SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                              REPORT ON FORM 10-KSB

[X]    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
       Act of 1934

                    For the fiscal year ended June 30, 1999.

[ ]    Transition Report pursuant Section 13 or 15(d) of the Securities Exchange
       Act of 1934

              For the transition period from ________ to ________.

                           Commission File No. 0-22014

                               eMARKETPLACE, INC.
                      (formerly Computer Marketplace, Inc.)
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                      33-0558415
 ----------------------------------           ---------------------------------
 (State of or other jurisdiction of           (IRS Employer Identification No.)
   incorporation of organization)

 255 West Julian Street
 Suite 100
 San Jose, CA                                                    95110
 ---------------------                                        ----------
 (Address of Principal                                        (Zip Code)
 Executive Offices)

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

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

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

                    Common Stock, par value $.0001 per share
                    ----------------------------------------
                                (Title of Class)


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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of the Regulation  S-B is not contained in this form, and no disclosure  will be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

Issuer's revenues for its most recent fiscal year were $2,208,855.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
Registrant,  computed  by  reference  to the  closing  price of such stock as of
September 30, 1999, was approximately $36,208,676.

Number of shares  outstanding of the Issuer's  common stock, as of September 30,
1999, was 12,691,460.

                   DOCUMENTS INCORPORATED BY REFERENCE: None.

<PAGE>
                                TABLE OF CONTENTS
                                                                            Page


DESCRIPTION OF BUSINESS........................................................1


DESCRIPTION OF PROPERTY.......................................................22


LEGAL PROCEEDINGS.............................................................23


SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........................23


MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........23


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.........................................................25


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...................................31


CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE..........................................................31


DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.............................31


EXECUTIVE COMPENSATION........................................................32


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................36


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................37


EXHIBITS AND REPORTS ON FORM 8-K..............................................39


                                       i

<PAGE>
                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

         Quality Associates, Inc., a California corporation, was incorporated in
July 1983,  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" in this Annual Report.

         In  April  1999,  by  acquiring   E-Taxi,   Inc.   ("E-Taxi")  and  its
wholly-owned subsidiary, TechStore, LLC ("TechStore"), the Company adopted a new
corporate  strategy  focused on  developing,  acquiring and  operating  Internet
businesses.  The  Company is  presently  pursuing  a business  plan to become an
Internet  holding  company  engaged  primarily in development and operation of a
network of Internet  properties  ("Portfolio  Companies")  that provide content,
commerce and online services to demographically-targeted  audiences. 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.

         RECENT DEVELOPMENTS

         Set forth below is a summary of the Company's significant  developments
since April 1999:

         As of April 9, 1999, the Company and Gateway Advisors,  Inc.  ("Gateway
Advisors"),  a company  majority  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.  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 8,
2000.

         As of April 9, 1999,  the Company and each of the holders of  1,500,000
Class D Common Stock  Purchase  Warrants  entered  into a Settlement  Agreement,
pursuant to which the Company  issued  375,000  shares of the  Company's  Common
Stock in exchange for (i) the  cancellation of all Class D Common Stock Purchase
Warrants,  (ii) the  surrender  and  transfer to the Company of an  aggregate of
500,000  shares of Common Stock of Medical  Marketplace,  Inc. (a majority owned
subsidiary of the Company),  and (iii) a general release,  releasing the Company
from all liabilities. In addition, as of April 9, 1999, the Company and Victoria
Holdings,   Inc.,  the  Company's  former  financial  advisor,  entered  into  a

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<PAGE>

Settlement Agreement, pursuant to which the Company issued 250,000 shares of the
Company's  Common  Stock  in  exchange  for  (i)  the  cancellation  of  Options
exercisable  for 1,000,000  shares of the Company's  Common Stock at an exercise
price of $1.00 per share, and (ii) a general release, releasing the Company from
all liabilities.  As part of the foregoing  Settlement  Agreements,  the Company
agreed  to  include  the  shares  issued  in  connection  therewith  in the next
registration  statement  filed by the Company with the  Securities  and Exchange
Commission  (other  than  on a  Form  S-4  or  Form  S-8),  subject  to  certain
limitations and restrictions.

         As of April 9, 1999 (and clarified as of October 12, 1999), the Company
entered into an Agreement with L. Wayne Kiley,  the Company's  President,  Chief
Executive Officer and at that time Chairman of the Board,  pursuant to which Mr.
Kiley  waived  (i) his  rights to  accrued  and  unpaid  salary in the amount of
$314,135 (ii) all of his rights under his employment agreement with the Company,
including without limitation,  all future  compensation,  and (iii) on behalf of
Quality  Associates,  Inc. (a company owned and  controlled by Mr.  Kiley),  its
rights to  accrued  and unpaid  rent with  respect  to the  Company's  executive
offices,  in the amount of $64,536.  In exchange for the foregoing,  the Company
reduced the exercise  price of (a) 661,667  options held by Mr. Kiley from $1.00
to $.60 per share and (b) 29,167  options  held by Mr.  Kiley from $1.68 to $.60
per share.  In addition,  the Company agreed to include the shares issuable upon
the  exercise  of such  options  as well as  certain  other  options  issued  to
management and certain consultants under a Registration Statement on Form S-8 to
be filed with the Commission in the near future.

         As of April 21,  1999,  the  Company  and each of the  stockholders  of
E-Taxi  entered into a Stock Purchase  Agreement,  pursuant to which the Company
acquired all of the issued and outstanding  capital stock of E-Taxi (the "E-Taxi
Acquisition")  on April 23, 1999 (the "Closing Date") in a business  combination
accounted for a reverse acquisition for accounting  purposes.  See Notes 1 and 3
of  the  Notes  to  the  Company's   Consolidated   Financial   Statements.   As
consideration  for  9,074,000  shares of the  E-Taxi's  common stock and 400,000
shares of the E-Taxi's Series A Preferred Stock, the Company issued an aggregate
of 9,074,000  shares of the Company's  common stock,  par value $.0001 per share
(the "Common  Shares"),  and 400,000 shares of the Company's  Series A Preferred
Stock, par value $.0001 per share (the "Preferred Shares").

         As a result of the E-Taxi Acquisition, (i) E-Taxi became a wholly-owned
subsidiary of the Company, (ii) the stockholders of E-Taxi became the beneficial
owners of (a) the  Common  Shares,  or 81.8% of the shares of  Company's  common
stock  outstanding,  and (b) the  Preferred  Shares,  or 100% of the  shares  of
Company's  preferred  stock  outstanding,  and  (iii)  two of the four  existing
members of the Company's  Board of Directors  resigned and Robert M. Wallace was
appointed as Chairman of the Board of Directors. L. Wayne Kiley and Thomas Evans
remain as directors of the Company. Mr. Kiley will remain as the Company's Chief
Executive  Officer,  President  and Chief  Accounting  Officer until the Company
hires  suitable  replacements  which the  Company  expects  to occur in the near
future.  The  Company has also  granted to each of the former  holders of E-Taxi
capital stock the right to have the Common Shares and the shares of Common Stock
issuable  upon  conversion  of  the  Preferred   Shares  included  in  the  next
registration  statement  filed by the Company with the  Securities  and Exchange
Commission  (other  than  on a  Form  S-4  or  Form  S-8),  subject  to  certain
limitations and  restrictions.  The number of shares  constituting  the Series A
Preferred Stock is 400,000, $.0001 par value per share, all of which were issued
to the former holders of Series A Preferred Stock of E-Taxi.  As of the close of
business on April 28, 1999,  the shares of Common  Stock had a closing  price of
greater than $3.75 per share for more than three (3) consecutive days, and based
upon the terms of the Preferred  Shares, as of May 3, 1999, the Preferred Shares
were automatically converted into 1,600,000 shares of Common Stock.

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<PAGE>

         E-Taxi was  incorporated  in April 1998 to develop a vertical  Internet
portal for the small office,  home office ("SOHO") market.  Immediately prior to
the closing of the E-Taxi  Acquisition,  E-Taxi closed (i) a private offering of
its  shares  of  preferred  stock and  common  stock  raising  an  aggregate  of
approximately  $1,400,000  therefrom and (ii) on the  acquisition  of all of the
outstanding  limited  liability company interests of TechStore LLC, a California
limited liability company ("TechStore"). As of March 31, 1999, Gateway Advisors,
Inc.,  Bejan   Aminifard,   Mosen  Aminifard  and  Derek  Wall  entered  into  a
Contribution  Agreement,  pursuant  to which  each of the  owners  of  TechStore
contributed his ownership interest in TechStore,  or rights to acquire ownership
interests  in  TechStore  to E-Taxi in exchange  for shares of Common  Stock and
Preferred Stock of E-Taxi.  Since its incorporation in March 1998, TechStore has
been engaged in the business of selling  computer  hardware and software as well
as   consumer   electronics   products   through   its  world   wide  web  site,
http://www.techstore.com.  Through the acquisition of E-Taxi and TechStore,  and
additional  planned  acquisitions,  joint ventures and other combined  marketing
efforts,  the Company  intends to provide  products,  services  and  information
specifically tailored to the needs of the SOHO community.

         As of June 14, 1999, E-Taxi entered into (i) a Stock Purchase Agreement
(the "Stock Purchase  Agreement")  with all of the shareholders of SSPS, Inc., a
California  corporation  ("SSPS"),  pursuant  to  which  E-Taxi  has  agreed  to
purchase, and the shareholders of SSPS have agreed to sell,  approximately 94.6%
of the  outstanding  shares  of  capital  stock of SSPS,  and (ii) a  Membership
Interest   Purchase   Agreement   with  all  of  the   members  of  Impact  Team
International,  LLC, a California  limited liability company and an affiliate of
SSPS  ("Impact"),  pursuant  to which  E-Taxi  has agreed to  purchase,  and the
members  of  Impact  have  agreed  to sell,  all of the  outstanding  membership
interests of Impact. SSPS, and its operating divisions TRISTEP, GIG2GIG.COM, and
IT  WORLDNET.COM,  and  Impact,  provide  short  term  and long  term  temporary
workforce solutions primarily to rapidly growing technology firms.

         The  closing of the  transactions  contemplated  by the Stock  Purchase
Agreement and the Membership  Interest  Purchase  Agreement (the  "Closing") are
subject to the satisfaction of certain conditions, including without limitation,
the execution and delivery of employment  agreements with certain members of the
senior  management team of SSPS, the release of a principal  stockholder of SSPS
of his guaranty of certain indebtedness of SSPS, the waiver of certain rights of
first  refusal to purchase the shares of SSPS capital stock owned by a principal
stockholder,  the termination  and release of certain  obligations of SSPS under
existing employment agreements and other customary conditions to closing. At the
Closing,  the Company will issue approximately 2.9 million shares of it's Common
Stock and pay cash and notes of approximately $1.5 million for SSPS. The Company
has also  agreed to  provide  the  sellers  of the SSPS  shares  and the  Impact
interests  with  demand  and  piggyback  registration  rights.  It is  presently
anticipated that the Company's  acquisition of SSPS and Impact will occur during
October 1999.

         On July 16,  1999,  the  Company  commenced  a  private  offering  (the
"Offering")  of up to  1,200,000  shares of its Common Stock (each a "Share" and
collectively the "Shares"). The Offering is being 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  will  be  made  only  to  "accredited
investors," as such term is defined in Rule 501(a) under the Act. The Shares are
being offered at a purchase price of $3.875 per share and on a "best efforts all
or  none"  basis  with  respect  to  the  first  400,000  Shares  (the  "Minimum
Offering"),  and on a  "best  efforts"  basis  thereafter  with  respect  to the
remaining 800,000 Shares (the "Maximum  Offering").  The Offering was originally
scheduled to terminate on August 30, 1999,  but has been  extended at the option
of the Company.  Subscriptions  for less than 20,000  Shares (or $77,550) may be
accepted  at the  discretion  of the  Company.  Upon  completion  of the Minimum
Offering and the Maximum Offering, the Company expects to receive gross proceeds
of  approximately  $1,550,000 and  $4,650,000,  respectively,  before  deducting
commissions  (placement  agent) and  expenses  of the  Offering  (consisting  of

                                       3
<PAGE>


accounting  and legal  fees,  "blue sky" fees and other  related  expenses).  On
October 8, 1999,  the  Company  conducted  an interim  closing  receiving  gross
proceeds of  $2,883,872  from the sale of 744,225  shares of Common  Stock.  The
proceeds of the Offering will be used to fund the acquisition of SSPS and Impact
and the working capital needs of the Company..

         In August 1999, TopTeam, Inc., a newly formed subsidiary of the Company
("TopTeam")  entered  into letters of intent with Full Moon  Interactive  Group,
Inc. and Orrell  Communications,  Inc., and in September,  1999, TopTeam entered
into letters of intent with Paradigm 3 Marketing,  De Vries Data Systems,  Inc.,
Image Network and Muccino Design Group,  Inc. Under the letters of intent, it is
contemplated  that  together  the Company  and Top Team will  acquire all of the
outstanding capital stock of these interactive architect companies (the "TopTeam
Candidates")  in exchange for the issuance of shares of common stock of both the
Company  and Top Team.  The  closing  of each of the  proposed  transactions  is
subject to the  completion of legal,  business and  accounting due diligence and
the execution and delivery of definitive acquisition  agreements.  In connection
with the  acquisition of the TopTeam  Candidates,  the Company also  anticipates
capitalizing TopTeam with approximately $1.5 million in cash.

HISTORICAL INFORMATION

         Since the  Company  has been  unprofitable  since the fiscal year ended
June 1994, management implemented  substantial measures to address its financial
difficulties.   The  Board  of  Directors,   after  having  considered  numerous
alternatives,  concluded that the Company must significantly reduce its expenses
in order to decrease the Company's net losses.  Therefore,  during the Company's
fiscal year ended June 30, 1997,  the Company  embarked upon a cost cutting plan
by reducing its  workforce,  closing  unprofitable  locations and  discontinuing
under performing product lines. Specifically,  the Company (i) closed all of its
branch  offices and (ii) reduced the number of  employees  from a high of ninety
six (96) in September  1995 to twenty four (24) full-time and five (5) part-time
as of September 30, 1997.  Despite  implementing  this  business  reorganization
strategy,  the  Company  failed to regain  profitability  during the fiscal year
ended June 30, 1998. As a result,  the Company  determined to reduce further its
existing computer  equipment business and in April 1999 adopted a plan to divest
Medical  Marketplace,  Inc.,  the Company's  subsidiary  engaged in the sale and
lease of used medical equipment.

         During the past fiscal year,  the Company has further  reduced the size
and scope of its computer equipment business.  The Company believes that because
of significant changes in the computer industry,  the market is more competitive
and  opportunities  to engage in certain business are no longer  available.  The
increase in the importance and dominance of personal  computers (with relatively
low sales  prices)  and the  reduced  usage of  mid-sized  computer  systems has
severely  reduced the  Company's  business in the RISC 6000 and AS400  mid-range
systems.  Further,  the Company has seen major OEM manufacturers  (such as, IBM,
and Digital  Equipment  Corporation)  enter into the  reselling  business.  As a
consequence,  the Company  actively  pursued  acquiring an alternative  business
and/or assets resulting in the E-Taxi Acquisition in April 1999.

         In March of 1994, Computer  Marketplace(R)  formed Medical Marketplace,
Inc. ("Medical Marketplace") as a wholly owned subsidiary to engage in worldwide
distribution  of used  medical  equipment  to  health  care  providers.  Medical
Marketplace has bought and resold a wide variety of medical equipment  including
Magnetic  Resonance  Imaging ("MRI"),  Computed  Tomography  Scanners ("CT") and
Ultrasound equipment.  In addition,  Medical Marketplace provides customers with
consulting  services  related to  equipment  acquisition,  equipment  layout and
facility  design.  Medical  Marketplace  also had a small rental  program  which
provides new  equipment  and contract  service with mobile MRI and CT equipment.
Medical Marketplace conducts its primary  distribution  operations from its main
office  in Apple  Valley,  California.  Since  the  Company  has  adopted  a new

                                       4

<PAGE>

strategic plan regarding its development,  acquisition and operation of Internet
businesses,  the  Company  decided  to  accelerate  its  efforts  to divest  its
ownership of Medical Marketplace.  On October 12, 1999, the Company entered into
a Stock  Purchase  Agreement  with two  employees  (together,  the  "Buyers") of
Medical  Marketplace,  pursuant to which the Company has agreed to sell, and the
Buyers have agreed to purchase  for cash and  promissory  notes in the amount of
$65,000 all of the issued and outstanding capital stock of Medical  Marketplace.
The  closing  of the  transaction  will be  effected  as of June  30,  1999  for
accounting purposes.

THE eMARKETPLACE STRATEGY

         The Company is pursuing a business  plan to become an Internet  holding
company engaged  primarily in development and operation of a network of Internet
properties  ("Portfolio  Companies") that provide  content,  commerce and online
services to demographically-targeted audiences. The Company believes that highly
targeted audience profiles of our Portfolio Companies may make them valuable for
advertisers,  retailers and service  providers who are  increasingly  allocating
marketing  resources to target  markets  online.  The  Company's  strategy is to
develop and  promote  synergistic  business  relationships  among the  Portfolio
Companies,  and to provide numerous operational and management  services.  These
services  include active strategic  direction,  operating  guidance,  merger and
acquisition  assistance,   board  and  management  recruitment,  and  innovative
financing.

DEVELOP PREMIER NARROWCAST DESTINATION SITES

         Responding  to  market  opportunities,  our goal is to become a premier
Internet "Studio" for timely  development of Internet media properties.  Through
acquisitions  and  investments,  the  Company  intends  to  develop  a series of
valuable, narrowcast destination sites in major segments of the economy.

         The Company's programming strategy is to establish destination sites to
attract  affinity  audiences of  demographically  valuable users, and serve them
with premier advertisers,  sponsors and electronic commerce partners. Due to the
high-value demographics of our audiences,  believes that it will attract premier
Internet  advertisers  at higher a cost per thousand  impressions  (CPM) than is
paid to  portals  and other  Internet  destinations.  Our sales  strategy  is to
develop context-driven, long-term relationships with leading corporate sponsors.
These sponsorships may go beyond banner advertising to focus on the advertiser's
broader marketing objectives.  Exclusive category  opportunities will be offered
to certain sponsors within the context of each site's audience.  For example,  a
Small  Office Home Office  (SOHO) site will offer  opportunities  for  exclusive
relationships   for   insurance,   benefits,   financial   services   and  other
relationships.

         For electronic commerce, we hope to develop strategic arrangements with
premier  online  retailers  and service  providers  whose goods and services tie
closely  to  specific  areas  of  content  within  the  sites  of our  Portfolio
Companies.  Each  Portfolio  Company  site will have its own  opportunities  for
electronic commerce tie-ins.  Sponsorship fees and revenue sharing  arrangements
will be  established  in return for a measure of  exclusivity  in the  sponsor's
industry and market segments.

PROVIDE STRATEGIC GUIDANCE AND SUPPORT, AND PROMOTE COLLABORATION

         Responding to market challenges, our operating strategy is to work with
our  Portfolio   Companies  to  actively  develop  their  business   strategies,
operations and management  teams, and to establish a collaborative  network that
leverages  their  collective  strengths  and  strategic  relationships.  We will
provide strategic guidance to Portfolio  Companies regarding market positioning,
business  model  development  and market  trends.  In  addition,  our  Portfolio

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Companies  who  provide  Internet   Architecture,   Human  Resources  and  other
Administrative  services  will  be  engaged  to  accelerate  the  new  Portfolio
Company's  development  and relieve them of certain  day-to-day  management  and
operational issues.

         We intend to assist our  Portfolio  Companies  by  providing  access to
companies and individuals who serve them in the following areas:

  -      Recruiting, Staffing and Human Resource Management Support
  -      Web Strategy, Development and Site Hosting
  -      Information Technology and Electronic Commerce
  -      Finance and Administration
  -      Business Development and Strategic Relationships

         The collaboration of our Portfolio  Companies is the result of our role
as the  hub  of  our  network.  Through  the  network  we  identify  prospective
alliances,  assist in strategic  planning and monitor the ongoing  relationships
among our Portfolio  Companies.  We encourage and regulate the information  flow
among  our  Portfolio  Companies.  We  also  control  the  information  flow  by
determining  the  composition  of the  network.  If we believe  that a Portfolio
Company is not contributing to our network or has lost its strategic  importance
to the network, we may sell our interest in that Portfolio Company.

PORTFOLIO COMPANY CRITERIA

         Portfolio  acquisition  and investment  opportunities  will be assessed
with these factors:

  -      AUDIENCE DEMOGRAPHIC. We will assess companies that we believe have the
         content, products, services and skills to attract a valuable narrowcast
         audience.
  -      MANAGEMENT  QUALITY.  We will assess  management's  overall quality and
         industry expertise.
  -      SIGNIFICANT OWNERSHIP. We will assess whether we will be able to obtain
         a  significant  position in the company  and exert  influence  over the
         company.
  -      NETWORK SYNERGY.  We consider the degree to which a potential Portfolio
         Company may contribute to our network, and benefit from our network and
         operational resources.

         To ensure our  ability  to provide  active  guidance  to the  Portfolio
Company, we will require representation on the company's Board of Directors as a
condition to an acquisition or investment.  For proper incentives, the Portfolio
Company's  management  and key  personnel  will  retain an  equity  stake in the
company.   During  negotiations  with  potential  Portfolio  Companies  we  will
emphasize  the  value  of our  collaborative  network  and  the  opportunity  to
efficiently  take  their  company  public  through  a  rights  offering  to  our
shareholders.  Our Portfolio  Companies,  strategic investors and Advisory Board
members may assist in these  discussions  and in other stages of the acquisition
process,  including the initial evaluation of potential  Portfolio Companies and
due diligence.

eMARKETPLACE PORTFOLIO COMPANIES

E-TAXI, INC. - VERTICAL PORTAL FOR SMALL OFFICE, HOME OFFICE MARKET

         In April 1999,  the Company  acquired  all of the  outstanding  capital
stock of E-Taxi which is currently developing a SOHO web site, commonly referred
to as a VERTICAL  PORTAL for the Small Office,  Home Office (SOHO)  market.  The
Company  believes a SOHO portal will offer valuable  proprietary and aggregated,
community  content of such a nature that this  targeted  affinity  audience will

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regard the site as a valuable  destination.  E-Taxi has acquired the domain name
emarketplace.com  and has  begun  development  of the web site.  It  anticipates
launching the site sometime in the first quarter of 2000.

         ATTEMPT TO CAPITALIZE ON MARKET OPPORTUNITY.  The Internet continues to
experience  an  exponential  rate of user growth,  with  estimates  ranging from
300,000 to 1 million  new users per  month,  and an  estimated  20% of the North
American  population  over  the age of 15 has  Internet  access  in  some  form.
According  to  CommerceNet/Nielsen,  this  rapid  growth  has  led  to  combined
US/Canada  market in June 1998 of over 78.6 million  Internet  subscribers,  and
corresponding  increases in subscription revenues, and transaction revenues. IDC
research  anticipates that the amount of commerce conducted over the Internet is
expected to grow from $2.6 billion in 1996 to more than $220 billion in 2001.

         AFFINITY GROUP. The SOHO market  represents 89% of all U.S.  companies.
As a consequence, it is an attractive consumer group to a variety of industries,
but difficult to reach due to its fragmentation.  When defined as companies with
fewer  than 25  employees,  the  SOHO  market  accounts  for  49.5%  of all U.S.
employment.  This  segment  within the SOHO market  collectively  spent over $54
billion  on  office  technology  alone,  in  1998.  Fifty-two  percent  of  SOHO
businesses  identified  the use of the  Internet  to reduce  costs and  increase
efficiency.  Despite its attractive size and purchasing power, it is a difficult
market to reach due to its  fragmentation.  However,  as these  SOHO  businesses
increasingly rely on the Internet to increase  productivity and efficiency,  the
Internet  should  provide a  vehicle  with  which to reach  this  market  group.
Aggregating   this  type  of  affinity  group  generates  a  number  of  revenue
opportunities: (i) sponsorship; (ii) advertising; (iii) e-commerce; (iv) content
creation and ownership; and (vi) distance education and training.

TECHSTORE LLC

         TechStore LLC was acquired by E-Taxi in April 1999 immediately prior to
the Company's acquisition of E-Taxi.  Founded in 1997, TechStore offers for sale
through its Web site,  WWW.TECHSTORE.COM,  more than 40,000 name brand  computer
hardware  and  software  and  consumer  electronics   products.   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.

         Based upon the  demographics  of  TechStore's  customers,  the  Company
believes that SOHO businesses make up a large group of those consumers using the
Internet for procurement of office technology  products.  In fact, nearly 40% of
e-commerce  transactions on the Internet  involved  computer related products in
1998, and 27% of advertising revenue was generated by technology advertising. To
attract prospective  computer equipment purchasers to its site, TechStore spends
ad dollars at major portals,  such as CNET, in the hope of generating e-commerce
revenue.  The Company believes those ads are inefficient because a large portion
of those  portals'  audiences  are  outside  of their  targeted  consumer,  SOHO
businesses.  The Company  intends to better  utilize  those ad dollars by having
TechStore directly target SOHO customers via the EMARKETPLACE.COM web site. Once
identified by TechStore as a SOHO consumer,  we intend to use the TechStore site
to introduce  them to other  valuable  content,  products,  and services  within
EMARKETPLACE.COM.  This will not only add new revenue sources to TechStore, such
as  sponsorship  and ad revenue,  but will lower the cost of  reaching  the SOHO
audience for our other proprietary and aggregated content.

                                       7
<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.

RESEARCH AND DEVELOPMENT/TECHNOLOGY

         TechStore  is  attempting  to provide  complete  eCommerce  integration
throughout  the entire sales  process.  To  accomplish  this goal,  TechStore is
utilizing the latest  generation  of industry  standard  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 (EDS) 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.

OFFICE EXPRESS, INC.

         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.

         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.

                                        8
<PAGE>

PROPOSED BUSINESS OPPORTUNITIES

TOP TEAM, INC.

         In August 1999, the Company formed a wholly-owned  Delaware subsidiary,
TopTeam, Inc., to undertake a strategic consolidation of businesses that provide
strategic  consulting and  comprehensive  Internet based  solutions to corporate
users of information technology.

         To businesses across a variety industries, the Internet represents both
a significant  opportunity for growth, as well as a significant  threat from new
competition.  International  Data Corp. (IDC) estimates Internet users will grow
from  nearly 100 million in 1998 to 320  million by 2002,  with a  corresponding
growth in  e-commerce  transactions  from $32 billion in 1998 to $426 billion in
2002.  This  is  forcing  companies  to  rapidly  develop  and  deploy  Internet
strategies. Since most companies are outsourcing all or portion of this process,
demand for Internet professional services is soaring,  jumping from $2.4 billion
in 1997 to $7  billion  in 1998 and  expected  to exceed  $40  billion  in 2002,
according to IDC.

         The  complexity  of the Internet  goes beyond the scope of  traditional
computer systems  integrators and information  technology (I.T.)  professionals.
Total e-business  solutions require business  strategy,  brand  management,  the
marketing  skills  required to develop an audience  and the  creative and design
skills to develop compelling content and engaging user interface, as well as the
technology skills to enable a site for e-commerce  transactions.  A new class of
professionals  have emerged to meet these complex needs,  which some Wall Street
analysts refer to as "Interactive  Architects." These firms combine  traditional
I.T. skills,  with business  consulting and advertising skills in one integrated
company. They include such firms as USWEB/CKS, Viant, IXL, Razorfish and Scient.

         In August 1999,  TopTeam  entered into letters of intent with Full Moon
Interactive  Group, Inc. and Orrell  Communications,  Inc. and in September 1999
TopTeam entered into letters of intent with Paradigm 3 Marketing,  De Vries Data
Systems,  Inc.,  Image  Network and Muccino  Design  Group,  Inc  (collectively,
"TopTeam  Candidates").  It is the objective of  e-Marketplace  to build a world
class  "interactive  architect" through the acquisition of companies involved in
Internet consulting. The TopTeam Candidates service a blue chip customer list in
California and represent approximately $25 million in annual revenue.

         Under the terms of the letters of intent,  the Company will acquire all
of the outstanding  capital stock of the TopTeam  Candidates in exchange for the
issuance of shares of common stock of both the Company and TopTeam.  At the time
of closing of the acquisition of the TopTeam  Candidates it is expected that the
Company will also capitalize  TopTeam with  approximately  $1.5 million in cash.
The closing of each of the proposed transactions is subject to the completion of
legal,  business, and accounting due diligence and the execution and delivery of
a definitive acquisition  agreement.  In light of the fact that these conditions
have yet to be fully satisfied,  there can be no assurance that  acquisitions of
the TopTeam  Candidates will occur or that we will complete a sufficient  number
of acquisitions to gain the critical mass, experienced  professionals,  industry
expertise,  technical skills, and geographic  coverage necessary to make TopTeam
an economically viable investment.

SSPS, INC.

         The terms of the  definitive  agreement  executed  by the  Company  and
E-Taxi with the owners of SSPS  requires  the  payment of (i)  $450,000 in cash;
(ii) 2,300,000 shares of Common Stock;  (iii) a promissory note in the amount of
$150,000;  and (iv) a  convertible  promissory  note in the amount of  $900,000,
convertible into 600,000 shares of Common Stock. Pursuant to the SSPS Agreement,
a portion of the  consideration  will be subject to adjustment in the event that
certain financial  thresholds are not achieved.  It is the intent of the Company
to complete the SSPS Acquisition  within a reasonable period from the Closing of

                                        9
<PAGE>

this Offering. The SSPS Acquisition is subject to certain closing conditions. In
addition to the execution of Employment  and  Non-Competition  Agreements by the
owners of SSPS and the issuance of a legal opinion on behalf of the owners,  the
closing  is subject to the  absence of any events  which has a material  adverse
effect  on  SSPS'   financial   condition  or  operations.   In  addition,   all
representations and warranties made by the parties in the Acquisition  Agreement
must be true at the time of closing.

         The  operating  divisions  of SSPS  consist  of  TriStep,  Gig2Gig.com,
ITWorldnet.com,  and  Impact  Team  International.  TriStep is a leader in using
Internet-based  systems to provide outsourced management of corporate recruiting
and  staffing,  contractor  payment and  benefits  administration  --  sometimes
referred to as  client-side  management of the  contingent  workforce.  Gig2Gig,
ITWorldnet and Impact Team employ  TriStep's  systems,  software and services to
focus on market  opportunities  in the  Information  Technology  (IT)  industry.
ITWorldnet  and  Impact  Team help  clients  identify  and  engage  IT  contract
professionals through multiple sources,  including agencies, direct solicitation
and Internet  resume  postings.  Gig2Gig is a Web site to be launched later this
year  to  deliver  services  to IT  contractors,  technical  writers  and  other
independents  who  work  "gig to  gig."  The  site  will  allow  them to  engage
personalized  employment  services,  including access to insurance and benefits,
vacation pay, billing and collection, contracting and compliance, accounting and
tax, and other business-related services.

         TriStep's  proprietary  software allows hiring managers to initiate and
fill  job  orders  interactively  on  the  Internet  and  electronically  access
TriStep's  service  bureau for  Employment  Transaction  Processing  (ETP).  The
company provides each client with a secure intranet ordering site where they can
identify,  assess, engage, track and account for contract employees from any and
all  sources.  TriStep is able to  receive,  process  and  manage  the  client's
contractor  and  employee  resumes  directly  from  its  servers.  From  resumes
submitted by agencies,  from  candidates  or directly  from the Web,  Tri-Step's
software   provides   real-time   extraction   and  grading  of  job-skills  and
automatically  submits  those  that  meet the  client's  specific  requirements.
Clients  have  access  to  real-time  and  historical  analyses  of  the  entire
contingent  workforce  and  Consolidated  Billing  Services to places all agency
bills on one convenient invoice. All data is uploadable to ERP systems, like SAP
and PeopleSoft,  allowing employers to model both their permanent and contingent
workforces.

GOVERNMENT REGULATION

         Our business may face increased government regulation.

         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 on December, 2002. Our business may be harmed by the passage of laws in the
future imposing taxes or other burdensome regulations on Internet commerce.

         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.

                                       10
<PAGE>

         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.

PATENTS, TRADEMARKS, LICENSES, AND FRANCHISES

         TechStore  and  Office  Express do not hold any  patents or  registered
trademarks.  TechStore  holds  various web domain  names  relating to our brand,
including  the  "TechStore.com"  and   "OfficeExpress.com"   domain  names.  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 TechStore brand.

         Our 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.

                                       11
<PAGE>

         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

         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.

         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.

CREDIT FACILITIES

         In connection with TechStore's  distribution  arrangement with TechData
Corporation,  TechStore  currently has lines of credit in the amount of $300,000
with  each  of  Deutche   Financial   Services  and  TechData   Credit  Services
Corporation. The Credit Lines accrue interest at a rate of 1.1875% per month.

EMPLOYEES

         As of August 31, 1999,  the Company had 15 employees.  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 on our continued  ability
to attract, hire and retain qualified personnel.

                                       12
<PAGE>

         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.

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, our plan to acquire 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 $1,331,431,
$3,347,435  and  $2,207,131  for the years ended June 30,  1996,  1997 and 1998,
respectively,  and a net loss of  $728,297  for the year  ended  June 30,  1999,
although such net losses for such periods resulted from the Company's operations
prior to the implementation of its new business plan.

LIMITED OPERATING HISTORY

         Currently,  the Company's business is principally  operated through its
TechStore, LLC and Office Express, Inc. subsidiaries. It is anticipated that the
Company will close on the acquisition of SSPS, Inc. and its affiliated companies
("Tri-Step")  during the second  quarter of 2000.  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.

WE MAY NEED ADDITIONAL FINANCING

         We believe that proceeds from the issuance of securities  together with
anticipated  cash flow from operations  could be adequate to fund our operations
for the next fiscal year. There can be no assurance,  however,  that we will not
require  additional  financing  prior to or after  such  time.  There  can be no
assurance  that any  additional  financing  will be  available to the Company on
acceptable  terms,  or at all. If adequate funds are not available,  the Company
may be required to delay,  scale back or eliminate its plans for expansion.  Our
inability to obtain additional financing could have a material adverse effect on
the Company's business, financial condition and results of operations.

                                       13
<PAGE>

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.

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

                                       14
<PAGE>

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;

  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 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.

                                       15
<PAGE>

Y2K COMPLIANCE

         Although  management  believes that the computer systems of the Company
and its the Portfolio Companies are Year 2000 compliant, it is possible that our
systems and those of our Portfolio Companies as well as third parties (over whom
we have  little or no  control)  may not be Year 2000  compliant.  Should any of
these computer  systems fail to be Year 2000  compliant,  our operations and the
operations of our Portfolio Companies could be disrupted. Many software programs
have been  written  using two  digits  rather  than  four  digits to define  the
applicable  year.  This poses a problem at the end of the century  because these
programs may recognize a date using "00" as the year 1900,  rather than the year
2000. This in turn could result in major system failures or miscalculations  and
is  generally  referred to as the Year 2000 issue.  We may realize  exposure and
risk if our  systems  and the  systems  on which  our  Portfolio  Companies  are
dependent to conduct their operations are not Year 2000 compliant. Our potential
areas of exposure  include  products  purchased from third  parties,  computers,
software,  telephone systems and other equipment used internally. If our present
efforts  and the  efforts of our  Portfolio  Companies  to address the Year 2000
compliance  issues are not successful,  or if distributors,  suppliers and other
third parties with which we and our Portfolio  Companies conduct business do not
successfully  address  such  issues,  our  business  and the  businesses  of our
Portfolio  Companies  may  not be  operational  for a  period  of  time.  If the
Web-hosting  facilities of our Portfolio  Companies are not Year 2000 compliant,
their  production Web sites would be  unavailable  and they would not be able to
deliver services to their users.

RISKS  PARTICULAR  TO  OUR  PROPOSED   ACQUISITIONS  AND  PROSPECTIVE  PORTFOLIO
COMPANIES

UNCERTAINTY OF CONSUMMATION OF PROPOSED ACQUISITIONS

         Although  the Company and its E-Taxi  subsidiary  have  entered  into a
definitive  agreement with the stockholders of SSPS, each party's  obligation to
consummate  the   acquisition  is  subject  to  the   satisfaction  of  numerous
conditions,  including  the absence of  material  adverse  changes in  business,
financial condition and results of operations. In addition,  TopTeam has entered
into letters of intent with the TopTeam  Candidates,  none of which are binding.
Therefore, no assurance can be provided that E-Taxi will consummate its proposed
acquisition  of SSPS  nor that  TopTeam  and the  Company  will  consummate  the
proposed acquisition of the TopTeam Candidates.

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  acquisitions of E-Taxi and the proposed  acquisitions of the SSPS
companies and the TopTeam Candidates. 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.
For example,  for the year ended June 30, 1999, the Company recorded  in-process
research  and  development  expense  of  approximately  $20,000,   primarily  in
connection   with  the   acquisition  of  TechStore.   In  September,   1998,  a
representative  of the Securities and Exchange  Commission (the SEC) advised the
American Institute of Certified Public Accountants with respect to factors to be
considered in the valuation of in-process research and development. Although the
release of this new  guidance  presents the  potential  risk of  adjustments  to
reported amounts, if the Company's  valuation  methodology were to be challenged
by the SEC,  the Company  believes  that its  recorded  in-process  research and
development expenses were determined in compliance with such guidance.  Any such
adjustment could result in an increase in the amount of goodwill recorded, which
would result in higher amortization  expenses and,  therefore,  adversely affect
the  Company's  operating  results.  Further,  acquisitions  involve a number of
special problems, including difficulty integrating technologies, operations and

                                       16
<PAGE>


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  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 these  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.

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.

                                       17
<PAGE>

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.

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.

                                       18
<PAGE>

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
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.

                                       19
<PAGE>

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.

RISK 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  65.6% of the Company's Common Stock as of September 30, 1999.
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

                                       20
<PAGE>

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.

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 14,500,000 shares are outstanding as of September 27, 1999
of which  approximately  11,000,000  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;
   -     changes  in  our  methods  of  accounting  for  our  Portfolio  Company
         interests,  which may result from changes in our ownership  percentages
         of our Portfolio Companies;
   -     sales of equity  securities  by our  Portfolio  Companies,  which could
         cause us to  recognize  gains or  losses  under  applicable  accounting
         rules;
   -     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
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

                                       21
<PAGE>


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.  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.  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.  Additionally,  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.

         On April 23,  1987,  L.  Wayne  Kiley and Nancy  Kiley,  the  Company's
President and Secretary, respectively, purchased a fifty percent (50%) undivided
interest in the land and 5,000  square-foot  building at 205 East Fifth  Street,
Corona,  California,  which had, until  February  1994,  served as the Company's
headquarters, and subsequently was used as an interim sales office and temporary
headquarters for Medical Marketplace until October,  1995. On June 30, 1987, the
Kiley's  deeded their fifty percent  (50%)  interest in the land and building to
the Company in exchange for 952,623  shares of common stock of the Company.  The
other fifty  percent  (50%)  interest in the land and building was owned by Jack
Mooney,  an unrelated third party, who, in June, 1997, sold such interest to the
Company in exchange for the  cancellation  of certain  indebtedness.  In October
1998, the Company  transferred the property as consideration for cancellation of
outstanding indebtedness in the aggregate principal amount of $200,000.  Shortly

                                       22
<PAGE>


thereafter,  Mr. Mooney sold the property to the Kiley Children's Trust, a trust
created for the benefit of the children of L. Wayne Kiley,  the Company's  Chief
Executive Officer and former Chairman of the Board.

         On December  1, 1997,  the Company  entered  into a lease with  Quality
Associates,  Inc.,  a company  owned  and  controlled  by L.  Wayne  Kiley,  the
Company's  Chairman of the Board,  Chief  Executive  Officer and President.  The
lease was for the Company's  executive  offices located at 1171 Railroad Street,
Corona,  CA 91720,  and for  warehouse  space located at 340 North Grant Street,
Corona, CA, each for a three year term ending October 31, 2000. The office space
and the  warehouse  space  required  the payment of $9,000 and $4,000 in monthly
rent,  respectively.  Maintenance of the premises was at the Company's  expense.
The  Company has failed to pay rent since  September  1998.  In April 1999,  the
Company's landlord, Quality Associates, Inc., a company owned by L. Wayne Kiley,
the Company's Chief Executive  Officer and former Chairman of the Board,  agreed
to cancel all rent due and payable by the Company $64,536 to Quality Associates,
Inc. in exchange  for the  reduction of the  exercise  price of certain  options
granted to Mr. Kiley. See "Certain Relationships and Related Transactions."

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.

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

         On August 12, 1999, the Company  received written consents in lieu of a
meeting  of  stockholders  from  holders  of  6,873,734  shares of Common  Stock
representing  approximately  51.6% of the total issued and outstanding shares of
voting stock of the Company  approving  (i) the adoption of the  Company's  1999
Stock Plan and (ii) an amendment to the Company's  Certificate of  Incorporation
changing the Company's name to "eMarketplace, Inc.".

                                     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 30, 1999, there were
approximately   135  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, 1998,
through June 30, 1999, 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.

                                       23
<PAGE>


                FOR THE PERIOD FROM JULY 1, 1997 TO JUNE 30, 1999
                                QUOTED BID PRICE
<TABLE>
<CAPTION>

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)
                    ----------------     -----------------   ----------------   ---------------
<S>                      <C>                   <C>                 <C>           <C>
Common Stock:
         High            $1.50                 $.875               $1.56         $6.375
         Low             $.875                 $.688               $.875         $1.375


1998 FY                1st Quarter          2nd Quarter*       3rd Quarter*         4th Quarter*
                    (ended  9/30/97)     (ended  12/31/97)   (ended  3/31/98)    (ended  6/30/98)
                    ----------------     -----------------   ----------------     ---------------

Common Stock:
         High            1.06                   1.53                1.00          1.56
         Low             1.00                   1.00                1.00          1.50
</TABLE>

         On  September  30,  1999,  the closing bid price of the Common Stock as
reported on OTC Bulletin Board was $7.00.  eMarketplace  has no dividend policy,
and does not intend to pay any dividends in the foreseeable future.

                                       24
<PAGE>


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

FORWARD LOOKING STATEMENTS

         The   following   Management's   Discussion   and   Analysis   contains
forward-looking statements, which involve risks and uncertainties. The Company's
actual  results  may  differ   materially   from  those   anticipated  in  these
forward-looking  statements  as a result of the  acquisition  of  TechStore  and
E-taxi, and the proposed  acquisition of SSPS, which is expected to close during
the  second  quarter  of fiscal  2000,  and other  factors,  including,  without
limitation,  those risk factors set forth under "Risk Factors"  included in Part
I, Item 1, - "Description of Business" of this Annual Report on Form 10-KSB.

OVERVIEW

         eMarketplace,  Inc. (the "Company") consists of eMarketplace,  Inc. and
its wholly owned  subsidiaries.  Until April 1999,  the Company was primarily in
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  has been in the  process of winding  down its
computer  equipment  business because it has failed to operate  profitably since
the fiscal  year ended June 1994.  In April  1999,  the Board of  Directors,  in
connection  with their shift in business  strategy,  announced  its intention to
divest of Medical  Marketplace,  resulting in the classification of the business
as a discontinued operation.  Therefore, the results of Medical Marketplace have
been excluded from the results of operations of the Company, and a liability was
recorded as an estimate of the total loss to be incurred upon the sale.

         In April 1999, the Company adopted a new corporate  strategy focused on
developing,  acquiring and operating  Internet  businesses by acquiring  E-Taxi,
Inc. ("E-Taxi").  The Company is presently pursuing a business plan to become 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.

         On April 23, 1999, the Company acquired E-Taxi,  which is accounted for
as a  "reverse  acquisition."  As  consideration  for the  9,074,000  shares  of
E-Taxi's  common  stock and 400,000  shares of the  E-Taxi's  Series A Preferred
Stock,  the Company issued an aggregate of 9,074,000 shares of common stock, par
value  $.0001 per share,  and 400,000  shares of Series A Preferred  Stock,  par
value  $.0001 per share.  For  accounting  purposes,  E-Taxi is deemed to be the
acquirer, and the Company is deemed to be acquired, under the purchase method of
accounting. Therefore, the financial information presented herein represents the
historical  results of E-Taxi and the results of the Company from April 23, 1999
(date of acquisition)  only. E-Taxi 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.

         Immediately  prior to the  closing  of the E-Taxi  Acquisition,  E-Taxi
closed (i) a private  offering of its shares of preferred stock and common stock
raising an aggregate of  approximately  $1,400,000  and (ii) the  acquisition of
TechStore.  LLC, a California  limited  liability company  ("TechStore"),  is an
online retailer of computer hardware and software.

         The  acquisition  was  accounted  for as a  purchase.  The  results  of
operations include the results of TechStore from the date of acquisition.

                                       25
<PAGE>


         As of June 14, 1999, E-Taxi entered into (i) a Stock Purchase Agreement
(the "Stock Purchase  Agreement")  with all of the shareholders of SSPS, Inc., a
California  corporation  ("SSPS"),  pursuant  to  which  E-Taxi  has  agreed  to
purchase, and the shareholders of SSPS have agreed to sell,  approximately 94.6%
of the  outstanding  shares  of  capital  stock of SSPS,  and (ii) a  Membership
Interest   Purchase   Agreement   with  all  of  the   members  of  Impact  Team
International,  LLC, a California  limited liability company and an affiliate of
SSPS  ("Impact"),  pursuant  to which  E-Taxi  has agreed to  purchase,  and the
members  of  Impact  have  agreed  to sell,  all of the  outstanding  membership
interests of Impact. SSPS, and its operating divisions TRISTEP, GIG2GIG.COM, and
IT  WORLDNET.COM,  and  Impact,  provide  short  term  and long  term  temporary
workforce solutions primarily to rapidly growing technology firms.

         The  closing of the  transactions  contemplated  by the Stock  Purchase
Agreement and the Membership  Interest  Purchase  Agreement (the  "Closing") are
subject to the satisfaction of certain conditions, including without limitation,
the execution and delivery of employment  agreements with certain members of the
senior  management team of SSPS, the release of a principal  stockholder of SSPS
of his guaranty of certain indebtedness of SSPS, the waiver of certain rights of
first  refusal to purchase the shares of SSPS capital stock owned by a principal
stockholder,  the termination  and release of certain  obligations of SSPS under
existing employment agreements and other customary conditions to closing. At the
Closing,  the Company will issue approximately 2.9 million shares of it's Common
Stock and pay cash and notes of approximately $1.5 million for SSPS. The Company
has also  agreed to  provide  the  sellers  of the SSPS  shares  and the  Impact
interests  with  demand  and  piggyback  registration  rights.  It is  presently
anticipated that the Company's  acquisition of SSPS and Impact will occur during
the second quarter of 2000.

         In August 1999, the Company's newly formed 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 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.

RESULTS OF OPERATIONS

         Because the Company had no revenues and nominal expenses for the period
from inception (April 14, 1998) to June 30, 1998 (total operating  expenses were
$8,071),  any  comparison  of fiscal  1999  results to fiscal  1998 would not be
meaningful  and have been  excluded from the  following  discussion.  The E-Taxi
Acquisition was accounted for as a reverse acquisition. The historical financial
statements reflect the operations of E-Taxi for twelve months and the operations
of Computer  Marketplace  from April 1999 to June 30,  1999.  In  addition,  any
forward looking information does not include the impact, if any, of the proposed
acquisition of SSPS discussed above.

     The Company may experience significant fluctuations in operating results in
future  periods due to a variety of factors,  including  but not limited to, the
following  factors which are  discussed at more length  elsewhere in this Annual
Report on Form 10-KSB:

   -     The Company has incurred operating losses and there can be no assurance
         that these losses will be reduced in the future.
   -     The Company has a limited  operating history on which to base estimates
         of future performance.
   -     The Company  may need  additional  financing  in order to carry out its
         business plans.

                                       26
<PAGE>

   -     The Company's business model is unproven and could fail.
   -     The  Company is  dependent  on  continued  growth of the  Internet  and
         Internet infrastructure.
   -     The completion of proposed acquisitions cannot be assured.
   -     The  Company  must  manage its growth and the  integration  of acquired
         businesses,  which diverts management's'  attention from the day-to-day
         operations of existing businesses.
   -     Competition for Internet products and services is intense.
   -     Some of the Company's  businesses may be dependent on the efficient and
         uninterrupted  operation of their computer and communications  hardware
         systems.
   -     The  market  in  which  the  Company   operates  is  subject  to  rapid
         technological  change,  which could render the  Company's  products and
         services obsolete.


FISCAL YEAR ENDED JUNE 30, 1999

NET LOSS

         The Company recorded a net loss of $728,297 for the year ended June 30,
1999  because the cost of revenues  and expenses  were not  sufficient  to cover
revenues  generated.  Management  believes that (i) the  discontinuation  of its
computer resale operations;  (ii) the divestiture of Medical Marketplace;  (iii)
the  operations of TechStore  for a complete 12 month period;  and (iv) interest
income  resulting  from interest on financing  proceeds could result in improved
profitability.  There can be no assurance that the Company will be successful in
reducing net losses.

 REVENUE

         Total  revenue for the year ended June 30, 1999 was  $2,208,855,  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. Revenue is expected to increase in fiscal 2000
with the inclusion of the result of TechStore for full twelve months.

COST OF REVENUE

         Total cost of revenue for the year ended June 30,  1999 was  $2,061,725
or 93.3% of revenue.  Cost of revenue includes the cost of product sold,  credit
card   processing   fees  and  freight  costs.   The  Company   utilizes  vendor
drop-shipments directly to customers, and therefore does not maintain inventory.
The  Company  expects  margins  to  remain  low in the  near  future  as it uses
competitive pricing as a means to obtain increased market share.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         Total selling,  general and administrative  expenses for the year ended
June  30,  1999  were  $453,616  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  $88,661 in non-cash  expenses  associated  with stock  issued to three
directors  for  services  rendered  and stock  options  issued to an  accounting
consultant.  The  Company  expects to incur  approximately  $88,000 in the first
quarter  of  fiscal  2000  for the  amortization  of the  deferred  compensation
associated with the options.  Selling,  general and administrative expenses over
the  next  year  will  include  the  expenses  of  TechStore  for a  full  year,
advertising  expenses  to  market  the  Company's  expanded  product  offerings,

                                       27
<PAGE>

administrative   expenses   associated  with  conforming  to  public   reporting
requirements  of  the  Company,  and  expenses  associated  with  the  Company's
acquisition and expansion  strategy  discussed in the "Business" section of this
annual report on Form 10-KSB.

PRODUCT DEVELOPMENT EXPENSES

         Product  development  expenses were $19,173 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 $404,174
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 $9,972,630 in goodwill, $140,000
in  acquired  technology  $160,000  in  established  workforce  and  $280,000 in
trademarks,  are being  amortized over their  estimated  useful lives of four to
five years. In the event that the Company  continues to acquire other companies,
amortization  of  acquisitions  will continue to have an impact on the Company's
results of operations in the future. Based on acquisitions  completed as of June
30, 1999, and assuming no impairment of the value  resulting in an  acceleration
of  the   amortization,   future   amortization  will  reduce  net  income  from
operations..  If the Company  completes  additional  acquisitions in the future,
this could result in additional  amortization  charges of the resulting goodwill
from the acquisition.

INTEREST INCOME AND EXPENSE

         Interest income, net of interest expense, was $1,536 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.

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,  1999,  the Company had a cash  balance of  $1,255,966  and
negative  working capital of ($377,642).  The primary source of cash and working
capital to the Company  during 1999 was  approximately  $1.4 million in proceeds
from a private placement in April 1999. Of the total proceeds,  $53,000 was used
to repay loans assumed in acquisitions and $114,323 was used to fund operations.
The acquisition of TechStore and the reverse acquisition between the Company and
E-Taxi resulted in cash acquired of approximately  $21,550. The Company believes
that its projected cash flow from operations,  cash balances as of June 30, 1999
of  approximately  $1,255,000,  and the proceeds from the  Company's  subsequent
capital raising  activities will be sufficient to meet the working capital needs
of the Company through June 30, 2000.

                                       28
<PAGE>

         Operations  for the period from inception  (April  14,1998) to June 30,
1998 were funded  primarily by increases  in  liabilities,  with no investing or
financing activities occurring during that period.

         The Company's principle commitments at June 30, 1999 consist of monthly
operating rental payments,  compensation of employees and accounts  payable.  In
addition,  the accrued loss on the disposal of Medical  Marketplace (see Note 13
of Notes to  Consolidated  Financial  Statements)  includes  notes  payable  and
capital  lease  obligations  which  would,  should the  subsidiary  not close as
anticipated  by the  Company  in the  fourth  quarter  of  fiscal  2000,  remain
obligations of the Company.  Also, at the closing of the proposed acquisition of
SSPS,  which is  anticipated  to be in the second  quarter of fiscal  2000,  the
Company has  committed to pay cash and notes of  approximately  $1.5 million for
SSPS.

         On July 16,  1999,  the  Company  commenced  a  private  offering  (the
"Offering")  of up to  1,200,000  shares of its common stock (each a "Share" and
collectively  the "Shares").  The Offering is being conducted under an exemption
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  will  be  made  only  to  "accredited
investors," as such term is defined in Rule 501(a) under the Act. The Shares are
being offered at a purchase price of $3.875 per share and on a "best efforts all
or  none"  basis  with  respect  to  the  first  400,000  Shares  (the  "Minimum
Offering"),  and on a  "best  efforts"  basis  thereafter  with  respect  to the
remaining 800,000 Shares (the "Maximum  Offering").  The Offering was originally
scheduled to terminate on August 30, 1999,  but has been  extended at the option
of the Company.  Subscriptions  for less than 20,000  Shares (or $77,550) may be
accepted  at the  discretion  of the  Company.  Upon  completion  of the Minimum
Offering and the Maximum Offering, the Company expects to receive gross proceeds
of  approximately  $1,550,000 and  $4,650,000,  respectively,  before  deducting
commissions  (placement  agent) and  expenses  of the  Offering  (consisting  of
accounting  and legal  fees,  "blue sky" fees and other  related  expenses).  On
October 8, 1999,  the  Company  conducted  an interim  closing  receiving  gross
proceeds of $2,883,872  from the sale of 744,225  shares of Common  Stock..  The
proceeds of the Offering will be used to fund the acquisition of SSPS and Impact
and the working capital needs of the Company.

         The Company will rely upon its projected cash flow from  operations and
additional debt and equity financing for its long-term capital needs.

YEAR 2000 COMPLIANCE

         Many  currently   installed   computer   systems  are  not  capable  of
distinguishing  21st  century  dates  from  20th  century  dates  or  have  been
programmed with default dates ending in 99, the common  two-digit  reference for
1999. As a result, as the Company  transitions from the 20th century to the 21st
century, computer systems and used by many companies and organizations in a wide
variety of industries  will produce  erroneous  results or fail unless they have
been  modified or upgraded to process date  information  correctly.  Significant
uncertainty  exists  concerning  the scope and magnitude of problems  associated
with the year 2000 issue.

         STATE OF  READINESS.  Although  the Company has not  conducted a formal
audit  internally or by any third party,  based on its current  assessment,  the
Company believes its internal  systems are year 2000 compliant.  The Company has
confirmed  that  the  accounting  systems  used  by  it  and  its  wholly  owned
subsidiaries  are year 2000 compliant.  However,  such a review has not yet been
completed  on  potential  acquisition  targets.  The  Company  is  beginning  to
communicate  with  its  significant  suppliers  to  determine  their  year  2000
readiness. The Company has not completed its year 2000 investigation and overall
compliance initiative.

                                       29
<PAGE>

         COSTS.  To date,  the  Company  has not  incurred  any  material  costs
directly  associated  with  its  year  2000  compliance   efforts,   except  for
compensation  expenses  associated with its salaried  employees who have devoted
some of their time to the year 2000 assessment.  The Company does not expect the
total cost of year 2000  problems  to be material  to its  business.  During the
months prior to the century  change,  the Company will  continue to evaluate new
software and  information  systems  provided to it by third  parties and any new
infrastructure  systems that the Company acquires to determine  whether they are
year 2000 compliant.  Despite the Company's current assessment,  the Company may
not identify and correct all  significant  year 2000 problems on a timely basis.
Year 2000  compliance  efforts  may  involve  significant  time and  expense and
unremediated  problems  could  substantially  harm  its  business.  The  Company
currently  has no  contingency  plans  to  address  the  risks  associated  with
unremediated year 2000 problems.

         RISKS.  The Company is not currently  aware of any year 2000  readiness
problems  relating to its  internally-developed  proprietary  systems that would
substantially  harm its business.  The Company may discover year 2000  readiness
problems in these systems that will require substantial  revision.  In addition,
third-party  software,  hardware or  services  incorporated  into the  Company's
material  systems  may need to be revised  or  replaced,  all of which  could be
time-consuming  and  expensive.  The  Company's  failure to fix or  replace  its
internally developed proprietary software or third-party  software,  hardware or
services on a timely basis could result in lost  revenues,  increased  operating
costs,  the loss of customers  and other  business  interruptions,  any of which
could  substantially  harm the  Company's  business.  In addition,  governmental
agencies,  utility  companies,  Internet access companies,  third-party  service
providers  and others  outside  of the  Company's  control  may not be year 2000
ready.  The failure by these  entities  to be year 2000 ready could  result in a
systemic  failure beyond the Company's  control,  such as a prolonged  Internet,
telecommunications  or electrical failure,  which could also prevent the Company
from  delivering  goods  to the  Company's  customers,  decrease  the use of the
Internet or prevent users from accessing the Company's web sites.

         In particular,  the Company has  identified  the following  vendors and
service  providers as significant  to its business:  Wells Fargo Bank for credit
card processing,  Masterlink,  Inc. for Internet services, Tech Data Corporation
for  inventory  and  Deutsche  Financial  Services  for  banking  and  financing
services.  The Company has not yet  received  any written  assurance  from these
vendors  and  service  providers  as to their  readiness  for year 2000  issues.
However,  the Company does monitor the progress of these companies in their year
2000  preparations  by  reviewing  their  respective  web  sites,  each of which
contains detailed  information about their year 2000  preparations.  Because the
Company has not received written assurances,  the Company has assumed that these
vendors and services may not be ready for the year 2000 before  January 1, 2000,
and that their  processing  capabilities  could fail at that time. Based on this
assumption,  the Company  believes such a failure  would be the most  reasonably
likely worst case year 2000  scenarios.  If the credit card service  fails,  the
Company would seek to complete credit card transaction  manually using temporary
staff. If service were not restored promptly,  the Company believes switching to
another financial institution for automated credit card processing would require
approximately 15 days. Similarly, finding alternative vendors for inventory, web
site hosting and banking could take approximately 15 to 30 days.

         CONTINGENCY  PLAN.  As  discussed  above,  the Company is engaged in an
ongoing year 2000 assessment and has not yet developed any contingency plans.

                                       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,  1999.  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, 1999 all of the
Company's  cash and cash  equivalents  mature in three months or less, and there
were no 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.

                                    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              51            Chairman of the Board
L. Wayne Kiley              56            Director, Chief Executive Officer and
                                          Principal Accounting Officer
Bejan Aminifard             25            Chief Executive Officer of TechStore
Derek Wall                  29            President of TechStore
Brian Hintergardt           41            President of Medical Marketplace
Thomas E. Evans, Jr.        59            Director

ROBERT WALLACE has been Chairman of the Board since April 1999. Since April 1999
he 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.

                                       31
<PAGE>

L. WAYNE KILEY has been the President and Chief Executive Officer of the Company
since March 1984,  and a director  since June 1993. 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 Tuscon, Arizona.
From  1970 to 1978,  he was the owner of the  Business  Exchange  in Santa  Ana,
California.

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. Aminfard 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.

BRIAN HINTERGARDT has been Executive Vice President of Medical  Marketplace from
March 1994 to August 1998 and since that time he has served as the  President of
Medical  Marketplace.  From  1987  until  1993,  Mr.  Hintergardt  was the Chief
Executive  Officer,  Administrator  and  Engineer of Coalinga  Regional  Medical
Center.  Mr.  Hintergardt  has  an  engineering  degree  from  California  State
Polytechnical University.

THOMAS E. EVANS,  JR. has been a director since February 1994.  Since July 1995,
he has held various senior management positions with the Orange County Division,
of Fidelity  National Title Insurance,  most recently he has served as President
since 1995.  Mr. Evans is a member of the American  Land Title  Association  and
serves  as its  current  President.  Mr.  Evans  served  from  1984 to 1992 as a
director of Fidelity National  /financial,  Inc. which is listed on the New York
Stock Exchange.

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, 1999, all
Section 16(a) filing  requirements  applicable  to its  officers,  directors and
greater than ten percent (10%)  beneficial  owners were  satisfied,  except that
Bejan Aminifard filed a Form 3 late and Derek Wall failed to file a Form 3.

ITEM 10. EXECUTIVE COMPENSATION

         The following table shows all the cash compensation paid by the Company
to the Chief Executive Officer and two of the Company's officers who received in

                                       32
<PAGE>

excess of $100,000 in annual salary and bonus during the fiscal years ended June
30, 1999, 1998, and 1997:

<TABLE>
<CAPTION>
                                       Annual                    Compensation
                                    Compensation                    Awards
       (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>
L. Wayne Kiley, President Chief         1999        $-------(1)      $----       100,000        $-----
Executive Officer and Director          1998        $269,228         $----        -----         $-----
                                        1997        $306,977         $----       661,667         4,476

Thomas Mason(2) Vice President          1999        $-------         $----        -----         $-----
                                        1998        $178,800         $----        -----         $-----
                                        1997        $211,976         $----       143,000        $-----

Brian Hintergardt Chief Executive       1999        $120,000                                    $-----
Officer -- Medical Marketplace          1998        $ 20,168                      41,666
                                        1997        $ 19,033

Mauri Lathouwers, Jr.                   1999        $120,000         $----        -----         $3,900
                                        1998        $-------         $----        -----
</TABLE>

----------
(1)      Mr.  Kiley did not  receive a salary for the year ended June 30,  1999.
         However, the exercise price of certain options were reduced to $.60 per
         share. The Company recorded $ as additional compensation as a result of
         the exercise price adjustment.

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

         During the year  ended June 30,  1999,  the  Company  issued a total of
300,000  options to L. Wayne Kiley, a director and the Company's Chief Executive
Officer,  and Joe Achten,  then a director of the Company, in exchange for loans
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."

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,  motivate  and reward  good  performance,
encourage  such  employees  to continue to exert their best efforts on behalf of
the Company and its subsidiaries and provide  opportunities  for stock ownership
by such employees in order to increase their proprietary interest in the Company
by providing  incentive  awards to key  employees,  whose  responsibilities  and
decisions directly affect the performance of the Company and its subsidiaries.

         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

                                       33
<PAGE>

to adjustment to prevent dilution in the event of stock splits,  stock dividends
or other changes in the capitalization of the Company.

         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,

                                       34
<PAGE>

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.

        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 $64,536,  and accrued and
unpaid  salary in the amount of  $314,135,  in  exchange  for the  repricing  of
690,834 options outstanding,  resulting in a compensation charge of $204,557, 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,

                                       35
<PAGE>

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).

         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).

CONSULTING AGREEMENT

         In April 1999,  the Company  entered into a consulting  agreement  with
Thomas  Browne,  dated  April 13,  1999,  whereby Mr.  Browne  agreed to provide
financial accounting services to the Company for a period of five (5) months. As
consideration,  the  Company  granted Mr.  Browne an option to purchase  125,000
shares of common  stock at an  exercise  price of $2.50 per share.  Prior to his
consultancy  with the Company,  Mr. Browne was employed by Infoseek in a variety
of accounting positions, most recently as Corporate Controller.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information, as of September 30,
1999, 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:

NAME AND ADDRESS OF            SHARES OF COMMON STOCK
 BENEFICIAL OWNER(1)            BENEFICIALLY OWNED(2)        PERCENT OF CLASS(3)
 -------------------            ---------------------        -------------------

Robert M. Wallace(4)                 6,426,800(5)                     45.3%

L. Wayne Kiley(6)                    1,123,351(7)                      8.3%

Thomas Evans(8)                         50,833(9)                         *

Bejan Aminifard(10)                  1,824,500                        13.7%

Derek Wall(11)                         414,975                         3.3%

Brian Hintergardt(12)                   41,666(13)

All Officers and Directors           9,882,125(5)(7)(9)(13)           65.6%
as a Group (4 persons)

                                       36
<PAGE>
----------
*        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 12,691,460 shares of common stock outstanding.

4.       Mr.  Wallace is the  Chairman  of the Board of the  Company 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,  (ii) 1,500,000  shares of Common Stock
         issuable  to  Gateway  Advisors  upon the  exercise  of a Common  Stock
         Purchase Warrant held thereby, and (iii) 102,800 shares of Common Stock
         held by the Gateway Advisors Profit Sharing Plan.

6.       Mr. Kiley is a director,  Chief Executive  Officer and Chief Accounting
         Officer of the Company

7.       Includes  (i) 249,184  shares of Common  Stock owned  jointly  with Mr.
         Kiley's  wife,  (ii) 790,834  shares of Common Stock  issuable upon the
         exercise  of stock  options at an  exercise  price $.60 per share,  and
         (iii) 83,333 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  30,833  shares of Common Stock  issuable upon the exercise of
         options at an exercise prices of $1.00 per share and $1.68 per share.

10.      Mr. Aminifard is the Chief Executive Officer of TechStore LLC.

11.      Mr. Wall is the President of TechStore.

12.      Mr. Hintergardt is the Chief Executive Officer of Medical Marketplace.

13.      Includes 41,666 shares issuable upon the exercise of stock options.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         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.  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 8,
2000.

         As of April 9, 1999,  the  Company and  Victoria  Holdings,  Inc.,  the
Company's  former  financial  advisor,  entered  into  a  Settlement  Agreement,
pursuant to which the Company  issued  250,000  shares of the  Company's  Common
Stock in exchange for (i) the cancellation of Options  exercisable for 1,000,000
shares of the  Company's  Common Stock at an exercise  price of $1.00 per share,
and (ii) a general release, releasing the Company from all liabilities.  As part
of the foregoing Settlement Agreements, the Company agreed to include the shares
issued in connection  therewith in the next registration  statement filed by the
Company with the Securities and Exchange Commission (other than on a Form S-4 or
Form S-8), subject to certain limitations and restrictions.

         As of April 9, 1999 (and clarified as of October 12, 1999), the Company
entered into an Agreement with L. Wayne Kiley,  the Company's  President,  Chief
Executive Officer and at that time Chairman of the Board,  pursuant to which Mr.
Kiley  waived  (i) his  rights to  accrued  and  unpaid  salary in the amount of
$314,135 (ii) all of his rights under his employment agreement with the Company,
including without limitation,  all future  compensation,  and (iii) on behalf of
Quality  Associates,  Inc. (a company  owned and  controlled  by Mr.  Kiley) its
rights to accrued and unpaid rent with

                                       37
<PAGE>

respect  to the  Company's  executive  offices,  in the  amount of  $64,536.  In
exchange  for the  foregoing,  the  Company  reduced the  exercise  price of (a)
661,667  options  held by Mr.  Kiley from $1.00 to $.60 per share and (b) 29,167
options held by Mr. Kiley from $1.68 to $.60 per share. In addition, the Company
agreed to include the shares  issuable upon the exercise of such options as well
as certain other options  issued to management and certain  consultants  under a
Registration  Statement on Form S-8 to be filed with the  Commission in the near
future.

         As of April 21,  1999,  the  Company  and each of the  stockholders  of
E-Taxi, Inc., a Delaware corporation  ("E-Taxi"),  entered into a Stock Purchase
Agreement,  pursuant  to  which  the  Company  acquired  all of the  issued  and
outstanding  capital  stock of E-Taxi on April 23, 1999.  As  consideration  for
9,074,000 shares of the E-Taxi's common stock and 400,000 shares of the E-Taxi's
Series A Preferred Stock, the Company issued an aggregate of 9,074,000 shares of
the Company's  common stock,  par value $.0001 per share,  and 400,000 shares of
the  Company's  Series A Preferred  Stock,  par value $.0001 per share.  Messrs.
Wallace,  Aminifard  and Wall  were  significant  stockholders  of  E-Taxi.  See
"Business" and "Principal Stockholders."

         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.

         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 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.  The maturity dates of the notes have been extended to December 31, 1999.
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.

         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.

         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.

                                       38
<PAGE>

                                     PART IV


ITEM 13. EXHIBITS AND REPORTS ON FORM 8-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.

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.

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.

                                       39
<PAGE>

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

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

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.

21.01             Subsidiaries of the Registrant

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


(B)      REPORTS ON FORM 8-K

         (1)  Current Report on Form 8-K filed on May 10, 1999, Items 1,2 and 5.
         (2)  Current Report on Form 8-K filed on April 1, 1999, Item 5.

                                       40
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                 PAGES
                                                                                 -----
<S>                                                                               <C>
Report of Independent Auditors.................................................   F-1

Consolidated Balance Sheet as of June 30, 1999.................................   F-2

Consolidated Statements of Operations for the year ended June 30, 1999 and
the period from April 14, 1998 (inception) to June 30, 1998....................   F-3

Consolidated Statements of Stockholders' Equity for the year ended
June 30, 1999 and the period from April 14, 1998 (inception) to June 30, 1998..   F-4

Consolidated Statements of Cash Flows for the year ended
June 30, 1999 and the period from April 14, 1998 (inception) to June 30, 1998..   F-5

Notes to Consolidated Financial Statements.....................................   F-6
</TABLE>

                                . . . . . . . . .

<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. (formerly Computer Marketplace, Inc.) and its subsidiaries as
of June  30,  1999,  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, 1999.  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, 1999, and the
consolidated  results of their  operations  and their cash flows for each of the
two fiscal years in the period ended June 30, 1999, in conformity with generally
accepted accounting principles.







                                             MOORE STEPHENS, P. C.
                                             Certified Public Accountants.


Cranford, New Jersey
September 16, 1999
[Except for Notes 17A, B and E as to which
the dates are October 12, 12 and 11, 1999, respectively]

                                       F-1
<PAGE>


EMARKETPLACE, INC. AND ITS SUBSIDIARIES


CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999.

<TABLE>
<CAPTION>
ASSETS:
CURRENT ASSETS:
<S>                                                                       <C>
   Cash and Cash Equivalents                                              $  1,255,966
   Accounts Receivable (Less Allowance For Doubtful Accounts of $5,032)         57,318
   Prepaids and Other Current Assets                                            35,060
                                                                          ------------

   TOTAL CURRENT ASSETS                                                      1,348,344
                                                                          ------------

   PROPERTY AND EQUIPMENT (LESS ACCUMULATED DEPRECIATION OF $294,503)           43,955
                                                                          ------------

OTHER ASSETS:
   Intangible Assets (Less Accumulated Amortization of $404,174)            11,335,749
   Deposits                                                                    105,765
                                                                          ------------

   TOTAL OTHER ASSETS                                                       11,441,514

   TOTAL ASSETS                                                           $ 12,833,813
                                                                          ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES:
   Notes Payable to Related Party                                         $    167,000
   Notes Payable                                                                12,167
   Accounts Payable                                                            776,856
   Accrued Loss on Disposal of Acquired Subsidiary (13)(17A)                   661,287
   Other Accrued Liabilities                                                   175,676
                                                                          ------------

   TOTAL CURRENT LIABILITIES                                                 1,792,986
                                                                          ------------

COMMITMENTS AND CONTINGENCIES                                                       --

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, 12,691,460 Shares Issued and Outstanding                        1,269
   Capital in Excess of Par Value                                           12,491,501
   Common Stock Subscription Notes Receivable                                  (70,020)
   Accumulated Deficit                                                        (735,428)
   Deferred Compensation                                                      (646,495)
                                                                          ------------

   TOTAL STOCKHOLDERS' EQUITY                                               11,040,827
                                                                          ------------

   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             $ 12,833,813
                                                                          ============
</TABLE>


See Notes to Consolidated Financial Statements.

                                          F-2
<PAGE>


EMARKETPLACE, INC. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                             PERIOD FROM
                                                                            APRIL 14, 1998
                                                               YEAR ENDED   (INCEPTION) TO
                                                                JUNE 30,        JUNE 30,
                                                                 1999            1998
                                                             ------------    ------------
<S>                                                          <C>             <C>
REVENUE                                                      $  2,208,855    $         --
                                                             ------------    ------------

OPERATING COSTS AND EXPENSES:
   Cost of Revenue                                              2,061,725              --
   Selling, General and Administrative                            453,616           8,071
   Product Development                                             19,173              --
   Amortization of Goodwill and Other Acquired Intangibles        404,174              --
                                                             ------------    ------------

   TOTAL OPERATING COSTS AND EXPENSES                           2,938,688           8,071
                                                             ------------    ------------

LOSS FROM OPERATIONS                                             (729,833)         (8,071)

INTEREST INCOME                                                     5,795             940
INTEREST EXPENSE                                                   (4,259)             --
                                                             ------------    ------------

   NET LOSS                                                  $   (728,297)   $     (7,131)
                                                             ============    ============

NET LOSS PER SHARE:
   Basic and Diluted                                         $      (0.06)   $         --
                                                             ============    ============
   Weighted Average Common Shares Outstanding                  11,224,793      11,091,460
                                                             ============    ============
</TABLE>

See Notes to Consolidated Financial Statements.

                                           F-3

<PAGE>


EMARKETPLACE, INC. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                                                   COMMON STOCK
                                                                                                     CAPITAL IN     SUBSCRIPTION
                                          PREFERRED STOCK                  COMMON STOCK               EXCESS OF         NOTES
                                      SHARES           AMOUNT          SHARES          AMOUNT         PAR VALUE      RECEIVABLE
                                    ------------    ------------    ------------    ------------    ------------    ------------
<S>                                 <C>             <C>                <C>          <C>             <C>             <C>
Issuance of Subscribed Common
   Stock in April 1998                        --    $         --       6,360,000    $        636    $     63,924    $    (64,560)

Issuance of Common Stock in
   April 1998 for Consulting
   Services                                   --              --         100,000              10              90              --
Issuance of Common Stock in
   E-Taxi Combination [1]                400,000              40       9,074,000             907            (942)             --
Interest Income Accrued                       --              --              --              --              --            (940)
Net Loss                                      --              --              --              --              --              --
Recapitalization Adjustment                   --              --      (6,460,000)           (646)            646              --
                                    ------------    ------------    ------------    ------------    ------------    ------------

BALANCE - JUNE 30, 1998                  400,000              40       9,074,000             907          63,713         (65,500)

Issuance of Common Stock in
   April 1999 for Consulting
   Services                                   --              --          60,000               6          29,994              --
Issuance of Common and
   Preferred Stock in April 1999
   for Acquisition of TechStore          310,000              31       1,744,000             174       1,491,795              --
Sale of Common and Preferred
   Stock for Cash in April 1999           90,000               9         810,000              81       1,406,160              --
Recapitalization Adjustment             (400,000)            (40)     (2,614,000)           (261)            301              --
Acquired Deficiency of CMP [1]                --              --       2,017,460             202        (472,972)             --
Goodwill Recorded on E-Taxi
   Combination [1]                            --              --              --              --       9,972,630              --
Amortization of Deferred
   Compensation Associated
   with Stock Options Issued to a
   Consultant by Acquired Company             --              --              --              --              --              --
Amortization of Deferred
   Compensation Associated with
   Financial Advisory Agreement               --              --              --              --              --              --
Conversion of Preferred Stock
    to Common in May 1999               (400,000)            (40)      1,600,000             160            (120)             --
Interest Income Accrued                       --              --              --              --              --          (4,520)
Net Loss                                      --              --              --              --              --              --
                                    ------------    ------------    ------------    ------------    ------------    ------------

BALANCE - JUNE 30, 1999                       --              --      12,691,460    $      1,269    $ 12,491,501    $    (70,020)
                                    ============    ============    ============    ============    ============    ============

See Notes to Consolidated Financial Statements.
</TABLE>

<PAGE>


EMARKETPLACE, INC. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                         TOTAL
                                        DEFERRED      ACCUMULATED     STOCKHOLDERS'
                                      COMPENSATION      DEFICIT          EQUITY
                                      ------------    ------------    ------------
<S>                                   <C>             <C>             <C>
Issuance of Subscribed Common
   Stock in April 1998                $         --    $         --    $         --

Issuance of Common Stock in
   April 1998 for Consulting
   Services                                     --              --             100
Issuance of Common Stock in
   E-Taxi Combination [1]                       --              --              --
Interest Income Accrued                         --              --            (940)
Net Loss                                        --          (7,131)         (7,131)
Recapitalization Adjustment                     --              --              --
                                      ------------    ------------    ------------

BALANCE - JUNE 30, 1998                         --          (7,131)         (7,971)

Issuance of Common Stock in
   April 1999 for Consulting
   Services                                     --              --          30,000
Issuance of Common and
   Preferred Stock in April 1999
   for Acquisition of TechStore                 --              --       1,492,000
Sale of Common and Preferred
   Stock for Cash in April 1999                 --              --       1,406,250
Recapitalization Adjustment                     --              --              --
Acquired Deficiency of CMP [1]            (757,156)             --      (1,229,926)
Goodwill Recorded on E-Taxi
   Combination [1]                              --              --       9,972,630
Amortization of Deferred
   Compensation Associated
   with Stock Options Issued to a
   Consultant by Acquired Company           58,661              --          58,661
Amortization of Deferred
   Compensation Associated with
   Financial Advisory Agreement             52,000              --          52,000
Conversion of Preferred Stock
    to Common in May 1999                       --              --              --
Interest Income Accrued                         --              --          (4,520)
Net Loss                                        --        (728,297)       (728,297)
                                      ------------    ------------    ------------

BALANCE - JUNE 30, 1999               $   (646,495)   $   (735,428)   $ 11,040,827
                                      ============    ============    ============

See Notes to Consolidated Financial Statements.
</TABLE>

See Notes to Consolidated Financial Statements.

                                        F-4
<PAGE>


EMARKETPLACE, INC. AND ITS SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                         PERIOD FROM
                                                                                        APRIL 14, 1998
                                                                            YEAR ENDED  (INCEPTION) TO
                                                                             JUNE 30,      JUNE 30,
                                                                              1999           1998
                                                                           -----------    -----------
<S>                                                                        <C>            <C>
OPERATING ACTIVITIES:
   Net Loss                                                                $  (728,297)   $    (7,131)
   Adjustments to Reconcile Net Loss to Net Cash Provided
     (Used) by Operating Activities:
     Consulting Services Paid for by Issuance of Common Stock                   30,000            100
     Amortization of Deferred Compensation Associated with
       Issuance of Stock Options and Warrants                                  110,661             --
     Depreciation                                                                5,815             --
     Amortization                                                              404,174             --
     Interest Accrued on Stockholder Notes                                      (4,520)          (940)
     Changes in Assets and Liabilities:
     Accounts Receivable                                                       (31,480)            --
     Other Assets                                                              (33,781)            --
     Accounts Payable                                                          175,432            649
     Accrued Liabilities                                                       (42,327)         7,322
                                                                           -----------    -----------

   NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES                           (114,323)            --
                                                                           -----------    -----------

INVESTING ACTIVITIES:
   Purchase of Fixed Assets                                                     (4,511)            --
   Cash Received from Acquisitions - Net of Cash Paid                           21,550             --
                                                                           -----------    -----------

   NET CASH PROVIDED BY INVESTING ACTIVITIES                                    17,039             --
                                                                           -----------    -----------

FINANCING ACTIVITIES:
   Repayment of Loans Assumed in Acquisitions                                  (53,000)            --
   Proceeds from Issuance of Common and Convertible Preferred Stock          1,406,250             --
                                                                           -----------    -----------

   NET CASH PROVIDED BY FINANCING ACTIVITIES                                 1,353,250             --
                                                                           -----------    -----------

INCREASE IN CASH AND CASH EQUIVALENTS                                        1,255,966             --

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIODS                                    --             --
                                                                           -----------    -----------

CASH AND CASH EQUIVALENTS - END OF PERIODS                                 $ 1,255,966    $        --
                                                                           ===========    ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid for the periods:
     Interest                                                              $     4,259    $        --
     Income Taxes                                                          $        --    $        --

 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Issuance of Common and Convertible Preferred Stock for
     Acquisition of TechStore                                              $ 1,492,000    $        --
   Issuance of Common and Convertible Preferred Stock for Reverse
     Acquisition of E-taxi                                                 $ 9,499,860    $        --
   Deferred Compensation Assumed in Reverse Acquisition of E-taxi          $  (757,157)   $        --
</TABLE>

See Notes to Consolidated Financial Statements.

                                                 F-5
<PAGE>

EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================


(1) ORGANIZATION AND BUSINESS

eMarketplace,  Inc. (formerly Computer  Marketplace,  Inc.) (the "Company") is a
California  corporation,  that was  incorporated  on July 19,  1983,  as Quality
Associates,  Inc. and changed its name to Computer  Marketplace in June 1987. In
March 1993, Computer  Marketplace  changed its name to Computer  Marketplace(R),
Inc. ("Computer  Marketplace") and its state of incorporation from California to
Delaware.  In  September of 1999,  the name of the Company was again  changed to
eMarketplace,  Inc. Until April 1999,  the Company was primarily  engaged in the
wholesale  distribution of new and used computer equipment to dealers,  computer
maintenance  companies,  leasing companies,  equipment  brokers,  and end users,
despite  the fact  that the  Company  was in the  process  of  winding  down its
business  because it failed to operate  profitably  since the fiscal  year ended
June 1994. Computer Marketplace's wholly owned subsidiary,  Medical Marketplace,
which  engages in the  distribution  of used  medical  equipment  to health care
providers,  was  reflected  as  disposed  of at the time of the  merger  between
Computer Marketplace and E-Taxi, Inc. ("E-Taxi").  An estimated loss on disposal
was recorded.
[See Notes 3 and 17]

On April 23, 1999, the Company  acquired E-Taxi,  Inc.  ("E-Taxi") in a business
combination  accounted  for as a "reverse  acquisition."  As  consideration  for
9,074,000  shares of E-Taxi's common stock and 400,000 shares of E-Taxi's Series
A preferred stock, the Company issued an aggregate of 9,074,000 shares of common
stock,  par value  $.0001 per share,  and  400,000  shares of Series A Preferred
Stock, par value $.0001 per share. For accounting purposes,  E-Taxi is deemed to
be the  acquirer,  and the Company is deemed to be acquired,  under the purchase
method of accounting.  Therefore,  the financial  information  presented  herein
represents the historical  results of E-Taxi and the results of the Company from
April 23, 1999 (date of  acquisition)  only, and the Statement of  Stockholders'
Equity  reflects  the   acquisition  of  the  outstanding   shares  of  Computer
Marketplace, Inc.'s outstanding common shares as of April 23, 1999 of 2,017,460.
E-Taxi 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
that provide content,  commerce and online services to  demographically-targeted
audiences.

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 (See Note 3).

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

BASIS OF  CONSOLIDATION - The  accompanying  consolidated  financial  statements
include the  accounts of  eMarketplace  and  various  subsidiaries  in which the
Company holds a majority  ownership  interest.  The subsidiaries  are:  Computer
Marketplace,  Inc., E-Taxi, Inc. and TechStore,  LLC. All material  intercompany
balances and transactions have been eliminated.

REVENUE  RECOGNITION - The Company records product sales revenue when goods have
been shipped.

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, 1999.

                                      F-6
<PAGE>

EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #2
================================================================================

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INVENTORY - The Company's  policy is to state  inventory at the lower of cost or
net realizable value. The company did not have any inventory at June 30, 1999.

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

IMPAIRMENT - Long-lived  assets of the Company are reviewed at least annually 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 - Net loss per  share of  common  stock is
computed  reflecting the shares issued in the reverse acquisition as outstanding
for all periods  presented  and 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 1999 and 1998, 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.  See
Notes 8 and 10 for further details on contingently issuable shares.

COMPREHENSIVE  INCOME - The Company does not have any  transactions  included in
comprehensive income.

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  based on business  activities,
management responsibility and geographical location. During the years ended June
30, 1999 and 1998, the Company operated in a single business segment,  primarily
in the United States.  Through June 30, 1999,  foreign  operations have not been
significant in either revenue or investment in long-lived assets.

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 $45,917 and $-0- for the years ended June 30, 1999 and 1998,
respectively.

RESEARCH AND DEVELOPMENT - Research and development costs are charged to expense
as incurred. Research and development costs amounted to $19,173 and $-0- for the
years ended June 30, 1999 and 1998, respectively.

                                      F-7
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #3
================================================================================

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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.

(3) ACQUISITIONS

On April 23, 1999, Computer Marketplace,  Inc., (or "CMP") acquired E-Taxi, Inc.
("E-Taxi") in a business combination  accounted for as a "reverse  acquisition."
As  consideration  for  9,074,000  shares of E-Taxi's  common  stock and 400,000
shares  of  E-Taxi's  Series A  preferred  stock,  CMP  issued an  aggregate  of
9,074,000 shares of common stock, par value $.0001 per share, and 400,000 shares
of Series A  Preferred  Stock,  par  value  $.0001  per  share.  For  accounting
purposes, E-Taxi is deemed to be the acquirer, and CMP is deemed to be acquired,
under the purchase method of accounting.  Therefore,  the financial  information
presented herein represents the historical  results of E-Taxi and the results of
CMP from April 23, 1999 (date of  acquisition)  only. The total purchase  price,
including stock valued at  approximately  $9.5 million and  acquisition  related
expenses of  approximately  $95,700 was allocated to net  liabilities  of CMP of
$(472,972),  and  $9,972,630  of goodwill,  which is being  amortized  using the
straight-line method over its estimated useful life of five years.

In April  1999,  E-Taxi  acquired  TechStore,  an online  retailer  of  computer
hardware  and  software,  in a  business  combination  accounted  for  using the
purchase method of accounting.  The results of operations include the results of
TechStore from the date of acquisition.  The purchase price,  which consisted of
stock valued at $1,492,000,  cash of $66,667 and acquisition related expenses of
approximately  $38,300,  was allocated  $(170,300)  to net tangible  liabilities
acquired,  $140,000 to developed technology,  $160,000 to established workforce,
$280,000 to  trademarks,  and  $1,187,300  to goodwill.  The value and estimated
lives of the  identified  intangible  assets  was  determined  by a  third-party
valuation. The intangible assets are being amortized over their estimated useful
lives of four years.

The following unaudited pro forma financial  information reflects the results of
operations for the year ended June 30, 1999 as if the  acquisitions had occurred
on July 1, 1998,  and after giving  effect to purchase  accounting  adjustments.
These  unaudited pro forma results have been prepared for  comparative  purposes
only and do not purport to be  indicative of what  operating  results would have
been had the  acquisitions  actually  taken place on July 1, 1998 and may not be
indicative of future operating  results.  (Data for the year ended June 30, 1998
are not meaningful).

                                                         YEAR ENDED
                                                          JUNE 30,
                                                           1 9 9 9
                                                         [UNAUDITED]
                                                         -----------

Revenues                                                $  9,756,060
Income (Loss) from Operations                             (4,390,304)
Net Income (Loss)                                         (4,842,488)
Net Loss per Share:
   Basic and Diluted                                                 (.43)


                                      F-8
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #4
================================================================================

(4) INTANGIBLE ASSETS

Intangible assets consists of the following as of June 30, 1999:

Goodwill                                    $     11,159,923
Acquired Technology                                  140,000
Established Workforce                                160,000
Trademarks                                           280,000
                                            ----------------

Total                                             11,739,923
Less:  Accumulated Amortization                     (404,174)

   TOTAL                                    $     11,335,749
   -----                                    ================

Amortization expense for the years ended June 30, 1999 and 1998 was $404,173 and
$-0-, respectively.

(5) PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 1999:

Computer Hardware and Software              $        253,616
Office Equipment                                      12,360
Furniture and Fixtures                                67,632
Automobiles and Trucks                                 4,850
                                            ----------------

Total                                                338,458
Less:  Accumulated Depreciation                     (294,503)

   TOTAL                                    $         43,955
   -----                                    ================

Depreciation  expense  for the years ended June 30, 1999 and 1998 was $5,815 and
$-0-, respectively.

(6) COMMITMENTS

The Company  leases office space under  month-to-month  leases.  See Note 15 for
related party lease.

Total rent expense under all operating  leases for the years ended June 30, 1999
and 1998 was $4,450 and $-0-, respectively.

(7) NOTES PAYABLE - RELATED PARTY

$100,000 is payable to a director of the  Company,  and  consists of two secured
promissory  notes,  each for $50,000 bearing  interest at 10% and payable within
three days of demand dated on January 26, 1999 and April 15, 1999, respectively.
These  notes are fully  collateralized  by all real and  personal  property.  In
conjunction  with these notes,  the Company  granted the  director  fully vested
options  to  purchase  a total of  200,000  shares of common  stock at $0.50 per
share.  Prior to it's reverse  merger with E-Taxi,  CMP recorded the  difference
between the market  value of the  options on the date of grant and the  exercise
price,  totaling $125,000, in compensation expense associated with these options
(See Note 17E).

$67,000 is payable to an officer of the Company and consists of the following:

Secured Promissory Note                $         50,000     10% interest
Promissory Note                                  10,000     12% interest
Promissory Note                                   7,000     12% interest
                                       ----------------

   TOTAL                               $         67,000
                                       ================

                                      F-9
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #5
================================================================================

(7) NOTES PAYABLE - RELATED PARTY (CONTINUED)

These notes are payable within three days of demand. The secured promissory note
is fully  collateralized by all real and personal property.  In conjunction with
these notes, the Company granted the director fully vested options to purchase a
total of 100,000 shares of common stock at $.60 per share. Prior to it's reverse
merger with E-Taxi,  CMP recorded the difference between the market value of the
options  on the date of grant  and the  exercise  price,  totaling  $33,000,  in
compensation expense associated with these options.

The prime rate at June 30, 1999, was 8.25%.

(8) EMPLOYMENT CONTRACTS

The  Company has  employment  contracts  with two  officers of one of its wholly
owned  subsidiaries.  These  contracts  are for a term of five years.  Under the
terms of the contracts,  the two officers are each eligible for cash performance
bonuses based on the subsidiary's  revenue and earnings before  interest,  taxes
and  deprecation  ("EBITD"),  up to a maximum of 100% of their base salary.  The
base  salary of $75,000  is subject to  reviewed  and  adjustment  annually.  In
addition,  each officer is entitled to a $500 per month automobile allowance. In
connection with these  employment  agreements,  the Company also granted each of
the two  officers a  Restricted  Stock Award for 500,000  shares each which vest
100% on March 31, 2000 subject to continued employment and attainment of certain
revenue and EBITD  targets.  Because the likelihood of attainment of the targets
is considered  by management to be remote,  these shares have not been issued as
of June 30, 1999 and no expense has been recorded associated with these shares.

(9) INCOME TAXES

The Tax Reform Act of 1986 imposes  substantial  restrictions on the utilization
of net  operating  loss and tax credits in the event of a change in ownership as
defined in the Internal  Revenue Code.  Accordingly,  the  Company's  ability to
utilize net operating loss and credit  carryforwards  may be limited as a result
of such an "ownership  change."  Management has not  determined  whether such an
ownership change has occurred.

Generally accepted accounting principles require the establishment of a deferred
tax  asset  for  all  deductible   temporary   differences  and  operating  loss
carryforwards.  At June 30, 1999,  management  cannot  estimate the deferred tax
asset attributable to operating loss carryforwards. However, because the Company
does not as yet have a history of  continuing  profitability,  any  deferred tax
asset  established  for the operating loss  carryforward  would  correspondingly
require a valuation of allowance  of the same amount.  Accordingly,  no deferred
tax asset is reflected in these consolidated financial statements.

No  provision  for Federal  income  taxes has been made during the fiscal  years
ended June 30, 1999 and 1998, because of the Company's net loss position.

(10) STOCKHOLDERS' EQUITY

PRIVATE PLACEMENT - In April 1999, E-Taxi, Inc. completed a private placement of
810,000 shares of common stock at $0.625 per share and 90,000 shares of Series A
convertible  preferred  stock  at  $10.00  per  share,   realizing  proceeds  of
$1,406,250.

CONVERSION  OF PREFERRED  STOCK - As of the close of business on April 28, 1999,
the  Company's  common stock had a closing price of greater than $3.75 per share
for more than three  consecutive  days, and based upon the terms of the Series A
convertible preferred stock, all outstanding shares of preferred stock converted
into  common  stock at a one to four ratio,  resulting  in the  cancellation  of
400,000 shares of preferred stock and the issuance of 1,600,000 shares of common
stock.

                                      F-10
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #6
================================================================================

(10) STOCKHOLDERS' EQUITY (CONTINUED)

STOCK  COMPENSATION PLANS - All of the stock option activity presented below was
recorded  by Computer  Marketplace  prior to its  reverse  merger  with  E-Taxi.
Because these financial  statements  represent the historical  results of E-Taxi
and  combine  the  results  of  Computer  Marketplace  only  from  its  date  of
acquisition  of April 23,1999,  no charges are included in the income  statement
for  options  issued to  consultants  other than the  amortization  of  deferred
compensation after April 23, 1999.

In January 1996, 157,083  non-qualified  stock options were granted to employees
of Computer Marketplace and its subsidiaries,  and to non-employee directors, to
purchase  shares of Computer  Marketplace's  common  stock at an exercise  price
equal to $1.6875,  which was equal to 100% of the market value of the  Company's
common stock on the date of grant. The stock options required future  employment
or  services  to  Computer  Marketplace  and vested one third each on January 3,
1997, January 3, 1998, and January 3, 1999, respectively. The stock options must
be exercised by January 3, 2006.  As of June 30, 1999,  13,666 of these  options
are outstanding and exercisable.

In  December  1996,  the  Company  issued to  certain  employees,  officers  and
directors  options to  purchase an  aggregate  of  1,000,000  shares of Computer
Marketplace's  Common Stock during a four year period  commencing  on January 1,
1997 at an  exercise  price of $1.00 per share (the  "Management  Options").  In
exchange for the issuance of certain of the Management  Options,  certain option
holders  surrendered for cancellation an aggregate of 242,250 options previously
issued in June 1996 for 722,500 of the Management Options.
As of June 30, 1999, 153,333 of these options are outstanding and exercisable.

In September  1998,  185,000 options were issued to employees and consultants at
$1.00 per  share,  which was higher  than the market  value of the shares on the
date of  grant.  Compensation  expense  associated  with the  options  issued to
consultants computed using the Black-Scholes model of $36,632 was recorded.

In November 1998,  options to purchase a total of 100,000 shares were granted to
an officer of Computer  Marketplace,  with an  exercise  prices less than market
value on the date of grant, in conjunction with loans to Computer Marketplace of
$50,000.  Compensation  charges equal to the difference between the market value
and the exercise price of $33,000 were recorded by the predecessor company prior
to its merger with E-Taxi.

In January  and April 1999,  options to purchase a total of 200,000  shares were
granted to a director of Computer Marketplace, with an exercise prices less than
market  value  on the date of  grant,  in  conjunction  with  loans to  Computer
Marketplace of $100,000.  Compensation  charges equal to the difference  between
the  market  value and the  exercise  price of  $125,000  were  recorded  by the
predecessor company prior to its merger with E-Taxi.

In March 1999,  60,000  shares of common  stock were granted to  consultants  as
payment for services  rendered to E-Taxi,  resulting in a charge to compensation
expense of $30,000.

In April 1999,  690,834 options  outstanding for the chief executive  officer of
the Company were repriced in conjunction  with the  cancellation of liabilities,
resulting  in a  compensation  charge  of  $204,557,  which  was  equal  to  the
difference  between the fair value of the repriced  options and the  liabilities
forgiven.

In April  1999,  40,000  shares of common  stock were  granted to  Directors  as
payment  for  services  rendered  to  the  Company,  resulting  in a  charge  to
compensation expense of $150,000.

In April of 1999,  pursuant to a settlement  agreements,  the Company  cancelled
options issued to  non-employees in addition to obligations for 1,000,000 shares
of the Company's  common stock in exchange for the issuance of 250,000 shares of
common stock.  The options had a unamortized  deferred  compensation  balance of
$274,372, and accordingly, expensed the $274,372 as the fair value of the shares
issued.

                                      F-11
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #7
================================================================================

(10) STOCKHOLDERS' EQUITY (CONTINUED)

In April 1999, the Company granted to a consultant  options to purchase  125,000
shares of the Company's  common stock. The options vest monthly in increments of
25,000,  commencing May 1, 1999. As a result,  deferred compensation of $146,653
was recorded and cumulative  compensation  expense of approximately  $58,000 has
been recognized.

As of April 9, 1999,  the Company and each of the holders of  1,500,000  Class D
Common Stock Purchase Warrants entered into a Settlement Agreement,  pursuant to
which the  Company  issued  375,000  shares  of the  Company's  common  stock in
exchange for (i) the cancellation of all Class D Common Stock Purchase Warrants,
(ii) the surrender and transfer to the Company of an aggregate of 500,000 shares
of common  stock of  Medical  Marketplace,  Inc.,  and (iii) a general  release,
releasing the Company from all liabilities.

In June 1999,  a majority  of the  shareholders  approved  the  adoption  of the
Company's  1999 Stock Plan (the "1999  Plan").  A total of  1,700,000  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.

The following is a summary of transactions under the stock option plans:
<TABLE>
<CAPTION>
                                                                                          WEIGHTED
                                                 NUMBER OF       WEIGHTED AVERAGE         AVERAGE
                                               COMMON SHARES      EXERCISE PRICE         FAIR VALUE
                                               -------------      --------------         ----------
<S>                                               <C>            <C>                       <C>
Options Outstanding at June 30, 1997              2,054,917      $     1.02                $  0.14

 Granted                                             98,000            1.00                   0.14
 Cancelled                                         (137,917)           1.97                   0.15
                                                -----------

Options Outstanding at June 30, 1998              2,015,000            1.02                   0.14

 Granted                                          1,300,834            0.82                   0.93
 Cancelled                                       (1,848,001)           1.01                   0.14
                                                -----------

OPTIONS OUTSTANDING AT JUNE 30, 1999              1,467,833            0.86                   0.84
                                                ===========

OPTIONS EXERCISABLE AT JUNE 30, 1999              1,392,833            0.77                   0.83
                                                ===========
</TABLE>
The  following is a summary of the status of fixed options  outstanding  at June
30, 1999:
<TABLE>
<CAPTION>
               OUTSTANDING OPTIONS                                    EXERCISABLE OPTIONS
----------------------------------------------------    --------------------------------------------
                                           WEIGHTED                                       WEIGHTED
                             REMAINING     AVERAGE                                        AVERAGE
 EXERCISE                   CONTRACTUAL    EXERCISE                       EXERCISE        EXERCISE
  PRICE         NUMBER         LIFE         PRICE           NUMBER          PRICE          PRICE
  -----         ------         ----         -----           ------          -----          -----
<S>             <C>         <C>           <C>               <C>           <C>             <C>
$ 0.50          200,000     3.7 years     $    0.50         200,000       $   0.50        $   0.50
$ 0.60          790,834     2.7 years     $    0.60         790,834       $   0.60        $   0.60
$ 1.00          338,333     2.6 years     $    1.00         338,333       $   1.00        $   1.00
$ 1.69           13,666     6.8 years     $    1.69          13,666       $   1.68        $   1.69
$ 2.50          125,000     0.4 years     $    2.50          50,000       $   2.50        $   2.50
           ------------                                 -----------
              1,467,833     2.6 years     $    0.86       1,392,833                       $   0.77
           ============                                 ===========                       ========
</TABLE>
                                      F-12

<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #8
================================================================================

(10) STOCKHOLDERS' EQUITY (CONTINUED)

WARRANTS - In April  1999,  the Company and  Gateway  Advisors,  Inc.  ("Gateway
Advisors"),  a company owned and controlled by 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 years in exchange for the issuance by the
Company of 1,500,000  Common Stock Purchase  Warrants.  Each warrant,  which was
fully vested on the date of grant,  entitles the holder to purchase one share of
the Company's  Common Stock at an exercise  price of $2.50 per share until April
8, 2000. Deferred compensation associated with the options issued to consultants
computed  using  the  Black-Scholes  model  of  $636,504  was  recorded  by  the
predecessor  company prior to its merger with E-Taxi.  Compensation  expense for
the two months ended June 30, 1999 was $52,000 (See Note 15).

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:
<TABLE>
<CAPTION>

                                                                       PERIOD FROM
                                                                       APRIL 14, 1998
                                                      YEAR ENDED      (INCEPTION) TO
                                                       JUNE 30,          JUNE 30,
                                                        1999              1998
                                                   ---------------    ---------------
<S>                                                <C>                <C>
Net Loss as Reported                               $      (728,297)   $        (7,131)
                                                   ===============    ===============
Pro Forma Net Loss                                 $    (1,129,657)   $        (7,131)
                                                   ===============    ===============

Basic and Diluted Net Loss per Share as Reported   $         (0.06)   $            --
                                                   ===============    ===============
Pro Forma Basic and Diluted Net Loss per Share     $         (0.10)   $            --
                                                   ===============    ===============
</TABLE>

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

       1998             5.80%          2             90.74%            None
       1999             4.76%          2             106.80%           None

SHARES  RESERVED  FOR FUTURE  ISSUANCE - In addition  to the  options  discussed
above,  the Company has reserved  1,000,000  shares of common stock for issuance
under certain employment agreements. See Note 8 above.

                                      F-13
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #9
================================================================================

(11) CONCENTRATIONS

CREDIT RISK - The Company  currently  maintains  cash  accounts  with  financial
institutions  which exceed the maximum amounts insured by the Federal Depository
Insurance  Corporation.  At  June  30,  1999  these  uninsured  amounts  totaled
approximately $1,129,000.

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, 1999, 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, 1999.

OTHER - One of the Company's  subsidiaries  purchases all of its finished  goods
from one supplier.  The Company is entirely dependent on this supplier 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.

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.  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.

In addition, it is possible that a number of laws and regulations may be adopted
with respect to the Internet  generally and the adoption of any such  additional
laws or  regulations  may  decrease  the growth of commerce  over the  Internet,
increase the Company's cost of doing business or otherwise have a harmful effect
on the Company's business.

(12) NEW AUTHORITATIVE PRONOUNCEMENTS

The  Financial  Accounting  Standards  Board  ["FASB"]  has issued  Statement of
Financial  Accounting  Standards  ["SFAS"] No. 133,  "Accounting  for Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts and for hedging activities. SFAS No. 133
requires  that  an  entity   recognize  all  derivatives  as  either  assets  or
liabilities in the statement of financial position and measure those instruments
at fair value.  The  accounting  for  changes in the fair value of a  derivative
depends on the intended use of the  derivative  and how it its  designated,  for
example, gain or losses related to changes in the fair value of a derivative not
designated  as a hedging  instrument  is recognized in earnings in the period of
the  change,  while  certain  types of hedges  may be  initially  reported  as a
component  of  other   comprehensive   income   [outside   earnings]  until  the
consummation of the underlying transaction.

SFAS No. 133 is  effective  for all fiscal  quarters of fiscal  years  beginning
after June 15,  1999.  Initial  application  of SFAS No. 133 should be as of the
beginning  of a fiscal  quarter;  on that date,  hedging  relationships  must be
designated  anew and  documented  pursuant  to the  provisions  of SFAS No. 133.
Earlier application of all of the provisions of SFAS No. 133 is encouraged,  but
it is permitted only as of the beginning of any fiscal quarter.  SFAS No. 133 is
not to be applied retroactively to financial statements of prior periods.

                                      F-14
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #10
================================================================================

(12) NEW AUTHORITATIVE PRONOUNCEMENTS [CONTINUED]

The  Company  does not  currently  have any  derivative  instruments  and is not
currently engaged in any hedging activities.

In October 1998, the FASB issued SFAS No. 134,  "Accounting for  Mortgage-Backed
Securities  Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprises." SFAS No. 134 is not expected to have a material
impact on the Company.

In February 1999, the FASB issued SFAS No. 135, which is a recission of SFAS No.
75  "Deferral  of the  Effective  Date of Certain  Accounting  Requirements  for
Pension Plans of State and Local Government Units." SFAS No. 135 is not expected
to have a material impact on the Company.

The FASB has had on its  agenda a project  to address  certain  practice  issues
regarding  Accounting  Principles Board ["APB"] Opinion No. 25,  "Accounting for
Stock Issued to Employees." The FASB plans on issuing various interpretations of
APB Opinion No. 25 to address these practice issues. The proposed effective date
of these interpretations would be the issuance date of the final Interpretation,
which is expected to be in September 1999. If adopted,  the Interpretation would
be applied  prospectively  but would be applied to plan  modification and grants
that occur after December 15, 1998. The FASB's tentative  interpretations are as
follows:

*    APB  Opinion  No.  25 has  been  applied  in  practice  to  include  in its
     definition  of  employees,  outside  members of the board or directors  and
     independent  contractors.  The FASB's  interpretation of APB Opinion No. 25
     will limit the definition of an employee to individuals who meet the common
     law definition of an employee  [which also is the basis for the distinction
     between  employees and nonemployees in the current U.S. tax code].  Outside
     members of the board of  directors  and  independent  contractors  would be
     excluded  from the  scope of APB  Opinion  No. 25 unless  they  qualify  as
     employees under common law. Accordingly,  the cost of issuing stock options
     to board  members and  independent  contractors  not meeting the common law
     definition of an employee  will have to be  determined  in accordance  with
     FASB Statement No. 123,  "Accounting  for  Stock-Based  Compensation,"  and
     usually  recorded  as an expense  in the  period of the grant [the  service
     period  could  be  prospective,  however,  depending  on the  terms  of the
     options].

*    Options  [or  other  equity  instruments]  of a parent  company  issued  to
     employees of a subsidiary should be considered options,  etc. issued by the
     employer  corporation  in  the  consolidated  financial  statements,   and,
     accordingly,  APB  Opinion  No. 25 should  continue  to be  applied in such
     situations.  This interpretation  would apply to subsidiary companies only;
     it would not apply to equity method investees or joint ventures.

*    If the terms of an option [originally  accounted for as a fixed option] are
     modified during the option term to directly change the exercise price,  the
     modified  option  should be accounted  for as a variable  option.  Variable
     grant accounting  should be applied to the modified option from the date of
     the  modification  until  the date of  exercise.  Consequently,  the  final
     measurement  of  compensation  expense would occur at the date of exercise.
     The cancellation of an option and the issuance of a new option with a lower
     exercise price shortly  thereafter [for example,  within six months] to the
     same  individual  should be considered  in substance a modified  [variable]
     option.

*    Additional interpretations will address how to measure compensation expense
     when a new measurement date is required.

                                      F-15
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #11
================================================================================

(13) ACCRUED LOSS ON DISPOSAL OF SUBSIDIARY

In April of 1999,  the  Company  decided  to adopt a plan to sell a  subsidiary,
Medical  Marketplace and its  wholly-owned  subsidiary,  New Millineum  Leasing,
which was finalized in September of 1999. The combined assets and liabilities of
Medical  Marketplace  and New  Millineum  Leasing as of April 1999 are presented
below  including the accrued loss on their  disposal.  This plan of  disposition
occurred prior to combination with E-Taxi.
<TABLE>
<CAPTION>
Assets and Liabilities:
<S>                                                                     <C>
   Cash                                                                 $     101,377
   Accounts Receivable - Net                                                   28,403
   Residual Value of Equipment                                                375,000
   Deposits                                                                    20,000
   Property and Equipment, Net                                                723,418
   Notes Payable                                                             (213,406)
   Accounts Payable                                                          (102,855)
   Accrued Liabilities                                                       (190,244)
   Capital Lease Obligations                                                 (334,962)
                                                                        -------------

   Net Assets of Entity to be Disposed of:                                    406,731
   Estimated Additional Losses to be Incurred through Disposal Date           314,556
   Estimated Net Proceeds upon Sale                                           (60,000)
                                                                        -------------

   TOTAL ACCRUED LOSS ON DISPOSAL OF SUBSIDIARY                         $     661,287
                                                                        =============
</TABLE>

The revenues of Medical Marketplace and New Millineum Leasing for the year ended
June 30, 1998 were approximately $4,414,000.

(14) PENDING ACQUISITION

As of June 14, 1999, the Company's legal  subsidiary,  E-Taxi entered into (i) a
Stock  Purchase  Agreement  (the  "Stock  Purchase  Agreement")  with all of the
shareholders of SSPS, Inc., a California corporation ("SSPS"), pursuant to which
E-Taxi has agreed to purchase, and the shareholders of SSPS have agreed to sell,
approximately 94.6% of the outstanding shares of capital stock of SSPS, and (ii)
a Membership  Interest Purchase Agreement with all of the members of Impact Team
International,  LLC, a California  limited liability company and an affiliate of
SSPS  ("Impact"),  pursuant  to which  E-Taxi  has agreed to  purchase,  and the
members  of  Impact  have  agreed  to sell,  all of the  outstanding  membership
interests of Impact. SSPS, and its operating divisions TRISTEP, GIG2GIG.COM, and
IT  WORLDNET.COM,  and  Impact,  provide  short  term  and long  term  temporary
workforce solutions primarily to rapidly growing technology firms.

The closing of the transactions contemplated by the Stock Purchase Agreement and
the Membership  Interest  Purchase  Agreement (the "Closing") are subject to the
satisfaction of certain conditions,  including without limitation, the execution
and  delivery  of  employment  agreements  with  certain  members  of the senior
management  team of SSPS, the release of a principal  stockholder of SSPS of his
guaranty of certain  indebtedness of SSPS, the waiver of certain rights of first
refusal  to  purchase  the shares of SSPS  capital  stock  owned by a  principal
stockholder,  the termination  and release of certain  obligations of SSPS under
existing employment agreements and other customary conditions to closing. At the
Closing,  the Company will issue  approximately 2.9 million shares of its Common
Stock and pay cash and notes of approximately $1.5 million for SSPS. The Company
has also  agreed to  provide  the  sellers  of the SSPS  shares  and the  Impact
interests  with  demand  and  piggyback  registration  rights.  It is  presently
anticipated that the Company's  acquisition of SSPS and Impact will close second
quarter of fiscal 2000 (See Note 17B).

                                      F-16
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #12
================================================================================

(15) RELATED PARTY TRANSACTIONS

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.

In September 1998, E-Taxi retained Gateway  Advisors,  Inc., a company owned and
controlled by the Company's  Chairman of the Board,  as financial  advisor for a
three year term,  pursuant to which Gateway  receives  quarterly fee payments of
$30,000 plus reimbursement of expenses (See Note 10).

In October 1998,  the Company repaid a $200,000  promissory  note to a lender by
transferring its ownership interest in certain property. Shortly thereafter, the
lender sold the property to the trust fund (the Kiley  Children's  Trust) of the
children of the then President and Chairman of the Board.

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 17E).

(16) 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 herein 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
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.

(17) SUBSEQUENT EVENTS

(A) SALE OF SUBSIDIARY - MEDICAL  MARKETPLACE - 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  June 30, 1999 for $65,000 in cash and
notes (See Note 13). 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. Further,  the outstanding  principal
amount of the Note shall be reduced (i) proportionately  based upon the proceeds
received by the Company  with  respect to the  Specified  Receivable  divided by
$225,000  and  (ii)  to the  extent  that  Medical  Marketplace  incurs  any tax
liabilities from the non-payment of taxes by Medical  Marketplace  prior to June
30, 1999, subject to certain limitations.

                                      F-17
<PAGE>
EMARKETPLACE, INC. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, SHEET #13
================================================================================

(17) SUBSEQUENT EVENTS (CONTINUED)

(B)  PRIVATE  PLACEMENT  - On July 16,  1999,  the  Company  commenced a private
offering (the  "Offering") of up to 1,200,000 shares of its Common Stock (each a
"Share" and  collectively  the "Shares").  The Offering is being 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  will  be  made  only to
"accredited  investors,"  as such term is defined in Rule 501(a)  under the Act.
The  Shares are being  offered at a purchase  price of $3.875 per share and on a
"best efforts all or none" basis with respect to the first  400,000  Shares (the
"Minimum  Offering"),  and on a "best efforts" basis  thereafter with respect to
the  remaining  800,000  Shares  (the  "Maximum  Offering").  The  Offering  was
originally  scheduled to terminate on August 30, 1999,  but has been extended at
the  option of the  Company.  Subscriptions  for less  than  20,000  Shares  (or
$77,550) may be accepted at the  discretion of the Company.  Upon  completion of
the Minimum  Offering and the Maximum  Offering,  the Company expects to receive
gross proceeds of approximately $1,550,000 and $4,650,000,  respectively, before
deducting commissions (placement agent) and expenses of the Offering (consisting
of accounting and legal fees, "blue sky" fees and other related  expenses).  The
Company has received  proceeds from the Offering of approximately  $2,884,000 as
of  October  12,  1999 which  will be used to fund the  acquisition  of SSPS and
Impact and the working capital needs of the Company.

(C) NEW  SUBSIDIARIES AND OTHER AGREEMENTS - On August 12, 1999, Top Team, Inc.,
a newly formed  subsidiary of the Company  ("Top Team")  entered into letters of
intent with Full Moon Interactive Group, Inc. and Orrell  Communications,  Inc.,
and on September 7, 1999,  Top Team entered into letters of intent with Paradigm
3 Marketing,  De Vries Data  Systems,  Inc.,  Image  Network and Muccino  Design
Group,  Inc. Under the letters of intent,  it is contemplated  that together the
Company and Top Team will acquire all of the outstanding  capital stock of these
interactive  architect  companies  in  exchange  for the payment of cash and the
issuance of shares of common stock of both the Company and Top Team. The closing
of each of the  proposed  transactions  is subject to the  completion  of legal,
business  and  accounting  due  diligence  and the  execution  and  delivery  of
definitive acquisition agreements.

In August 1999,  Office Express,  Inc. a newly formed subsidiary of the Company,
began its operations to sell office products and supplies through its Web site.

(D) RELATED PARTY  TRANSACTIONS  - In July 1999,  the Company  terminated a real
property  lease  agreement  with Quality  Associates,  Inc., a company owned and
controlled by the Company's Chief Executive Officer.

As of July 15, 1999,  the Company has agreed to reimburse a company owned by the
Company's  Chairman of the Board for the use of office space. The  reimbursement
is  $5,422  per  month.  The  Company  has  not  agreed  to any  term  for  this
arrangement.

(E) EXTENSION ON RELATED PARTY NOTES PAYABLE - On October 11, 1999,  the Company
received an extension on notes payable  aggregating  $100,000  which were due in
July and September of 1999 until December 31, 1999 (See Note 7).



                               . . . . . . . . . .

                                      F-18
<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 day of October  13, 1999.

                                 EMARKETPLACE, INC.


                                 By: /s/ L. WAYNE KILEY
                                    --------------------------------------------
                                         L. Wayne Kiley
                                         President, Chief Executive Officer,
                                         (Chief Accounting Officer) and Director

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

L. WAYNE KILEY               President,                     October 13, 1999
-------------------------    Chief Executive
l. Wayne Kiley               Officer (Chief Accounting
                             Officer) and Director

ROBERT M. WALLACE            Chairman of the Board          October 13, 1999
-------------------------
Robert M. Wallace

THOMAS E. EVANS, JR.         Director                       October 13, 1999
-------------------------
Thomas E. Evans, Jr.