proposed acquisition or merger. M.
Mitchell Stevko, a former director of the Company is employed by U.S Bancorp as
a Managing Director, Investment Banking (Mr. Stevko resigned as a Director in
August 2000). U.S. Bancorp agreed to (i) advise Full Moon concerning valuation,
acquisition strategy and deal structure, (ii) assist in negotiations, (iii)
advise Full Moon with financial terms of any proposed transaction, and (iv)
provide other customary services reasonably requested by Full Moon. Under the
terms of the engagement, U.S. Bancorp received a warrant to purchase 75,000
shares of common stock of Full Moon at an exercise price of $5.00 per share and
is entitled to receive a cash fee in the amount of $600,000 in the event a sale
of Full Moon is consummated by January 19, 2001.

         On March 24, 2000, the Company retained U.S. Bancorp as its exclusive
financial advisor. M. Mitchell Stevko, a former director of the Company is
employed by U.S Bancorp as a Managing Director, Investment Banking (Mr. Stevko
resigned as a Director in August 2000). U.S. Bancorp has agreed to provide
eMarketplace with financial advisory services, which may include assisting the
Company in its capital raising activities. Under the terms of the engagement,
U.S. Bancorp is entitled to receive a selling commission of six percent (6%) of
the gross proceeds by the Company on all sales of the Company's securities and
reimbursement of certain reasonable costs and expenses.

         As of June 26, 2000, the Company, Full Moon, and BayWeb, Inc.
("BayWeb") entered into a merger agreement whereby BayWeb would be merged with
and into Full Moon ("Merger Agreement"). M. Mitchell Stevko, a former director
of the Company (Mr. Stevko resigned as a Director in August 2000), is a Board
member and principal stockholder of BayWeb. Under the terms of the Merger
Agreement, the stockholders of BayWeb were to receive 523,243 shares of common
stock of Full Moon and 720,000 shares of Common Stock of the Company. In
connection with the execution of the Merger Agreement, Full Moon advanced
approximately $300,000 to BayWeb under a promissory note, dated July 28, 2000
("BayWeb Note"). On September 1, 2000, the Merger Agreement was terminated as a
result of material adverse changes in BayWeb's financial condition and operating
results. The repayment of the BayWeb Note is unlikely to occur given the current
financial condition of BayWeb.

         As of June 30, 2000, Greg De Vries, an employee of Full Moon, owed Full
Moon approximately $330,000, of which $43,000 was borrowed subsequent to the
acquisition of DeVries Data Systems by Full Moon. The loan amount is unsecured
and is not evidenced by any promissory note. However, the Company and Full Moon
regard this loan as a bona fide loan by Full Moon.

                                       45
<PAGE>

         As of June 30, 2000, Lisa Orrell, an employee of Full Moon, owed Full
Moon approximately $72,000, which was borrowed subsequent to the acquisition of
Orrell Communications by Full Moon. The loan amount is unsecured and is not
evidenced by any promissory note. However, the Company and Full Moon regard this
loan as a bona fide loan by Full Moon.

         As of June 30, 2000, Scott Gardener, an employee of Full Moon, owed
Full Moon approximately $35,000, which was borrowed prior to the acquisition of
Image Network by Full Moon. The loan amount is unsecured and is evidenced by a
promissory note. The Company and Full Moon regard this loan as a bona fide loan
by Full Moon. Additionally, the Company had a note payable to Scott Gardner for
$43,000, at June 30, 2000, which was assumed in the acquisition of Full Moon and
is evidenced by a promissory note.

         With respect to each of the foregoing transactions, the Company
believes that the terms of such transactions were as fair to the Company as
could be obtained from an unrelated third party. Future transactions with
affiliates will be on terms no less favorable than could be obtained from
unaffiliated parties and will be approved by a majority of the independent
and/or disinterested members of the board of directors.

                                       46
<PAGE>

PART IV


ITEM 13.          EXHIBITS AND REPORTS ON FORM 10-K
(a) EXHIBITS

The following is a list of exhibits filed as part of this Annual Report. Where
so indicated by footnote, the exhibits have either been previously filed, and
are hereby incorporated by reference:

EXHIBIT NO.

3.01              Certificate of Incorporation of the Company.  (1)

3.02              Articles of Incorporation of TechStore, LLC

3.03              Certificate of Incorporation of TopTeam, Inc.

3.04              By-Laws of the Company.  (1)

3.05              By-Laws of TopTeam, Inc.

3.06              Certificate of Designation with respect to the Series A
                  Preferred Stock.

3.07              Certificate of Amendment of Certificate of Incorporation.

4.01              Certificate for shares of Common Stock.  (1)

10.01             Operating Agreement for TechStore, LLC. (1)

10.2              Stock Purchase Agreement, dated as of April 21, 1999, among
                  the Company and the stockholders of E-Taxi, Inc. (1)

10.3              Financial Advisory Agreement, dated as of April 9, 1999,
                  between the Company and Gateway Advisors, Inc.(1)

10.4              Consulting Agreement, dated as of October 1, 1999, between
                  E-Taxi, Inc. and Gateway Advisors, Inc. (1)

10.5              Form of Settlement Agreement with the Class D Common Stock
                  Warrantholders. (1)

10.6              Settlement Agreement, dated as of April 9, 1999, between the
                  Company and Victoria Holdings, Inc. (1)

10.7              Letter Agreement, dated as of April 9, 1999, among the
                  Company, L. Wayne Kiley and Quality Associates, Inc. (1)

                                       47
<PAGE>

10.8              Contribution Agreement dated as of March 31, 1999 by and among
                  Gateway Advisors, Inc., Bejan Aminifard, Mosen Aminifard and
                  Derek Wall. (1)

10.9              Consulting Agreement between the Company and Thomas Browne,
                  dated as of April 26, 1999. (1)

10.10             Stock Purchase Agreement, dated as of June 14, 1999, among
                  E-Taxi, Inc. and all of the shareholders of SSPS, Inc. (1)

10.11             Membership Interest Purchase Agreement dated as of June 14,
                  1999 among E-Taxi, Inc. and all of the interest holders of
                  Impact Team International, LLC. (1)

10.12             Stock Purchase Agreement entered into on October 12, 1999 and
                  dated as of June 30, 1999 among the Company, Brian Hintergardt
                  and Maruice Lathouwers. (1)

10.13             Amended and Restated Full Moon Interactive, Inc. 1999 Stock
                  Plan.

10.14             Employment Agreement, dated as of January 1, 2000, by and
                  between Robert M. Wallace and eMarketplace, Inc.

10.15             Employment Agreement, dated as of December 31, 1999, by and
                  between Brian P. Burns, Jr. and eMarketplace, Inc.

10.16             Employment Agreement, dated as of January 1, 2000, by and
                  between Robert M. Wallace and Full Moon Interactive, Inc.

10.17             Employment Agreement, dated as of January 1, 2000, by and
                  between Brian P. Burns, Jr. and Full Moon Interactive, Inc.

10.18             Employment Agreement, dated as of November 23, 1999, by and
                  between Robert Wilson and Full Moon Interactive, Inc. (1)

10.19             Employment Agreement, dated as of January 7, 2000, by and
                  between John Davis and Full Moon Interactive, Inc.

10.20             Credit Agreement, dated August 14, 2000, by and among Full
                  Moon Interactive, Inc., Full Moon Interactive Group, Inc.,
                  Devries Data System, Inc., Image Network, Inc., Orrell
                  Communications, Inc., and Grand Pacific Financing Corp.

10.21             Financial Advisory Agreement, dated January 19,2000, by and
                  between Full Moon Interactive, Inc. and U.S. Bancorp Piper
                  Jaffray Inc.

10.22             Financial Advisory Agreement, dated March 24,2000, by and
                  between eMarketplace, Inc. and U.S. Bancorp Piper Jaffray Inc.

                                       48
<PAGE>

10.23             Merger Agreement, dated as of June 26, 2000, by and between
                  BayWeb, Inc., eMarketplace, Inc. and Full Moon Interactive,
                  Inc.

10.24             Promissory Note, dated February 2, 2000, in the amount of
                  $800,000 issued by Gateway Advisors, Inc. in favor of
                  eMarketplace, Inc.

10.25             Pledge Agreement, dated February 28, 2000, by and between
                  Gateway Advisors, Inc., Brian P. Burns, Jr. and eMarketplace,
                  Inc.

10.26             Promissory Note, dated April 7, 2000, in the amount of
                  $2,937,500 issued by Gateway Advisors, Inc. in favor of
                  eMarketplace, Inc.

10.27             Financing Agreement, by and among TechData Financial Services,
                  Deutsche Financial Services and TechStore, dated November 16,
                  1998.

10.28             Standard Consulting Agreement used by Full Moon Interactive,
                  Inc.

10.29             Employment Agreement, dated as of November 23, 1999, by and
                  between Fred H. Walti, II and Full Moon Interactive, Inc.

21.01             Subsidiaries of the Registrant

---------------
(1)      Previously filed with the Securities and Exchange Commission.


(b)      REPORTS ON FORM 8-K

         None

                                       49
<PAGE>

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                         PAGES


Report of Independent Auditors.........................................    51

Consolidated Balance Sheet as of June 30, 2000.........................    52

Consolidated Statements of Operations for the years ended June 30, 2000
and 1999...............................................................    53

Consolidated Statements of Stockholders' Equity
for the years ended June 30, 2000 and 1999.............................    54

Consolidated Statements of Cash Flow for the years ended June 30, 2000
and 1999...............................................................    56

Notes to Consolidated Financial Statements.............................    58

                                       50
<PAGE>
                         REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Stockholders of eMarketplace, Inc.



         We have audited the accompanying consolidated balance sheet of
eMarketplace, Inc. and its subsidiaries as of June 30, 2000, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the two fiscal years in the period ended June 30, 2000. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the 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
eMarketplace, Inc. and its subsidiaries as of June 30, 2000 and the consolidated
results of their operations and their cash flows for each of the two fiscal
years in the period ended June 30, 2000, in conformity with generally accepted
accounting principles.

         The accompanying consolidated financial statements have been prepared
assuming that eMarketplace, Inc. will continue as a going concern. As discussed
in Note 4 to the consolidated financial statements, the Company had recurring
losses, and net cash used by operations of $4.1 million for the year ended June
30, 2000 and had had difficulty meeting its financial obligations as they become
due. These factors raise substantial doubt about eMarketplace's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 4. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



                                           MOORE STEPHENS, P. C.
                                           Certified Public Accountants.


Cranford, New Jersey
August 31, 2000

                                       51
<PAGE>

                     EMARKETPLACE, INC. AND ITS SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                               AS OF JUNE 30, 2000
                        (IN THOUSANDS, EXCEPT SHARE DATA)


                                     ASSETS:

CURRENT ASSETS:
   Cash and Cash Equivalents                                           $    772
   Accounts Receivable
      (Less Allowance For Doubtful Accounts of $1,200)                    3,706
   Unbilled Receivables                                                     736
   Related Party Loans                                                      800
   Prepaids and Other Current Assets                                        616
                                                                       --------

   TOTAL CURRENT ASSETS                                                   6,630

   PROPERTY AND EQUIPMENT
      (Less Accumulated Depreciation of $871)                             2,046

   OTHER ASSETS:
   Intangible Assets
      (Less Accumulated Amortization of $3,038)                           9,952
   Investments and Advances                                               3,250
   Other Assets                                                             370
                                                                       --------
   TOTAL OTHER ASSETS                                                    13,572

   TOTAL ASSETS                                                        $ 22,248
                                                                       ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts Payable                                                    $  2,629
   Accrued Benefits                                                         310
   Other Accrued Liabilities                                                774
   Notes Payable to Related Party                                           277
   Lines of Credit                                                          563
   Other Current Liabilities                                                 25
   Deferred Revenue                                                         465
   Deferred Tax Liability                                                   610
   Short Term Portion of Capital Lease                                      177
                                                                       --------

   TOTAL CURRENT LIABILITIES                                              5,830

   Long-Term Notes Payable                                                1,100
   Long-Term Portion of Capital Lease                                       294
                                                                       --------

   TOTAL LONG-TERM LIABILITIES                                            1,394
                                                                       --------

   TOTAL LIABILITIES                                                      7,224

   COMMITMENTS (NOTE 10)

   Minority Interest                                                      1,686

STOCKHOLDER'S EQUITY:
   Preferred Stock - $.0001 Par Value, 1,000,000 Shares Authorized,
      No Shares Issued and Outstanding                                       --

   Common Stock - $.0001 Par Value, 50,000,000 Shares
      Authorized, 16,783,723 Shares Issued and Outstanding                    2

   Capital in Excess of Par Value                                        27,798

   Shareholder Notes Receivable                                          (3,340)

   Deferred Compensation                                                   (239)

   Accumulated Deficit                                                  (10,883)
                                                                       --------

   TOTAL STOCKHOLDERS' EQUITY                                            13,338
                                                                       --------

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $ 22,248
                                                                       ========

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       52
<PAGE>

                     EMARKETPLACE, INC. AND ITS SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


                                                            For the Year Ended
                                                                  June 30
                                                           --------------------
                                                             2000        1999
                                                           --------    --------

REVENUE                                                    $ 28,720    $  2,209

OPERATING COSTS AND EXPENSES:
Cost of Revenue                                              20,411       2,062
Selling, General and Administrative                          13,670         454
Product Development                                              30          19
Amortization of Goodwill and Other Acquired
  Intangibles                                                 2,634         404
Impairment Loss                                               3,500          --
                                                           --------    --------
TOTAL OPERATING COSTS AND EXPENSES:                          40,245       2,939
                                                           --------    --------
LOSS FROM OPERATIONS                                        (11,525)       (730)

Non-Operating Income/(Expense):
Related Party Interest Income                                    84          --
Interest Income                                                  55           6
Other Expense                                                   (47)         --
Interest Expense                                               (255)         (4)
                                                           --------    --------
LOSS BEFORE MINORITY INTEREST                               (11,688)       (728)
                                                           --------    --------
Minority Interest                                             1,540          --
                                                           --------    --------
NET LOSS                                                   $(10,148)   $   (728)
                                                           ========    ========

NET LOSS PER SHARE:
Basic and Diluted                                          $  (0.70)   $  (0.06)
                                                           ========    ========
Weighted Average Common Shares Outstanding                   14,460      11,225
                                                           ========    ========

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       53
<PAGE>

                     EMARKETPLACE, INC. AND ITS SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                                                           Total
                                  Preferred Stock        Common Stock     Capital in  Shareholder   Deferred     Accum-    Stock-
                                -------------------  -------------------  Excess of     Notes         Com-       ulated   holders'
                                  Shares    Amount     Shares    Amount   Par Value   Receivable    pensation    Deficit   Equity
                                --------- ---------  ---------- --------  ---------   ----------    ---------   --------  --------
<S>                                   <C>       <C>      <C>     <C>        <C>       <C>           <C>          <C>      <C>
BALANCE - JUNE 30, 1998               400       .04       9,074      .91         64         (66)           --        (7)        (8)

Issuance of Common Stock
   in April 1999 for
   Consulting Services                 --        --          60       --         30          --            --        --         30
Issuance of Common and
   Preferred Stock in April
   1999 for Acquisition of
   TechStore                          310       .03       1,744      .17      1,491          --            --        --      1,492
Sale of Common and Preferred
   Stock for Cash in April 1999        90       .01         810      .08      1,406          --            --        --      1,406
Recapitalization Adjustment          (400)     (.04)     (2,614)    (.26)       301          --            --        --         --
Acquired Deficiency of CMP             --        --       2,017      .20       (473)         --          (757)       --     (1,230)
Goodwill Recorded on E-Taxi
   Combination                         --        --          --       --      9,973          --            --        --      9,973
Amortization of Deferred
   Compensation Associated
   with Stock Options Issued
   to a Consultant by Acquired
   Company                             --        --          --       --         --          --            59        --         59
Amortization of Deferred
   Compensation Associated
   with Financial Advisory
   Agreement                           --        --          --       --         --          --            52        --         52
Conversion of Preferred Stock
    to Common in May 1999            (400)     (.04)      1,600      .16       (120)         --            --        --         --
Interest Income Accrued                --        --          --       --         --          (5)           --        --         (5)
Net Loss                               --        --          --       --         --          --            --      (728)      (728)
                                --------- ---------  ---------- --------  ---------   ----------    ---------   --------  --------

BALANCE - JUNE 30, 1999                --        --      12,691  $  1.27    $12,492   $     (70)    $    (647)  $  (735)  $ 11,041
                                ========= =========  ========== ========  =========   ==========    =========   ========  ========
</TABLE>

                                       54
<PAGE>

                     EMARKETPLACE, INC. AND ITS SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>

                                                                                                                           Total
                                  Preferred Stock        Common Stock     Capital in  Shareholder   Deferred     Accum-    Stock-
                                -------------------  -------------------  Excess of     Notes         Com-       ulated   holders'
                                  Shares    Amount     Shares    Amount   Par Value   Receivable    Pensation    Deficit   Equity
                                --------- ---------  ---------- --------  ---------   ----------    ---------   --------  --------
<S>                                   <C>       <C>      <C>     <C>        <C>       <C>           <C>          <C>      <C>

BALANCE - JUNE 30, 1999                --        --      12,692  $  1.27    $12,492   $     (70)    $    (647)  $   (735) $ 11,041

Issuance of Common Stock
   In Private Placement                --        --         826      .08      3,020          --            --         --     3,020
Issuance of Common Stock
   For Warrant Exercise                --        --       1,500      .15      3,680          --            --         --     3,680
Issuance of Common Stock
   For Option Exercises                --        --         351      .04        488          --            --         --       489
Payment of Shareholder
   Notes Receivable                    --        --          --       --         --          70            --         --        70
Exercise of Options in
   Subsidiary                          --        --          --       --         38          --            --         --        38
Compensation Expense For
   Options Issued to Consultants (a)   --        --          --       --        345          --            --         --       619
Compensation Expense for
   Options Issued to Directors
   And Employees                       --        --          --       --        619          --            --         --       484
Issuance of Common Stock
   For Acquisition of Full Moon        --        --       1,045      .10      4,154          --            --         --     4,154
Issuance of Common Stock
   For Investment in Gold Label        --        --         370      .04      2,823          --            --         --     2,823
Reclassification of
   Shareholders' Notes                 --        --          --       --         --      (3,340)           --         --    (3,340)
Amortization of Deferred Comp          --        --          --       --         --          --           408         --       408
Net Loss                               --        --          --       --         --          --            --    (10,148)  (10,148)
                                --------- ---------  ---------- --------  ---------   ----------    ---------   --------  --------

BALANCE - JUNE 30, 2000                --        --      16,784  $  1.68    $27,798   $  (3,340)    $    (239)  $(10,883) $ 13,338
                                ========= =========  ========== ========  =========   ==========    =========   ========  ========
</TABLE>

See Notes to Consolidated Financial Statements.

(a) Includes $188,000 of capitalized compensation costs related to the
    acquisition of Full Moon

                                       55
<PAGE>
                     EMARKETPLACE, INC. AND ITS SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (IN THOUSANDS)


                                                            For the Year Ended
                                                                  June 30
                                                           --------------------
                                                             2000        1999
                                                           --------    --------

OPERATING ACTIVITIES:
Net Loss                                                   $(10,148)   $   (728)
Adjustments to Reconcile Net Loss to Net Cash
     Provided (Used) by Operating Activities:
     Stock-based Compensation                                 1,246          30
     Amortization of Deferred Compensation                      408         111
     Bad Debt                                                 1,001          --
     Impairment Loss                                          3,500          --
     Income on Conversion Capital Lease                        (188)         --
     Minority Interest                                       (1,540)         --
     Depreciation                                               345           6
     Amortization                                             2,635         404

Changes in Assets and Liabilities:
     Accounts Receivable                                     (1,912)        (32)
     Prepaids and Other Assets                                 (277)        (33)
     Deferred Taxes                                             162          --
     Accounts Payable                                           794         175
     Accrued Liabilities                                        (85)        (47)
                                                           --------    --------
NET CASH USED BY OPERATING ACTIVITIES                        (4,059)       (114)
                                                           --------    --------

INVESTING ACTIVITIES:
Purchase of Fixed Assets                                     (1,014)         (5)
Issuance of Note Receivable                                  (1,300)         --
Related Party Advances                                         (115)         --
Purchase of Intangibles                                         (30)         --
Cash (Paid) Received from Acquisitions
   Net of Cash Received (Paid)                                  (16)         22
                                                           --------    --------

   NET CASH USED BY                                          (2,475)         17
                                                           --------    --------
   INVESTING ACTIVITIES

   FINANCING ACTIVITIES:
   Repayment of Loans Assumed in Acquisitions                  (862)        (53)
   Proceeds from exercise of options                            580          --
   Proceeds from Private Placement less Issuance Cost         3,020          --
   Proceeds from Warrants exercises                             743          --
   Deferred Revenue                                             465          --
   Payments on Notes to Related Parties                        (129)         --
   Repayment of Notes From Stockholders                          70          --
   Net Borrowings on Line of Credit                             366          --
   Proceeds From Issuance of Debt                             1,100          --
   Proceeds of Issuance of Subsidiary Stock                     860          --
   Payment on Notes                                            (163)         --

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       56
<PAGE>

                     EMARKETPLACE, INC. AND ITS SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                 (IN THOUSANDS)

                                                            For the Year Ended
                                                                  June 30
                                                           --------------------
                                                             2000        1999
                                                           --------    --------

Proceeds from Issuance of Common and Convertible
Preferred Stock                                                  --       1,406
                                                           --------    --------

Net Cash Provided by Financing Activities                     6,050       1,353
                                                           --------    --------

Decrease in Cash and Cash Equivalents                          (484)      1,256

Cash and Cash Equivalents Beginning of Periods                1,256          --
                                                           --------    --------

Cash and Cash Equivalents - End of Periods                 $    772    $  1,256
                                                           ========    ========

Supplemental Disclosure of Cash Flow Information:
   Cash Paid for the Periods:
   Interest                                                $     12    $      4
   Income Taxes                                                 281          --

SUPPLEMENTAL DISCLOSURE OF
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of Common and Convertible Preferred
   Stock for Acquisition of TechStore                            --       1,492
Issuance of Common and Convertible Preferred
   Stock for Reverse Acquisition of E-taxi                       --       9,500
Deferred Compensation Assumed in Reverse
   Acquisition of E-taxi                                         --        (757)
Reduction in Fixed Assets due to Conversion Of
   Capital Lease to Operating Lease                           2,559          --
Fixed Assets Acquired Under Capital Lease                       264          --
Issuance of Common Stock for Acquisition Of
   Interactive Architects Firms                               4,154          --
Issuance of Subsidiary's Common Stock For
   Acquisition of Interactive Architects                      4,786          --
Issuance of Common Stock in exchange for Investment
   in Gold Label                                              2,823          --
Issuance of Common Stock for Exercise of Warrants             2,937          --

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       57
<PAGE>

(1)  ORGANIZATION AND BUSINESS

eMarketplace, Inc., (the "Company" or "eMarketplace") is a Delaware holding
company that acquires and develops Internet businesses that provide content,
commerce and online services to demographically-targeted audiences. E-Taxi, a
wholly owned subsidiary acquired in April 1999, was incorporated in the state of
Delaware on April 14, 1998, to develop a vertical Internet portal for the small
office, home office ("SOHO") market.

The acquisition of E-Taxi by the Company signified the adoption by the Company
of a new corporate strategy to develop, operate and acquire Internet businesses.
Additionally, in April 1999, immediately prior to the Company's acquisition of
E-Taxi, E-Taxi acquired TechStore, L.L.C. ("TechStore"), an online retailer of
computer hardware and software, in a business combination accounted for as a
purchase. The results of operations include the results of TechStore from the
date of acquisition.

In November 1999, the Company and its newly formed subsidiary, TopTeam, Inc.
("TopTeam") closed on the acquisition of six Internet consulting companies -
Full Moon Interactive Group, Inc., Orrell Communications, Inc., Devries Data
Systems, Inc., Muccino Design Group, Inc., Image Network, Inc., and OnCourse
Network, Inc. (collectively, the "Interactive Architect Firms"). As a result of
the acquisitions, i) TopTeam owned all of the outstanding capital stock of the
Internet Architect Firms; and ii) eMarketplace owned approximately 44.9% of the
total TopTeam shares outstanding. On February 23, 2000, Top Team changed its
name to Full Moon Interactive, Inc. ("Full Moon"). Hereinafter, Top Team and its
subsidiaries will be referred to as Full Moon.


(2)  NATURE OF OPERATIONS

FULL MOON is an Internet consulting firm, which provides e-business solutions to
its customers desiring to initiate or enhance their presence on the Internet.
Its services include, among others, strategic market consulting and research,
web site design, brand management, ancillary promotional sales, media buying and
management, online marketing and software engineering and technical program
management. Full Moon's primary market is the Western United States. The company
has offices in Los Angeles, the Silicon Valley and in Lubbock, Texas.

TECHSTORE, TOGETHER WITH OFFICE EXPRESS, INC. ("OFFICE EXPRESS") are global
Internet retailers featuring over 75,000 consumer technology and related
products for the home and office. Its products include computer hardware,
software, electronics, other consumer technology products and office equipment
and supplies. TechStore's and Office Express's headquarters are in Novato,
California.

E-TAXI was incorporated in April 1998 to develop a vertical Internet portal for
the small office, home office ("SOHO") market. As part of this strategy, E-Taxi
acquired TechStore in April, 1999, immediately prior to the reverse acquisition
of Computer Marketplace, Inc. by E-Taxi. Plans to create a SOHO portal by E-Taxi
have been postponed as a result of the Company's focus on developing Full Moon.
E-Taxi currently has no other revenues or expenses other than those of
TechStore, its wholly owned subsidiary.

                                       58
<PAGE>

STARSONLINE, INC. ("STARSONLINE") was formed in February 2000 and initially
capitalized with $250,000 to develop and launch an Internet based entertainment
company. StarsOnline expects to build a celebrity portal that enables Internet
users to access the official sites of well-known personalities in television,
film, music, fashion, publishing, sports and art. StarsOnline is currently in
the start-up stage and has no revenues and only nominal expenses.


(3)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION - The accompanying consolidated financial statements
include the accounts of eMarketplace and those subsidiaries in which it holds a
majority or controlling ownership interest. The subsidiaries are: Full Moon,
StarsOnline, TechStore, E-Taxi, and OfficeExpress. The Company consolidates Full
Moon due to operational control. All material intercompany balances and
transactions have been eliminated.

SALE OF STOCK BY A SUBSIDIARY - Changes in the Company's proportionate share of
subsidiary equity are accounted for as equity transactions.

WEBSITE DEVELOPMENT - The Company capitalizes website development costs in
accordance with AICPA Statement of Position 98-1 "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." and EITF: Issue 00-2
"Accounting for Website Development Costs". EITF 00-2 requires costs incurred in
the planning stage of website development to be expensed and requires the
application of SOP 98-1 for costs incurred for website application and
infrastructure, graphics and content development stages, and costs incurred in
the operating stage. Generally, website application costs and infrastructure,
and graphics and content development costs are capitalized, while costs incurred
in the operating stage are expensed. The Company depreciates website development
costs over three years.

REVENUE RECOGNITION - The Company records product sales revenue, including gross
outbound shipping and handling charges, when goods have been shipped. For all
product sales transactions with customers, the Company acts as a principal,
takes title to all products sold open shipment, bears credit risk, and bears
inventory risk for returned products that are not successfully returned to
suppliers, although these risks are mitigated through arrangements with credit
card issuers, shippers and suppliers. Professional services revenue is
recognized for fixed consulting engagements and time and materials-based
arrangements on the percentage-of-completion method. Provisions for estimated
losses on uncompleted contracts are made on a contract-by-contract basis and are
recognized in the period in which such losses become probable and can be
reasonably estimated. To date, such losses have been insignificant. Unbilled
fees and services on contracts are comprised of costs plus fees on certain
contracts in excess of contractual billings on such contracts. Advanced billings
and billings in excess of costs plus fees are classified as deferred revenue.

DEFERRED INCOME TAXES - The Company accounts for deferred income taxes in
accordance with SFAS No. 109 "Accounting for Income Taxes". The statement
requires that deferred income taxes reflect the tax consequences on future years
of differences between the tax basis of assets and liabilities and their
financial reporting amounts.

CASH AND CASH EQUIVALENTS - The Company considers all highly liquid instruments
with a maturity of three months or less when purchased to be cash equivalents.
There are no cash equivalents at June 30, 2000.

                                       59
<PAGE>

RECLASSIFICATION - Certain prior year amounts have been reclassified to conform
to current year financial statement presentation.

PROPERTY AND EQUIPMENT AND DEPRECIATION - Property and equipment are stated at
cost. Depreciation is computed using the straight-line method and the
double-declining method over the estimated useful lives of the related assets,
which range from three to thiry-nine years.

INTANGIBLES AND AMORTIZATION - Intangible assets are stated at cost.
Amortization is computed using the straight-line method over the estimated
useful lives of the related assets, which is generally four to ten years.

IMPAIRMENT - Long-lived assets of the Company are reviewed regularly as to
whether their carrying value has become impaired pursuant to Statement of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS No. 121
requires long-lived assets, if impaired, to be remeasured at fair value,
whenever events or changes in circumstances indicate that the carrying amount of
the asset may not be recoverable. Management also reevaluates the periods of
amortization of long-lived assets to determine whether events and circumstances
warrant revised estimates of useful lives.

NET LOSS PER SHARE OF COMMON STOCK - Common stock issued in the reverse
acquisition is treated as outstanding for all periods presented on the basis of
the weighted average shares of common stock outstanding. Potential common shares
arising from the effect of dilutive stock options and warrants using the
treasury stock method are included if dilutive. For fiscal years 2000 and 1999,
the per share results were computed without consideration for contingently
issuable shares underlying stock options and warrants as the effect on the per
share results would be anti-dilutive.

SEGMENTS - Effective July 1, 1998, the Company adopted the provisions of SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
The Company identifies its operating segments as components of an enterprise for
which discrete financial information is available that is evaluated by the chief
operating decision maker or decision making group to make decisions how to
allocate resources and assess performance. For the year ended June 30, 2000, the
Company effectively has two business segments, its interactive architects
business and its online retailing business, for purposes of SFAS No. 131. For
the year ended June 30, 1999, the Company operated its online retailing
activities as a single business segment.

USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles 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.

ADVERTISING COSTS - Advertising costs are expensed when incurred. Advertising
costs amounted to $284,000 and $46,000 for the years ended June 30, 2000 and
1999, respectively.

RESEARCH AND DEVELOPMENT - Research and development costs are charged to expense
as incurred. Research and development costs amounted to $30,000 and $19,000 for
the years ended June 30, 2000 and 1999, respectively.

STOCK OPTIONS ISSUED TO EMPLOYEES - The Company adopted SFAS No. 123 on July 1,
1996 for financial note disclosure purposes and will continue to apply the
intrinsic value method of Accounting Principles Board ("APB") Opinion No. 25 for
financial reporting purposes.

                                       60
<PAGE>

(4)  GOING CONCERN

As of June 30, 2000, the Company had recurring losses and difficulty meeting its
financial obligations as they became due. Cash used in operations for the period
ended June 30, 2000 was $4.1 million.

The accompanying financial statements have been prepared on a going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities and commitments in the normal course of business. In view of these
matters, the continuation of the Company as a going concern is dependent upon
continued operations of the Company, which in turn is dependent upon the
Company's ability to meet its financing requirements, the success of its future
operations and the reduction of its cost. Management is in the process of
seeking additional debt and equity financing and had implemented cost
reductions. The Company is also in the process of analyzing potential equity
investments. Management believes that actions presently being taken to revise
the Company's operating and financial requirements provide the opportunity for
the Company to continue as a going concern. There can be no assurance that
management will be successful in the implementation of its plans. The financial
statements do not include any adjustments in the event the Company is unable to
continue as a going concern.


(5)  ACQUISITIONS AND NEWLY FORMED SUBSIDIARIES

STARSONLINE - In February 2000, the Company capitalized a wholly owned
subsidiary, StarsOnline, Inc., ("StarsOnline") a Delaware corporation, with
$250,000 to develop and launch an Internet based entertainment company. To date,
StarsOnline has no revenues and only nominal expenses.

OFFICEEXPRESS - In August 1999, the Company's newly formed subsidiary,
OfficeExpress. began its operations to sell office products and supplies through
its Web site www. officeexpress.com.

FULL MOON ACQUISITIONS - On November 23, 1999, eMarketplace, Inc. and its then
wholly owned subsidiary, Full Moon, closed on the acquisition of the Interactive
Architect Firms. In connection with the acquisition, the Company issued a total
of 1.0 million shares of its common stock in exchange for shares of the acquired
companies including shares issuable pursuant to rights granted under the
acquisition agreements. Concurrently therewith, (i) the Company contributed its
newly purchased shares of the Interactive Architect Firms to Full Moon in
exchange for Full Moon's issuance of 5.0 million shares of its common stock (all
references to shares of common stock of Full Moon give effect to a three for two
stock split) , and (ii) the stockholders of the Interactive Architect Firms
contributed all of the remaining outstanding shares (the shares not purchased by
the Company) to Full Moon in exchange for the issuance of 5.7 million shares of
Full Moon common stock

                                       61
<PAGE>

The consolidated results of operations include the results of the Interactive
Architect Firms from November 1999, the month of acquisition, through June 30,
2000. The purchase price, which consisted of stock valued at $8.9 million and
acquisition related expenses of approximately $1.1 million, was allocated to net
tangible assets of $1.9 million and minority interest of $2.8 million, resulting
in goodwill of approximately $5.3 million. The goodwill is being amortized over
its estimated useful lives of ten years.

The following unaudited proforma financial information reflects the results of
operations for the year ended June 30, 2000 and 1999 as if the acquisitions had
occurred on the first day of each year, and after giving effect to purchase
accounting adjustments. These unaudited proforma results have been prepared for
comparative purpose, only and do not purport to be indicative of what operating
results would have been had the acquisitions actually taken place on the first
day of each year, and may not be indicative of future operating results.

                                        2000           1999
                                      -------        -------

Revenue                                36,088         23,233
                                      =======        =======
Loss from Operations                  (10,754)           (41)
                                      =======        =======
Net Loss                               (9,731)          (931)
                                      =======        =======
Net Loss per Share:
Basic and Diluted                       (0.67)         (0.07)
                                      =======        =======

In connection with the acquisition of the Interactive Architects Firms and as
consideration for a $1.0 million loan, Full Moon executed a promissory note in
favor of the Company in the aggregate amount of $1.0 million, bearing interest
at a rate of seven percent per annum. Interest payments are due and payable
monthly and the principal amount outstanding is due and payable on November 22,
2001. Full Moon is required to prepay the note in full in the event that Full
Moon consummates an initial public offering of its common stock, which generates
gross proceeds of not less than $25 million. In addition, as consideration for
this acquisition, the Company received 375,000 shares of Full Moon common stock.
The Company also purchased 250,000 shares of Full Moon Series A Convertible
preferred stock for the total amount of $1.0 million. In addition, the Company
received rights for 5.4 million shares of Full Moon common Stock.

As of November 23, 1999, the Company agreed to sell and assign the following to
Internet Asset Inc. Class D, an investment fund, for $2.0 million.

(a)  A $1.0 million promissory note, dated November 23, 1999, issued by Full
     Moon.;
(b)  375,000 shares of Full Moon's common stock;
(c)  250,000 shares of the Full Moon's Series A preferred stock, and
(d)  Certain option rights which expired, by their terms, on February 21, 2000.

As a result of these transactions, (a) the Company owned 3.3 million shares of
Full Moon common stock or 44.9% of the total number of shares of Full Moon
common stock outstanding, and (b) Full Moon owned all of the outstanding shares
of capital stock of each of the Interactive Architects. The Company consolidates

                                       62
<PAGE>

Full Moon as it has operational control over the entities. The Company also owns
5.4 million rights to purchase 5.4 million shares of Full Moon at $5.00. The
rights, which originally expired on May 23, 2000, were extended on May 22, 2000
to the earlier of (i) December 31, 2000 or (ii) the date the Company closes an
initial public offering of its securities that is registered under the
Securities Act and results in gross proceeds of $25 million.

On December 31, 1999, the Company issued a $1.5 million line of credit to Full
Moon. As consideration for this line of credit, eMarketplace received 375,000
shares of Full Moon. This transaction increased eMarketplace's ownership in Full
Moon to approximately 47%.

On February 23, 2000, the Board of Directors of Full Moon approved a stock split
whereby each share of common stock of Full Moon was exchanged for one and
one-half shares of common stock of Full Moon.

(6)  DISPOSITIONS

On October 12, 1999, the Company entered into a definitive agreement to sell
100% of its interest in Medical Marketplace to a third party effective July 1,
1999 for $65,000 in cash and notes.

(7)  INVESTMENTS AND ADVANCES

GOLD LABEL AGREEMENT - On December 27, 1999, the Company entered into a Stock
Purchase and Contribution Agreement, among the Company, Pat Boone's Gold Label,
Inc., a Delaware corporation ("Gold Label"), and all of the shareholders of The
Gold Label-Honest Entertainment, Inc., a Tennessee corporation ("Honest
Entertainment"). Under the terms of the agreement, i) the Company agreed to
issue approximately 370,000 shares of its common stock to the Honest
Entertainment shareholders in exchange for 1.3 million shares of common stock of
Honest Entertainment; ii) the Company agreed to contribute its newly purchased
shares of Honest Entertainment to Gold Label in exchange for 1.3 million shares
of common stock of Gold Label; and iii) the shareholders of Honest Entertainment
agreed to contribute all of the remaining outstanding shares of Honest
Entertainment (the shares not purchased by the Company) to Gold Label for 3.1
shares of common stock of Gold Label. The transaction closed on April 8, 2000,
but was retroactive to January 1, 2000. As a result of these transactions, the
Company has a $2.8 million investment in Gold Label representing a 29.7%
ownership interest. In addition, the Company received a warrant to purchase
200,000 shares of Gold Label at an exercise price of $500,000. The Company
accounts for its investment under the equity method of accounting. The Company
recorded an approximate loss of $73,000 on its investment for the year ended
June 30, 2000.

In connection with the Company's investment in Gold Label, the Company loaned
$500,000 to Gold Label under a promissory note, dated December 31, 1999, bearing
interest at a rate of six (6) percent per annum. Interest payments are due and
payable monthly and the principal amount outstanding is due and payable on
December 31, 2001. Interest income associated with this note was $15,000 for the
year.

                                       63
<PAGE>

(8)  RELATED PARTIES LOANS

On February 29, 2000, the Company received a promissory note from Gateway
Advisors, Inc. ("Gateway") (a company owned and controlled by Robert M. Wallace,
the Company's Chairman of the Board) in the amount of $800,000, and bearing
interest at 11% per annum. The principal amount and accrued interest were due
and payable on April 1, 2000. The note was paid in full subsequent to June 30,
2000. Interest income on this note was approximately $30,000.

(9)  INTANGIBLE ASSETS

Intangible assets consisted of the following at June 30, 2000 (in thousands):

Goodwill                                          $  12,381
Acquired Technology                                     140
Established Workforce                                   160
Trademarks                                              280
Domain Names                                             29
                                                  ---------

Total                                                12,990
Less:  Accumulated Amortization                      (3,038)
                                                  ---------

   TOTAL                                          $   9,952
                                                  =========

Amortization expense for the years ended June 30, 2000 and 1999, was
approximately $2.6 million and $404,000 respectively. The Company also
recognized a $3.5 million impairment loss on goodwill related to TechStore,
which is included in the Company's online retailers segment, for the period
ended June 30, 2000 as described below.

During April 2000, Internet companies overall experienced substantial declines
in market value. In accordance with SFAS 121 (Note 3), whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable, the company reviews such assets for impairment by comparing the
assets undiscounted cash flows to the carrying value of the assets. If an
impairment exist, the assets are marked to fair market value, with the goodwill
written off entirely before long-lived assets and identifiable intangible assets
are marked down.

The undiscounted cash flows of TechStore failed to support the recoverability of
the assets of TechStore, including the carrying value of goodwill. Accordingly,
the assets of the company were marked to fair market value using the average
market value of similar Internet companies based on a multiple of revenues.
Using this methodology, it is managements' opinion that the value of the
TechStore decreased by approximately $3.5 million in the quarter ended June 30,
2000, resulting in $3.5 million reduction in goodwill with an offsetting charge
to impairment loss. Although, the discounted cash flow method failed to support
recoverability of the assets in prior quarters, the fair value of the assets
were above the carrying value using this same methodology.

                                       64
<PAGE>
(10) PROPERTY AND EQUIPMENT

Property and equipment consists of the following at June 30, 2000 (in
thousands):

                                                      2000
                                                   ---------
        Computer Hardware and Software             $    1707
        Website Development                              268
        Office Equipment                                 392
        Leasehold Improvements                           347
        Furniture and Fixtures                           116
        Automobiles                                       87
                                                   ---------

        Total                                          2,917
        Less:  Accumulated Depreciation                 (871)
                                                   ---------

        Total                                      $   2,046
                                                   =========

Depreciation expense for the years ended June 30, 2000 and 1999 was $345,000 and
$6,000, respectively.

(11) COMMITMENTS

The Company leases office space under operating leases, which expire on various
dates through 2019. See Note 16 for related party leases. The Company also has
capital leases for computer equipment totaling $471,000. The cost of equipment
under capital leases at June 30, 2000 is $585,000. Accumulated depreciation for
fiscal 2000 was $150,000. Depreciation expense for fiscal 2000 is $147,000. None
of these leases are subject to renewal, purchase or escalation clauses.

Total rent expense under all operating leases for the years ended June 30, 2000
and 1999, was $565,000 and $5,000, respectively.

Future minimum lease payments under noncancelable capital and operating leases,
including lease commitments entered into as of June 30, 2000 are as follows (in
thousands):

                Year Ending                     Capital               Operating
               March June 30,                   Leases                  Leases
               -------------                    -------                 ------
                    2001                        $  247                  $1,055
                    2002                           176                     963
                    2003                           146                     804
                    2004                            --                     804
                    2005                            --                     690
                                                -------                 ------

Total minimum lease payments                       569                  $4,316
                                                                        ======

Less:  Amount representing interest                 98
                                                -------

Principal portion of capital lease obligations  $  471
Less:  Current Portion                            (177)
                                                -------
Long-Term Portion of Capital Leases                294
                                                =======

EMPLOYMENT CONTRACTS - At June 30, 2000, the Company had eleven employment
contracts in effect with certain officers of eMarketplace, Full Moon, and
TechStore. The contracts provide for the payment of base salaries plus bonuses
and stock option grants. The contracts also contain other customary provisions
including severance arrangements and confidentialty agreements. All contracts
are for five year terms.

(12) DEBT

RELATED PARTY LOANS - $100,000 is payable to a former director of the Company,
and consists of two secured promissory notes, each for $50,000 bearing interest
at 10% and due in July and September of 1999, dated on January 26, 1999 and
April 15, 1999, respectively. As of the maturity date of each note, the notes
are payable upon demand. Mr. Achten has exercised his right to demand repayment
of the Loan. As of June 30, 2000, the Company had accrued approximately $13,000
in interest payable on this promissory note. In addition, the Company has a
payable to Gateway Advisors for $120,000 for services provided and loans due to
shareholders totaling approximately $44,000.

                                       65
<PAGE>

LINES OF CREDIT - At June 30, 2000, Full Moon had $388,000 outstanding under a
promissory note with a bank. The note provided for borrowings up to $400,000 and
beared interest at prime (8.50% at June 30, 2000) plus 1.75%. The note was
payable in full on August 1, 2000. The note was subsequently paid off on July
18, 2000 and replaced with a loan to another bank in the amount of $500,000
which provided for borrowings of up to $500,000 and the loan beared interest at
prime (8.5% at the time of the loan) plus 1.00%. This loan was subsequently paid
off on August 14, 2000 and replaced with an initial line of credit for $900,000.
The line of credit calls for borrowings of up to $1,500,000 and is subject to
borrowing restrictions based on the accounts receivable borrowing base. This
base shall not exceed the lesser of (1) 70% of eligible accounts with balances
less than 30 days from the invoice date plus 35% of eligible accounts with
balances over 30 days but less than 60 days from invoice date plus 15% of
eligible accounts with balances over 60 days from invoice date; or $1,500,000.
The line of credit is due upon the earlier of (1) February 11, 2001; (2) upon
the successful initial public offering of its equity securities; (3) upon
liquidation, dissolution, merger or consolidation or commencement of proceedings
thereof; (4) upon equity or debt financing in excess of $5,000,000. The line of
credit bears interest at prime (9.5% at the time of the loan) plus 1.00%. As
additional consideration for the loan, Full Moon granted Grand Pacific warrants
to purchase 33,000 shares of common stock of Full Moon at $0.01 per share. This
line is secured by all of the assets of Full Moon.

Additionally at June 30, 2000, Full Moon had $75,000 and $100,000 outstanding
under two separate lines of credit. The $75,000 line of credit bears interest at
prime (8.5% at June 30, 2000) plus 2.00%. This line of credit is payable in full
on December 9, 2000. The $100,000 beared interest at the bank reference rate
(8.22% at June 30, 2000) plus 4.50%. This line of credit is subject to an annual
review for renewal. Neither of theses lines had any remaining availability at
June 30, 2000. Both the $75,000 and $100,000 lines of credit are personally
guaranteed by a shareholder of Full Moon.

In connection with TechStore's distribution arrangement with TechData
Corporation, TechStore currently has a line of credit in the amount of $250,000
with Deutsche Financial Services which does not accrue interest ("Deutsche
Line"). The Deutsche Line is personally guaranteed by Bejan Aminifard and Derek
Wall, officers of TechStore. For accounting purposes, this line is classified as
accounts payable on the balance sheet because the line can only be used for
purchases with TechData.

NOTES PAYABLE - In connection with the acquisition of the Interactive Architects
Firms and as consideration for a $1.0 million loan, Full Moon executed a
promissory note in favor of the Company in the aggregate amount of $1.0 million,
bearing interest at a rate of seven percent per annum. Interest payments are due
and payable monthly and the principal amount outstanding is due and payable on
November 22, 2001. As of November 23, 1999, the Company agreed to sell and
assign the note to Internet Asset Inc., an investment fund, for $1.0 million.
Interest expense related to this note was $35,000 for the year ended June 30,
2000.

On January 1, 2000, Full Moon executed a note payable to High Tide, LLC for
$100,000 in exchange for cash. The note bears interest at seven percent per
annum. Interest and principal is due on January 1, 2002. Interest expense on
this note was approximately $3,000 at June 30, 2000.

(13) INCOME TAXES

Under generally accepted accounting principals, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
temporary differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which temporary differences are expected to be
recovered or settled. Temporary differences include different tax and book bases
of property and equipment and intangible assets. Generally accepted accounting
principles requires the establishment of a deferred tax asset for all deductible
temporary differences and operating loss carry forwards. The Company has not
made an election to file a consolidated tax return for eMarketplace and E-Taxi.
Therefore, the operating loss carry forwards at June 30, 2000 (assuming all
operating loss carry forwards will be available) these entitites are combined
for financial statement purposes. The operating loss carry forwards at June 30,
2000, (assuming all operating loss carry forwards will be available) amount to
approximately $11.900,000 and expire through June 2015. At June 30, 2000, based
on the amount of operating loss carry forwards, the Company would have had a
deferred tax asset of approximately $4,800,000 million. However, because of the
uncertainty that the Company will generate income in the future sufficient to
fully or partially utilize these carry forwards, a valuation allowance of
$4,800,000 million has been established representing an increase of $4,800,000
million from June 30, 1999. Accordingly, no deferred tax asset is reflected in
these financial statements.


                                       66
<PAGE>

Full Moon incurred taxable losses for Federal and state tax purposes for the
year ended June 30, 2000. Accordingly, Full Moon did not incur any federal
income tax expense for the period other than the minimum required taxes for
certain state and local jurisdictions. Full Moon is not consolidated with the
Company for income tax reporting. Full Moon had a deferred tax liability at June
30, 2000 of $610,000, which is a result of changing from the cash method of
accounting to the accrual at the time of the acquisition by eMarketplace.

(14) STOCKHOLDERS' EQUITY

On April 8, 2000, The Company issued 370,000 shares of its common stock in
connection with a series of transactions which resulted in a 29.7% investment in
Gold Label (Note 6).

On January 5, 2000, Crossfire Ventures, a private investor, exercised 25,000
warrants for 25,000 shares of the Company's common stock for net proceeds of
$62,500.

During December 1999, warrants issued to Gateway in April 1999 and sold to an
investor in December 1999 to purchase approximately 300,000 shares of common
stock of the Company at an exercise price of $2.50 per share were exercised. The
Company received net proceeds of $680,000 as a result of the warrant Exercise.

On July 16, 1999, the Company commenced a private offering (the "Offering") of
approximately 826,000 shares of its Common Stock at $3.875 per share (each a
"Share" and collectively the "Shares"). The Offering was conducted under the
exemptions from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), provided by Section 4(2) of the Act and the provisions of
Rule 506 of Regulation D. Sales of the Shares were made only to "accredited
investors," as such term is defined in Rule 501(a) under the Act. The Offering
was completed on November 30, 1999, resulting in gross proceeds of approximately
$3.2 million before deducting commissions (placement agent) and expenses of the
Offering (consisting of accounting and legal fees, "blue sky" fees and other
related expenses) totaling approximately $180,000. The proceeds of the Offering
were used to fund working capital needs of the Company and its subsidiaries.

SHAREHOLDER LOANS - On April 7, 2000, Gateway exercised its warrants to purchase
1.2 million shares of common stock of the Company at an exercise price of $2.50.
As payment for the shares, Gateway tendered cash in the amount of $118 and a
promissory note in the amount of $2.9 million. The note bears interest at six
percent and all principal and accrued interest are due April 7, 2001.
Approximately $40,000 of interest was accrued on this note during the year.

As of June 30, 2000, Greg De Vries, an employee of Full Moon, owed Full Moon
approximately $330,000, of which 43,000 was borrowed subsequent to the
acquisition of DeVries Data Systems by Full Moon. The loan amount is unsecured
and is not evidenced by any promissory note. However, the Company and Full Moon
regard this loan as a bona fide loan by Full Moon.

As of June 30, 2000, Lisa Orrell, an employee of Full Moon, owed Full Moon
approximately $72,000, which was borrowed subsequent to the acquisition of
Orrell Communications by Full Moon. The loan amount is unsecured and is not
evidenced by any promissory note. However, the Company and Full Moon regard this
loan as a bona fide loan by Full Moon.

                                       67
<PAGE>

STOCK OPTIONS - In June 1999, a majority of the shareholders approved the
adoption of the Company's 1999 Stock Plan (the "1999 Plan"). A total of 1.7
million shares of common stock have been reserved for issuance under this plan.
The 1999 plan permits the granting of incentive or non-incentive options to
employees, directors, consultants or advisors of the Company and its
subsidiaries. Incentive options may be granted to employees only and may not
have an exercise price less than 100% of fair market value (110% for 10%
Stockholders) on the date of grant, and terminate no later than ten years from
date of grant (five years for 10% Stockholders). Awards of restricted stock or
deferred stock may also be granted under the 1999 Plan.

VALUATION OF STOCK OPTIONS AND WARRANTS - The Company applies Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and
related interpretations, for stock options issued to employees in accounting for
its stock option plans.

Had compensation cost been determined on the basis of fair value pursuant to
SFAS No. 123, for the employee options, net income and earnings per share would
have been as follows (in thousands, except per share data):

                                                        For the Year Ended
                                                             June 30
                                                     -----------------------
                                                       2000           1999
                                                     --------       --------

Net Loss as Reported                                 $(10,148)      $   (728)
                                                     ========       ========
Pro Forma Net Loss                                    (11,623)        (1,130)
                                                     ========       ========
Basic and Diluted Net Loss per Share as Reported        (0.70)         (0.06)
                                                     ========       ========
Pro Forma Basic and Diluted Net Loss per Share          (0.80)         (0.10)
                                                     ========       ========

The proforma net loss includes a $322,000 proforma loss associated with
eMarketplace options and $1.2 million associated with Full Moon options ($2.5
million, less $1.3 million attributable to minority interest).

The information and tables below regarding options of eMarketplace and Full Moon
have been presented separately to provide the reader with a clearer presentation
of the transactions that transpired during the year relating to each plan. The
common stock of Full Moon is not publically traded, the common stock and paid in
capital of Full Moon is not reflected on the consolidated balance sheet, and
transactions related to Full Moon's option's are not reflected in the Statement
of Shareholders' Equity. For these reasons, the weighted average prices and fair
values have not been combined in the tabular presentation. On a combined basis,
the weighted average exercise price of options granted is $4.00, of options
exercised is $1.41 and options outstanding is $3.34; the weighted average fair
value of options granted is $2.15, of options exercised is $0.99, and options
outstanding is $1.92.

                                       68
<PAGE>

The fair value used in the pro forma data was estimated by using an option
pricing model which took into account as of the grant date, the exercise price
and the expected life of the option, the current price of the underlying stock
and its expected volatility, expected dividends on the stock and the risk-free
interest rate for the expected term of the option. The following is the average
of the data used for the following items.

                                      Weighted         Weighted
                                       Average          Average
    Year Ended        Risk-Free       Expected         Expected       Expected
     June 30,       Interest Rate       Life          Volatility      Dividends
    ----------      -------------     --------        ----------      ---------

       1999             4.76%             2             106.80%         None
       2000             6.13%             4             104.98%         None


The following is a summary of transactions under the stock option plans (in
thousands, except per share data):
<TABLE>
<CAPTION>

                                                                                     Weighted
                                               Number of       Weighted Average       Average
                                             Common Shares      Exercise Price      Fair Value
                                             -------------     ----------------     ----------
<S>                                                 <C>              <C>               <C>
Options Outstanding at June 30, 1998                2,015            1.02              0.14
 Granted                                            1,301            0.82              0.93
 Cancelled                                         (1,848)           1.01              0.14
                                             -------------     ----------------     -----------

Options Outstanding at June 30, 1999                1,468            0.86              0.84
Granted                                               902            3.42              4.25
Cancelled                                              --              --                --
Exercised                                            (351)           1.39              0.99
Forfeited                                             (25)           2.50              1.17
                                             -------------     ----------------     ----------

OPTIONS OUTSTANDING AT JUNE 30, 2000                1,994            1.90              2.43
                                             =============     ================     ==========
</TABLE>

SHARES RESERVED FOR FUTURE ISSUANCE - In addition to the options discussed
above, the Company has reserved 798,000 shares of common stock for issuance
under the 1999 Stock Plan.

                                       69
<PAGE>

OPTIONS OUTSTANDING AND
EXERCISABLE AT JUNE 30, 2000

The following is a summary of the status of fixed options outstanding at June
30, 2000 (in thousands):

                  Outstanding Options                     Exercisable Options
 --------------------------------------------------      --------------------
                                           Weighted                  Weighted
                            Remaining       Average                   Average
 Exercise                  Contractual     Exercise                  Exercise
  Price        Number         Life           Price       Number        Price
 --------      ------      -----------     --------      ------      --------
  $ 0.50          200          2.7          $ 0.50          200       $ 0.50
    0.60          658          1.7            0.60          658         0.60
    1.00          253          1.6            1.00          253         1.00
    1.69            4          5.8            1.69            4         1.69
    2.50          647          9.4            2.50          360         2.50
    4.00           90          9.6            4.00           10         4.00
    7.38          142          9.6            7.38           31         7.38
               ------         ----          ------       ------       ------

                1,994          5.2          $ 1.90        1,516       $ 1.27
               ======         ====          ======       ======       ======

FULL MOON INTERACTIVE STOCK OPTIONS

VALUATION OF STOCK OPTIONS AND WARRANTS - The Company applies Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees and
related interpretations, for stock options issued to employees in accounting for
its stock option plans.

Had compensation cost been determined on the basis of fair value pursuant to
SFAS No. 123, for the employee options, net income would have decreased by
approximately $2.5 million.

The fair value used in the pro forma data was estimated by using an option
pricing model which took into account as of the grant date, the exercise price
and the expected life of the option, the current price of the underlying stock
and its expected volatility, expected dividends on the stock and the risk-free
interest rate for the expected term of the option. The following is the average
of the data used for the following items:

     Weighted         Weighted          Average         Average
    Year Ended        Risk-free        Expected        Expected       Expected
     June 30,       Interest Rate        Life         Volatility      Dividends
     --------       -------------        ----         ----------      ---------

       2000             6.00%              5              80%           None


The following is a summary of transactions under the stock option plans (in
thousands):

                              Number of      Weighted Average   Weighted Average
                            Common Shares     Exercise Price       Fair Value
                            -------------     --------------       ----------
  Options Outstanding
  at June 30, 1999                  0                  0                  0
  Granted                       3,607               4.15               1.62
  Cancelled                       (20)              5.00               1.52
  Exercised                        (2)              5.00               1.52
  Forfeited                         0                  0                  0
                                -----               ----               ----
  Options Outstanding
  at June 30, 2000              3,585               4.14               1.63
                                =====               ====               ====

                                       70
<PAGE>

OPTIONS OUTSTANDING AND
EXERCISABLE AT JUNE 30, 2000

The following is a summary of the status of fixed options outstanding at June
30, 2000 (in thousands):


            Outstanding Options               Exercisable Options
     ------------------------------------    ---------------------
                                                         Weighted
                               Remaining                  Average
     Exercise                 Contractual                Exercise
      Price       Number          Life        Number      Price
      -----       ------          ----        ------      -----
    $  2.67        1,319          9.2           616      $  2.67
       5.00        2,267          9.6           442         5.00
    -------       ------                      ------     -------
       4.14        3,585          9.4         1,058         3.64
    =======       ======                      ======     =======


  OPTIONS OUTSTANDING AND EXCERCISABLE AT JUNE 30,2000

(14) CONCENTRATIONS

CREDIT RISK - Generally, the Company does not require collateral or other
security to support financial instruments, however the Company routinely
assesses the financial strength of its customers and, as a consequence, believes
that its trade receivable credit risk exposure is limited. At June 30, 2000, no
single customer accounted for 10% or more of trade receivables, and no single
customer accounted for more than 10% of total revenues for the year ended June
30, 2000. Of the Company's cash balance, $772,000 is not FDIC insured.

OTHER - TechStore and Office Express each purchase finished goods from one
supplier. The Company is entirely dependent on these suppliers for order
fulfillment and for shipping merchandise directly to customers. Management
believes that there is no business vulnerability regarding this concentration of
purchases as the goods are available from other sources. However, there can be
no assurance that such a distributor could provide the fulfillment, service and
pricing currently offered by its current supplier.

(15) NEW AUTHORITATIVE PRONOUNCEMENTS

The Company does not expect the adoption of recently issued accounting
pronouncements to have a significant impact on the Company's results of
operations, financial position or cash flows.

(16) RELATED PARTY TRANSACTIONS

In January and April of 1999, a director of the Company loaned proceeds totaling
$100,000 to the Company with repayment terms of July and September of 1999 and
an annual interest rate of 10%. These notes are fully collateralized by all real
and personal property (See Note 11).

                                       71
<PAGE>

On February 29, 2000, the Company received a promissory note from Gateway
Advisors, Inc. ("Gateway") (a company owned and controlled by Robert M. Wallace,
the Company's Chairman of the Board) in the amount of $800,000, and bearing
interest at 11% per annum. The principal amount and accrued interest were due
and payable on April 1, 2000. The note was paid in full subsequent to June 30,
2000.

On April 7, 2000, Gateway exercised its warrants to purchase 1.2 million shares
of common stock of the Company at an exercise price of $2.50. As payment for the
shares, Gateway tendered cash in the amount of $118 and a promissory note in the
amount of $2.9 million. The note bears interest at six percent and all principal
and accrued interest are due April 7, 2001.

In April 1998, TechStore, a subsidiary of the Company, entered into a
month-to-month lease agreement for office space with an entity owned by an
officer and a 10% stockholder of the Company. The lease payments are
approximately $1,500 per month. The lease was terminated March 31, 2000.

In July 1999, the Company relocated its executive offices from Corona,
California to San Jose California. It closed its office in Corona and entered
into a month-to-month lease arrangement for the Company's executive offices
located at 255 West Julian Street, Suite 100, San Jose, CA with Crown Services,
Inc. ("Crown"), pursuant to which the Company reimburses Crown $5,421.56 per
month, the direct rental cost for approximately 3,200 square feet of office
space. Robert M. Wallace, the Company's Chairman of the Board, is the Chairman
and principal stockholder of Crown.

On January 1, 2000, DeVries Data Systems, entered into a five-year lease
agreement for office space with Greg DeVries, an officer of the company. The
lease payments are approximately $9,562.50 per month and are included in
operating leases in Note 11.

(17) FAIR VALUE OF FINANCIAL INSTRUMENTS

Generally accepted accounting principles require disclosing the fair value of
financial instruments to the extent practicable for financial instruments which
are recognized or unrecognized in the balance sheet. The fair value of the
financial instruments disclosed in the financial statements is not necessarily
representative of the amount that could be realized or settled, nor does the
fair value amount consider the tax consequences of realization or settlement.

For certain financial instruments, including cash and cash equivalents, trade
and notes receivables, trade payables, and short-term debt, it was estimated
that the carrying amount approximated fair value for the majority of these items
because of their short maturities.

                                       72
<PAGE>

(18) SEGMENT DISCLOSURES

The following table presents operating results by segment for the year ended
June 30, 2000 (Also, see notes 2 and 14 for additional segment information).
<TABLE>
<CAPTION>

                                           Interactive    Online
                                           Arctitects    Retailers    Corporate
                                               (a)          (b)          (c)        Total
                                           ----------   ----------   ----------   ----------
<S>                                        <C>          <C>          <C>              <C>
REVENUE                                    $   16,378   $   12,331   $       11       28,720

OPERATING COSTS AND EXPENSES:
     Cost of Revenue                            8,864       11,528           19       20,411
     Selling, General and Administrative        9,978          959        2,733       13,670
     Product Development                           15           15           --           30
     Amortization of Goodwill                                   --        2,634        2,634
     and Other Acquired Intangibles (d)
     Impairment Loss                               --           --        3,500        3,500
                                           ----------   ----------   ----------   ----------

     TOTAL OPERATING COSTS AND EXPENSES        18,857       12,502        8,886       40,245
                                           ----------   ----------   ----------   ----------

     LOSS FROM OPERATIONS                      (2,479)        (171)      (8,875)     (11,525)

NON-OPERATING INCOME/(EXPENSE)
     Other Income (Expense)                        40           --          (87)         (47)
     Related Party Interest Income                 --           --           84           84
     Interest Income                               --            8           47           55
     Interest Expense                            (231)          (2)         (22)        (255)
                                           ----------   ----------   ----------   ----------

LOSS BEFORE MINORITY INTEREST                  (2,670)        (165)      (8,853)     (11,688)
                                           ----------   ----------   ----------   ----------
     Minority Interest                             --           --        1,540        1,540
                                           ----------   ----------   ----------   ----------

     NET LOSS                              $   (2,670)  $     (165)  $   (7,313)     (10,148)
                                           ==========   ==========   ==========   ==========
</TABLE>
Capital expenditures for Full Moon, Online Retailers, and Corporate were
$882,000, $111,000, and $51,000, respectively. Total assets for Full Moon,
Online Retailers, and Corporate were $1.8 million, $155,000, and $21,000
respectively.

(a)  Results of operations are for Full Moon from November 2000.  (Note 5)

(b)  Online Retailers include Tech Store and Office Express.

(c)  Corporate includes all non-operating entities and StarsOnline, which
     year-to-date had zero revenues and approximately $162,000 of expenses,
     primarily start-up costs.

(d)  Of the total amortization of intangibles, $313,000 is attributable to the
     Interactive Architect Firms and 2.3 million is attributable to Tech Store.

(19) FOURTH QUARTER ADJUSTMENT

During the fourth quarter of fiscal 2000, the Company determined that goodwill
related to TechStore, which is included in the Company's online retailers
segment was impaired. Therefore, the Company recorded a $3.5 million impairment
loss.

In addition, the Company reduced its accounts receivable to their net realizable
value by approximately $890,000. The aggregate of these and certain other
adjustments was to reduce net income for the fourth quarter by $4.4 million
($.30 per share).

(20) SUBSEQUENT EVENTS

On August 14, 2000, Full Moon initiated a line of credit with Grand Pacific
Financing Corp., a California corporation for $1.5 million. At August 31, 2000,
there was $900,000 outstanding under this line (Note 12).

On August 24, 2000, the merger agreement, by and among BayWeb, Inc.,
eMarketplace, Full Moon, M. Mitchell Stevko, and C. Jett Winter, dated as of
June 26, 2000, was terminated in accordance with its terms as a result of
material adverse changes in BayWeb's financial condition and operating results.

On August 24, 2000, M. Mitchell Stevko tendered his resignation from the Board
of Directors of the Company, effective August 24, 2000.

On August 29, 2000, Gateway Advisors repaid its promissory note to Company in
full (Note 13).

                                       73
<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
executed on this 28th day of September, 2000.

                                       EMARKETPLACE, INC.


                                       By: /s/ ROBERT M. WALLACE
                                           ----------------------------
                                           Robert M. Wallace
                                           Chief Executive Officer and Chairman,
                                           (Chief Accounting Officer)

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant in the capacities and on the dates
indicated.

Signature                              Title                         Date
---------                              -----                         ----

/s/ ROBERT M. WALLACE             Chairman of the Board       September 28, 2000
--------------------------
Robert M. Wallace


/s/ THOMAS E. EVANS, JR.          Director                    September 28, 2000
--------------------------
Thomas E. Evans, Jr.

                                       73