U.S. 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  for  the  quarterly  period  ended  September  30,  2001

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT  OF  1934  for  the  transition  period  from  _______  to  _______

COMMISSION FILE NUMBER 000-29865
--------------------------------

                                 CATHAYONE, INC.
                                 ---------------
        (Exact name of small business issuer as specified in its charter)


          Delaware                                   13-4140336
          --------                                   ----------
(State or other jurisdiction of             (IRS Employer identification
incorporation or organization)                           No.)


c/o MRB Investor Relations - 400 Madison Avenue, 16th Floor - New York, NY 10017
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (212) 230-1727
                                 --------------
                           (Issuer's telephone number)



Check whether the issuer (1) filed all reports required to be filed by Section13
or  15(d)  of  the  Exchange  Act during the past 12 months (or for such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past 90 days. Yes [x] No [  ]

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by the court. Yes [   ] No [X]

Number of shares of common stock outstanding as of
February 5, 2002: 29,689,158







                        CATHAYONE, INC. AND SUBSIDIARIES
                            (A Debtor in Possession)

PART I - FINANCIAL INFORMATION (Post Re-Capitalization - See Notes)
-------------------------------------------------------------------
PAGE NO.
--------
Item 1.     Financial Statements
          Consolidated Balance Sheets as of September 30, 2001(unaudited)  3
          Consolidated Statements of Operations for the
           Three and nine months ended September 30, 2001 and 2000         4
          Consolidated Statements of Cash Flows for the
           nine months ended September 30, 2001 and 2000                 5-6
          Notes to Consolidated Financial Statements                     7-8

Item 2.     Management's Discussion and Analysis
9-12


PART II - OTHER INFORMATION
---------------------------
Item 1.     Legal Proceedings (including Chapter 11 bankruptcy filing
information)                                                              13

Item 2.     Changes in Securities and Use of Proceeds                     13

Item 3.     Defaults Upon Senior Securities                               13

Item 4.     Submission of Matters to a Vote of Security Holders           13

Item 5.     Other Information                                             13

Item 6.     Exhibits and Reports on Form 8-K                              13

SIGNATURES                                                                14
















ITEM 1.     FINANCIAL STATEMENTS
<TABLE>
<CAPTION>


                                   CATHAYONE, INC. & SUBSIDIARIES
                                      (A DEBTOR IN POSSESSION)
                                     CONSOLIDATED BALANCE SHEETS
                       AT SEPTEMBER 30, 2001 (UNAUDITED) AND DECEMBER 31, 2000



<S>                                                                <C>               <C>
ASSETS
-----------------------------------------------------------------
                                                                     (Unaudited)
CURRENT ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . .  Sept. 30, 2001    Dec. 31, 2000
-----------------------------------------------------------------
  Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . .  $             8   $       37,187
  Loan Receivable, net. . . . . . . . . . . . . . . . . . . . . .               -0-              -0-
  Prepaid Expenses. . . . . . . . . . . . . . . . . . . . . . . .               -0-             500
    TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . . . .                8           37,687

FIXED ASSETS
-----------------------------------------------------------------
  Furniture and Office Equipment. . . . . . . . . . . . . . . . .              -0-            5,946
  Accumulated Depreciation. . . . . . . . . . . . . . . . . . . .              -0-             (850)
     Net Fixed Assets . . . . . . . . . . . . . . . . . . . . . .              -0-            5,096
                                                                   ----------------  ---------------

    TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . .  $            8    $       42,783
                                                                   ==============    ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-----------------------------------------------------------------

CURRENT LIABILITIES
-----------------------------------------------------------------
  Accounts Payable and Accrued Expenses . . . . . . . . . . . . .        1,167,017        1,044,701
  Due to Related Parties. . . . . . . . . . . . . . . . . . . . .          859,877          776,177
    TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . .        2,026,894        1,820,878

COMMITMENTS AND CONTINGENCIES - NOTE 4
-----------------------------------------------------------------

STOCKHOLDERS' DEFICIT
-----------------------------------------------------------------
  Common Stock ($.001 par value, 100,000,000 shares authorized:
   29,689,158 and 29,489,158 issued and outstanding at
   September 30, 2001 and December 31, 2000, respectively). . . .           29,689           29,489
  Preferred Stock ($.001 par value, 5,000,000 shares authorized:
   none issued and outstanding) . . . . . . . . . . . . . . . . .              -0-              -0-
  Additional Paid-in-Capital. . . . . . . . . . . . . . . . . . .        3,129,149        2,667,349
  Deficit Accumulated During Development Stage. . . . . . . . . .       (5,185,724)      (4,474,933)
    TOTAL STOCKHOLDERS' DEFICIT . . . . . . . . . . . . . . . . .       (2,026,886)      (1,778,095)
                                                                   ---------------   ---------------
    TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT . . . . . . . . .  $             8   $       42,783
                                                                   ===============   ===============
</TABLE>





<TABLE>
<CAPTION>


                                             CATHAYONE, INC. & SUBSIDIARIES
                                                (A DEBTOR IN POSSESSION)
                                    CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                            FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000*



                                                          Three Months Ended Sept. 30,      Nine Months Ended Sept. 30,
                                                       2001                      2000           2001         2000*
<S>                            <C>                             <C>                       <C>           <C>

OPERATING EXPENSES:
-----------------------------
  General and administrative.  $                      42,646   $               572,743   $   248,687   $   670,872
    TOTAL EXPENSES. . . . . .                         42,646                   572,743       248,687       670,872

    OPERATING LOSS. . . . . .                        (42,646)                 (572,743)     (248,687)     (670,872)

OTHER EXPENSE:
-----------------------------
  Interest Expense - Note 3 .                            -0-                       -0-      (462,104)          -0-
    TOTAL OTHER EXPENSE . . .                            -0-                       -0-      (462,104)          -0-

    LOSS BEFORE TAXES . . . .                        (42,646)                 (572,743)     (710,791)     (670,872)

    INCOME TAX (PROVISION)
    BENEFIT . . . . . . . . .                            -0-                       -0-           -0-           -0-

    NET LOSS. . . . . . . . .  $                     (42,646)  $              (572,743)  $  (710,791)  $  (670,872)
                               =============================   =======================   ===========   ============
  Net Loss Per Common Share
  Basic & Fully Diluted . . .  $                          **   $                 (0.02)  $     (0.02)  $     (0.05)
                               =============================   =======================   ===========   ============
  Weighted Average Common
  Shares Outstanding. . . . .                     29,689,158                29,258,319    29,666,936    16,819,189
                               =============================   =======================   ===========   ============
</TABLE>


* Date of reorganization was
   March 1, 2000
** Less than $.01












<TABLE>
<CAPTION>


                                     CATHAYONE, INC. & SUBSIDIARIES
                                        (A DEBTOR IN POSSESSION)
                            CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                         FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000*

<S>                                                                  <C>               <C>
                                                                      Sept. 30, 2001    Sept. 30, 2000*
CASH FLOWS FROM OPERATING ACTIVITIES:
-------------------------------------------------------------------
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $      (710,791)  $       (670,872)
  Adjustments to reconcile net loss to net
  cash provided by (used in) operating activities:
    Depreciation and writedown. . . . . . . . . . . . . . . . . . .            5,096                -0-
    Common stock issued in connection with legal services - Note 3.          462,000                -0-
    Common stock issued in reorganization . . . . . . . . . . . . .              -0-             24,658
    Write-down of note receivable and prepaid asset . . . . . . . .            8,000              2,672
    Increase in operating assets:
      Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . .              -0-             (2,000)
    Increase in operating liabilities:
      Amounts due related party for services rendered . . . . . . .           83,700                -0-
      Accounts payable and accrued expenses . . . . . . . . . . . .          122,316          1,106,814
      NET CASH PROVIDED BY (USED IN)
      OPERATING ACTIVITIES. . . . . . . . . . . . . . . . . . . . .          (29,679)           461,272
                                                                    ----------------   -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
-------------------------------------------------------------------
  Expenditures for furniture and equipment. . . . . . . . . . . . .              -0-            (18,131)
  Intangible assets . . . . . . . . . . . . . . . . . . . . . . . .              -0-            (63,770)
  Investment in foreign operations. . . . . . . . . . . . . . . . .              -0-           (375,259)
      NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . .              -0-           (457,160)
                                                                     ----------------   ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
-------------------------------------------------------------------
  Issuance of note receivable . . . . . . . . . . . . . . . . . . .           (7,500)               -0-
  Common stock issuances. . . . . . . . . . . . . . . . . . . . . .              -0-              1,300
      NET CASH PROVIDED BY (USED IN)
      FINANCING ACTIVITIES. . . . . . . . . . . . . . . . . . . . .           (7,500)             1,300
                                                                    ----------------    ----------------
      NET INCREASE (DECREASE) IN
      CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . .          (37,179)             5,412

CASH AND CASH EQUIVALENTS:
-------------------------------------------------------------------
      Beginning of period . . . . . . . . . . . . . . . . . . . . .           37,187                -0-
      End of period . . . . . . . . . . . . . . . . . . . . . . . .  $             8   $          5,412
                                                                     ----------------  -----------------
</TABLE>


* Date of reorganization was March 1, 2000


<TABLE>
<CAPTION>


                            CATHAYONE, INC. & SUBSIDIARIES
                               (A DEBTOR IN POSSESSION)
                  CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000*


                                                    Sept. 30, 2001   Sept. 30, 2000*
<S>                                                 <C>              <C>

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
--------------------------------------------------
  Cash paid for interest . . . . . . . . . . . . .  $           104  $            -0-
                                                    ===============  ================
NON-CASH FINANCING ACTIVITIES:
--------------------------------------------------
  Common stock issued in connection with
  legal services - Note 3. . . . . . . . . . . . .  $       462,000  $            -0-
                                                    ===============  ================
  Common stock issued relating to reverse merger .  $           -0-  $         24,658
                                                    ===============  ================
  Common stock issued for acquisition of
  CMD Capital Limited. . . . . . . . . . . . . . .  $           -0-  $          2,800
                                                    ===============  ================
  Common stock issued for equity investments
  in foreign operations. . . . . . . . . . . . . .  $           -0-  $      2,000,000
                                                    ===============  ================

</TABLE>




























                         CATHAYONE, INC. & SUBSIDIARIES
                            (A Debtor in Possession)
              NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
                               September 30, 2001


NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities  and Exchange Commission. Accordingly, they do not include all of the
information  and  footnotes required by generally accepted accounting principles
for  complete  financial  statements.

In  the  opinion  of  management, the unaudited condensed consolidated financial
statements  contain all adjustments consisting only of normal recurring accruals
considered  necessary  to  present  fairly  the  Company's financial position at
September  30,  2001,  the  results  of  operations for the three and nine month
periods  ended  September  30, 2001 and 2000, and cash flows for the nine months
ended  September  30,  2001 and 2000. The results for the period ended September
30,  2001,  are not necessarily indicative of the results to be expected for the
entire  fiscal  year  ending  December  31,  2001.

NOTE  2  -  EARNINGS  (LOSS)  PER  SHARE

The  following  represents  the  calculation  of  earnings  per  share:

                  For the three months ended          For the nine months ended
                         September 30,                    September 30,
BASIC  &  DILUTED*    2001               2000        2001               2000
-------------------------------------------------------------------------------
Net  loss       $    (42,646)      $  (572,743)   $(710,791)     $  (670,872)

Less- preferred stock dividends
                      --                  --           --              --
-------------------------------------------------------------------------------
Net loss        $    (42,646)      $ (572,743)    $(710,791)     $ (670,872)

Weighted average number
of common shares  29,689,158       29,258,319    29,666,936      16,819,189
-------------------------------------------------------------------------------

Basic & diluted earnings per share
                $    **            $     (.02)    $  (.02)       $   (.05)
===============================================================================


*There were no common stock equivalents for either period presented.
** Less than $.01




NOTE 3 - OTHER EXPENSE

During  the  nine  months  ended  September 30, 2001, the Company issued 200,000
shares  of its common stock in connection with legal services rendered on behalf
of  the  Company.  The  Company  is  disputing  a  significant  portion  of  the
approximately  $593,000  in  accumulated  invoices  claimed by the law firm. The
Company  has  accrued  these  invoices  in  its  financial  statements pending a
settlement  with  the  law firm. The shares were issued pursuant to an agreement
whereby  the  law  firm will provide the Company until April 30, 2001 to pay the
outstanding invoices. The Company is currently in default of this agreement. The
value  of  the  shares  was  determined  using  the  fair  market on the date of
issuance,  or  $2.31  per share, yielding an aggregate market value of $462,000.

NOTE  4  -  BANKRUPTCY  FILING

On  June 15, 2001, the registrant filed a voluntarily Chapter 11 petition in the
United  States  Bankruptcy Court for the Southern District of New York, Case No.
01-41726(cb).  The  registrant  is continuing as a debtor in possession with its
prior  management,  as  noted in Item 2, pursuant to Section 1107 of Title 11 of
the  United States Code. The Company intends to file a plan of reorganization as
provided  by  Chapter  11  of  the  United  States  Bankruptcy  Code  as soon as
practicable.

A  meeting  of creditors pursuant to section 341 of the United States Bankruptcy
Code  was  held  in  August  2001.

The  Company  intends  to  proceed  as  expeditiously  as  possible  to  resolve
outstanding  liabilities.  The  Company  presently  is  in  negotiation  with
prospective merger partners in order to inject new capital into the Company, and
therefore  maximize  value  for  its  constituents.

NOTE  5  -  DUE  TO  RELATED  PARTIES

The  total  amount  presented as due to related parties at September 30, 2001 is
primarily  the  net  outstanding  balances  of  advances  and cash payments from
CathayOnline, Inc. and its subsidiaries, a beneficial shareholder of the Company
which also has a director in common. The amount is comprised of $475,070 in cash
advances  and  another  $347,307  due  for services rendered as described below.

The  balances  are  unsecured  and  carry  an  interest rate of 8%; however, all
interest  through  September  30,  2000  has  been  waived by CathayOnline, Inc.

Certain  accounting,  administrative  support, and Internet development services
are  provided by CathayOnline, Inc. and subsidiaries. Charges for these services
are  based  on  estimates  of  payroll  and benefits of involved staff and other
department  costs  that were approximately $347,307 for the period from March 1,
2000  (date of reorganization) through September 30, 2001 and are included under
'Due  to  Related  Parties'  in  the  accompanying  consolidated  balance sheet.

The  remaining  balance  of  $37,500  is  payable  to  members  of the Company's
management  for  third  quarter 2001 administrative services rendered during the
Chapter  11  reorganization  case  at  a  rate  of  $12,500  per  month.

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

With  the  exception of historical facts stated herein, the matters discussed in
this  report  are  "forward  looking"  statements  that  involve  risks  and
uncertainties  that  could  cause  actual  results  to  differ  materially  from
projected  results.  Such  "forward  looking"  statements  include,  but are not
necessarily  limited  to,  statements  regarding  anticipated  levels  of future
revenues and earnings from operations of the Company. Readers of this report are
cautioned not to put undue reliance on "forward looking" statements that are, by
their  nature,  uncertain  as  reliable  indicators  of  future performance. The
Company  disclaims  any  intent  or obligation to publicly update these "forward
looking"  statements,  whether as a result of new information, future events, or
otherwise.

DESCRIPTION OF BUSINESS

Business Development History
----------------------------

CathayOne,  Inc.  (the "Company") is a publicly traded Delaware corporation that
was  originally  incorporated  in the State of Utah on August 6, 1984, under the
name  North  American  Clothing  Company,  Inc.

As  of June 30, 2000, a majority of the shareholders of the Company authorized a
change  in  the  Company's state of incorporation from Utah to Delaware, and the
merger  of  the  Company  into its wholly owned subsidiary, Cathay Bancorp Inc.,
CathayOne Inc. being the surviving company.  The re-domiciling of the Company to
the  State  of  Delaware  and  the  concurrent  change  of the Company's name to
CathayOne  Inc.  occurred  on  August  9,  2000.

The  Company  has  vacated  its  former  executive  offices  and  is  receiving
correspondence  at  :  c/o MRB Investor Relations, Attn: Charles A. Nelson - 400
Madison  Avenue,  16th  Floor  -  New  York,  NY  10017

Business of the Issuer.
----------------------

-     Overview  of  Operations  as  Debtor  in  Possession

The  Company's  stated  business purpose was to manage, take a majority position
in, and/or make strategic investments in, technological and service companies in
the  entertainment,  Internet  and  e-commerce industries.  While located in the
United  States,  the  Company sought to position itself to take advantage of the
appetite  for  foreign  content  entertainment,  the  fast-growing  broadband
multimedia  information  dissemination  opportunities  and  the Internet content
services  market  in China.  The Company does not anticipate that these business
purposes  will  continue  to  be  pursued.  Please  see  comments  below  under
"Subsequent Events". The Company is currently seeking merger prospects and other
strategic  relationships  that  will  attempt  to  add  value  to  the  existing
shareholders.  There  can be no assurance that the Company will be successful in
achieving  this  goal.  In  addition, there can be no assurance that the current
shareholders  of  the  Company  will  see their value per share increase if such
reorganization  occurs.


-     Subsequent  Events

Since  filing its bankruptcy petition, the Company has been attempting to locate
a funding source, investor or operating company so that it could emerge from its
bankruptcy  as  a  publicly-traded  corporate  shell  or  as  a  publicly-traded
operating  entity.  In  December of 2001, management began negotiating the terms
of a business combination with the principal officer of a private company in the
transportation  business  ("Tranco").

On  January 28, 2002, the Debtor and Tranco entered into a non-binding letter of
intent  relating  to the reverse merger of a subsidiary of the Debtor (that will
be  formed  as  a merger vehicle) with and into Tranco, with Tranco remaining as
the  surviving company.  The Company intends to file a Plan of Reorganization in
February  2002.

-     Employees

The  two  remaining  officers  continue  to  manage  the  Company  as  a
debtor-in-possession. This arrangement will continue into the foreseeable future
pursuant  to  their  Chapter  11  plan  of  reorganization.

Market for the Company's Common Stock
-------------------------------------

The Company's common stock had been de-listed from the Over-the-Counter Bulletin
Board  (OTCBB)  during the fourth quarter of 2001 and does not currently have an
active  trading  market.  The Company will attempt to locate a market maker that
may  have an interest in making a market in the Company's common stock. However,
there can be no assurance that a market for the common stock will be established
or  maintained.

RESULTS OF OPERATIONS
---------------------

The  following  are  the  results  of operation as of and for the three and nine
months  ended  September  30,  2001  and  2000. As indicated in the accompanying
financial  statements,  the Company did not have any material operations for the
three  months  ended  March  31,  2000.

Net  Income

The  Company  had a net loss of $42,646 for the three months ended September 30,
2001 versus a net loss of $572,743 for the same period in 2000. The net loss for
the  third  quarter of the year was primarily attributable to administrative and
court  costs for its bankruptcy proceedings and the write-off of fixed assets no
longer  held  by the Company. There were no other material operations within the
Company  during  the  third  quarter.

Sales

The  Company  did  not  have  any  revenues  during  the  periods  presented.




Expenses

Total expenses were $42,646 for the three months ended September 30, 2001 versus
$572,743  during  the  same  period  in  2000. Total expenses for the nine month
period  ended  September  30, 2001 were $710,791 versus $670,872 during the same
period  in  2000.  Expenses  for both periods were primarily incurred due to the
Company's  development  activities  in  Greater  China.

Total expenses for the nine months ended September 30, 2001 included $462,000 in
connection  with  the  payable  due the Company's legal counsel. The payment was
made  with  200,000  shares  of  the  Company's common stock valued at $2.31 per
share,  the  fair  market  value at the time of issuance. Expenses also included
$120,000  in  accruals for consultants and officers pursuant to their respective
employment  agreements.  Rent  expense  was  $16,200.

Liquidity  and  Capital  Resources

On  September 30, 2001, the Company had cash of $8 and a working capital deficit
of $2,026,886. The working capital deficit represents primarily obligations from
operations  and  amounts  due  related  parties  for  advances  and  services.

Net  cash  used  in  operating  activities was $29,679 for the nine months ended
September  30, 2001 versus net cash provided by operating activities of $461,272
during  the  same  period  in  2000.  The  difference in cash used was primarily
attributable  to  an  increase in accounts payable of $1,106,814 during 2000 and
$462,000  in  common  stock  issuances  for  services  during  2001.

Net  cash used in investing activities for 2000 included expenditures for office
furniture  and  equipment,  intangible  assets  and  the Company's investment in
foreign  operations,  which  were $18,131, $63,770 and $375,259. The Company did
not  have  any  cash  flows  form  investing  activities  during  2001.

Cash  used  in  financing  activities  totaled  $7,500 for the nine months ended
September  30,  2001  as  a result of the incurrence of a loan receivable in the
amount  of  $7,500 to an unrelated party. The Company now believes collection of
this  is  unlikely  and,  accordingly, has reserved this amount to bad debt. The
Company  will  need to reorganize itself as part of its Chapter 11 case in order
to  continue operating. The Company does not currently have enough liquid assets
to  remain in operations. In addition, the Company's auditors expressed doubt as
to  the  Company's  ability  to  continue  as  a going concern absent Chapter 11
reorganization.  Failure  to  raise  additional  capital  during the next twelve
months  will  have  a  material  adverse  effect  on  the  Company.










PART II. OTHER INFORMATION
--------------------------

Item 1. Legal Proceedings

On  June 15, 2001, The registrant filed a voluntarily Chapter 11 petition in the
United  States  Bankruptcy Court for the Southern District of New York, Case No.
01-41726(cb).  The  registrant  is continuing as a debtor in possession with its
prior  management,  except as noted in Item 6, pursuant to Section 1107 of Title
11  of  the  United  States  Code.  The  Company  intends  to  file  a  plan  of
reorganization as provided by Chapter 11 of the United States Bankruptcy Code in
February  2002  as  soon  as  practicable.

A  meeting  of creditors pursuant to section 341 of the United States Bankruptcy
Code  was  held  in  August  2001.

The  Company  intends  to  proceed  as  expeditiously  as  possible  to  resolve
outstanding  liabilities.  The  Company  presently  is  in  negotiation  with
prospective merger partners in order to inject new capital into the Company, and
therefore  maximize  value  for  its  constituents.

Capital  Lake  S.A.  v.  CathayOne, Inc., Case No. 01-CV-1266 (SAS) filed in the
----------------------------------------
United  States  District  Court for the Southern District of New York.  The case
---
involves a claim to entitlement to a $300,000 finder's fee/brokerage commission.
--
The  Company  denies  liability and is defending the action.  The case is in its
early  stages.  No  discovery has occurred.  The Company is unable to express an
opinion  on  the  outcome  at this time, although the Company does feel it has a
meritorious  defense  to  the  claim.
As a result of the bankruptcy filing, this case has been stayed.

The  Company  is aware of a claim being asserted by its former legal counsel for
fees  in  the approximate amount of $593,000, which is contested by the Company.
The Company is attempting to settle this claim. Collection efforts on this claim
has  also  been  stayed.

Item 2. Changes in Securities

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 5. Other Information

Since  filing its bankruptcy petition, the Company has been attempting to locate
a funding source, investor or operating company so that it could emerge from its
bankruptcy  as  a  publicly-traded  corporate  shell  or  as  a  publicly-traded
operating  entity.  In  December of 2001, management began negotiating the terms
of a business combination with the principal officer of a private company in the
transportation  business  ("Tranco").

On  January 28, 2002, the Debtor and Tranco entered into a non-binding letter of
intent  relating  to the reverse merger of a subsidiary of the Debtor (that will
be  formed  as  a merger vehicle) with and into Tranco, with Tranco remaining as
the  surviving company.  The Company intends to file a Plan of Reorganization in
February  2002.

Item 6. Exhibits and Reports on Form 8-K

a) Exhibits
-----------

None.

b) Reports on Form 8-K
----------------------

     1.  A  Form  8-K  was  filed  on  June  20,  2001 announcing the bankruptcy
proceeding  filed  under Chapter 11 of the United Stated Bankruptcy Code and the
resignation  of  a  director  of  the  Company.


                                   SIGNATURES
                                   ----------

In  accordance with 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.


                              /s/ Peter Lau, Chief Executive Officer
                              --------------------------------------
Date:  February 5, 2001           Peter Lau, Chief Executive Officer

                              /s/ David Cooperberg, President
                              -------------------------------
                                  David Cooperberg, President

                              /s/ Charles A. Nelson, Director
                              -------------------------------
                                  Charles A. Nelson, Director