UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-QSB

(Mark One)
[X]  QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934


For the quarterly period ended September 30, 2001
                               ------------------

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

For the transition period from __________ to _________


Commission file number 333-82493
                       ---------

California Molecular Electronics Corp.
--------------------------------------
(Exact name of small business is here as specified in its charter)


Arizona
-------
(State or other jurisdiction
 of incorporation or organization)

86-0888087
----------
(IRS Employer Identification No.)

50 Airport Parkway, San Jose, CA 95110
--------------------------------------
(Address of principal executive offices)


(408) 451-8404
--------------
(Issuer's telephone number)


Check  whether  the  registrant  (1)  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  report(s),  and  (2)  has been subject to such filing requirements for the
past  90  days.

Yes [X]    No [ ]

The  number  of  shares  outstanding of the issuer's common stock on October 26,
2001  was  5,151,586.


<PAGE>
CALIFORNIA  MOLECULAR  ELECTRONICS  CORP.

INDEX

PART  I.  FINANCIAL  INFORMATION

                                                                            Page
                                                                            ----
   ITEM 1.  FINANCIAL STATEMENTS

   Balance Sheets as of December 31, 2000 and September 30, 2001              2

   Statements of Operations for the three and nine months ended
   September 30, 2001 and 2000.                                               3

   Statement of Stockholders' Equity for the three and nine months
   ended September 30, 2001
                                                                              4

   Statements of Cash Flows for the nine months ended September 30,
   2001 and 2000.                                                             5

   Notes to Financial Statements.                                             6

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
   FINANCIAL CONDITION AND RESULTS OF OPERATIONS.                             9


PART  II.  OTHER  INFORMATION                                                12

   SIGNATURES                                                                13


<PAGE>
<TABLE>
<CAPTION>
PART  I.  FINANCIAL  INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS


                             CALIFORNIA MOLECULAR ELECTRONICS CORP.
                             --------------------------------------

                                         BALANCE SHEET
                                         -------------


                                                                 September 30,    December 31,
                                                                     2001             2000
                                                                ---------------  --------------
<S>                                                             <C>              <C>
                                                                 (unaudited)
                             ASSETS
                             ------

Current assets:
  Cash                                                          $      173,533   $     120,606
  Employee advance                                                      10,000          10,000
  Prepaid expenses                                                           -           8,247
                                                                ---------------  --------------
    Total current assets                                               183,533         138,853

Equipment, net                                                           6,050           5,167
Other                                                                    1,388           1,406
                                                                ---------------  --------------
                                                                $      190,971   $     145,426
                                                                ===============  ==============

              LIABILITIES AND STOCKHOLDERS' EQUITY
              ------------------------------------

Current liabilities:
  Accounts payable and accrued liabilities                      $       18,633   $      23,175
  Other payable                                                          5,000           5,000
                                                                ---------------  --------------
    Total current liabilities                                           23,633          28,175
                                                                ---------------  --------------

Stockholders' equity:
  Common stock, no par value:
    Authorized 20 million shares; 5,149,136 and
    5,090,123 issued and outstanding (including
    4,800 treasury shares) at September 30, 2001
    and December 31, 2000, respectively                              2,300,248       1,937,413
  Paid-in capital                                                          570
  Preferred stock, no par value:
    Authorized 10 million shares; 31,314 and
    none issued and outstanding at September 30, 2001
    and December 31, 2000, respectively                                184,381               -
  Preferred stock subscribed - 2,000 shares  (Note 7)                   12,000               -
  Stock subscription receivable (Note 7)                               (12,000)              -
  Less: Treasury stock at cost; 4,800 shares at September 30,
    2001 and December 31, 2000, respectively                           (28,800)        (28,800)
  Accumulated deficit                                               (2,289,061)     (1,791,362)
                                                                ---------------  --------------
                                                                       167,338         117,251
                                                                ---------------  --------------
                                                                $      190,971   $     145,426
                                                                ===============  ==============
</TABLE>

                See accompanying notes to financial statements.


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                                           CALIFORNIA MOLECULAR ELECTRONICS CORP.
                                           --------------------------------------

                                                   STATEMENT OF OPERATIONS
                                                   -----------------------

                                                         (UNAUDITED)
                                                         -----------

                                                           Nine months ended September 30,  Three months ended September 30,
                                                          --------------------------------  --------------------------------
                                                                2001             2000             2001             2000
                                                          ---------------  ---------------  ---------------  ---------------
<S>                                                       <C>              <C>              <C>              <C>
Revenue:
  Grant income                                            $            -   $       66,666   $            -   $            -
  Interest income                                                  3,153            8,502              996            3,246
                                                          ---------------  ---------------  ---------------  ---------------
                                                                   3,153           75,168              996            3,246
                                                          ---------------  ---------------  ---------------  ---------------

Expenses:
  Research and development expenses                              216,722          234,666           75,692           79,521

  Officers' compensation donated to the Company (Note 5)          71,550          103,600           23,850           24,900

  Selling, general and administrative expenses                   211,701          223,037           76,287           64,762
                                                          ---------------  ---------------  ---------------  ---------------

    Total expenses                                               499,973          561,303          175,829          169,183
                                                          ---------------  ---------------  ---------------  ---------------

Loss before state income taxes                                  (496,820)        (486,135)        (174,833)        (165,937)

Provision for state income taxes                                     877            1,385              827            1,335
                                                          ---------------  ---------------  ---------------  ---------------

Net loss                                                  $     (497,697)  $     (487,520)  $     (175,660)  $     (167,272)
                                                          ===============  ===============  ===============  ===============


Basic and diluted loss per common share                   $        (0.10)  $        (0.10)  $        (0.03)  $        (0.03)
                                                          ===============  ===============  ===============  ===============

Weighted average number of common shares outstanding           5,127,101        5,048,181        5,140,602        5,079,218
                                                          ===============  ===============  ===============  ===============
</TABLE>

                See accompanying notes to financial statements.


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                                              CALIFORNIA MOLECULAR ELECTRONICS CORP.
                                              --------------------------------------

                                                 STATEMENT OF STOCKHOLDERS' EQUITY
                                                 ---------------------------------

                                                            (UNAUDITED)
                                                            -----------

                                                   Common stock             Preferred stock
                                         --------------------------------  ------------------
                                                                 Paid -in                       Treasury   Accumulated
                                          Shares      Amount     Capital   Shares    Amount      Stock      Deficit       Total
                                         ---------  -----------  --------  -------  ---------  ---------  ------------  ----------
<S>                                      <C>        <C>          <C>       <C>      <C>        <C>        <C>           <C>
Balance at December 31, 2000             5,085,323  $1,937,413   $      -  $     -  $      -   $(28,800)  $(1,791,362)  $ 117,251

  Stock issued in public offering           31,232     187,392          -        -         -          -             -     187,392

  Exercise of warrants                      15,120      52,920          -        -         -          -             -      52,920

  Stock issuance costs                           -      (2,582)         -        -         -          -             -      (2,582)

  Officers' compensation donated to the          -      23,850          -        -         -          -             -      23,850
    Company (Note 5)

  Net loss                                       -           -          -        -         -          -      (145,045)   (145,045)
                                         ---------  -----------  --------  -------  ---------  ---------  ------------  ----------

Balance at March 31, 2001                5,131,675   2,198,993          -        -         -    (28,800)   (1,936,407)    233,786

  Series A Preferred stock issued in                         -              18,250   109,500          -             -     109,500
    private placement offering

  Exercise of warrants                       7,000      28,000          -        -         -          -             -      28,000

 Stock issued in exchange for services         575       3,450          -        -         -          -                     3,450

 Grant of option in exchange                     -           -        570        -         -          -             -         570
  for services

 Stock issuance costs                            -        (765)         -        -    (1,842)         -             -      (2,607)

 Officers' compensation donated to the           -      23,850          -        -         -          -             -      23,850
 Company (Note 5)

 Net loss                                        -           -          -        -         -          -      (176,994)   (176,994)
                                         ---------  -----------  --------  -------  ---------  ---------  ------------  ----------

Balance at June 30, 2001                 5,139,250  $2,253,528   $    570   18,250  $107,658   $(28,800)  $(2,113,401)  $ 219,555
                                         =========  ===========  ========  =======  =========  =========  ============  ==========

 Series A Preferred stock issued in                          -              13,064    78,384          -             -      78,384
  private placement offering

 Exercise of warrants                        2,000       5,000          -        -         -          -             -       5,000

 Stock issued to an employee                 1,000       6,000          -        -         -          -                     6,000
  as compensation

 Stock issued in exchange                    2,086      12,516          -        -         -          -                    12,516
  for services

 Stock issuance costs                            -        (646)         -        -    (1,661)         -             -      (2,307)

 Officers' compensation donated                  -      23,850          -        -         -          -             -      23,850
  to the Company (Note 5)

 Net loss                                        -           -          -        -         -          -      (175,660)   (175,660)
                                         ---------  -----------  --------  -------  ---------  ---------  ------------  ----------

Balance at September 30, 2001            5,144,336  $2,300,248   $    570   31,314  $184,381   $(28,800)  $(2,289,061)  $ 167,338
                                         =========  ===========  ========  =======  =========  =========  ============  ==========
</TABLE>

                See accompanying notes to financial statements.


                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                         CALIFORNIA MOLECULAR ELECTRONICS CORP.
                         --------------------------------------

                                 STATEMENT OF CASH FLOWS
                                 -----------------------

                                       (UNAUDITED)
                                       -----------

                                                         Nine months ended September 30,
                                                         -------------------------------
                                                               2001            2000
                                                         ---------------  --------------
<S>                                                      <C>              <C>
Operations:
  Net loss                                               $     (497,697)  $    (487,520)
  Items not requiring current use of cash:
    Officers' compensation, donated to the                       71,550         103,600
    Company (Note 5)
    Depreciation and amortization                                 1,483             458
    Legal fees in exchange for stock                             15,966          28,386
    Other fees in exchange for option                               570
    Compensation paid in stock                                    6,000
    Changes in other operating items:
      Grant receivable                                                -          33,334
      Prepaid expenses                                            8,247          (6,561)
      Accounts payable and accrued liabilities                   (4,542)          9,090
      Deferred grant income                                           -         (33,334)
                                                         ---------------  --------------
      Cash used for operating activities                       (398,423)       (352,547)
                                                         ---------------  --------------

Investments:
  Furniture and fixtures                                         (1,960)         (4,885)
  Other investment                                                 (388)         (1,000)
                                                         ---------------  --------------
      Cash used by investing activities                          (2,348)         (5,885)
                                                         ---------------  --------------

Financing:
  Issuance of common and preferred stock, net of stock
  issuance expense                                              367,778         492,858
  Exercise of common stock warrants                              85,920               -
  Stockholder advances                                                -         (10,000)
                                                         ---------------  --------------
       Cash provided by financing activities                    453,698         482,858
                                                         ---------------  --------------

Increase in cash                                                 52,927         124,426

Cash at beginning of period                                     120,606          91,993
                                                         ---------------  --------------
Cash at end of period                                    $      173,533   $     216,419
                                                         ===============  ==============

Supplemental cash flow disclosures:
  Taxes paid                                             $          877   $       1,385
                                                         ===============  ==============
  Interest paid                                          $          292   $         156
                                                         ===============  ==============
</TABLE>

                See accompanying notes to financial statements.


                                      -5-
<PAGE>
                     CALIFORNIA MOLECULAR ELECTRONICS CORP.
                     --------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------


NOTE  1  -  Basis  of  presentation:

     The  financial  statements  included  herein  for  California  Molecular
Electronics Corp. ("CALMEC" or the "Company") have been prepared by the Company,
without  audit  pursuant  to  the  rules  and  regulations of the Securities and
Exchange  Commission.  In  management's  opinion,  the  interim  financial  data
presented  includes  all  adjustments  (which  include  only  normal  recurring
adjustments)  necessary  for  a  fair  presentation.  Certain  information  and
footnote  disclosures  normally  included  in  financial  statements prepared in
accordance with accounting principles generally accepted in the United States of
America  have  been condensed or omitted pursuant to such rules and regulations.

     The  results of operations for the nine months ended September 30, 2001 are
not  necessarily  indicative  of  the  operating results expected for the entire
fiscal  year.  The  financial  statements  included  herein  should  be  read in
conjunction  with  other  documents the Company files from time to time with the
Securities  and Exchange Commission, including the Company's Form 10-KSB for the
fiscal  year  ended  December  31,  2000.

NOTE  2  -  Use  of  estimates  and  reclassifications:

     The  preparation  of  financial  statements  requires  management  to  make
estimates  and  assumptions  that  affect  the amounts reported in the financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

     Certain  reclassifications  have  been  made  to  the  prior year financial
statements  to  conform  with the current year financial statement presentation.
Such  reclassifications  had  no  effect  on  net income as previously reported.

NOTE  3  -  Loss  per  share:

     Basic  and dilutive loss per common share is calculated by dividing the net
loss for the period by the average number of common shares outstanding.  For the
nine  months ended September 30, 2001 and 2000, dilutive loss per share excludes
the  effect of convertible preferred stock and options, because the effect would
have  been  antidilutive.

NOTE  4  -  Leases:

     The  Company  had  entered  into a cost reimbursable contract with San Jose
State  University  Foundation  ("Foundation")  for the period from April 1, 2000
through  March  31,  2001,  which has been extended through March 31, 2002.  The
contract  includes  advisory  services  to  be  provided  by  the San Jose State
University Department of Chemistry, facilities, supplies and equipment use.  The
Foundation  shall  be  reimbursed  for  costs  incurred  in  providing  the
aforementioned  items  not to exceed a maximum amount of $90,658 over the period
of  the  contract.  The  Company  also  leases  office  space  in  Arizona.


                                      -6-
<PAGE>
NOTE  5  -  Related  party  transactions:

     CALMEC's  three officers have devoted 100% of their time to the business of
the  Company since their hire in 1997. Planned annual remuneration for the three
officers  is as follows:  $40,000 - Chairman and Treasurer; $110,000 - President
and  Chief  Executive  Officer;  and  $120,000  -  Executive  Vice President and
Secretary.  The  officers  had elected to forego their salaries through December
31,  1999,  and  certain  officers  have continued to forego all or a portion of
their  salaries  through  September  30, 2001. As required by the Securities and
Exchange  Commission  accounting rules, in the accompanying financial statements
the  officers'  unpaid  salaries  totaling  $23,850 and $31,200 for the quarters
ended  September  30, 2001 and 2000, respectively, are reflected as compensation
expense  and  a  credit to common stock, as the Company does not intend to repay
such  forfeited  salaries  in the future. Effective February 2000, the Executive
Vice  President  and  Secretary  began  to  receive  a  salary for his services.
Effective  May  2000, the President and Chief Executive Officer ("CEO") began to
receive  a portion of his salary in cash ($1,050 per week) and 250 stock options
per week with an exercise price of $6.00 per share ("Rolling Option").  When the
Board  of  Directors  determines at some point in the future that the Company is
able  to pay full cash compensation to the CEO, the CEO has a right to no longer
receive  250  stock options per week and require the Company to issue him shares
of  common  stock or pay him $6.00 per share, or a combination of the two, based
on  the  number  of  unexercised  shares  under  the  Rolling  Option.

NOTE  6-  Grant:

     During  the  first  quarter  of 2000, the Company received a grant from The
National Science Foundation in the amount of $100,000, to be paid in three equal
installments.  The  grant  was  made  in  support of research to demonstrate the
feasibility  of the unique Chiropticene molecular switch.  The first installment
of  $33,333  was  received  in  January 2000, and was recognized as grant income
during  the quarter ended March 31, 2000.  The second installment of $33,333 was
received  in  April  2000, and was recognized as grant income during the quarter
ended June 30, 2000.  The third and final installment of $33,334 was received in
the  fourth  quarter  of 2000.  The grant has been recognized in earnings in the
period  in  which  the  related  expenditures  were  incurred  by  the  Company.

NOTE  7  -  Stockholders'  Equity

     Commencing  January  26,  2001,  as  an  inducement  for warrant holders to
exercise  their  warrants,  existing warrant holders were able to exercise their
warrants  at  a  price  of  $3.50 a share before March 1, 2001 and at a price of
$4.00  a  share  after March 1, 2001, but before April 30, 2001. After April 30,
2001, the exercise price of the warrants returned to $5.00 a share. If a warrant
holder  exercised  all  of  their  warrants prior to April 30, 2001, the Company
issued  the  warrant  holder  new  warrants  in the same number of shares as the
original  warrant at an exercise price of $3.25 a share and expiring on November
30,  2001.  Warrant holders who obtained these warrants expiring on November 30,
2001  and  exercise  them  will  be issued another and final warrant in the same
number of shares as the original warrant with an exercise price of $3.00 a share
and  expiring  on  May  31,  2002.


                                      -7-
<PAGE>
     On  March  25,  2001, the Company commenced a private placement offering to
sell  200,000  units  at  $6.00  per  unit.  A unit is comprised of one share of
Series  A  Preferred Stock, one warrant for one common share exercisable through
October  31,  2001 at $2.50 per share, and one warrant to purchase an additional
common  share  at  $3.50  per share, through April 30, 2002.  During the quarter
ended September 30, 2001, the Company sold 13,064 units for $78,384, and warrant
holders  exercised  2,000  warrants  for  $5,000.

     The  private placement closed on October 1, 2001. Certain investors entered
into  arrangements  to  purchase  2,000  shares  of preferred stock prior to the
closing of the private placement, but the stock had not been issued and the cash
had  not  been received prior to the private placement closing. This transaction
has  been  reflected  in  the  accompanying  financial  statements  as  stock
subscription  receivable  and  preferred  stock  subscribed  in  the  amounts of
$12,000.

     The  Series A Preferred Stock has a conversion price of $6.00 per share and
is  convertible at the option of the holder into one share of common stock.  The
conversion  price  of the Series A Preferred Stock is subject to adjustment from
time  to time upon certain events, such as common stock dividends.  The Series A
Preferred Stock outstanding will automatically be converted into common stock at
the  then  effective  conversion  price  (a)  immediately upon the closing of an
underwritten  public  offering  pursuant  to an effective registration statement
under  the  Securities  Act  of 1933, as amended, covering the offer and sale of
capital  stock of the Company in which the proceeds received by the Company, net
of  underwriting  discounts and commissions, equal or exceed $15 million, or (b)
immediately  upon the vote of a majority of the shares of the Series A Preferred
Stock  outstanding  on  the date of such vote.  In the event of any voluntary or
involuntary  liquidation,  dissolution  or winding up of the Company, holders of
the  Series  A  Preferred Stock then outstanding are entitled to be paid, out of
the assets of the Company available for distribution to its stockholders, before
any  payments  are  to  be  made  to  holders  of  the  Company's  common stock.

     On  May  1, 2001 the Company granted to a non-employee an option, under the
CALMEC's  1997 Stock Option Plan, to purchase 634 shares of the Company's common
stock  at an exercise price of $5.10 per share, which represents 85% of the fair
market  value  of  a share of common stock at the date of grant as determined by
the  Company's Board of Directors. The fair value of the option at date of grant
totaled  $570, which is reflected in selling, general and administrative expense
and  additional  paid-in  capital  on  the  accompanying  financial  statements.

     During  the  quarter  ended  September  30,  2001, the Company issued 2,086
shares of common stock in exchange for professional services and 1,000 shares of
common  stock  as  additional  compensation  to  an  employee.


                                      -8-
<PAGE>
CALIFORNIA  MOLECULAR  ELECTRONICS  CORP.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS:

FORWARD-LOOKING  STATEMENTS

From  time  to time, statements made by California Molecular Electronics Corp.'s
("CALMEC"  or  the  "Company")  employees  or  information  included in CALMEC's
filings with the Securities and Exchange Commission (including this Form 10-QSB)
may contain statements that are not historical facts, so called "forward-looking
statements,"  which  are  subject  to  risks  and uncertainties that could cause
actual  results  to  differ  materially.  Forward-looking  statements  are  made
pursuant  to  the  safe  harbor  provisions of the Private Securities Litigation
Reform  Act  of  1995.  When  used in this Form 10-QSB, the terms "anticipates,"
"expects,"  "estimates,"  "believes,"  and other similar terms as they relate to
CALMEC  or  its  management  are  intended  to  identify  such  forward-looking
statements.  For  example,  statements  made  herein  relating  to  acquiring
intellectual  property,  marketing intellectual property to potential customers,
maintaining commercial acceptance of our products, and anticipated growth of our
target  markets  are  forward-looking statements.  Because these forward-looking
statements  involve  risk  and  uncertainties,  actual  results  could  differ
materially  from  those expressed or implied by these forward-looking statements
for a number of reasons, including those discussed in the section entitled "Risk
Factors" of CALMEC's Form SB-2 filed with the Securities and Exchange Commission
on January 31, 2000.  Readers are cautioned not to place undue reliance on these
forward-looking  statements,  which  speak  only  as of the date hereof.  CALMEC
undertakes  no  obligation  to  update  or  revise  these  statements.

OVERVIEW

CALMEC  was  formed to engage primarily in the business of producing and selling
products  and  services  related  to  the  new  technological field of molecular
electronics.  Molecular  electronics is the technology of using single molecules
to  form  components  of  electronic  devices.

The  Company  continues to be in the initial phase of its existence, and through
December 31, 1999, CALMEC's three officers had elected to forego their salaries.
Commencing  February  2000,  the  Executive  Vice  President and Secretary began
receiving  remuneration  for  his services and the President and Chief Executive
Officer  began  to  receive  a  portion  of his salary commencing May 2000.  The
Company will transition from the initial phase to the operational phase when the
Board  of Directors has determined sufficient capital has been accumulated to do
so.  At  that  time, all employees and executive officers will receive salaries,
additional  space will be leased, capital equipment will be purchased, and other
operating  expenses  will  be  incurred.  Prior to that time, activities will be
restricted  to  low  cost  activities that will keep the Company within its cash
resources.


                                      -9-
<PAGE>
In  the  second  quarter  of  1999,  the  Company started paying salaries to two
chemists  to perform research.  Also in the second quarter of 1999, CALMEC began
leasing  lab  space  from  San  Jose State University for the purpose of housing
these  chemists  and developing Chiropticene demonstration chemistry.  The lease
ran through March 31, 2000, and the Company has renegotiated with San Jose State
University  to extend the lease until March 31, 2001, and then again until March
31,  2002.

On  January 31, 2000, CALMEC filed a Form SB-2, Registration Statement under the
Securities Act of 1933, with the Securities and Exchange Commission ("SEC").  On
February  7,  2000,  the  Registration  Statement  became  effective  and CALMEC
commenced its sale of up to 1,000,000 shares of common stock at $6.00 per share.
CALMEC  planned  to  raise  $6  million  with  this  offering, before payment of
estimated offering expenses of $50,000.  Subsequent to the effective date of the
Registration  Statement through February 28, 2001, CALMEC sold 120,239 shares of
its  common  stock,  for  a  total  aggregate  price  of  $721,434.  The Company
terminated  the  sale  of  its  common stock under the Registration Statement on
February  28,  2001.

Operations
----------

     The  Company  was in the development stage during 1999, and had no revenues
from operations.  During the first quarter of 2000, the Company received a grant
from  The  National Science Foundation in the amount of $100,000, which was paid
in  three  equal  installments.  The grant supported research to demonstrate the
feasibility  of the unique Chiropticene molecular switch.  The first installment
of  $33,333  was  received  in  January 2000, and was recognized as grant income
during  the quarter ended March 31, 2000.  The second installment of $33,333 was
received  in  April  2000, and was recognized as grant income during the quarter
ended June 30, 2000.   The third and final installment of $33,334 was recognized
during the fourth quarter of 2000.  The grant has been recognized in earnings in
the  period  in which the related expenditures were incurred by the Company.  No
income  other  than  interest  income  was  recorded  in  2001.

     Research  and  development  ("R&D") costs were $216,722 for the nine months
ended  September  30,  2001  as  compared  to $234,666 for the nine months ended
September  30, 2000, a decrease of $17,944 or 8%. R&D costs were $75,692 for the
three  months  ended  September  30,  2001,  as compared to $79,521 for the same
period  in  the  prior  year,  a  decrease  of  $3,829  or 5%.  The decrease was
primarily  related  to  a  decrease  in  R&D  related  salary  and wage expense.

     Officers'  compensation donated to the Company was $71,550 and $103,600 for
the  nine  months ended September 30, 2001 and 2000, respectively, a decrease of
$32,050  or  31%.  Officers' compensation donated to the Company was $23,850 for
the  three  months ended September 30, 2001, as compared to $24,900 for the same
period  in  the  prior year, a decrease of $1,050 or 4%, entirely related to the
fact  that  certain of the officers began receiving payment for all or a portion
of  their  salary  during  2000.


                                      -10-
<PAGE>
     In  1999,  the Company was still considered to be in the development stage,
and  costs other than R&D and Officers' compensation donated to the Company were
considered to be preoperating expenses.  During the year 2000 the Company earned
revenue,  and  therefore is no longer considered to be in the development stage,
and  costs  other than R&D and Officers' compensation donated to the Company are
recorded  as  selling,  general  and administrative costs.  Selling, general and
administrative  costs consist primarily of rent, travel and other administrative
expenses, and were $211,701 and $223,037 for the nine months ended September 30,
2001  and  2000, respectively, a decrease of $11,336 or 5%. Selling, general and
administrative  costs  were  $76,287  and  $64,762  for  the  three months ended
September  30,  2001 and 2000, respectively, an increase of $11,525 or 18%.  The
increase  was  primarily  related  to  an  increase  in  professional  fees.

Liquidity  and  Capital  Resources
----------------------------------

     The full extent of CALMEC's future capital requirements and the adequacy of
its  available  funds  will  depend  on  many  factors,  not all of which can be
accurately  predicted.  Although no assurance can be given, the Company believes
it  can  continue  to operate in its present status for at least the next twelve
months.  After  terminating its sale of common stock effective February 28, 2001
under  its  public  offering  which  became  effective  on February 7, 2000, the
Company has undertaken additional and new activities to develop certain products
using the Company's technology.  The Company is aggressively pursuing industrial
and  venture capital funds, as well as a private placement offering, in order to
develop  this  technology.  The  private placement, which commenced on March 25,
2001,  will  attempt  to  sell 200,000 units at $6.00 per unit.  A unit would be
comprised  of  one share of Series A Preferred Stock, one warrant for one common
share  exercisable  through October 31, 2001 at $2.50 per share, and one warrant
to  purchase  an  additional  common share at $3.50 per share, through April 30,
2002.  As of September 30, 2001, the Company has sold 31,314 units for $187,884.
The  private  placement  offering  closed  as  of  October  1,  2001.

     In  the event that additional capital is required, CALMEC may seek to raise
that  capital  through  public  or  private  equity  or debt financings.  Future
capital  funding  transactions  may  result  in  dilution  to  stockholders.

     There  can  be  no  assurance  that additional capital will be available on
favorable  terms, if at all.  CALMEC's inability to obtain additional capital on
acceptable  terms  could  limit  its  ability  to  meet  its  plan of operation.

Hiring  of  employees
---------------------

     CALMEC will transition from its initial phase to its operational phase when
its  accumulated  cash  balances  permit  it  to do so according to the business
judgment of management. At that time, employees currently working without pay or
for partial pay will begin receiving full compensation.  Regardless of when that
time  occurs,  the Company has already hired and is supporting the lab work of a
chemist,  and  is  paying  one  of the executive officers full compensation, and
another  executive  officer  a  portion  of  his  compensation.


                                      -11-
<PAGE>
CALIFORNIA  MOLECULAR  ELECTRONICS  CORP.

PART  II.  OTHER  INFORMATION

Item  6.  Exhibits  and  Reports  on  Form  8-K

(a)  Exhibits

None.

(b)  Reports  on  Form  8-K.

None.


                                      -12-
<PAGE>
CALIFORNIA  MOLECULAR  ELECTRONICS  CORP.

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.

Date:  October  26,  2001
-------------------------

California  Molecular  Electronics  Corp.
-----------------------------------------
(Registrant)


-----------------------------------------
James  Marek,  Jr.
President  and  Chief  Executive  Officer



                                      -13-
<PAGE>