<PAGE>

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                             ---------------------
                                  FORM 10-QSB
      [X]    QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934.

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

             FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001

                         COMMISSION FILE NUMBER 0-25435

                             ---------------------
                       CROSS MEDIA MARKETING CORPORATION
       (Exact name of small business issuer as specified in its charter)

<Table>
<S>                                            <C>
                   DELAWARE                                      13-4042921
           (State of Incorporation)                       (I.R.S. Employer ID No.)
</Table>

                          461 FIFTH AVENUE, 19TH FLOOR
                            NEW YORK, NEW YORK 10017
                    (Address of Principal Executive Offices)

                                 (212) 457-1200
                (Registrant's Telephone No. including area code)

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

     The number of shares outstanding of each of the Registrant's classes of
common equity, as of November 14, 2001, is as follows:

<Table>
<Caption>
       CLASS OF SECURITIES       SHARES OUTSTANDING
       -------------------       ------------------
  <S>                            <C>
  Common Stock, $.001 par value    12,211,754
</Table>

Transitional Small Business Disclosure Format (check one):   Yes [ ]     No [X]

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                       CROSS MEDIA MARKETING CORPORATION

                                  FORM 10-QSB
                               SEPTEMBER 30, 2001

                                C O N T E N T S

PART I.  FINANCIAL INFORMATION

<Table>
<Caption>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
Item 1.   Financial Statements
  Condensed Consolidated Balance Sheet September 30, 2001
     (unaudited)......................................................  F-1
  Condensed Consolidated Statements of Operations (unaudited) for the
     three months and nine months ended September 30, 2001 and
     September 30, 2000...............................................  F-2
  Condensed Consolidated Statements of Stockholders' Equity
     (unaudited) for the nine months ended September 30, 2001.........  F-4
  Condensed Consolidated Statements of Cash Flows (unaudited) for the
     nine months ended September 30, 2001 and September 30, 2000......  F-5
  Notes to Consolidated Financial Statements(unaudited)...............  F-6
Item 2.   Management's Discussion and Analysis or Plan of Operation...    1

PART II.  OTHER INFORMATION
Item 1.   Legal Proceedings...........................................   16
Item 2.   Change in Securities and Use of Proceeds....................   16
Item 3.   Defaults Upon Senior Securities.............................   18
Item 4.   Submission of Matters to a Vote of Security Holders.........   18
Item 5.   Other Information...........................................   18
Item 6.   Exhibits and Reports on Form 8-K............................   18

SIGNATURES
</Table>

                                        i
<PAGE>

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2001

<Table>
<Caption>
                                                               (UNAUDITED)
                                                              (IN THOUSANDS)
<S>                                                           <C>
ASSETS:
Current assets
  Cash and cash equivalents.................................     $  1,600
  Accounts receivable, net of reserve of $24,819............       36,375
  Other receivables.........................................        4,632
  Prepaid expenses..........................................        2,166
  Deferred expenses.........................................        2,267
                                                                 --------
          Total current assets..............................       47,040
                                                                 --------
  Property and equipment, net...............................        3,522
  Deferred financing costs..................................          591
  Goodwill..................................................        7,694
  Other assets..............................................          344
                                                                 --------
                                                                 $ 59,191
                                                                 ========

LIABILITIES AND STOCKHOLDERS' EQUITY:
Liabilities Current liabilities
  Revolving credit facility.................................     $ 17,648
  Accounts payable and accrued expenses.....................        6,037
  Amounts due to publishers -- current......................        4,209
  Deferred revenue..........................................        2,361
                                                                 --------
          Total Current liabilities.........................       30,255
Long term liabilities
  Amounts due to publishers -- non-current..................        4,875
  Capital lease obligations -- non-current..................          865

STOCKHOLDERS' EQUITY:
  Convertible preferred stock, $5,063 liquidation value;
     authorized 10,000 shares; 51 outstanding...............        3,304
  Common stock, par value $.001 per share; authorized 40,000
     shares; 7,427 issued and 7,306 outstanding.............            7
  Additional paid in capital................................       71,723
  Treasury stock, 120 shares................................         (600)
  Note receivable -- common stock...........................         (698)
  Accumulated deficit.......................................      (50,540)
                                                                 --------
          Total stockholders' equity........................       23,196
                                                                 --------
                                                                 $ 59,191
                                                                 ========
</Table>

         The accompanying notes are an integral part of this statement.
                                       F-1
<PAGE>

               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                FOR THE THREE
                                                                MONTHS ENDED
                                                                SEPTEMBER 30,
                                                              -----------------
                                                               2001      2000
                                                              -------   -------
                                                                 (UNAUDITED)
                                                               (IN THOUSANDS,
                                                              EXCEPT PER SHARE
                                                                    DATA)
<S>                                                           <C>       <C>
Revenues, net...............................................  $25,910   $15,152
Direct costs and expenses
  Commission expense........................................   10,590     8,731
  Other direct costs........................................    7,202     2,622
                                                              -------   -------
                                                               17,792    11,353
     Gross profit...........................................    8,118     3,799
General and administrative expenses.........................    4,559     3,058
                                                              -------   -------
Income (loss) from operations...............................    3,559       741
Interest expense............................................      514       842
                                                              -------   -------
Income (loss) before income taxes...........................    3,045      (101)
Provision for income taxes..................................      607        93
                                                              -------   -------
Net income (loss)...........................................    2,438      (194)
Preferred dividends.........................................      129     4,866
                                                              -------   -------
Net income (loss) to common stockholders....................  $ 2,309   $(5,060)
                                                              =======   =======
Income (loss) per share applicable to common stockholders
  Basic.....................................................  $  0.32   $ (0.92)
                                                              =======   =======
  Diluted...................................................  $  0.26   $ (0.92)
                                                              =======   =======
Weighted -- average shares of common stock outstanding
  Basic.....................................................    7,225     5,488
                                                              =======   =======
  Diluted...................................................    9,005     5,488
                                                              =======   =======
</Table>

         The accompanying notes are an integral part of this statement.
                                       F-2
<PAGE>

               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                                                 FOR THE NINE
                                                                 MONTHS ENDED
                                                                SEPTEMBER 30,
                                                              ------------------
                                                               2001       2000
                                                              -------   --------
                                                                 (UNAUDITED)
                                                                (IN THOUSANDS,
                                                               EXCEPT PER SHARE
                                                                    DATA)
<S>                                                           <C>       <C>
Revenues, net...............................................  $69,189   $ 42,170
Direct costs and expenses
  Commission expense........................................   31,543     22,743
  Other direct costs........................................   18,545      7,401
                                                              -------   --------
                                                               50,088     30,144
     Gross profit...........................................   19,101     12,026
General and administrative expenses.........................   11,055      8,590
                                                              -------   --------
Income from operations......................................    8,046      3,436
Interest expense............................................    1,465      3,711
                                                              -------   --------
Income (loss) before income taxes...........................    6,581       (275)
Provision for income taxes..................................    1,316        385
                                                              -------   --------
Net income (loss)...........................................    5,265       (660)
Preferred dividends.........................................    1,387     36,732
                                                              -------   --------
Net income (loss) to common stockholders....................  $ 3,878   $(37,392)
                                                              =======   ========
Income (loss) per share applicable to common stockholders
  Basic.....................................................  $  0.56   $  (8.21)
                                                              =======   ========
  Diluted...................................................  $  0.46   $  (8.21)
                                                              =======   ========
Weighted -- average shares of common stock outstanding
  Basic.....................................................    6,969      4,557
                                                              =======   ========
  Diluted...................................................    8,444      4,557
                                                              =======   ========
</Table>

         The accompanying notes are an integral part of this statement.
                                       F-3
<PAGE>

               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

<Table>
<Caption>
                                           COMMON STOCK                     TREASURY STOCK
                                        ------------------   ADDITIONAL   ------------------
                            PREFERRED   NUMBER OF             PAID-IN     NUMBER OF               NOTE      ACCUMULATED
                              STOCK      SHARES     AMOUNT    CAPITAL      SHARES     AMOUNT   RECEIVABLE     DEFICIT      TOTAL
                            ---------   ---------   ------   ----------   ---------   ------   ----------   -----------   -------
                                                                         (UNAUDITED)
                                                                       (IN THOUSANDS)
<S>                         <C>         <C>         <C>      <C>          <C>         <C>      <C>          <C>           <C>
Balance at January 1,
  2001....................   $3,304       5,921       $6      $63,246         --         --     $(2,498)     $(54,418)    $ 9,640
Sales of common stock.....       --         488       --        2,438         --         --          --            --       2,438
Common stock issued for
  consulting services.....       --           5       --           41         --         --          --            --          41
Warrants issued primarily
  for consulting
  services................       --          --       --          164         --         --          --            --         164
Common stock issued in
  connection with
  preferred stock
  conversion..............       --         922        1        4,842         --         --          --          (900)      3,943
Contractual dividends.....       --          --       --           24         --         --          --          (487)       (463)
Exercise of stock
  options.................       --           9       --           --         --         --          --            --          --
Put-right settlement......       --          --       --           --        120      $(600)      1,800            --       1,200
Common stock issued in
  settlement of
  dividends...............       --          82       --          968         --         --          --            --         968
Net income for the nine
  months ended September
  30, 2001................       --          --       --           --         --         --          --         5,265       5,265
                             ------       -----       --      -------        ---      -----     -------      --------     -------
Balance at September 30,
  2001....................   $3,304       7,427       $7      $71,723        120      $(600)    $  (698)     $(50,540)    $23,196
                             ======       =====       ==      =======        ===      =====     =======      ========     =======
</Table>

         The accompanying notes are an integral part of this statement.
                                       F-4
<PAGE>

               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                     FOR THE
                                                                NINE MONTHS ENDED
                                                                  SEPTEMBER 30,
                                                              ---------------------
                                                                 2001        2000
                                                              ----------   --------
                                                                   (UNAUDITED)
                                                                 (IN THOUSANDS)
<S>                                                           <C>          <C>
Cash flows from operating activities:
  Net income (loss).........................................  $    5,265   $   (660)
  Adjustments to reconcile results of operations to net cash
     provided by operating activities:
     Value of common stock and common stock purchase
      warrants issued for services..........................         205      2,535
     Non cash interest expense..............................          --      2,210
     Depreciation and amortization..........................       1,413        771
  Net change in asset and liability accounts, net of
     business acquired:
     Accounts receivable....................................     (11,987)    (3,058)
     Prepaid expenses.......................................        (395)       (46)
     Other..................................................        (731)     2,772
     Accounts payable and other accrued expenses............       3,216     (2,709)
                                                              ----------   --------
  Net cash by (used in) provided operating activities.......      (3,014)     1,815
                                                              ----------   --------
Cash flows from investing activities:
  Purchase of equipment.....................................      (2,980)      (350)
  Acquisition of DSI, net of cash acquired..................          --    (23,560)
  Deferred Acquisition Costs................................      (1,172)        --
                                                              ----------   --------
  Net cash used in investing activities.....................      (4,152)   (23,910)
                                                              ----------   --------
Cash flows from financing activities:
  Proceeds from sales of preferred stock....................          --     12,724
  Proceeds from sales of common stock.......................       2,438         --
  Payments received on note receivable......................          --          3
  Proceeds from acquisition bridge notes....................          --      1,350
  Repayment of bridge note..................................        (199)    (1,000)
  Redemption of preferred stock.............................      (2,100)      (535)
  Net funds drawn on Revolving Credit Agreement.............       6,422     12,265
  Preferred dividends paid..................................         251        (60)
  Accrued closing costs.....................................        (250)        --
  Deferred financing costs..................................        (123)      (190)
                                                              ----------   --------
  Net cash provided by financing activities.................       6,439     24,557
                                                              ----------   --------
Net (decrease) increase in cash and cash equivalents........        (727)     2,462
  Cash and cash equivalents at beginning of period..........       2,327        338
                                                              ----------   --------
  Cash and cash equivalents at end of period................  $    1,600   $  2,800
                                                              ==========   ========
Supplemental disclosure of cash flow information:
  Income taxes paid during the period.......................          --   $    858
                                                              ==========   ========
  Interest paid during the period...........................  $    1,316   $  1,501
                                                              ==========   ========
Supplemental disclosure of non-cash financing activities
  Non-cash proceeds from reduction of notes receivable (Note
     C).....................................................  $1,800,000         --
                                                              ==========   ========
</Table>

         The accompanying notes are an integral part of this statement.
                                       F-5
<PAGE>

               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001
                                  (UNAUDITED)

NOTE A -- ORGANIZATION

     We were incorporated in Delaware on May 9, 1997 under the name of Brack
Industries Inc. We changed our name to Symposium Corporation in December 1998
and subsequently changed our name to Cross Media Marketing Corporation in
December 2000. Our principal business strategy is to integrate well established
direct marketing skills with a variety of new technologies, including e-mail
marketing, web-based systems and interactive voice response, ultimately
resulting in a multi-faceted marketing platform for the sale of products and
services.

     In November 1999, we formed Media Outsourcing, Inc. ("MOS"), a wholly-owned
subsidiary, to acquire the assets of Direct Sales International, LP. We
completed this acquisition in January 2000 (see Note C).

     On October 24, 2001, our acquisition of LifeMinders, Inc., an online direct
marketer was completed through the merger of LifeMinders with and into Cross
Media (see Note K).

     On October 24, 2001, the Company effected a one-for-five reverse stock
split of the issued and outstanding shares of the Company's common stock. All
periods have been restated to reflect the reverse stock split.

NOTE B -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation:  The accompanying unaudited financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States of America for interim financial information and the
instructions to Form 10-QSB and do not include all the information and footnotes
required by accounting principles generally accepted in the United States of
America for complete financial statements. In the opinion of management, all
adjustments consisting of normal recurring accruals, considered necessary for a
fair presentation of the results for the interim period have been included.
Operating results for the three months and nine months ended September 30, 2001
are not necessarily indicative of the results that may be expected for the year
ended December 31, 2001. The accompanying condensed consolidated financial
statements and the information included under the heading "Management's
Discussion and Analysis of Financial Condition and Results of Operations" should
be read in conjunction with our consolidated financial statements and related
notes for the year ended December 31, 2000 as filed with our Form 10-KSB/A.

     Revenues:  Revenues derived from originating magazine subscriptions are
recognized by us when we receive the first installment payment for subscriptions
purchased. The customer can cancel the subscription within ten days of the
order. Amounts collected from customers prior to the expiration of the
cancellation period are recorded as deferred revenues. Magazine subscription
revenues are recorded net of cancellation, collection reserves, and payments
made to publishers for fulfillment costs. Such cancellation and collection
reserves are based upon our historical cancellation and collection experience.
During the nine months ended September 30, 2001, we evaluated actual
cancellation and collection experience as it relates to magazine sales and
adjusted our cancellation percentage from 35% to 33%.

     Revenues also include commissions earned from publishers in connection with
originating paid subscriptions for certain publications. Commissions are also
earned from outside parties for securing memberships in a discount-buying club
and sales of long-distance telephone services. Commission income is recognized
when the related subscriptions or memberships are obtained. For the nine months
ended September 30, 2001 and the year ended December 31, 2000, two independent
call centers accounted for approximately 35% of our magazine subscription
revenues. These call centers could terminate their relationships with us, which
could have a material adverse effect on our business.

                                       F-6
<PAGE>
               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(CONTINUED)

     Commission Expense:  Commission expense is recognized by us when we receive
the first installment payment for subscriptions purchased. Amounts paid to
brokers prior to the expiration of the cancellation period are recorded as
deferred expenses.

     Reclassification:  Certain amounts in the 2000 financial statements have
been reclassified to conform to the 2001 classifications, and certain other
amounts have been combined and reclassified.

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

NOTE C -- ACQUISITION OF DIRECT SALES INTERNATIONAL, LP ("DSI ACQUISITION")

     On January 28, 2000, through our wholly-owned subsidiary MOS, we acquired
substantially all of the assets and assumed certain liabilities of Direct Sales
International, LP ("DSI"), a Georgia limited partnership, for approximately
$27.6 million, including closing costs of approximately $1.1 million and an
agreement to provide approximately $1.5 million of funding to AmeriNet, Inc.
("AmeriNet"). The transaction was accounted for as a purchase business
combination. We also granted to Richard Prochnow, the seller of DSI
("Prochnow"), and to RLP Holdings, L.P. the right, which has an intrinsic value
of $1.2 million, to sell up to 120,000 shares of our Common Stock back to us at
a fixed price.

     On May 10, 2001, we entered into an agreement with Prochnow and RLP
Holdings, L.P. pursuant to which Mr. Prochnow exercised the right we granted to
him on January 28, 2000 to sell 120,000 shares of common stock to us for $15.00
per share. We paid the $1.8 million purchase price to Mr. Prochnow by reducing
the outstanding principal balance on a note issued by Mr. Prochnow to us from
$2.5 million to $0.7 million. This note was originally secured by a pledge of
380,000 shares of common stock. We also agreed with Mr. Prochnow to release of
approximately 280,000 shares from the pledge, leaving 106,400 shares to secure
remaining principal amount of the note.

     Goodwill is currently being amortized on a straight-line basis over a
ten-year period. Subsequent to June 30, 2001, the Financial Accounting Standards
Board approved Statements of Financial Accounting Standards No. 141 "Business
Combinations" and No. 142 "Goodwill and other Intangible Assets". See Note J for
an explanation of the effect on our financial statements going forward.

     The following pro forma information illustrates, the estimated effects of
the DSI Acquisition as if such transaction was consummated on January 1, 2000:

<Table>
<Caption>
                                                                          FOR THE NINE
                                                                          MONTHS ENDED
                                                                       SEPTEMBER 30, 2000
                                                                      --------------------
                                                                      (IN THOUSANDS EXCEPT
                                                                        PER SHARE DATA)
<S>                                                     <C>           <C>
Total revenues........................................  As reported         $42,170
                                                        Pro forma            51,862
Loss from.............................................  As reported         $  (660)
  operations                                            Pro forma              (307)
Basic and diluted.....................................  As reported         $ (8.21)
  loss per share                                        Pro forma             (0.55)
</Table>

                                       F-7
<PAGE>
               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(CONTINUED)

NOTE D -- REVOLVING CREDIT FACILITY

     On January 28, 2000, we and MOS entered into a three-year revolving credit
facility (as amended, the "Coast Facility") with Coast Business Credit ("Coast")
providing for borrowings of up to $20.0 million subject to certain availability
limitations stipulated in the agreement. All borrowings under this facility are
repayable with interest at the prime rate plus 2% per annum but not less than
9%. Cross Media Marketing and MOS are also required to maintain certain minimum
earnings ratios and levels of net worth as defined in the agreement and MOS was
restricted from making distributions to Cross Media Marketing in excess of $1.8
million annually plus any amounts necessary for tax obligations attributable to
MOS's operations. All of MOS's assets are pledged as collateral for this
obligation. As of September 30, 2001 MOS had an outstanding balance on the Coast
Facility of approximately $17.6 million compared to total availability of $18.0
million resulting in $0.4 million of funds available to MOS at September 30,
2001. The Coast Facility matures on January 28, 2003.

     In connection with the execution and delivery of the Coast Facility, the
Company initially granted Coast 60,000 five-year common stock purchase warrants
at an exercise price of $17.65 per share (110% of the closing price of the
common stock on the closing date). As a result of the anti-dilution provisions,
the exercise price has been reduced to $10.95 per share and the number of shares
has been increased to approximately 97,331 shares as of September 30, 2001.
Accordingly, we recorded a non-cash interest charge during the nine months ended
September 30, 2001 of approximately $20,491.

     MOS incurred fees and expenses in connection with this facility of
approximately $1.1 million, which are being amortized over three years.

     In May 2001, we agreed with Coast to amend the Coast Facility as follows:
(i) Coast waived the requirement that we maintain a minimum Tangible Net Worth
through March 31, 2001; (ii) Coast waived any violation of the limitation on
distributions by MOS to Cross Media Marketing with respect to a $1.0 million
distribution in February 2001; (iii) we agreed to maintain a minimum Senior Debt
to EBITDA ratio of no greater than 1.5 to 1.0; and (iv) we agreed to maintain
other covenants. We have been and expect to be fully in compliance with the
provisions of this agreement going forward.

NOTE E -- CONVERTIBLE PREFERRED STOCK

  SERIES A CONVERTIBLE PREFERRED STOCK ("NEW SERIES A SHARES")

     On June 9, 2000, we issued 30,375 shares of New Series A Shares and a
five-year warrant to purchase 45,000 shares of Common Stock at an initial
exercise price of $7.425 (subject to certain anti-dilution and similar
adjustments). The aggregate purchase price for the New Series A Shares and the
warrant was $2.25 million. We also granted the purchaser of the New Series A
Shares an option, exercisable in the purchaser's sole discretion during the
sixty day period following June 9, 2000, to purchase up to an additional
$2,025,000 face amount of New Series A Shares and a warrant to purchase an
additional 30,000 shares of Common Stock for the same purchase price. The
purchaser exercised its option, and we issued and sold to the purchaser an
additional 20,250 New Series A Shares and the additional warrant on August 1,
2000 for an aggregate purchase price of $1.5 million. The face amount and
liquidation value of the New Series A Shares is $5,062,500.

     Dividends accrue on the New Series A Shares at an annual rate of 10% of the
face amount, payable semi-annually in cash and/or Common Stock at our option
under certain conditions. On July 18, we issued 81,464 shares of our common
stock to the holders of the Series A shares based upon accrued dividends as of
that date which was in conjunction with the merger agreement with LifeMinders,
Inc. In addition, we have reserved 26,889 shares of common stock for issuance as
payment of dividends accrued through the date of conversion of the New Series A
Shares.

                                       F-8
<PAGE>
               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(CONTINUED)

     The New Series A Shares were convertible at a conversion price equal to the
lesser of: (i) $9.65 (110% of the closing bid price of the Common Stock on the
date of the issuance, subject to adjustments); or (ii) 91% of the average of the
three lowest, non-consecutive closing bid prices for the Common Stock in the ten
trading days preceding the date of the holder's conversion notice to us (the
"Conversion Notice"). The conversion price and the exercise price of the
warrants were subject to downward adjustment to equal the lowest price at which
shares of the Common Stock or securities convertible into, or exchangeable or
exercisable for, shares of Common Stock are issued while the New Series A Shares
and warrants remain outstanding (if such price is lower than the then effective
conversion or exercise price), subject to certain exceptions. These exceptions
included: (i) the issuance of shares of Common Stock upon conversion or exercise
of presently outstanding options, warrants or convertible securities in
accordance with the terms of such options, warrants or convertible securities as
in effect upon the initial issuance date of the New Series A Shares (but subject
to certain anti-dilution adjustments).

     By letter agreement dated December 28, 2000, the holder of all the
outstanding New Series A Shares agreed not to convert the New Series A Shares
prior to June 9, 2001 if, on the date of such proposed conversion, the
then-current market price of our Common Stock is less than $7.50 per share (the
"Conversion Floor"). The holders agreed that they would not redeem the New
Series A Shares prior to June 9, 2001. The conversion provisions of the New
Series A Shares and warrants create a substantial risk of dilution to the
holders of our Common Stock.

     On July 18, 2001, we entered into agreements with the holder of all of the
50,625 outstanding New Series A Shares.

     On October 24, 2001, Cross Media completed its merger with LifeMinders. As
a result of the merger, pursuant to the July 18, 2001 agreements, we made a cash
payment of $2,531,250 to redeem 25,312.5 Series A Shares and the remaining
25,312.5 Series A Shares were converted into 342,061 shares of our common stock.
In addition, we made a payment to the holder of $968,750 in cash and issued to
the holder 50,000 warrants to purchase shares of our common stock with an
exercise price of $9.9225 per share.

NOTE F -- MANDATORILY REDEEMABLE PREFERRED STOCK

  SERIES C MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK ("SERIES C
PREFERRED")

     On January 28, 2000, in a private placement, we issued 52,892 Series C
Preferred shares resulting in proceeds to us totaling approximately $5.0
million. The Series C Preferred was initially convertible into shares of Common
Stock at a conversion ratio of $10.00 per share and was entitled to a 10%
cumulative dividend. In connection with the initial issuance and sale of the
Series C Preferred in January 2000 (the "Series C Shares"), we also issued
352,613 shares of Common Stock to the holders of the Series C Shares and reduced
the exercise price of the 400,000 Common Stock purchase warrants previously
issued to a holder of Series C Shares and an affiliate of such holder from
$17.50 per share to $5.00 per share.

     The Series C Shares were originally mandatorily redeemable on the earlier
of July 26, 2000 or upon the consummation of a financing transaction resulting
in gross proceeds of at least $10.0 million. On April 24, 2000, the holders of
the Series C Shares agreed to extend the mandatory redemption date of the Series
C Shares from July 26, 2000 to December 26, 2000 (the "Mandatory Redemption
Date") in exchange for 449,413 shares of our Common Stock and a reduction in the
effective conversion ratio from $10.00 per share to $5.00 per share. The value
of the shares of Common Stock issued and change in the effective conversion
ratio was reflected during the second quarter of 2000 as an additional deemed
dividend in the amount of $8,560,417.

     On June 14, 2000, we issued an additional 7,500 shares of Series C
Preferred (the "New Series C Shares") and 50,000 shares of Common Stock,
resulting in proceeds of $750,000. We also agreed to reduce the exercise price
of 400,000 Common Stock purchase warrants held by the purchaser of the New
Series C

                                       F-9
<PAGE>
               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(CONTINUED)

Shares and an affiliate of such purchaser from $5.00 to $2.50 per share. We also
paid a fee in connection with the issuance of the New Series C Shares of 562.5
shares of Series C Preferred, five-year warrants to purchase 20,000 shares of
Common Stock at a price of $9.40 per share and 3,750 shares of Common Stock.

     On July 18, 2000, the holders of the Series C Shares and the New Series C
Shares agreed to waive the requirement that our failure to redeem the Series C
Preferred on or before the Mandatory Redemption Date would trigger a reduction
in the conversion ratio of the Series C Preferred from $5.00 to $1.25 per share.
In consideration for this waiver, we agreed to issue to such holders an
aggregate of 304,750 shares of Common Stock, pro rata in accordance with their
percentage holdings of the Series C Shares and New Series C Shares, and to issue
as a fee in connection with such waiver, an additional 1,500 shares of Series C
Preferred and 10,000 shares of Common Stock. The value of the shares was
reflected during the third quarter of 2000 as an additional deemed dividend in
the amount of $3,026,028.

     On December 19, 2000, the holders of the Series C Shares and the New Series
C Shares agreed to extend the Mandatory Redemption Date of the Series C
Preferred from December 26, 2000 to January 26, 2001. On January 25, 2001, the
holders agreed to further extend the redemption date from January 26, 2001 to
February 15, 2001. On February 15, 2001, we redeemed an aggregate of 22,992
Series C Shares and New Series C Shares for an aggregate redemption price of
$2,299,200 plus accrued and unpaid dividends of $122,300. The holders converted
all of the remaining Series C Shares and New Series C Shares into 789,250 shares
of Common Stock (at an effective conversion ratio of $5.00 per share). In
consideration of the agreement of the holders to convert the Series C Shares and
New Series C Shares (which would otherwise have been mandatorily redeemable by
us in full on February 15, 2001), we agreed to issue to the holders, pro rata in
accordance with the number of shares converted by each of them, an aggregate of
133,280 additional shares of Common Stock. The value of the shares of Common
Stock issued was reflected in the first quarter of 2001 as an additional deemed
dividend in the amount of $899,640. We agreed to pay a fee of $100,000 to one of
the Series C holders in connection with their services relating to the
negotiation of these agreements. There was a note payable of $199,200 related to
the redemption of the preferred stock which was repaid with interest during the
third quarter.

     The redemption of the Series C Shares and the New Series C Shares was
funded in part through the issuance and sale by us, in private placements, of an
aggregate of 300,000 shares of Common Stock at a price of $5.00 per share.

NOTE G -- NET INCOME (LOSS) PER SHARE

     Net income (loss) per share is presented under Statement of Financial
Accounting Standards No. 128 ("SFAS No. 128"), "Earnings Per Share." In
accordance with SFAS No. 128, basic and diluted net loss per share has been
computed using the weighted-average number of shares of common stock outstanding
during the period. Our diluted earnings per share for the three and nine months
ended September 30, 2001 includes an aggregate of 1,780 and 1,475 shares
representing the dilutive effect of convertible preferred stock, stock options
and warrants.

NOTE H -- INCOME TAXES

     We have Federal and State net operating loss carryforwards of approximately
$7.0 million available to offset future taxable income, if any, through December
2020. The utilization of the net operating losses is subject to a substantial
limitation due to the "change of ownership" provisions under Section 382 of the
Internal Revenue Code and similar State provisions. Such limitation may result
in the expiration of the net operating losses before their utilization. A
valuation allowance has been established to reserve for the deferred tax assets
arising from the net operating losses and other temporary differences since
there is no assurance that their benefit will be realized in the future. For the
three months and nine months ended September 30, 2001

                                       F-10
<PAGE>
               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(CONTINUED)

we recorded a $0.6 million and $1.4 million tax provision based on an estimate
of our effective income tax rate projected for the year ending December 31,
2001.

NOTE I -- COMMON STOCK

     At September 30, 2001, we were authorized to issue 100,000,000 shares of
Common Stock, $.001 par value and 10,000,000 shares of preferred stock, $.001
par value. As of September 30, 2001 there were 7,306,665 shares of Common Stock
outstanding after giving effect to the 1:5 reverse stock split on October 24,
2001 and 50,625 New Series A Shares issued and outstanding.

     If the holders of all outstanding options and Common Stock purchase
warrants and the holders of the New Series A Shares converted them into Common
Stock as of September 30, 2001, we would have been required to issue
approximately 5.1 million additional shares of Common Stock.

     During the nine months ended September 30, 2001, we received proceeds of
$2,438,000 from the sale of approximately 97,680 shares of our common stock.

NOTE J -- EFFECT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In June 2001, the Financial Accounting Standards Board approved the
issuance of Statements of Financial Accounting Standards No. 141 "Business
Combinations" and No. 142, "Goodwill and Other Intangible Assets". The new
standards require that all business combinations initiated after June 30, 2001
must be accounted for under the purchase method. In addition, all intangible
assets acquired that are obtained through contractual or legal right, or are
capable of being separately sold, transferred, licensed, rented or exchanged
shall be recognized as an asset apart from goodwill. Goodwill and intangibles
with indefinite lives will no longer be subject to amortization, but will be
subject to at least an annual assessment for impairment by applying a fair value
based test.

     We will continue to amortize goodwill existing at September 30, 2001 under
its current method until December 31, 2001. Thereafter, annual and quarterly
goodwill amortization of approximately $1.0 million and $0.3 million,
respectively, will no longer be recognized. The Company will perform a
transitional fair value based impairment test at March 31, 2002 and if the fair
value is less than the recorded value at January 1, 2002, we will record an
impairment loss in the March 31, 2002 quarter as a cumulative effect of a change
in accounting principle.

NOTE K -- SUBSEQUENT EVENTS

     On October 24, 2001, our acquisition of LifeMinders, Inc., an online direct
marketer, was completed through the merger of LifeMinders with and into Cross
Media. We paid an aggregate of approximately $24.06 million in cash and issued
an aggregate of approximately 4.54 million shares of our common stock to the
former LifeMinders stockholders.

     In connection with the merger, we assumed options to purchase 2,687,667
shares of LifeMinders common stock. The number of shares issuable on exercise of
these options was adjusted by the per share exchange ratio of .2596 and the
exercise price of these options was divided by the per share exchange ratio of
 .2596. As a result, these options are exercisable to purchase and aggregate of
697,825 shares of our common stock.

     Simultaneously with the closing of the merger with LifeMinders, we redeemed
25,312.5 Series A Shares for cash payment of $2,531,250 or ($100 per share) and
converted the remaining 25,312.5 Series A Shares into 342,060 shares of our
common stock at a conversion price of $7.40 per share. In addition, we made a
cash payment of $968,750 to the holders of Series A Shares and issued warrants
to purchase 50,000 share of common stock at an exercise price of $9.9225 per
share.

                                       F-11
<PAGE>
               CROSS MEDIA MARKETING CORPORATION AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS --(CONTINUED)

     The Company amended and restated the Company's certificate of incorporation
pursuant to which, the Company (i) effected a one-for-five reverse stock split
of the issued and outstanding shares of the Company's Common Stock and (ii)
decreased its authorized Common Stock from 100,000,000 to 40,000,000 common
shares.

     On October 24, 2001, we cancelled 120,000 treasury shares.

                                       F-12
<PAGE>

           CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

     This Quarterly Report on Form 10-QSB contains forward-looking statements
that involve risks and uncertainties that could affect Cross Media's business,
prospects and future operating results. Additionally, certain statements
contained in this Quarterly Report on Form-QSB are not based on historical fact
are "forward looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Cross Media intends that forward-looking
statements contained herein and on its web site be subject to the sage harbor
created hereby. Such forward-looking statements are based on current
expectations of management but involve certain risks and uncertainties. Cross
Media's actual results, performance or achievements could differ from the
results, performance or achievements projected in, or implied by, such
forward-looking statements as a result of risk factors, including, without
limitation, the following: Cross Media's ability to integrate the recently
acquired LifeMinders, Inc. operations and to make additional strategically
appropriate acquisitions; the adequacy of accounts receivable reserves, changes
in economic conditions or a material decline in the availability of consumer
credit, interest rate fluctuations, Cross Media's limited operating history,
competitive factors, the need to manage growth, volatility in the market price
of the common stock and the securities markets generally, risks relating to
government regulation of telemarketing and Internet marketing activities. Cross
Media's ability to exploit its database and technological innovations and
potential dilution. These factors are described in detail in Cross Media's with
the Securities Exchange Commission, including, where applicable, its most recent
filings on Forms 10-KSB, 10-QSB and 8-K, and registration statement Form S-3.
Cross Media's filings with the SEC are available to the public from commercial
document-retrieval services and at the web site maintained by the SEC free of
charge at http://www.sec.gov. Cross Media does not assume any responsibility to
update the information included in this press release or on its website, whether
as a result of new information, future events or otherwise.

                       CROSS MEDIA MARKETING CORPORATION
                        QUARTER ENDED SEPTEMBER 30, 2001

                         PART I.  FINANCIAL INFORMATION

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     The following discussion and analysis should be read together with the
Condensed Consolidated Financial Statements of Cross Media Marketing Corporation
(the "Company" or "Cross Media Marketing") and the notes to the Condensed
Consolidated Financial Statements included elsewhere in this Form 10-QSB.

     This discussion summarizes the significant factors affecting the
consolidated operating results, financial condition and liquidity and cash flows
of Cross Media Marketing Corporation for the three months and nine months ended
September 30, 2001 and 2000.

INTRODUCTION

     We were incorporated in Delaware on May 9, 1997 under the name Brack
Industries Inc. We changed our name to Symposium Corporation in December 1998
and subsequently changed our name to Cross Media Marketing Corporation in
December 2000. Our principal business strategy is to integrate well established
direct marketing skills with a variety of new technologies, including e-mail
marketing, web-based systems and interactive voice response, ultimately
resulting in a multi-faceted marketing platform for the sale of products and
services.

     On January 28, 2000 Cross Media Marketing, through its wholly-owned
subsidiary Media Outsourcing, Inc. ("MOS"), acquired substantially all the
assets and assumed certain liabilities of DSI, a magazine subscription agency
based in Atlanta, Georgia which works on behalf of US magazine publishers to
generate new magazine subscriptions. The purchase price paid by Cross Media
Marketing to acquire the net assets of DSI was approximately $27.6 million
including: (i) $25.0 million in cash paid to the Seller, (ii) an agreement to
loan $1.5 million to AmeriNet, Inc. ("AmeriNet") a company in which Richard
Prochnow, DSI's former owner and seller of DSI, holds a majority interest and
(iii) approximately $1.1 million in closing costs and fees
                                        1
<PAGE>

incurred in connection with the acquisition. Cross Media Marketing financed the
cash portion of the purchase price by borrowing $16.0 million under a credit
facility provided by Coast Business Credit, resulting in net proceeds of $15.8
million net of fees, and by using proceeds totaling approximately $9.2 million
from the issuance of common stock, warrants for the purchase of common stock,
convertible preferred stock and convertible debentures.

     On November 30, 2000, we acquired WeFusion.com, Inc. ("WeFusion"), an
application service provider which has developed a database architecture that
will enable us to develop sophisticated customer profiles. We paid approximately
$2.5 million to acquire WeFusion, including $0.6 million in cash and
approximately $1.9 million in Cross Media common stock and warrants to purchase
common stock.

     On October 24, 2001, our acquisition of LifeMinders, Inc., an online direct
marketer was completed through the merger of LifeMinders with and into Cross
Media. We paid an aggregate of approximately $24.06 million in cash and issued
and aggregate of approximately 4.54 million shares of our common stock to the
former LifeMinders stockholders.

     In connection with the merger, we assumed options to purchase 2,687,667
shares of LifeMinders common stock. The number of shares issuable on exercise of
these options was adjusted by the per share exchange ratio of .2596 and the
exercise price of these options was divided by the per share exchange ratio of
 .2596. As a result, these options are exercisable to purchase and aggregate of
697,825 shares of our common stock.

RESULTS OF OPERATIONS

  RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2001 AND
SEPTEMBER 30, 2000

     Revenues:  During the three months ended September 30, 2001, revenues were
$25.9 million, a 71% increase from revenues of $15.2 million for the three
months ended September 30, 2000. Revenues increased as a result of higher sales
of magazine contracts, increased revenue from sales of memberships, higher
publisher fees, revenues from the sales of long distance telephone service and
other revenues. For the three months ended September 30, 2001, revenues were
derived primarily from the sales of magazine contracts totaling approximately
$21.3 million and other revenues of $4.6 million consisting of commission
revenue from sales of memberships to discount third party buying clubs,
publisher fees, revenues from the sales of long distance service and other
revenues, a 51% and 318% increase over the same period in the prior year for
sales of magazine contracts of $14.1 million and other revenues of $1.1 million,
respectively. During the three months ended September 30, 2001, we evaluated
actual collection and cancellations experience activity as it relates to
magazine sales. Based upon this analysis, we adjusted our cancellation
percentage from 35% to 33%.

     Commission Expense:  Commission Expense increased 23% to $10.7 million
during the three months ended September 30, 2001 from $8.7 million in the same
period of 2000 as a result of higher sales and the expansion of the company
owned-call centers whose costs are included in other direct costs below. During
the three months ended September 30, 2001, commission expense decreased as a
percentage of net magazine revenues from 47% compared to 62% for the three
months ended September 30, 2000 as a result of the use of Company operated call
centers which were established during 2001.

     Other Direct Costs:  For the three months ended September 30, 2001, we
recorded $7.1 million of other direct costs related to sales of magazine
contracts and other revenues, a $4.5 million increase from the $2.6 million of
costs recorded in the three months ended September 30, 2000. The increase
primarily consists of $3.0 million relating to the expansion of our house
operations as well as an increase of 1.6 million relating to direct recurring
payroll, rent and other costs related to the expansion of our operations. For
the three months ended September 30, 2001, other direct costs as a percentage of
total net revenues were 27% compared to 17% for the three months ended September
30, 2000. The increase is a result of the use of Company operated call centers
during the three months ended September 30, 2001.

     General and Administrative Expenses:  General and administrative expenses
increased $1.6 million to $4.6 million for the three months ended September 30,
2001 from $3.0 million for the same period in 2000. The increase is primarily
related additional administrative personnel, impact of the move into the Atlanta
                                        2
<PAGE>

facility during the third quarter as well as an increase in direct recurring
payroll, rent and other costs related to the expansion of our operations and
increases in other operational expenses incurred during the third quarter
compared to the same period in prior year.

     Interest Expense:  Interest Expense for the three months ended September
30, 2001 was $0.5 million, a decrease of $0.3 million from $0.8 million for the
three months ended September 30, 2000. The decrease is primarily related to the
one time non-cash interest expense recorded in the three-month period ended
September 30, 2000 representing the fair value of shares and warrants issued in
connection with the initial issuance and subsequent conversion of the DSI
acquisition bridge financing.

     Income Taxes:  For the three months ended September 30, 2001, we recorded a
$0.6 million tax provision based on an estimate of our effective tax rate
projected for the year ending December 31, 2001. We may adjust the assumptions
of our projected earnings used to calculate such rate. We had Federal and State
net operating loss carryforwards of approximately $7.0 million available to
offset future taxable income, if any, through December 2020. Our ability to use
these net operating losses may be substantially limited because of the "change
of ownership" provisions under Section 382 of the Internal Revenue Code and
similar State provisions. As a result of these limitations, some or all of our
net operating losses may expire before we can use them. We have established a
valuation allowance to reserve for the deferred tax assets arising from the net
operating losses and other temporary differences, since we cannot be sure that
we will benefit from them in the future.

     Preferred Dividends:  For the three months ended September 30, 2001, we
recorded $0.1 million of contractual dividends in connection with the New Series
A Shares compared to $4.9 million of dividends for the same period in the prior
year. The decrease is primarily attributable to $4.6 million of non-cash deemed
dividends and contractual dividends of approximately $0.3 million recorded in
connection with the Series B and C preferred stock issued to complete the DSI
Acquisition on January 28, 2000. During 2001, both the Series B and C shares
were either redeemed and/or converted based on the terms of its respective
agreements.

     Net Income (Loss) Applicable to Common Stockholders and Net Income (Loss)
Applicable to Common Stockholders Per Share:  During the three months ended
September 30, 2001, net income applicable to common stockholders' was $2.3
million, or diluted earnings per share of $0.26, compared to a net loss
applicable to common stockholders' of $5.0 million, or $(0.92) per share, for
the three months ended September 30, 2000.

  RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND
SEPTEMBER 30, 2000

     Revenues:  During the nine months ended September 30, 2001, revenues were
$69.2 million, a 63% increase from revenues of $42.4 million for the nine months
ended September 30, 2000. Revenues increased as a result of higher sales of
magazine contracts, increased revenue from sales of memberships, higher
publisher fees revenues, revenues from the sales of long distance telephone
service and other revenues. For the nine months ended September 30, 2001,
revenues were derived primarily from the sales of magazine contracts totaling
approximately $55.2 million and other revenues of 14.0 million consisting of
commission revenues from sales of memberships in a third party discount-buying
club, publisher fees, commissions on sales of discount long distance telephone
service and other revenues which represents a 39% and 483% increase compared to
magazine sales of $40.0 million and $2.4 million of other revenues for the nine
months ended September 30, 2000. During the nine months ended September 30,
2001, we evaluated actual experience as it relations to collection and
cancellation activity as it relates to magazine sales. Based upon this analysis,
we adjusted our cancellation percentage from 35% to 33%.

     Commission Expense:  Commission expense increased by 38% to $31.5 million
during the nine months ended September 30, 2001 from $22.8 million in the same
period of 2000 as a result of higher sales and the expansion of our own call
centers whose costs are included in other direct costs below. For the nine
months ended September 30, 2001, commission expense as a percentage of net
magazine revenue was 57% compared to 57% for the same period in prior year.

                                        3
<PAGE>

     Other Direct Costs:  For the nine months ended September 30, 2001, we
recorded $18.6 million of other direct costs related to sales of magazine
contracts and other revenues, a $11.1 million increase from the $7.4 million of
costs recorded in the nine months ended September 30, 2000. The increase
consists largely of approximately $7.0 million relating to the expansion of our
house operations as well as an increase of 4.1 million relating to increase in
direct recurring payroll, rent and other costs related to the expansion of our
operations. For the nine months ended September 30, 2001, other direct costs as
a percentage of total revenues were 27% compared to 17% for the nine months
ended September 30, 2000 as a result of the use of Company operated call centers
in 2001.

     General and Administrative Expenses:  General and administrative expenses
increased $2.5 million to $11.1 million for the nine months ended September 30,
2001 from $8.6 million for the same period in 2000. The increase is primarily
related additional administrative personnel, impact of the move into the Atlanta
facility during the third quarter of 2001 and increases in other operational
expenses incurred during the third quarter compared to the same period in prior
year.

     Interest Expense:  Interest Expense for the nine months ended September 30,
2001 was $1.5 million, a decrease of $2.2 million from $3.7 million for the nine
months ended September 30, 2000. The decrease is primarily related to the one
time non-cash interest expense of $1.5 million recorded in the nine months ended
September 30, 2000 representing the fair value of shares and warrants issued in
connection with the initial issuance and subsequent conversion of the DSI
acquisition bridge financing.

     Income Taxes:  For the nine months ended September 30, 2001, we recorded a
$1.3 million tax provision based on an estimate of our effective tax rate
projected for the year ended December 31, 2001. We may adjust the assumptions of
our projected earnings used to calculate such rate. We had Federal and State net
operating loss carryforwards of approximately $7.0 million available to offset
future taxable income, if any, through December 2020. Our ability to use these
net operating losses may be substantially limited because of the "change of
ownership" provisions under Section 382 of the Internal Revenue Code and similar
State provisions. As a result of these limitations, some or all of our net
operating losses may expire before we can use them. We have established a
valuation allowance to reserve for the deferred tax assets arising from the net
operating losses and other temporary differences, since we cannot be sure that
we will benefit from them in the future.

     Preferred Dividends:  For the nine months ended September 30, 2001, we
recorded $1.4 million of dividends including $0.9 million of non-cash deemed
dividends and approximately $0.5 million of contractual dividends. On February
15, 2001, we redeemed 22,992 Series C Shares and New Series C Shares and
converted the remaining of 39,363 Series C Preferred Stock into 789,250 shares
of common stock. In consideration of the agreement of the holders to convert the
Series C Preferred Stock, we agreed to issue to the holders a total of 133,280
additional shares of common stock, pro rata in accordance with the number of
shares each holder converted. The non-cash deemed dividend of $0.9 million
represents the fair value of the additional shares issued. For the nine months
ended September 30, 2000, we recorded $36.7 million of dividends including $31.6
million of non-cash deemed dividends in connection with the Series A, B and C
preferred stock we issued to complete the DSI Acquisition.

     Net Income (Loss) Applicable to Common Stockholders and Net Income (Loss)
Applicable to Common Stockholders Per Share:  During the nine months ended
September 30, 2001, net income applicable to common stockholders was $3.9
million or diluted earnings per share of $0.46 compared to a net loss applicable
to common stockholders of $37.4 million or $(8.21) per share for the nine months
ended September 30, 2000. The increase in net income and net income per share is
attributable to an increase in revenues and a decrease in preferred dividends
during the nine months ended September 30, 2001.

FINANCIAL CONDITION AND LIQUIDITY

     At September 30, 2001, we had cash on hand of $1.6 million. For the nine
months ended September 30, 2001 we used $3.0 million in operating activities and
$4.2 million in investing activities, and generated $6.4 million from financing
activities. Through the operations of MOS, we generate cash flow from the sale
and collection of consumer receivables, commissions earned from publishers in
connection with originating
                                        4
<PAGE>

paid subscriptions for certain publications, and commissions earned on the sale
of third party discount buying club memberships. MOS uses these funds as well as
funds available under its revolving credit facility to fund its working capital
needs.

     Under the Coast Facility as amended in May 2001 (as discussed below), MOS
is generally permitted to make distributions to Cross Media Marketing of up to
$400,000 per month, plus any amounts necessary for Cross Media Marketing to
satisfy tax obligations attributable to MOS's operations. We believe that the
cash flow from operations at MOS, and the amount available for borrowing under
the revolving credit facility, is currently sufficient to meet our day-to-day
operating requirements. However, MOS's cash flow would not be sufficient to
complete any additional acquisitions in furtherance of our overall strategy.
Consequently, we may be required to raise additional financing to fund any
future acquisitions.

     During the quarter ended March 31, 2000, we financed the cash portion of
the purchase price of the DSI Acquisition by borrowing $16.0 million under a
credit facility provided by Coast Business Credit (described below) and by using
proceeds totaling approximately $9.2 million from the issuance of common stock,
warrants to purchase common stock, convertible preferred stock and convertible
debt. As of December 31, 2000, all of the convertible debt issued in connection
with the DSI Acquisition had either been converted into common stock or paid and
all of the convertible preferred stock issued in connection with the DSI
Acquisition other than the Series C Convertible Preferred Stock had either been
converted into common stock or redeemed. As described below, on February 15,
2001, we redeemed 22,992 shares of Series C Convertible Preferred Stock and the
holders converted the remaining shares into shares of common stock.

  COAST BUSINESS CREDIT -- FINANCING FACILITY

     In connection with the DSI Acquisition, Coast Business Credit ("Coast")
provided a credit facility (the "Coast Facility") used to fund the DSI
Acquisition and working capital needs of MOS. The Coast Facility has a three
year term, and provides a maximum credit line of $20.0 million subject to
certain availability limitations. As a result of these limitations, the amount
available for borrowing under the Coast Facility at the time of the DSI
Acquisition was $16.0 million, which MOS drew down in its entirety to finance
the DSI Acquisition. We pay interest under the Coast Facility at an annual rate
equal to the higher of (i) the prime rate plus 200 basis points, and (ii) 9.0%.
The Coast Facility requires Cross Media Marketing and MOS to comply with
specified financial covenants. The Coast Facility matures on January 28, 2003.

     When the Coast Facility was established, we issued to Coast a five-year
warrant to purchase our common stock. As of December 31, 2000, Coast was
entitled to purchase 88,777 shares of common stock under this warrant at an
exercise price of $11.95 per share. As a result of anti-dilution adjustments,
the number of shares Coast was entitled to purchase under the warrant as of
September 30, 2001 increased to 97,133 and the exercise price of the warrant was
reduced to $10.95 per share. We recorded a non-cash interest charge of
approximately $20,491 for the nine-month period ended September 30, 2001 as a
result of these adjustments.

     Coast extended the facility to us subject to the condition that we raise
additional equity capital of not less than $3 million by February 28, 2000,
which was subsequently extended to March 31, 2000. On March 30, 2000 the Coast
Facility was amended as follows: (i) the covenant requiring us to raise
additional cash equity of $3.0 million was eliminated; (ii) the parties reduced
the consolidated net worth (defined as stockholder equity and subordinated debt)
covenant to $9.0 million from $12.0 million at March 31, 2000; and (iii) a new
covenant was added requiring that we maintain excess borrowing availability of
$750,000.

     As of September 30, 2001 the outstanding loan balance under the Coast
Facility was approximately $17.6 million and the total amount available for
borrowing was $18.0 million. Therefore, MOS was entitled to borrow an additional
$0.4 million under the Coast Facility as of September 30, 2001. In May 2001, we
agreed with Coast to amend the Coast Facility as follows: (i) Coast waived the
requirement that we maintain a minimum Tangible Net Worth through March 31,
2001; (ii) Coast waived any violation of the limitation on distributions by MOS
to Cross Media Marketing with respect to a $1.0 million distribution in February
2001; (iii) we agreed to maintain a minimum Senior Debt to EBITDA ratio of no
greater than 1.5 to 1.0; and (iv) we agreed to maintain other covenants. We have
been and expect to be fully in compliance with the provisions of this agreement
going forward.
                                        5
<PAGE>

  SERIES A CONVERTIBLE PREFERRED STOCK ("NEW SERIES A SHARES" OR "SERIES A
SHARES")

     On July 18, 2001, we entered into agreements with the holder of all of the
50,625 outstanding New Series A Shares.

     On October 24, 2001, Cross Media completed its merger with LifeMinders. As
a result of the merger, pursuant to the July 18, 2001 agreements, we made a cash
payment of $2,531,250 to redeem 25,312.5 Series A Shares and the remaining
25,312.5 Series A Shares were converted into 342,060 shares of our common stock.
In addition, we made a payment to the holder of $968,750 in cash and issued to
the holder 50,000 shares of our common stock with an exercise price of $9.9225
per share.

  SERIES C MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK ("SERIES C
PREFERRED")

     On February 15, 2001, we redeemed 22,992 Series C Shares and New Series C
Shares for an aggregate redemption price of $2,299,200 including accrued and
unpaid dividends of $122,300. The holders converted all of the remaining Series
C Shares and New Series C Shares into 789,250 shares of common stock (at an
effective conversion ratio of $5.00 per share). In consideration of the
agreement of the holders to convert the Series C Shares and New Series C Shares
(which would otherwise have been mandatorily redeemable by the Company in full
on February 15, 2001), we agreed to issue to the holders 133,280 additional
shares of common stock, pro rata in accordance with the number of shares they
converted. The value of the shares of common stock we issued was reflected in
the first quarter of 2001 as an additional deemed dividend in the amount of
$899,640. We also agreed to pay a fee of $100,000 to one of the Series C holders
in connection with its services relating to the negotiation of these agreements.
There was a note payable of $199,200 related to the redemption of the Series C
Preferred Stock which was paid with interest during the third quarter.

     We obtained a portion of the funds required to redeem the Series C Shares
and the New Series C Shares by selling 300,000 shares of common stock, in
private placements, at a price of $5.00 per share.

  MERGER WITH LIFEMINDERS, INC.

     On October 24, 2001, our acquisition of LifeMinders, Inc., an online direct
marketer was completed through the merger of LifeMinders with and into Cross
Media. We paid an aggregate of approximately $24.06 million in cash and issued
and aggregate of approximately 4.54 million shares of our common stock to the
former LifeMinders stockholders.

     In connection with the merger, we assumed options to purchase 2,687,667
shares of LifeMinders common stock. The number of shares issuable on exercise of
these options was adjusted by the per share exchange ratio of .2596 and the
exercise price of these options was divided by the per share exchange ratio of
 .2596. As a result, these options are exercisable to purchase and aggregate of
697,825 shares of our common stock.

                                        6
<PAGE>

                        CERTAIN TRENDS AND UNCERTAINTIES

BUSINESS RISKS

  WE HAVE A LIMITED OPERATING HISTORY WHICH MAKES IT DIFFICULT TO EVALUATE OUR
PROSPECTS.

     We developed our business strategy in 1999, completed our first acquisition
in January 2000, and opened our first company-owned and operated call center and
undertook our first email campaign in the last quarter of 2000. Therefore, we
have a limited history of operations under our current business strategy upon
which the likelihood of our success can be evaluated. Moreover, prior to the
merger LifeMinders had only a limited operating history.

     The implementation of a new business strategy frequently involves risks,
expenses and uncertainties that may adversely affect our business, results of
operations, financial condition and prospects, including:

     - the ability to compete effectively against other companies;

     - the need to retain and motivate qualified personnel;

     - the ability to anticipate and adapt to the changing market;

     - the ability to develop and introduce new products and services and
       continue to develop and upgrade technology; and

     - the need to attract and retain a large number of customers from a variety
       of industries.

 WE HAVE A HISTORY OF LOSSES, PRIMARILY AS A RESULT OF NON-CASH CHARGES AND
 INTEREST EXPENSE, AND MAY INCUR FUTURE LOSSES. IN ADDITION, LIFEMINDERS'
 HISTORICAL OPERATIONS HAS INCURRED SIGNIFICANT LOSSES AND MAY CONTINUE TO
 EXPERIENCE LOSSES FOR THE FORESEEABLE FUTURE.

     Cross Media's net loss available to common stockholders for the year ended
December 31, 2000 was $44.6 million, or $9.20 per share. On a proforma basis,
giving affect to the merger with LifeMinders, the net loss would have been
$145.4 million for the year ended December 31, 2000. Cross Media's net loss was
primarily as a result of dividends on its preferred stock of $39.6 million,
including non-cash dividends of $38.7 million. Non-cash dividends represent the
accretion of the difference between the carrying value and the mandatory
redemption amounts of preferred stock that resulted from allocating a portion of
the proceeds to common stock, common stock purchase warrants, and the beneficial
conversion features of the shares. If Cross Media's net revenues grow more
slowly than it anticipates, or if its operating expenses exceed its
expectations, Cross Media's business, results of operations, financial condition
and prospects would be materially and adversely affected. Although Cross Media
realized net income during the first nine months of 2001, there can be no
assurance that Cross Media will continue to realize net income.

     Prior to the merger, LifeMinders' operations never achieved profitability.
LifeMinders' operations may continue to contribute operating losses for the
foreseeable future. LifeMinders incurred net losses of $50.7 million for the six
months ended June 30, 2001, and $109.5 million for the year ended December 31,
2000. Although LifeMinders' operations and net losses have been significantly
reduced, there is no assurance that LifeMinders' operations will not continue to
incur losses.

 THE ANTICIPATED BENEFITS OF THE MERGER WITH LIFEMINDERS MAY NOT BE REALIZED IN
 A TIMELY FASHION, OR AT ALL. IN ADDITION, CROSS MEDIA'S OPERATIONS MAY BE
 ADVERSELY AFFECTED IF THE OPERATION OF LIFEMINDERS' BUSINESS DIVERTS TOO MUCH
 ATTENTION AWAY FROM CROSS MEDIA'S BUSINESS.

     The success of the merger with LifeMinders will depend, in part, on our
ability to realize the anticipated revenue enhancements, growth opportunities
and synergies of combining with LifeMinders and effectively utilize the net cash
and other resources we now have after the merger. There are risks related to the
integration and management of the acquired technology and operations and
personnel. The integration of the businesses will be a complex, time-consuming
and potentially expensive process and may disrupt our Cross Media

                                        7
<PAGE>

business if not completed in a timely and efficient manner. Some of the
difficulties that may be encountered by the combined company include:

     - the diversion of management's attention from other ongoing business
       concerns;

     - the inability to utilize the acquired member database and technology
       effectively to grow our Cross Media business; and

     - potential conflicts between business cultures.

     If our management focuses too much time, money and effort to integrate
LifeMinders' operations and assets, they may not be able to execute our overall
business strategy.

 CROSS MEDIA MAY NEED ADDITIONAL FINANCING TO IMPLEMENT ITS STRATEGY AND EXPAND
 ITS BUSINESS.

     Cross Media may need additional debt or equity financing to pursue its
strategy of expanding its business through the acquisition of companies whose
businesses are strategically appropriate for it or for its existing operations.
Although Media Outsourcing, Cross Media's principal subsidiary, has in the past
generated positive cash flow, Cross Media's credit facility limits the amount of
distributions Media Outsourcing can make to Cross Media. Any financing that
Cross Media needs may not be available at all and, if available, may not be
available on terms that are acceptable to Cross Media. The failure to obtain
financing on a timely basis, or on economically favorable terms, could prevent
Cross Media from continuing its strategy or from responding to changing business
or economic conditions, and could cause Cross Media to experience difficulty in
withstanding adverse operating results or competing effectively.

     If Cross Media raises additional funds by issuing equity securities, Cross
Media stockholders may experience dilution of their ownership interest.
Moreover, Cross Media could issue preferred stock that has rights senior to
those of its common stock. If Cross Media raises funds by issuing debt
securities, these securities would have rights, preferences and privileges
senior to holders of common stock and lenders may place limitations on Cross
Media's operations.

 CROSS MEDIA IS SUBJECT TO RESTRICTIVE CREDIT FACILITY COVENANTS WHICH COULD
 HARM ITS FINANCIAL STATUS AND HAVE A NEGATIVE IMPACT ON ITS STOCK PRICE.

     In January 2000, Cross Media entered into an agreement with Coast Business
Credit to provide a credit facility to finance the acquisition of its magazine
subscription teleservicing business and the ongoing working capital needs of
Media Outsourcing. Cross Media has guaranteed Media Outsourcing's obligations
under the Coast credit facility and all of Media Outsourcing's assets are
pledged to Coast to secure its obligations under the Coast facility.

     Under the agreement with Coast, Cross Media is required, among other
things, to maintain a consolidated net worth of not less than $9 million and
excess borrowing availability of $750,000. If Cross Media cannot satisfy these
or other covenants under the Coast facility, Cross Media will be required to
seek a waiver or amendment from Coast. In May 2001, Coast waived the requirement
that Cross Media maintain a minimum tangible net worth through March 31, 2001
and waived any violation of the limitation on distributions by Media Outsourcing
to Cross Media with respect to a $1 million distribution in February 2001.
Although Cross Media expects to be in compliance with the provisions of the
Coast facility agreement going forward, if it should require waivers or
amendments to the agreement, there can be no assurance that Coast will agree. If
Cross Media defaults in performing its obligations to Coast, Coast would be
entitled to accelerate the maturity of outstanding indebtedness under the credit
facility, $17.6 million as of September 30, 2001, and to enforce its security
interest in Media Outsourcing's assets.

                                        8
<PAGE>

 IF CROSS MEDIA IS UNABLE TO COLLECT ITS RECEIVABLES IN A TIMELY MANNER, ITS
 CASH FLOW FROM OPERATIONS WILL BE NEGATIVELY IMPACTED.

     Cross Media is subject to the risks associated with selling products on
credit, including delays in collection or uncollectibility of accounts
receivable. If Cross Media experiences significant delays in collection or
uncollectibility of accounts receivable, its liquidity and working capital
position could suffer.

 IF SUBSCRIPTION CANCELLATION RESERVES ARE NOT ADEQUATE, CROSS MEDIA COULD BE
 REQUIRED TO INCREASE ITS RESERVES, WHICH WILL RESULT IN A REDUCTION OF
 REVENUES.

     Cross Media extends credit to subscribers who purchase multi-magazine
subscription packages. Cross Media has established a reserve to cover
subscription cancellation based upon its past history with magazine subscription
orders. In the past, Cross Media has had to increase the reserves on its 20 pay
contracts. If Cross Media's accounts subscription cancellation reserves are
inadequate, it will be required to increase reserves, which will reduce revenues
and could otherwise materially adversely effect Cross Media's results of
operations.

 INTERNET ADVERTISING CUSTOMERS AND THE COMPANIES WITH WHICH WE HAVE OTHER
 BUSINESS RELATIONSHIPS MAY EXPERIENCE ADVERSE BUSINESS CONDITIONS THAT COULD
 ADVERSELY AFFECT OUR BUSINESS.

     Some of our customers may experience difficulty in supporting their current
operations and implementing their business plans. These customers may reduce
their spending on our LifeMinders' products and services, or may not be able to
discharge their payment and other obligations to us. The non-payment or late
payment of amounts due from a significant customer could negatively impact our
financial condition. In addition to intense competition, the overall market for
Internet advertising has been characterized in recent quarters by increasing
softness of demand, the reduction or cancellation of advertising contracts, an
increased risk of uncollectible receivables from advertisers, and the reduction
of Internet advertising budgets, especially by Internet-related companies.
Customers may experience difficulty in raising capital, or may be anticipating
such difficulties, and therefore may elect to scale back the resources they
devote to advertising, including on LifeMinders' system. Other companies in the
Internet industry have depleted their available capital, and could cease
operations or file for bankruptcy protection.

     In addition, our Cross Media business may be adversely affected by periods
of economic slowdown, inflation or recession, which may be accompanied by a
decrease in the availability of consumer credit. Any material decline in the
availability of consumer credit may result in a decrease in consumer demand to
make credit card purchases, which could adversely affect the demand for Cross
Media's products and services.

 FUTURE GROWTH COULD PLACE SIGNIFICANT STRAIN ON OUR RESOURCES AND WE MAY BE
 UNABLE TO MANAGE FUTURE GROWTH.

     Growth in our operations could place a significant strain on our
operational systems and employee resources. As a result, we may have to
implement new operational and financial systems, procedures and controls. In
order to manage and accommodate our planned growth, if it occurs, we will need
to continue to improve and adapt our financial planning, accounting systems,
information systems and management structures. We will also need to expand,
train, retain and manage our employee base. If we are unable to manage our
growth effectively, our financial condition and results of operations could be
materially adversely affected.

 IF WE ACQUIRE OR MAKES STRATEGIC INVESTMENTS IN OTHER BUSINESSES OR ACQUIRE OR
 LICENSE TECHNOLOGY AND OTHER ASSETS, WE MAY HAVE DIFFICULTY INTEGRATING THESE
 BUSINESSES, TECHNOLOGIES AND ASSETS OR GENERATING AN ACCEPTABLE RETURN ON ITS
 INVESTMENTS.

     We may acquire or enter into strategic relationships with other businesses
and acquire or license technology and other assets. We cannot assure you that
acquisition or licensing opportunities will be available

                                        9
<PAGE>

on terms acceptable to us or at all. Any future acquisitions and strategic
relationships will involve risks, including:

     - inability to raise the required capital;

     - difficulty in assimilating the acquired assets, operations and personnel;

     - disruption of ongoing business;

     - distraction of management from other responsibilities; and

     - lack of the necessary experience to enter new markets.

     We may not successfully overcome problems encountered in connection with
potential acquisitions or licensing arrangements. In addition, acquisitions or
strategic relationships could materially impair our operating results, causing
us to incur additional debt, or requiring us to amortize acquisition expenses
and acquired assets.

 THE LOSS OF CROSS MEDIA'S LARGEST CALL CENTERS WOULD LIKELY RESULT IN A
 REDUCTION OF REVENUES AND OTHERWISE ADVERSELY AFFECT OPERATING RESULTS.

     For the nine months ended September 30, 2001 and for the year ended
December 31, 2000, two independent call centers accounted for approximately 35%
of Cross Media's magazine subscription revenues. These call centers do not have
any commitment to generate sales for Cross Media and could therefore, at any
time, terminate their relationships with Cross Media without notice, which could
have a material adverse effect on our Cross Media business.

 PRIOR TO THE MERGER, LIFEMINDERS HAD SCALED BACK ITS BUSINESS OPERATIONS AND
 SIGNIFICANTLY REDUCED ITS WORK FORCE. AS A RESULT OF THESE ACTIONS, COUPLED
 WITH CONTINUING WEAKNESS IN THE ONLINE ADVERTISING MARKET, FUTURE REVENUES FROM
 LIFEMINDERS' OPERATIONS WILL LIKELY BE SIGNIFICANTLY REDUCED.

     As announced on May 10, 2001, LifeMinders' board of directors decided to
significantly scale back its business operations and reduce its work force.
Revenues from our LifeMinders operations will likely continue to decline
substantially from that reported in prior periods, because, among other reasons:

     - the market for online advertising will continue to decline significantly;
       and

     - opportunities for online advertising revenues will decline because the
       company will be producing and delivering a substantially lower number of
       emails.

 IF WE DO NOT MAINTAIN LIFEMINDERS ENGAGED MEMBER BASE, WE MAY NOT BE ABLE TO
 COMPETE EFFECTIVELY FOR, OR MAINTAIN, ADVERTISERS AND OUR BUSINESS COULD BE
 ADVERSELY AFFECTED.

     LifeMinders' revenue has been derived primarily from advertisers seeking an
engaged, targeted audience for their advertisements. Although we intend to
continue to produce and distribute emails to LifeMinders' members, prior to the
merger, LifeMinders scaled back its business operations and reduced the number
of emails it sends to members. Prior to the merger, LifeMinders had discontinued
most of its member related marketing activities. A significant portion of
LifeMinders' revenue was historically derived from performance-based and revenue
sharing arrangements. Under these arrangements, advertisers pay LifeMinders in
part based on member responses to advertisements and promotions placed in email
newsletters. If LifeMinders' members do not respond to advertisements and
promotions placed in email newsletters, revenues from these operations could be
materially and adversely affected.

     If we are unable to maintain LifeMinders engaged member base by keeping
current members active (i.e., opening email newsletters and responding to the
advertisements contained in those newsletters), advertisers could find our
audience less attractive and effective for promoting their products and
services.

                                        10
<PAGE>

 COMPETITION IN THE ONLINE ADVERTISING MARKET INDUSTRY IS INTENSE, AND
 LIFEMINDERS' SCALED BACK OPERATIONS MAY MAKE IT MORE DIFFICULT FOR US TO
 COMPETE EFFECTIVELY AND MAY REDUCE OUR ABILITY TO RETAIN AND ATTRACT
 ADVERTISERS.

     We face intense competition from both traditional and online advertising
and direct marketing businesses. LifeMinders' scaled back operations will make
it more difficult to compete effectively with its competitors. If we are not
able to compete effectively, we may not be able to retain current advertisers or
attract new advertisers. This would reduce revenues from our LifeMinders'
operation. We face competition for marketing dollars from online portals and
community websites such as AOL, Yahoo!, and CNET Networks, Inc. In addition,
other companies offer competitive email direct marketing services, including
coolsavings.com, MyPoints.com, NetCreations, YesMail.com and Digital Impact.

     Additionally, traditional advertising agencies and direct marketing
companies may seek to offer online products or services that compete with those
offered by us.

     Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than we have. Our competitors will most likely continue to develop and
market new technologies and products and to conduct research allowing them to
identify and respond to changes in customer requirements. In addition, these
competitors will continue to aggressively market and sell their products and
services.

 WE RELY HEAVILY ON OUR INTELLECTUAL PROPERTY RIGHTS AND OTHER PROPRIETARY
 INFORMATION, AND ANY FAILURE TO PROTECT AND MAINTAIN THESE RIGHTS AND
 INFORMATION COULD PREVENT US FROM COMPETING EFFECTIVELY.

     We seek to protect through a combination of patent, copyright, trade secret
and trademark law, as well as confidentiality or license agreements with
employees, consultants, and corporate and strategic partners. If we are unable
to prevent the unauthorized use of our proprietary information or if our
competitors are able to develop similar technologies independently, the
competitive benefits of our LifeMinders' technologies, intellectual property
rights and proprietary information will be diminished.

 WE DEPEND HEAVILY ON ITS NETWORK INFRASTRUCTURE AND IF THIS FAILS IT COULD
 RESULT IN UNANTICIPATED EXPENSES, AS WELL AS PREVENT OUR LIFEMINDERS' MEMBERS
 FROM EFFECTIVELY UTILIZING OUR LIFEMINDERS' SERVICES. THIS COULD NEGATIVELY
 IMPACT OUR ABILITY TO RETAIN LIFEMINDERS' MEMBERS AND ADVERTISERS.

     Our ability to successfully create and deliver our LifeMinders' email
newsletters depends in large part on the capacity, reliability and security of
its networking hardware, software and telecommunications infrastructure.
Failures of the network infrastructure could result in unanticipated expenses to
address such failures and could prevent our LifeMinders' members from
effectively utilizing our LifeMinders' services, which could prevent us from
retaining members and advertisers. We do not have fully redundant systems or a
formal disaster recovery plan. The system is susceptible to natural and man-made
disasters, including earthquakes, fires, floods, power loss and vandalism.
Further, telecommunications failures, computer viruses, electronic break-ins or
other similar disruptive problems could adversely affect the operation of the
systems. Our insurance policies may not adequately compensate it for any losses
that may occur due to any damages or interruptions in the systems. Accordingly,
we could be required to make capital expenditures in the event of unanticipated
damage.

     In addition, our LifeMinders' members depend on Internet service providers,
or ISPs, for access to our LifeMinders website. Due to the rapid growth of the
Internet, ISPs and websites have experienced significant system failures and
could experience outages, delays and other difficulties due to system failures
unrelated to our LifeMinders' systems. These problems could harm our
LifeMinders' business by preventing members from effectively utilizing its
services.

                                        11
<PAGE>

 THE CONTENT CONTAINED IN LIFEMINDERS' EMAILS MAY SUBJECT IT TO SIGNIFICANT
 LIABILITY FOR NEGLIGENCE, COPYRIGHT OR TRADEMARK INFRINGEMENT OR OTHER MATTERS.

     If any of the content that we create and deliver to our LifeMinders members
or any content that is accessible from our LifeMinders' emails through links to
other websites contains errors, third parties could make claims against us for
losses incurred in reliance on such information. In addition, the content
contained in or accessible from LifeMinders' emails could include material that
is defamatory, violates the copyright or trademark rights of third parties, or
subjects it to liability for other types of claims. Our general liability
insurance may not cover claims of these types or may not be adequate to
indemnify it for all liability that may be imposed. Any imposition of liability,
particularly liability that is not covered by insurance or is in excess of
insurance coverage, could result in significant costs and expenses and damage
our reputation.

     We have also entered into agreements with certain e-commerce partners under
which we may be entitled to receive a share of certain revenue generated from
the purchase of goods and services through direct links to LifeMinders'
e-commerce partners from the emails sent by us. These agreements may expose us
to additional legal risks and uncertainties, including potential liabilities to
consumers of those products and services by virtue of our involvement in
providing access to those products or services, even if we do not provide those
products or services. Any indemnification provided to us in its agreements with
these parties, if available, may not adequately protect us.

 CONCERNS ABOUT, OR BREACHES OF, THE SECURITY OF OUR LIFEMINDERS' MEMBER
 DATABASE COULD RESULT IN SIGNIFICANT EXPENSES TO PREVENT BREACHES, AND SUBJECT
 US TO LIABILITY FOR FAILING TO PROTECT THE MEMBERS' INFORMATION.

     We maintain a database containing information about our LifeMinders
members. Unauthorized users accessing our LifeMinders' systems remotely may
access its database or authorized users may make unauthorized copies of all or
part of the database for their own use in violation of specific agreements to
the contrary. As a result of these security and privacy concerns, we may incur
significant costs to protect against the threat of security breaches or to
alleviate problems caused by security breaches, and may be unable to effectively
target direct marketing offers to members or may be subject to legal claims of
members if unauthorized third parties gain access to our LifeMinders' system and
alter or destroy information in its database. Also, any public perception that
we engaged in the unauthorized release of member information, whether or not
correct, would adversely affect our ability to retain members.

 OUR LIFEMINDERS' BUSINESS MAY BE ADVERSELY AFFECTED BY THE REFUSAL OF ONE OR
 MORE EMAIL DELIVERY PROVIDERS TO DELIVER OUR, OR OUR CUSTOMERS', MESSAGES.

     Our LifeMinders' business may be adversely affected by the unilateral
election of certain domain administrators to block, filter or otherwise prevent
the delivery of Internet advertising or commercial emails to their users. We
cannot assure you that the number of domains which establish policies
restricting their users receipt of commercial deliveries as consideration for
receiving service will not become increasingly more popular, thereby diminishing
the reach of our LifeMinders' service, or the service of our customers.

 OUR LIFEMINDERS' BUSINESS MAY BE ADVERSELY AFFECTED BY PRODUCTS OFFERED BY
 THIRD PARTIES.

     Our ability to continue operating our LifeMinders' business may be
adversely affected by the adoption by computer users of technologies that harm
the performance of our products and services, such as technologies that allow
domain administrators on the aggregate level, or individual users managing their
own email accounts, to block, filter or otherwise prevent the delivery of
Internet advertising or commercial emails, or to block access to any services
that use cookies or other tracking technologies. We cannot assure you that the
number of domains or individual computer users who employ these or other similar
technologies will not increase, thereby diminishing the efficacy of our
LifeMinders', or our customers', services. LifeMinders' business, financial
condition and results of operations could be materially and adversely affected
if one or more of these technologies is widely accepted.

                                        12
<PAGE>

  SWEEPSTAKES REGULATION MAY LIMIT OUR ABILITY TO CONDUCT SWEEPSTAKES AND OTHER
  CONTESTS, WHICH COULD NEGATIVELY IMPACT OUR ABILITY TO RETAIN LIFEMINDERS'
  MEMBERS.

     The conduct of sweepstakes, lotteries and similar contests, including by
means of the Internet, is subject to extensive federal, state and local
regulation, which may restrict our ability to offer contests and sweepstakes in
some geographic areas or altogether. Any restrictions on these promotions could
adversely affect our ability to retain LifeMinders' members.

  OUR LIFEMINDERS' BUSINESS MAY BE ADVERSELY AFFECTED IF DEMAND FOR INTERNET
  ADVERTISING FAILS TO GROW AS PREDICTED OR DIMINISHES.

     The Internet advertising industry is new and rapidly evolving, and it
cannot yet be compared with traditional advertising media to gauge its
effectiveness. As a result, demand and acceptance for Internet advertising
solutions is uncertain. Many of our advertising customers have limited
experience using the Internet for advertising purposes and they have allocated
only a limited portion of their advertising budgets to Internet advertising. The
adoption of Internet advertising, particularly by those entities that have
historically relied upon traditional media for advertising, requires the
acceptance of a new way of conducting business, exchanging information and
advertising products and services. These customers may find Internet advertising
to be less effective for promoting their products and services relative to
traditional advertising media. We cannot assure you that our advertising
customers will continue to allocate a portion of their advertising budget to
Internet advertising or that the demand for Internet advertising will continue
to develop to sufficiently support Internet advertising as a significant
advertising medium. LifeMinders' results of operations have been adversely
affected in recent quarters as a result of a significantly declining market for
online advertising, and we expect that these adverse market conditions will
continue. If the market for online advertising fails to improve or deteriorates
more than expected, our LifeMinders' business, and consequently, our results of
operations and financial condition could be materially and adversely affected.

     There are currently no generally accepted standards or tools for the
measurement of the effectiveness of Internet advertising or the planning of
advertising purchases, and generally accepted standard measurements and tools
may need to be developed to support and promote Internet advertising as a
significant advertising medium. Our advertising customers may challenge or
refuse to accept the measurements of advertisement delivery results developed by
us or a third party. In addition, the accuracy of database information used to
target advertisements is essential to the effectiveness of Internet advertising
that may be developed in the future. The information in our database, like any
database, may contain inaccuracies that its customers may not accept.

     A significant portion of LifeMinders' revenue has historically been derived
from the delivery of advertisements, which are designed to contain the features
and measuring capabilities requested by advertisers. If advertisers determine
that those ads are ineffective or unattractive as an advertising medium or if we
are unable to deliver the features or measuring capabilities requested by
advertisers, the long-term growth of our online advertising business could be
limited and revenue levels could decline. There are also "filter" software
programs that limit or prevent advertising from being delivered to a user's
computer. The commercial viability of Internet advertising, and LifeMinders'
business, could be materially and adversely affected by web users' widespread
adoption of this software.

  THE UNAUTHORIZED ACCESS OF CONFIDENTIAL MEMBER INFORMATION THAT WE TRANSMIT
  OVER PUBLIC NETWORKS COULD ADVERSELY AFFECT ITS ABILITY TO RETAIN MEMBERS.

     Our LifeMinders members transmit confidential information to us over public
networks and the unauthorized access of such information by third parties could
harm our reputation and significantly hinder our efforts to retain LifeMinders'
members. We rely on a variety of security techniques and authentication
technology licensed from third parties to provide the security and
authentication technology to effect secure transmission of confidential
information, including customer credit card numbers. Advances in computer
capabilities, new discoveries in the field of cryptography or other developments
may result in a compromise or breach of the technology we use to protect
customer transaction data.

                                        13
<PAGE>

  PROBLEMS WITH THE PERFORMANCE AND RELIABILITY OF THE INTERNET INFRASTRUCTURE
  COULD ADVERSELY AFFECT THE QUALITY AND RELIABILITY OF THE PRODUCTS AND
  SERVICES WE OFFER OUR MEMBERS AND ADVERTISERS.

     We depend on the Internet infrastructure to deliver attractive, reliable
and timely email newsletters to our LifeMinders members. If Internet usage
grows, the Internet infrastructure may not be able to support the demands placed
on it by this growth, and its performance and reliability may decline. Among
other things, continued development of the Internet infrastructure will require
a reliable network backbone with necessary speed, data capacity and security.
Currently, there are regular failures of the Internet network infrastructure,
including outages and delays, and the frequency of these failures may increase
in the future. These failures may reduce the benefits of our LifeMinders'
products and services to our LifeMinders' members and undermine our advertising
partners' and members' confidence in the Internet as a viable commercial medium.
In addition, the Internet could lose its viability as a commercial medium due to
delays in the development or adoption of new technology required to accommodate
increased levels of Internet activity or due to government regulation.

  WE MAY HAVE TO LITIGATE TO PROTECT ITS INTELLECTUAL PROPERTY AND OTHER
  PROPRIETARY RIGHTS OR TO DEFEND CLAIMS OF THIRD PARTIES, AND SUCH LITIGATION
  MAY SUBJECT IT TO SIGNIFICANT LIABILITY AND EXPENSE.

     There is a substantial risk of litigation regarding intellectual property
rights in Internet-related businesses. Legal standards relating to the validity,
enforceability and scope of protection of certain proprietary rights in
Internet-related businesses are uncertain and still evolving. We may have to
litigate in the future to enforce its intellectual property rights, protect its
trade secrets or defend itself against claims of violating the proprietary
rights of third parties. This litigation may subject us to significant liability
for damages and result in invalidation of proprietary rights. In addition, such
litigation could be time-consuming and expensive to defend, even if not
meritorious, and result in the diversion of management time and attention. Any
of these factors could adversely affect our LifeMinders' business operations.

  GOVERNMENT REGULATION COULD ADD SIGNIFICANT ADDITIONAL COSTS TO OUR BUSINESS
  AND IMPOSE RESTRICTIONS ON OUR MARKETING PRACTICES WHICH COULD INTERFERE WITH
  OUR OPERATIONS AND HAVE A SIGNIFICANT ADVERSE EFFECT ON REVENUES.

     Laws and regulations applicable to direct marketing, telemarketing,
Internet marketing, consumer protection and membership club services are
becoming more prevalent. Each of the 50 states and the Federal government has
laws regulating telemarketing, sweepstakes promotions, promotional incentives
and advertising to consumers, which vary from state to state. While we review
our Cross Media telemarketing scripts and advertising copy to ensure that they
comply with applicable laws, there is no guarantee that Federal or state
authorities will not find that our marketing efforts do not comply with these
laws. In addition, it is likely that additional Federal and/or state regulations
regarding telemarketing, sweepstakes, email marketing and other marketing
practices engaged in by our Cross Media business will be enacted. If enacted,
these regulations could have an adverse effect on revenues and result in
additional expenses to our Cross Media business and could require Cross Media to
refrain from engaging in specific activities or modify its business practices.

     The Federal Trade Commission is currently in the process of reviewing the
provisions of the Telemarketing Sales Rule and Negative Option Rule to determine
if any changes to the rule should be made. If the Federal Trade Commission
determines that changes to the rule are necessary, changes could have a
significant adverse effect on our Cross Media business.

     In 1999, Congress enacted the Deceptive Mail Prevention and Enforcement
Act, which imposes various restrictions on the offering of sweepstakes through
the mail. Additional sweepstakes legislation has been enacted or is pending in
various states. This additional regulation could have an adverse impact on our
Cross Media marketing activities.

     Federal and state authorities have also been investigating various
companies' use of marketing practices, such as the use of personal information,
magazine subscription agents' sweepstakes practices and the marketing of
membership club services through the use of inbound and outbound telemarketing
campaigns. These investigations could result in additional rules, regulations or
industry standards, which could have an
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adverse impact on our marketing practices. At least two of the state
investigations have directly involved Memberworks, whose club memberships Cross
Media is marketing. To the extent Cross Media derives revenue from the sale of
memberships in the Memberworks club, there is a risk that Cross Media could be
subject to investigation as well, which could have an adverse impact on it.

  EXTENSIVE GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATED TO DOING
  BUSINESS ON THE INTERNET COULD LIMIT OUR SALES OR ADD SIGNIFICANT ADDITIONAL
  COSTS TO OUR BUSINESS.

     Laws and regulations directly applicable to Internet communications,
commerce, marketing and data protection are becoming more prevalent. If any of
these laws hinder the growth of Internet use generally or decreases the
acceptance of the Internet as a medium of communications, commerce and marketing
our Cross Media business and prospects may suffer materially. The United States
Congress has enacted Internet laws regarding children's privacy, copyrights and
taxation. Other laws and regulations may be adopted covering issues such as user
privacy, marketing activities, pricing, content, taxation and quality of
products and services. The governments of some states and foreign countries have
begun to regulate our Cross Media transactions and levy sales or other taxes
relating to its activities and will likely continue to do so. The laws governing
the Internet remain largely unsettled, even in areas where legislation has been
enacted. It may take years to determine whether and how existing laws such as
those governing intellectual property, privacy, libel and taxation apply to the
Internet and Internet advertising and marketing services. In addition, the
growth and development of the market for Internet commerce may prompt calls for
more stringent consumer protection laws, both in the United States and abroad,
that may impose additional burdens on companies conducting business over the
Internet.

     Laws and regulations governing the transmission of unsolicited email
marketing messages are being considered in many jurisdictions. Legislation of
that type has recently been adopted by numerous states, and similar legislation
is pending in several states and in Congress. These laws could have an adverse
impact on our Cross Media Internet marketing activities. The Telecommunications
Act of 1996 prohibits some types of information and content from being
transmitted over the Internet. The prohibition's scope and the liability
associated with a Telecommunications Act violation are currently unsettled. In
addition, although substantial portions of the Communications Decency Act were
held to be unconstitutional, we cannot be certain that similar legislation will
not be enacted and upheld in the future.

  CHANGES IN LAWS RELATING TO DATA COLLECTION AND USE PRACTICES AND THE PRIVACY
  OF INTERNET USERS AND CONSUMERS COULD HARM OUR BUSINESS.

     There have been increasing public debate about the collection, distribution
and use of information about consumers. New limitations on the collection and
use of information relating to Internet users are currently being considered by
legislatures and regulatory agencies in the United States and internationally.
We are unable to predict whether any particular proposal will pass, or the
nature of the limitations in those proposals that do pass. Since many of the
proposals are in their developmental stages, we are unable to determine the
impact these may have on our business. In addition, it is possible that changes
to existing law, including new interpretations of existing law, could have a
material and adverse impact on our business, financial condition and results of
operations.

  THE SUBSTANTIAL NUMBER OF OPTIONS AND WARRANTS TO PURCHASE CROSS MEDIA COMMON
  STOCK COULD RESULT IN DILUTION TO CROSS MEDIA STOCKHOLDERS.

     If the holders of the outstanding Cross Media options and common stock
purchase warrants exercise those options and warrants, including those issued in
connection with the merger and warrants being issued as partial consideration
for conversion of outstanding preferred stock, and the holders of all
outstanding convertible securities converted them into common stock, Cross Media
would be required to issue approximately 5.1 million additional shares of common
stock, based on current exercise and conversion prices. The exercise of options
and warrants and convertible rights, most of which have exercise prices or
conversion rates below the current market price of Cross Media common stock,
will result in dilution to Cross Media stockholders.
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<PAGE>

  BECAUSE OWNERSHIP OF CROSS MEDIA IS CONCENTRATED, A SMALL NUMBER OF
  STOCKHOLDERS EXERT SIGNIFICANT INFLUENCE OVER CROSS MEDIA.

     If a few of the largest stockholders of Cross Media were to act together,
as a result of their aggregate ownership, they would have the ability to exert
significant influence over Cross Media's business, including the election of
directors and the approval of any other action requiring the approval of
stockholders. This concentration of share ownership may:

     - delay or prevent a change of control of Cross Media;

     - impede a merger, consolidation, takeover or other business combination
       involving Cross Media; and/or

     - discourage a potential acquirer from making a tender offer or otherwise
       attempting to obtain control of Cross Media.

  PROVISIONS OF CROSS MEDIA'S CORPORATE CHARTER DOCUMENTS AND DELAWARE LAW COULD
  DELAY OR PREVENT A CHANGE OF CONTROL.

     Cross Media's certificate of incorporation authorizes the board of
directors to issue up to 10,000,000 shares of preferred stock. The preferred
stock may be issued in one or more series, the terms of which may be determined
at the time of issuance by Cross Media's board of directors, without further
action by stockholders, and may include, among other things, voting rights
(including the right to vote as a series on particular matters), preferences as
to dividends and liquidation, conversion and redemption rights, and sinking fund
provisions. Specific rights granted to future holders of preferred stock could
be used to restrict Cross Media's ability to merge with, or sell its assets to,
a third party. The ability of Cross Media's board of directors to issue
preferred stock could discourage, delay, or prevent a takeover of Cross Media,
thereby preserving control by the current stockholders.

     As a Delaware corporation, Cross Media is subject to the General
Corporation Law of the State of Delaware, including Section 203, an
anti-takeover law enacted in 1988. In general, Section 203 restricts the ability
of a public Delaware corporation from engaging in a "business combination" with
an "interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder. Subject to
exceptions, an interested stockholder is a person who, together with affiliates
and associates, owns, or within three years did own, 15% or more of a
corporation's voting stock. As a result of the application of Section 203,
potential acquirers may be discouraged from attempting to acquire Cross Media,
thereby possibly depriving its stockholders of acquisition opportunities to sell
or otherwise dispose of its stock at above-market prices typical of
acquisitions.

                       CROSS MEDIA MARKETING CORPORATION
                        QUARTER ENDED SEPTEMBER 30, 2001

                           PART II. OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS

     No significant changes have occurred with respect to legal proceedings as
disclosed in Part I, Item 3, of the Company's 2000 Annual Report on Form 10-KSB.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

RECENT ISSUANCES OF UNREGISTERED SECURITIES TO PROFESSIONALS

     On July 15, 2001, we issued two-year warrants to purchase 6,000 shares of
common stock to Koyah Leverage Partners, L.P. Koyah Leverage Partners, L.P. as
consideration for a delay in the filing of a registration statement covering
120,000 of common stock held by Koyah. The issuance of these securities was made
in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering, because: (1) Koyah Leverage Partners, L.P.
represented that he was an accredited investor and was acquiring

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the securities for investment purposes; and (2) we did not engage in any general
advertisement or general solicitation in connection with the issuance of the
securities.

     On July 18, 2001, we issued 81,464 shares of Cross Media common stock to
the holders of the new Series A Shares based upon accrued dividends through that
date.

     On August 15, 2001, we issued two-year warrants to purchase 3,000 shares of
common stock to Koyah Leverage Partners, L.P. Koyah Leverage Partners, L.P. as
consideration for a delay in the filing of a registration statement covering
120,000 of common stock held by Koyah. The issuance of these securities was made
in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering,because: (1) Koyah Leverage Partners, L.P.
represented that he was an accredited investor and was acquiring the securities
for investment purposes; and (2) we did not engage in any general advertisement
or general solicitation in connection with the issuance of the securities.

     On August 16, 2001, we issued five-year warrants to purchase 3,000 shares
of common stock to Paul E. Taboada for consulting services rendered to the
Company. The issuance of these securities was made in reliance on Section 4 (2)
of the Securities Act as a transaction not involving any public offering,
because: (1) Paul E. Taboada represented that it was an accredited investor and
was acquiring the securities for investment purposes; and (2) we did not engage
in any general advertisement or general solicitation in connection with the
issuance of the securities.

     On August 16, 2001, we issued five-year warrants to purchase 2,000 shares
of common stock to Hornblower and Weeks Financial Corporation for consulting
services rendered to the Company. The issuance of these securities was made in
reliance on Section 4 (2) of the Securities Act as a transaction not involving
any public offering, because: (1) Hornblower and Weeks Financial Corporation
represented that it was an accredited investor and was acquiring the securities
for investment purposes; and (2) we did not engage in any general advertisement
or general solicitation in connection with the issuance of the securities.

     On August 16, 2001, we issued five-year warrants to purchase 4,000 shares
of common stock to Middleburg Euro RSCG for consulting services rendered to the
Company. The issuance of these securities was made in reliance on Section 4 (2)
of the Securities Act as a transaction not involving any public offering,
because: (1) Middleburg Euro RSCG represented that it was an accredited investor
and was acquiring the securities for investment purposes; and (2) we did not
engage in any general advertisement or general solicitation in connection with
the issuance of the securities.

     On September 1, 2001, we issued five-year warrants to purchase 10,000
shares of common stock to Capital Research, Ltd. for consulting services
rendered to the Company. The issuance of these securities was made in reliance
on Section 4 (2) of the Securities Act as a transaction not involving any public
offering, because: (1) Capital Research, Ltd. represented that it was an
accredited investor and was acquiring the securities for investment purposes;
and (2) we did not engage in any general advertisement or general solicitation
in connection with the issuance of the securities.

     On September 4, 2001, we issued five-year warrants to purchase 4,000 shares
of common stock to Richard Geist as a sales commission in connection with the
sale of additional shares of common stock. The issuance of these securities was
made in reliance on Section 4 (2) of the Securities Act as a transaction not
involving any public offering, because: (1) Richard Geist represented that he
was an accredited investor and was acquiring the securities for investment
purposes; and (2) we did not engage in any general advertisement or general
solicitation in connection with the issuance of the securities.

     On September 15, 2001 we issued two-year warrants to purchase 3,000 shares
of common stock to Koyah Leverage Partners, L.P. as consideration for a delay in
the filing of a registration statement covering 120,000 of common stock held by
Koyah. The issuance of these securities was made in reliance on Section 4 (2) of
the Securities Act as a transaction not involving any public offering, because:
(1) Koyah Leverage Partners, L.P. represented that it was an accredited investor
and was acquiring the securities for investment purposes; and (2) we did not
engage in any general advertisement or general solicitation in connection with
the issuance of the securities.

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OTHER RECENT SALES OF UNREGISTERED SECURITIES

     None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (b) Reports on Form 8-K

     We filed the following Current Report on Form 8-K during the fiscal quarter
ended September 30, 2001:

          (i)  On July 19, 2001, we filed a Current Report on Form 8-K regarding
     an executed definitive agreement to acquire LifeMinders, Inc., and online
     direct marketer

          (ii)  On July 25, 2001, we filed a Current Report on Form 8-K
     regarding agreements (the "Agreements") with the holder (the "Holder") of
     all of the 50,625 outstanding shares of our New Series A Shares provided
     for among other things, the conversion and/or redemption of such shares
     simultaneously and conditioned upon the consummation of, our proposed
     acquisition of LifeMinders, Inc.

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

                                          CROSS MEDIA MARKETING CORPORATION
                                          (Registrant)

                                          By:       /s/ CHET BORGIDA
                                            ------------------------------------
                                            Name: Chet Borgida
                                            Title:  Executive Vice President
                                                and Chief Financial Officer
                                                (principal financial and
                                                    accounting officer)

Dated: November 14, 2001

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