U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549


                                  FORM 10-KSB


(Mark One)

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

             For the fiscal year ended December 31, 2001

OR

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

             For the transition period       to

             Commission file number 0-6933

                              CAMBEX CORPORATION
             (Name of small business issuer in its charter)


Massachusetts                                    04 244 2959
(State or other                                  (I.R.S. Employer
jurisdiction of                                  Identification No.)
incorporation or
organization)

360 Second Avenue                                02451
Waltham, Massachusetts                           (Zip Code)
(Address of principal
executive offices)

Issuer's telephone number:  781-890-6000

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $.10 par value

<PAGE>

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

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

State issuer's revenues for its most recent fiscal year. $1,855,011

An Exhibit Index setting forth the exhibits filed herewith or incorporated by
reference herein is included herein at Page A-1.

The aggregate market value of the voting stock held by non-affiliates of
Cambex Corporation as of March 25, 2002 was $5,359,730 based on the closing
price of the common stock on that date.

Indicate by check mark if issuer has 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 a court. Yes X_   No __

The number of shares of Cambex Corporation's common stock outstanding as of
March 25, 2002: 10,499,480.

















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                                    PART I

                              Item 1.  Business.

Overview

Cambex Corporation is a designer and supplier of fibre channel hardware and
software products used to build storage area networks (SANs). SANs enhance
and simplify the management and sharing of storage resources while providing
improved availability, scalability, performance, and disaster recovery. SANs
have been enabled by the emergence of fibre channel, a new generation of
server to storage communications technology. We develop and offer fibre
channel host bus adapters and hubs, high availability software, RAID disk
arrays and management software for the deployment of SAN solutions. We
supplement our own SAN product offerings by reselling fibre channel hardware
and software solutions from leading manufacturers.

We were organized as a corporation in Massachusetts in 1968. Our principal
executive offices are located at 360 Second Avenue, Waltham, Massachusetts.

We offer Cambex branded fibre channel connectivity products consisting of
host bus adapters and hubs for the SAN market. A host bus adapter provides
fibre channel connectivity between a computer workstation or server and a
SAN. Our proprietary driver software incorporates features that enhance and
simplify SAN device integration and provide high availability. Our fibre
channel hubs enable users to easily create SANs by simplifying cabling and
allowing servers and storage to be non-disruptively added or removed from the
SAN.

We offer Cambex branded fibre channel RAID (redundant array of inexpensive
disk) disk arrays that allow users to store large amounts of online
information in a SAN environment. RAID systems allocate data simultaneously
across multiple hard disk drives increasing system performance and ensuring
the integrity of data even in the event of a disk drive failure. In addition,
our RAID systems incorporate redundant power, cooling and processing
components for additional fault tolerance. Through reseller relationships, we
also offer fibre channel disk arrays manufactured by Hitachi Data Systems,
tape storage products manufactured by Storage Technology Corporation, and
fibre channel switches manufactured by Brocade Communications Corporation.

We sell our SAN products domestically and internationally through OEM,
systems integrator, VAR and end-user channels.

                                 Industry Background

In today's information-based economy, a company's stored information is
central to the value of the enterprise. The volume of business-
critical data generated, processed, stored and manipulated has grown
dramatically over the last decade. Managing this increase in data is one
of the most important challenges for organizations.

The traditional storage architectures are commonly referred to as direct
attached and network attached storage. In the direct attached storage
architecture, each server is linked to a storage system in close proximity.
In the network attached storage architecture, stored data can be accessed
over the local area network because the storage device is connected directly
to the local area network by a dedicated storage server. Due to the
significant volume of data being stored in today's business environment, both
of these architectures have become increasingly costly to maintain and
expand. As a result, traditional architectures often do not adequately
support the requirements of data-intensive enterprises.

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In response to the demand for high-speed and high-reliability storage-
to-server and server-to-server connectivity, the fibre channel interconnect
protocol was developed. Fibre channel is an open, efficient data transport
system.

Fibre channel technology has the following capabilities:

      Performance capability of over four gigabits/second;
      Support for distances up to 10 kilometers;
      Scalable networks to thousands of devices;
      Reliable data transmission;
      Interoperability with standard components; and
      Ability to carry multiple existing interface data protocols.

As a result of its broad range of features, many industry analysts
consider fibre channel to be the most reliable, scalable, gigabit
communications technology for data storage applications. Fibre channel
technology can be implemented in a wide variety of applications, including
computer clustering, networking, and storage access.  To date, the most
widely accepted and deployed application for fibre channel technology has
been in SANs.

A storage area network is a network of servers and data storage devices.
Fibre channel is the enabling technology that has made implementation of a
SAN possible. SANs provide an open, scalable platform for storage access in
data intensive environments like those used for web hosting, online
transaction processing and data warehousing. SANs can be significantly less
expensive to maintain and expand than traditional storage architectures
because they enable shared, high-speed access to stored data as well as
centralized management.

SANs provide the following benefits that address the growing challenges
facing businesses:

	Availability:  SANs reduce the dependence on a single server to access
each storage device. Because SANs use a networked approach, they can be
designed with multiple redundant paths to provide more reliable connections
and thereby assure availability of data in spite of failures of individual
links or components of the system.

	Performance:  By using fibre channel technology, SANs support large
data block transfers at very high speeds and are therefore very effective for
data transfers between storage systems and servers.

	Distance:  Fibre channel supports transmission distances in excess of
10 kilometers without loss of speed, which simplifies network configuration
and significantly reduces susceptibility to environmental disasters.

	Scalability:  By using a networking model, a SAN eliminates the
scalability limitations imposed by traditional storage architectures. The
network architecture reduces the need to replicate data because all servers
can share access to each storage device. In addition, additional storage and
computing resources can be added to the SAN when needed.

	Manageability:  SANs facilitate the use of centralized management
software for monitoring and control.

	Flexibility:  SANs provide high-speed connectivity across multiple
operating systems, including UNIX, Linux and Windows and can be configured to
solve storage management issues.

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<PAGE>

Components of a SAN

Virtually all SANs use several basic components to make up the network,
including the following:

	servers and workstations;
	fibre channel host bus adapters;
	fibre channel hubs and/or switches;
	disk and/or tape storage devices;
	copper or fiber optic cables; and
	management software.

All the components must work together to deliver a functional SAN
environment.


                          The Cambex Solution

We are a developer, manufacturer and reseller of hardware and software
products that enable users to deploy SANs. We have developed a
family of fibre channel host bus adapters, hubs, software, and disk arrays
that allow large amounts of online data to be stored and accessed in a
high performance, high availability environment. By offering other SAN
products, including disk arrays, tape drives and libraries, switches,
routers, and software, from other leading manufacturers, we are able to
deliver a complete, tested and interoperable SAN solution to our customers.
Our objective is to become a leading solution provider for deploying high-
speed fibre channel SANs by providing both our internally developed SAN
products, as well as the highest quality SAN products available from other
vendors.

Products

We believe we offer high quality products with a superior price/performance
profile.  Our internally developed products include a comprehensive suite of
host bus adapters, hubs, disk arrays, and software. We also offer for resale
best-in-class SAN products from Hitachi Data Systems, Storage Technology, and
Brocade Communications.

Host Bus Adapters

We design, manufacture and sell the FibreQuik family of fibre channel host
bus adapters and related device driver software.  A host bus adapter is a
printed circuit card that plugs into the motherboard of servers and
workstations and enables these devices to connect to other fibre channel
devices in a SAN. Communication between the host bus adapter and the
operating system is regulated by device driver software that is included with
the host bus adapter. Our drivers simplify the installation and ensure
interoperability between many types of platforms and servers.

Hubs

We design, manufacture and sell an entry-level fibre channel hub targeted at
workgroup and small enterprise SAN applications. Our FibreQuik HB2000
provides a cost-effective solution to interconnect servers with storage
devices. The FibreQuik hub has been tested in a wide range of demanding,
mission-critical network environments. Our hub supports full gigabit data
transfer speeds and automatically bypasses failed or unused ports in a SAN.
Our flexible design allows customers to add, move or delete storage capacity
and Fibre Channel devices on the SAN as needed.

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<PAGE>

Cambex Disk Arrays

We sell full fibre channel RAID disk arrays that allow users to store large
amounts of online information in high availability, high performance
environments. The Centurion 2000 FF is our fifth generation disk array and is
targeted at enterprises running mission-critical Internet, e-commerce, on-
line transaction processing, data warehousing, and multimedia applications. A
fully redundant architecture ensures no single point of failure.  All
critical system components are hot swappable allowing for little or no
downtime maintenance. Centurion's building block modularity allows users to
start with configurations as small as 18 gigabytes, but with the ability to
scale up to 25 terabytes. Centurion Storage Manager, a graphical user
interface-based software management and configuration application, allows for
single seat management and control of Centurion 2000 FF arrays both locally
and remotely.

Software

We develop and sell software designed to provide very high availability
for enterprise level, mission-critical SAN deployments. Our Dynamic Path
Failover (DPF) software provides full data path redundancy and delivers up to
twice the data throughput when accessing storage in a SAN environment. When
using DPF, the SAN is constructed to have redundant fibre channel data paths
from each server to the storage resources on the SAN. DPF software
intelligently monitors the end-to-end integrity of each fibre channel data
path and automatically detects a host bus adapter, cable, hub, switch, or
RAID controller failure. Upon detection of a path failure, DPF dynamically
remaps the storage on the failed path to the active data path. When the
network failure is corrected, DPF dynamically remaps the storage to the
restored path. The failover/failback sequence is transparent to users and
provides high storage availability and performance.

SAN Integration Services

In addition to selling our internally developed fibre channel connectivity,
disk array, and software products, we resell high quality SAN solutions from
leading manufacturers of fibre channel disk arrays, tape storage libraries,
switches and management software. This allows us to offer our customer a
complete, fully integrated storage area network solution.

Technology

We possess a high level of multi-disciplinary technological expertise,
which we utilize in designing our products. This expertise includes fibre
channel technology, software design and development, embedded hardware
design, system design, and systems integration. We believe that our expertise
in these technologies provides us with competitive advantages in time-to-
market, price/performance, interoperability and product capabilities.


                                  Customers

We sell our products to OEMs, resellers and directly to end-users. In 2000
and 2001, our largest customers include Compaq, StorageTek, FDC Technologies,
and EDS.

In the year ended December 31, 2001, our top five customers accounted
for approximately 74% of our total net revenues, and, in the year ended
December 31, 2000, our top five customers accounted for approximately 45% of
our total net revenues. During 2001,two customers, Compaq and StorageTek,
accounted for 46% and 16%, respectively, of total revenues.In 2000, these two

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customers, Compaq and StorageTek, accounted for 18% and 11%, respectively, of
total revenues for the year. There is no assurance that current customers
will remain our customers in the future and the loss of a major customer
could have a material effect on our business.

                           Customer Service and Support

We offer customer service and support programs that include telephone
and on-site support 24 hours a day, seven days a week. In addition, we have
designed our products to allow easy diagnostics and administration. We employ
systems engineers for pre- and post-sales support and technical support
engineers for field support.

                              Sales and Marketing

We sell domestically and internationally to OEMs, systems integrators,
and VARs as well as directly to end users in the United States. We target
OEMs, systems integrators, and VARs who resell our products as a part of
complete SAN solutions to end-users. Our sales and marketing strategy will
continue to focus on the development of the fibre channel market through
these relationships. We also sell complete fibre channel SAN solutions to
certain targeted end-users through a small direct sales force.

Our marketing efforts are focused on increasing awareness of our fibre
channel products and ability to deliver complete SAN solutions, promoting
SAN-based solutions, and advocating industry-wide standards and
interoperability.  Key components of our marketing efforts include:

    extending our partnerships with leading manufacturers of fibre channel
    connectivity, disk and tape storage, and SAN management software products
    allowing us to offer a complete SAN solution;

    continuing our participation in industry associations and standards
    committees to promote and further enhance fibre channel technology and
    increase our visibility as industry experts; and

    participating in major trade show events and SAN conferences to promote
    our products and to continue our efforts to educate potential customers
    on the value of SANs.

Original Equipment Manufacturers (OEMs)

OEMs can exercise significant influence in the early development of our
market because they utilize products to deliver to end users complete,
factory-configured solutions that are installed and field-serviced by the
OEMs' technical support organizations. We intend to continue our efforts to
develop relationships with leading OEM customers to introduce new products.
We believe that OEMs will continue to provide critical input as we develop
our next generation of products.

Reseller Customers

As the markets for fibre channel products and SAN solutions evolve, and
as end-user awareness of the benefits of fibre channel increases, we believe
an increasing volume of sales will occur through reseller channels. We
believe that as the market for fibre channel matures, we will be able to
leverage sales through distributors, systems integrators, and value-added
resellers and that such sales will represent an increasing percentage of our
total net revenues. As this market continues to develop, we plan to establish
additional relationships with select domestic and international resellers to

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reach additional markets and increase our geographic coverage.

                          Manufacturing, Test and Assembly

We outsource the majority of our manufacturing, and we conduct quality
assurance, documentation control and certain finish assembly and test
operations at our headquarter facility in Waltham, Massachusetts. This
approach enables us to reduce fixed costs and to provide flexibility in
meeting market demands.

Except for the QLogic Corporation hardware we utilize in our host bus
adapters, we believe most component parts used in our products are standard
off-the-shelf items, which are, or can be, purchased from two or more
sources. We select suppliers primarily on the basis of technology,
manufacturing capacity, quality and cost. Our reliance on third-party
suppliers and manufacturers involves risks, including possible limitations on
availability of products due to market abnormalities, unavailability of, or
delays in obtaining access to, certain product technologies and the absence
of complete control over delivery schedules, manufacturing yields, and total
production costs. The inability of our suppliers and third party
manufacturers to deliver products of acceptable quality and in a timely
manner or our inability to procure adequate supplies of our products could
have a material adverse effect on our business, financial condition or
operating results.

                             Research and Development

Our success will depend to a substantial degree upon our ability to
develop and introduce in a timely fashion new products and enhancements to
our existing products that meet changing customer requirements and emerging
industry standards. We have made, and plan to continue to make, expenditures
for research and development and to participate in the development of
industry standards. However, because our net revenues declined in each of the
five most recently completed fiscal years, our expenditures for research and
development are significantly lower than the amount we expended for research
and development four years ago. Over the last two fiscal years, our
research and development expenses were approximately $1.0 million in 2001,
compared to $1.4 million in 2000.

Because the amount of resources available for research and development
are limited, we have made the decision to devote all research and development
expenditures on memories and storage I/O technologies and products, related
software, and on high availability software applications for the SAN market.
Before a new product is developed, our research and development engineers
work with marketing managers and customers to develop a comprehensive
requirements specification. After the product is designed and commercially
released, our engineers continue to work with customers on early design-in
efforts to understand requirements for future generations and upgrades.

Research and development expenses primarily consist of salaries and
related costs of employees engaged in ongoing research, design and
development activities and subcontracting costs. We are seeking to hire
additional skilled development engineers. Our business, operating results
and financial condition could be adversely affected if we encounter delays in
hiring needed additional engineers.

                                   Competition

The markets in which we compete are intensely competitive and are
characterized by frequent new product introductions, changing customer
preferences and evolving technology and industry standards. Our competitors

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continue to introduce products with improved price/performance
characteristics, and we will have to do the same to remain competitive.
Increased competition could result in significant price competition, reduced
revenues, lower profit margins or loss of market share, any of which would
have a material adverse effect on our business, operating results and
financial condition.

Our principal competitors in the memory market include the OEM processor
manufacturers, Kingston Technologies and Dataram.

Our principal competitors in the fibre channel connectivity product market
include Emulex Corporation, QLogic Corporation, and JNI Corporation. Our
primary competitors in the disk array market include International Business
Machines Corporation, EMC Corporation and Sun Microsystems.

Our principal competitors in the host bus adapter market include Emulex,
QLogic, and JNI. Our products may also compete at the end-user level with
other technology alternatives, such as SCSI, which are available from
companies such as Adaptec, LSI Logic and QLogic as well as a number of other
companies. In the future, other technologies may evolve to address the
applications served by fibre channel today, and because we focus on fibre
channel, our business would suffer as a result of competition from such
competing technologies.

Some of our OEM and reseller customers could develop products internally that
would replace our products. The loss of opportunities to sell our products to
any such OEM and reseller customers, in addition to the increased competition
presented by these customers, could have a material adverse effect on our
business, operating results and financial condition.

We believe that the principal bases of fibre channel product competition
presently include interoperability, reliability, scalability, connectivity,
performance and high-availability. Other competitive factors include pricing
and technical support.  We believe that we compete favorably with respect to
each of these factors.

                               Intellectual Property

The intellectual property rights we have in our technology, which generally
consist of system designs, software and know-how associated with our product
portfolio, principally arise from our own internal development efforts. We
attempt to protect our technology through a combination of unpatented trade
secrets, trademarks and contractual obligations. Our software products are
protected by copyright laws. We cannot assure that our intellectual property
protection measures will be sufficient to prevent misappropriation of our
technology or that our competitors will not independently develop
technologies that are substantially equivalent or superior to our technology.
In addition, the laws of many foreign countries do not protect our
intellectual property rights to the same extent as the laws of the United
States. Our failure to protect our proprietary information could have a
material adverse effect on our business, financial condition or operating
results.

We may need to initiate litigation in the future to enforce our intellectual
property rights, to protect trade secrets or to determine the validity and
scope of the proprietary rights of others. Litigation could result in
substantial costs and diversion of our resources and could materially harm
our business. In the future, we may receive notice of infringement claims of
other parties' proprietary rights. Infringement or other claims could be
asserted or prosecuted against us in the future, and it is possible that such
assertions or prosecutions could harm our business. Any such claims, with or
without

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merit, could be time-consuming, result in costly litigation and diversion of
technical and management personnel, cause delays in the development and
release of our products, or require us to develop non-infringing technology
or enter into royalty or licensing arrangements. Such royalty or licensing
arrangements, if required, may not be available on terms acceptable to us, or
at all. For these reasons, infringement claims could materially harm our
business.



                                     Employees

At March 25, 2002, we had 75 full-time employees. None of our employees are
represented by a labor union. We have not experienced any work stoppages and
consider our relations with our employees to be good.


                             Item 2.  Properties

We currently lease approximately 68,000 square feet in an office facility in
Waltham, Massachusetts pursuant to a lease that expires on May 31, 2003. Of
the approximately 68,000 square feet leased, approximately 42,000 square feet
of this space is subleased to unrelated parties for a term ending May 31,
2003.

We also own 12.4 acres of land in Poughkeepsie, New York.  This land is
vacant and not subject to a mortgage.


                          Item 3.  Legal Proceedings

There are no material legal proceedings pending against us. We are involved
in certain legal proceedings arising in the ordinary course of business. We
believe that the outcome of these proceedings will not have a material
adverse effect on our financial condition.


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

None.

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                                   PART II


              Item 5.  Market for Common Equity
                       and Related Stockholder Matters.



Our common stock is listed for quotation on the over the counter bulletin
board, under the symbol "CBEX".  The approximate number of shareholders of
record at March 25, 2002 was 524. The following table sets forth the range of
the high and low closing bid prices for our common stock for each quarter
during the years ended December 31, 2001 and December 31, 2000:



                                      2001                     2000

                               High        Low          High       Low

       First Quarter           1.56        0.63         9.25       3.00
       Second Quarter          0.75        0.34         5.75       1.56
       Third Quarter           0.37        0.20         2.96       1.50
       Fourth Quarter          1.01        0.16         1.62       0.62




We have never paid cash dividends on our common stock.  We presently intend
to retain future earnings, if any, to finance the operation of our business
and do not anticipate that we will pay cash dividends in the foreseeable
future. Our future dividend policy will depend on our earnings, capital
requirements, expansion plans, financial condition and other relevant
factors.

The series 1 bridge note purchase agreement between us and certain lenders
who were introduced to us by Sovereign Capital Advisors LLC(the "Sovereign
Lenders") provides that we may not pay dividends in cash or otherwise as long
as any of the series 1 bridge notes remain outstanding.  With the consent of
the Sovereign Lenders and as long as we are not in default, we may pay
dividends to preferred shareholders in accordance with our articles of
organization and we may repurchase shares of our common stock issued upon the
exercise of options granted under our stock option plans.

Set forth in chronological order is information regarding securities
convertible into or exercisable for shares of our common stock issued by
Cambex within the past three years:

In November 1998 we entered into a Loan and Security Agreement with B.A.
Associates, Inc. which allows us to borrow up to $650,000. In exchange for
this revolving loan facility, we issued the lender in a transaction exempt
under Section 4(2) of the Securities Act warrants for the purchase of two
shares of common stock for each dollar it committed to loan to us. The
exercise price of these warrants to purchase 1,300,000 shares of common stock
is $0.22 per share. In November 2000, the agreement with B.A. Associates was
amended to increase the amount we can borrow to $1,000,000. In exchange for
this $350,000 increased commitment, we agreed to issue the lender a warrant
to purchase one share of common stock for each additional dollar it committed
to loan to us. The exercise price of this warrant to purchase 350,000 shares
of common stock is $1.25 per share. In December 2000, the agreement with B.A.
Associates was amended to increase the amount we can borrow to $1,050,000. In

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exchange for this $50,000 increased commitment, we agreed to issue the lender
a warrant to purchase one share of common stock for each additional dollar it
committed to loan to us. The exercise price of this warrant to purchase
50,000 shares of common stock is $1.25 per share.

From June 1, 1999 through August 18, 1999, we borrowed $210,000 in exchange
for the issuance of 10% Subordinated Convertible Promissory Notes in a
transaction exempt under Section 4(2) of the Securities Act. During this time
period Joseph F. Kruy loaned us $100,000, and Richard E. Calvert and H. Terry
Snowday, Jr. each loaned us $55,000 of the total amount that we borrowed. In
addition to the notes, each of the holders received a stock purchase warrant
entitling the holder to purchase one share of common stock for each dollar
loaned to us. The exercise price of these warrants to purchase 210,000 shares
of common stock is $0.50.

In November 1999, we borrowed $125,000 from Joseph F. Kruy and $125,000
from Philip C. Hankins, a member of our board of directors, and $100,000 from
each of H. Terry Snowday, Jr. and Richard E. Calvert. We also entered into
separate Loan and Security Agreements with each of Messrs. Kruy, Hankins,
Calvert and Snowday. At that time, we entered into one other Loan and
Security Agreement with a person unrelated to the company (the "Other 1999
Lender") pursuant to which we borrowed an additional $100,000. Under these
Loan and Security Agreements, the individuals, who are all accredited
investors, received in a transaction exempt under Section 4(2) of the
Securities Act warrants to purchase up to two shares of common stock for each
dollar loaned to us. The exercise price of these warrants to purchase
1,100,000 shares of common stock is $2.00 per share. In November 2000, we
amended the Loan and Security Agreements to expand the date the loans are
due. The individuals, in a transaction exempt under Section 4(2) of the
Securities Act, received warrants to purchase 616,000 shares of common stock
at an exercise price of $1.25 per share.

In March through May 2001 we borrowed $50,000 from Joseph F. Kruy and
$300,000 from Richard E. Calvert and entered into Loan and Security
Agreements with Messrs. Kruy and Calvert, under which they received in a
transaction exempt under Section 4(2) of the Securities Act warrants to
purchase up to two shares of common stock for each dollar loaned to us. The
exercise price of these warrants to purchase 700,000 shares of common stock
is $0.50 per share. In July through September 2001 we borrowed $100,000 from
Joseph F. Kruy and $100,000 from Richard E. Calvert and entered into Loan and
Security Agreements with Messrs. Kruy and Calvert, under which they received
in a transaction exempt under Section 4(2) of the Securities Act warrants to
purchase up to one share of common stock for each dollar loaned to us. The
exercise price of these warrants to purchase 200,000 shares of common stock
is $0.25 per share.

The Sovereign Lenders, B.A. Associates, Inc., Joseph F. Kruy, Philip C.
Hankins, Richard E. Calvert and H. Terry Snowday, Jr. are all accredited
investors and have provided us written representations to that effect.

           Item 6.  Management's Discussion and Analysis of Financial
                      Condition and Results of Operations.


The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with our consolidated
financial statements and related notes appearing elsewhere in this
Form 10-KSB.  Please refer to "Special Note Regarding Forward-Looking
Statements" for additional information.

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Comparison of fiscal years 2001 and 2000

Our revenues were $1,855,000 and $2,400,000 for 2001 and 2000, respectively.
Revenues for 2001 decreased 23% compared to revenues for the prior year due
primarily to decreases of approximately 63% in service revenues from $620,000
in 2000 to $232,000 in 2001.

Gross profit rate was 52% of sales in 2001, compared to 53% of sales in 2000.

Operating expenses in 2001 decreased by 33% in comparison to operating
expenses in the prior year.  Research and development expenses in 2001
decreased by 24% compared to the amount of these expenses in 2000 due to
decreases in contract services. Selling expenses in 2001 decreased by 55%
compared to the amount of these expenses in 2000 due to decreases in
headcount and related expenses. General and administrative expenses decreased
by 10% compared to the amount of these expenses in 2000.

Interest expense decreased by 45% in 2001 compared to 2000. This decrease in
2001 was primarily due to the recording of $607,000 of penalties and premiums
relating to the Series 1 bridge financing notes in 2000. We did not incur a
similar penalty or premium in 2001. This decrease in interest expense was
partially offset by increased interest expense due to funds borrowed in 2000
and 2001. We borrowed $2,000,000 in January and February 2000 in exchange
for, among other things, our issuance of series 1 bridge financing notes that
accrued interest at the rate of 8% per annum until their maturity in the
third quarter of 2000. Since their maturity, these notes are accruing
interest at the rate of 12% per annum. During 2001, we borrowed $550,000 in
exchange for, among other things, our issuance of 12% promissory notes. These
borrowings were necessary to finance the development of new products and for
working capital purposes.


Extraordinary income items of $102,000 for 2000 were recorded as a result of
some of our creditors agreeing to accept partial cash payments in full
satisfaction of liabilities owed to those creditors.

Total comprehensive net loss for 2001 was $1,543,000, or $0.16 per share, as
compared with total comprehensive net loss of $2,578,000, or $0.27 per share,
for 2000.

Inflation

We did not experience any material adverse effects in 2000 or 2001 due to
general inflation.

Liquidity and Capital Resources

As discussed more fully in Note 1 to our audited consolidated financial
statements, we have suffered substantial recurring losses from operations for
the last seven consecutive years. Consequently, our ability to continue as a
going concern is dependent upon several factors including, but not limited
to, our ability to generate revenues in significantly greater amounts than in
the past four fiscal years, our ability to raise additional capital and the
assumption that certain of our lenders will accept shares of our common stock
instead of cash in satisfaction of our obligations. Our working capital
deficit is a significant threat to our ability to continue as a going
concern.

Management continues to work to establish new strategic alliances that it
believes will result in increases in revenues in the future through the sale
of a greater volume of products. Management has also been active in trying to

                              13
<PAGE>

secure additional capital. We cannot give any assurances that the actions
taken to date will increase revenues or raise additional capital.

Recent Developments

Subsequent to the end of 2001, Cambex Corporation completed the acquisition
of Super PC Memory, Inc., pursuant to the terms of the Stock Purchase and
Sale Agreement dated as of January 31, 2002 by and among Cambex Corporation,
a Massachusetts corporation, Super PC Memory, Inc., a California corporation,
Son T. Pham, Simon Le and Richard G. Schaefer. Super PC Memory, Inc. is a
memory supplier for desktop and laptop personal computers and workstations.

Effective as of March 12, 2002, Super PC Memory, Inc. is a wholly-owned
subsidiary of Cambex Corporation. The sellers, Son T. Pham, Simon Le and
Richard G. Schaefer received 560,000 shares of Cambex Corporation common
stock and will receive fifteen percent (15%) of Super PC Memory, Inc.'s gross
profit for the period from March 12, 2002 through December 31, 2004, payable
in installment payments pursuant to the terms of the Stock Purchase and Sale
Agreement.

Since Super PC has a 25 person sales force, which is many times larger than
the size of the Cambex sales force, we believe that as a result of the
acquisition the Cambex sales will increase from the present levels thereby
reducing the current cash burn rate. However, there is no assurance that the
expected burn rate reduction will occur in 2002. Therefore, we will continue
our efforts to raise additional capital to finance operations.

Requirements

Depending upon the market value of shares of our common stock, any additional
financing that we obtain through the sale of common stock to Thumberland
Limited under the common stock purchase agreement we entered into in 2000 or
cash that we may receive from the exercise of outstanding warrants may be
used to repay and prepay debt and for working capital purposes to fund our
continuing operations including research and development and sales and
marketing expenses.

During the first quarter of 2000, we borrowed $2,000,000 in cash from the
Sovereign Lenders in exchange for, among other things, our issuance of series
1 bridge financing notes that matured in the third quarter of 2000. We
received net proceeds equal to $1,737,900 from the Sovereign Lenders as a
result of this bridge financing. The series 1 bridge financing notes bore
interest at the rate of 8% per annum prior to maturity. Since maturity,
interest is accruing on these notes at a rate of 12% per annum. These bridge
notes are convertible into shares of our common stock at any time at a
weighted average per share price of $4.08. Because the bridge notes matured
before we registered, under the Securities Act of 1933, as amended, the offer
and resale of shares of our common stock issuable upon conversion of the
bridge notes and exercise of the repricing warrants and the common stock
purchase warrants described above, the Sovereign Lenders became entitled to
premiums and penalties totaling approximately $607,000 (in addition to the
repayment of principal and interest). Following conversion of the bridge
notes, if the Sovereign Lenders do not realize at least a 20% gain on shares
of common stock that they choose to sell during the 90 days following
conversion, then the Sovereign Lenders are entitled to acquire additional
shares of common stock at a price of $0.10 per share through the exercise of
repricing warrants.  In addition to these bridge notes and the attached
repricing warrants, we issued warrants to purchase 300,000 shares of common
stock. These warrants have a weighted average exercise price of $4.54 per
share. In the fourth quarter of 2000, one of our lenders, converted a portion

                               14
<PAGE>

of its Series 1 Bridge Financing Note ($50,000 of unpaid principal plus
interest, premiums and penalties) into 18,232 shares of our common stock at a
conversion price of $3.79.In the first quarter of 2001, the same lender,
converted the balance of its Series 1 Bridge Financing Note ($200,000 of
unpaid principal plus interest, premiums and penalties) into 74,335 shares of
our common stock at a conversion price of $3.79. They also exercised a
repricing warrant and received 112,778 shares of our common stock.

Resources

Our cash and marketable securities were $210,000 and $235,000 at December 31,
2001 and December 31, 2000, respectively. Working capital was a deficit of
$8,576,000 and $6,425,000 at December 31, 2001 and at December 31, 2000,
respectively. The increase in working capital deficit was primarily due to
the loss for the year 2001. During 2001, we did not expend any funds for
capital equipment. During fiscal 2002, we expect to acquire less than
$100,000 of capital equipment.

We have a revolving credit facility with B.A. Associates, Inc. under which we
may borrow up to $1,100,000. At December 31, 2001 we had a balance of
$1,058,000 outstanding under this revolving credit facility.

During the third quarter of fiscal 2000, we signed a common stock purchase
agreement with Thumberland Limited, a private investor, for the future
issuance and purchase of shares of our common stock. The common stock
purchase agreement was amended during the fourth quarter of fiscal 2000.  The
common stock purchase agreement establishes what is often referred to as a
structured equity line or an equity drawdown facility. In general, the
drawdown facility operates as follows:  the investor has committed to provide
us up to $10 million as we request it over an 18 month period, in return for
common stock we issue to the investor, subject to registering in advance the
shares of common stock issuable under the Securities Act of 1933. Once every
22 trading days, we may request a draw of up to $1 million of that money
(except that our initial drawdown may be for up to $2 million), subject to a
maximum of 18 draws.  The maximum amount we actually can drawdown upon each
request will be determined by the volume-weighted average daily price of our
common stock for the 22 trading days prior to our request and the average
trading volume for the 45 trading days prior to our request. Per the terms of
this agreement, we are currently unable to draw because we cannot meet the
minimum draw amount of $250,000. We filed registration statements on Form SB-
2 with the Securities and Exchange Commission registering 4,981,542 shares
issuable in connection with the bridge loan financing from the Sovereign
Lenders and the purchase agreement with Thumberland. Those registration
statements were declared effective on November 7, 2000 and December 22, 2000.
We filed a post-effective amendment on Form SB-2 in the second quarter of
2001 and we plan to file an additional amendment in the second quarter of
2002.

We need additional capital and additional financing may not be available. If
our stock price and trading volume stay at current levels, we will not be
able to draw down any of the $10 million under the common stock purchase
agreement with Thumberland Limited which expires in June 2002. We believe
that the combination of current existing cash, available borrowing capacity
and our ability to obtain additional long-term indebtedness may not be
adequate to finance our operations for our current activities and foreseeable
future. Currently, our cash burn rate is approximately $40,000 per month or
$480,000 per year at the current sales levels. We believe that as a result of
the acquisition of Super PC Memory, Inc. the Cambex sales will increase from
the present levels thereby reducing the cash burn rate from the previously
expected $40,000 per month or $480,000 in 2002.However, there is no assurance

                           15
<PAGE>

that the expected burn rate reduction will occur in 2002.For each 10 percent
reduction in sales, our cash burn rate would increase by approximately
$10,000 per month. Conversely, for each 10 percent increase in sales volume,
our cash burn rate would decrease by approximately $10,000 per month. In
order to drawdown the minimum amount of $250,000 under our equity drawdown
facility, the average daily trading volume for the 45 trading days prior to
our drawdown notice multiplied by the average of the volume-weighted average
daily prices of our common stock for the 22 trading days prior to the notice
would have to equal or exceed $56,819. For example, if the average volume-
weighted average daily price of our common stock was $1.00 and the average
daily trading volume for the 45 days prior to our drawdown notice was 56,819,
we would be able to draw down the minimum amount of $250,000. The closing
price for our common stock on March 25, 2002 was $0.60 per share and the
average daily trading volume for the 45 days preceding March 25, 2001 was
5,622 shares which is not sufficient to allow us to be able draw down the
minimum amount of $250,000. The time period for which we believe our capital
is sufficient and the burn rate are estimates. The actual time period and
burn rate may differ materially as a result of a number of factors, risks and
uncertainties that are described herein. In addition, business and economic
conditions may not make it feasible to draw down under the facility at every
opportunity, and drawdowns are available only every 22 trading days. We are
actively pursuing raising additional capital but our ability to raise
investment capital during the term of the common stock purchase agreement is
restricted with regard to under market offerings, and if we need capital but
are unable to drawdown under the common stock purchase agreement for any
reason, we may not be able to meet our anticipated working capital
requirements.

We are attempting to raise additional capital to cover the burn rate not
covered by incremental gross profit. This amount is dependent upon sales. If
sales do not increase or capital cannot be raised to cover the current burn
rate, we intend to reduce operating expenses as much as practicable to
continue operations until balance is established.

If we are not successful in raising additional capital or increasing our
sales to adequate levels, we will not be able to continue our current
operations and there is substantial doubt as to our ability to continue as a
going concern. There can be no assurance that we will be successful in
raising such additional capital at all or on terms commercially acceptable to
us or our shareholders.

In addition, the sale of equity securities could result in the dilution of
the percentage ownership of existing shareholders and could also adversely
affect the market price of our common stock.


Forward-Looking Statements

The statements contained in "Management Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere throughout this Annual
Report on Form 10-KSB that are not historical facts are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those reflected in the forward-
looking statements. These forward-looking statements reflect management's
analysis, judgment, belief or expectation only as of the date hereof. We
undertake no obligation to publicly revise these forward-looking statements
to reflect events or circumstances that arise after the date hereof or to
publicly release the results of any revisions to such forward-looking
statements that may be made to reflect events or circumstances after the date

                               16
<PAGE>

hereof. In addition to the disclosure contained herein, readers should
carefully review any disclosure of risks and uncertainties contained in other
documents we file or have filed from time to time with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.



                            17
<PAGE>

            Item 7.  Financial Statements.

See financial statements, beginning at page F-2, incorporated herein by
reference.


            Item 8.   Changes in and Disagreements with Accountants on
                     Accounting and Financial Disclosure.

   On January 4, 2001, Cambex Corporation appointed the accounting firm of
Sullivan Bille, P.C. as our new principal independent accountants for the
year ended December 31, 2000 and dismissed our former principal independent
accountants, Belanger & Company, P.C. ("Belanger"). One of our considerations
in changing independent accountants was our desire to work with a larger,
full service accounting firm.  Our Board of Directors and its Audit Committee
unanimously approved the change of principal independent accountants.

   For the fiscal years ended December 31, 1999 and 2000 and thereafter
through January 4, 2001, there were no disagreements between Belanger &
Company, P.C. and us on matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure which, if not
resolved to the satisfaction of Belanger and Company, P.C., would have caused
Belanger & Company, P.C. to make reference to the subject matter thereof in
its reports.  Since Belanger & Company, P.C. was retained on April 24, 1998
and thereafter through January 4, 2001, there was no occurrence of the kinds
of events described in Item 304(a)(1)(iv) of Regulation S-B promulgated by
the Securities and Exchange Commission.  In addition, none of the reports
issued by Belanger & Company, P.C. concerning our financial statements for
the fiscal years ended 1998 and 1999 and thereafter through January 4, 2001
contain an adverse opinion or disclaimer of opinion. Such reports were not
qualified or modified as to uncertainty, audit scope, or accounting
principles except for an explanatory paragraph discussing a going concern
uncertainty.

                              18
<PAGE>



                                   PART III


         Item 9. Directors and Executive Officers of the Registrant.

The following table shows the name, age and position of each of our
executive officers and directors.

Name                             Age    Position

Joseph F. Kruy (1)               70     President, Chief Executive Officer,
                                        Treasurer and Chairman of the Board
                                        and a Director
Philip C. Hankins (1)(2)         70     Director
C.V. Ramamoorthy, Ph.D. (1)(2)   75     Director
Robert J. Spain, Ph.D. (1)(2)    64     Director
Lois P. Lehberger                45     Clerk, Vice President and Controller
___________________
(1)	Member of the Compensation Committee.
(2)	Member of the Audit Committee.



Joseph F. Kruy has served as our President, Chief Executive Officer and a
member of our board of directors since our inception in 1968.  Mr. Kruy has
served as our Chairman of the Board since October 1975.  Mr. Kruy holds a
B.S. in electrical engineering and a Dipl. Eng. Degree from the Technical
University in Budapest.

Philip C. Hankins has been a member of our board of directors since 1975.
Since 1975 Mr. Hankins has been the President of Charter Information
Corporation, an information processing company.  Mr. Hankins holds a B.S. in
mechanical engineering from Cornell University and a M.S. from Harvard
University.

C.V. Ramamoorthy, Ph.D. has been a member of our board of directors since our
inception in 1968.  Since prior to 1995, Dr. Ramamoorthy has been a Professor
of Electrical Engineering and Computer Sciences at the University of
California Berkeley.  Dr. Ramamoorthy holds a B.S. in physics from the
University of Madras, India, a M.S. in mechanical engineering from the
University of California Berkeley and a M.S. and a Ph.D. from Harvard
University.

Robert J. Spain, Ph.D. has been a member of our board of directors since
1995.  Dr. Spain was also our Vice President of Research from 1969 to 1977.
Since prior to 1995, Dr. Spain has been the President of CFC, Inc., an
electronic component manufacturing company.  Dr. Spain holds a B.S.E.E. and a
M.S.E.E. from the Massachusetts Institute of Technology and a Doctor of
Science from Paris, Sorbonne.

Lois P. Lehberger joined Cambex in June 1978 and has served as our Controller
since August 1998, and our Vice President since November 1999. Mrs. Lehberger
was appointed Clerk in May 2001. Since joining Cambex, Mrs. Lehberger has
been responsible for our accounting function.  Mrs. Lehberger holds a B.A. in
economics and accounting from the College of the Holy Cross.

                             19
<PAGE>


                      Item 10.  Executive Compensation.

The following table provides certain summary information concerning
compensation awarded to, earned by, or paid to our Chief Executive Officer
and
each of our other executive officers for services rendered to Cambex in all
capacities during the fiscal years ended December 31, 2001 and December 31,
2000.

Summary Compensation Table
                                            Annual           Long Term
                                         Compensation(1) Compensation Awards
Name and Position              Year          Salary            Options(#)

Joseph F. Kruy                 2001          $200,000(2)           -
Chairman, President and CEO    2000          $200,000              -

Lois P. Lehberger              2001          $ 78,057(3)           -
Vice President,                2000          $ 72,276              -
Controller and Clerk

(1)The columns for "Bonus", "Other Annual Compensation" and "All Other
   Compensation" have been omitted because there is no such compensation
   required to be reported.

(2)Includes $51,923 for which payment has been deferred.

(3)Includes $5,128 for which payment has been deferred.

                            20
<PAGE>

Stock Options

The following table contains information concerning the grant of stock
options under our Year 2000 Equity Incentive Plan to the executive officers
named in the Summary Compensation Table. Each of the option grants listed
below vests in five equal installments on the first through the sixth
anniversaries of the date of grant.

Option Grants in Last Fiscal Year

Individual Grants


                  Number of     % of Total
                  Securities      Options
                  Underlying    Granted to     Exercise
                   Options     Employees in      Price    Expiration
Name                 (#)        Fiscal Year    ($/Share)     Date

Joseph F. Kruy         -             -             -           -

Lois P. Lehberger      -             -             -           -

Aggregate Option Exercises in Last Fiscal Year and Fiscal Year End Option
Value
                                                                 Value of
                                                                Unexercised
                                            Number of           In-the-money
                                            Options at           Options at
                                         December 31,2001 December 31,2001(1)
               Shares Acquired    Value     Exercisable/         Exercisable/
Name           on Exercise(#)    Realized  Unexercisable       Unexercisable

Joseph F. Kruy         -            -          -/-                  -/-

Lois P. Lehberger      -            -     44,000/ 60,500       13,820/17,815

(1) The closing price of our Common Stock on December 31, 2001 was
    $0.65 per share.  The numbers shown reflect the value of options
    accumulated over all years of employment.


Employment Contracts and Termination Agreements

We entered into an employment agreement with Joseph F. Kruy on November
18, 1994.  An extension of the term of this employment agreement to December
31, 2002 was approved by our board of directors in November 1999.  Under his
employment agreement, Mr. Kruy is engaged to serve as our Chairman of the
Board, President and Chief Executive Officer.  Except for illness, reasonable
vacations and other customary exceptions, during the term of the agreement,
Mr. Kruy is to devote all of his working time and attention to the
performance of his duties and responsibilities at Cambex.  Mr. Kruy is to be
paid a minimum annual base salary of $200,000 per year.  Mr. Kruy is also
entitled to participate in our Incentive Bonus Plan and is eligible to
receive an annual bonus equal to 4% of our pre-tax profit, as that term
defined in the Incentive Bonus Plan.  If Mr. Kruy voluntarily terminates his
employment with us, he is entitled to receive his base annual compensation
through the date of termination and any amount that he may be entitled to
receive under the Incentive Bonus Plan in accordance with the terms of that

                       21
<PAGE>

Plan.  If, after Mr. Kruy voluntarily terminates his employment with us, he
accepts employment during the remaining then current term of his agreement
with an entity that directly competes with us, then we may cease paying Mr.
Kruy any further amounts.  If we terminate Mr. Kruy's employment for reasons
other than for cause or if we give another person either the title or the
powers of the Chief Executive Officer, then Mr. Kruy is entitled to continue
to receive his annual base salary through the end of the then current term of
the agreement, and is entitled to receive any incentive bonus that would have
been earned under the Incentive Bonus Plan during the fiscal year in which
his employment was terminated.  If, following termination of Mr. Kruy's
employment with us, he accepts employment elsewhere before December 31, 2002,
then we do not have to continue to pay Mr. Kruy for the year ending December
31, 2002.  Moreover, if on the date of termination of Mr. Kruy's employment
with us, our assets are in the hands of a receiver, an assignee for the
benefit of creditors, trustee in bankruptcy, debtor-in-possession or other
entity for the benefit of creditors or if our consolidated net worth is less
than our consolidated net worth at December 31, 1999, then we have no
obligation to pay Mr. Kruy any amount after termination of his employment.

We compensate our non-employee directors with an annual fee of $10,000 and a
fee of $1,000 for each meeting of the board of directors attended. In August
1998, the board of directors authorized the non-employee director
compensation to be converted from cash to shares of our common stock at a
price of $0.25 per share, or 50% of the fair market value, whichever is
greater. To date, no shares have been issued to the non-employee directors as
compensation for services as a member of the board of directors.


  Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following table presents information regarding the beneficial ownership
of Cambex's common stock as of March 25, 2002, by:

      each person, or group of persons, known to us to be the beneficial
      owner of more than five percent of our outstanding shares of common
      stock;
      each of our directors;
      each of our executive officers; and
      all current directors and officers of Cambex as a group.

Unless otherwise noted in the table, the address for each person listed in
the table is c/o Cambex Corporation, 360 Second Avenue, Waltham, MA 02451.

Name and Address         (#)Shares of Common
of Beneficial Owner    Stock Beneficially Owned(1)    Percent of Class(2)

Joseph F. Kruy (3)             2,662,543                       22.6%

Richard E. Calvert(4)          1,916,500                       16.2
 7784 East Shore Road
 Traverse City, MI 49686

Bruce D. Rozelle (5)           1,700,000                       13.9

Peter J. Kruy (6)              1,097,164                       10.3

SovCap Equity Partners, Ltd.(7)  867,985                        7.6
 Cumberland House
 #27 Cumberland St.
 P.O. Box CB-13016
 Nassau, New Providence, The Bahamas

                                     22
<PAGE>

H. Terry Snowday, Jr.(8)         821,806                        7.4
 7784 East Shore Road
 Traverse City, MI 49686

Philip C. Hankins (9)            495,000                        4.5

C.V. Ramamoorthy                  99,156                         *

Robert J. Spain                    -0-                           *

Lois P. Lehberger (10)            44,500                         *

All directors and executive
officers as a group
(5 persons) (11)               3,301,199                       27.0


_______________
*		Represents beneficial ownership of less than 1%.

(1)	Beneficial ownership for purposes of the table is determined in
accordance with the rules of the Securities and Exchange Commission and is
not necessarily indicative of beneficial ownership for any other purpose.  In
computing the number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock issuable upon the
exercise of options and warrants held by that person that are currently
exercisable or exercisable within 60 days of following March 25, 2002 (May
24, 2002) are deemed to be outstanding. These shares, however, are not
considered outstanding for purposes of computing the percentage ownership of
any other person.  Except as indicated in the footnotes, we believe that the
persons and entities named in the table have sole voting and sole investment
power with respect to all shares beneficially owned by them, subject to
community property laws where applicable.

(2)	Percentage of ownership is based on 10,499,480 shares of common stock
outstanding as of March 25, 2002.

(3)	Includes 1,300,103 shares of common stock issuable upon exercise of
stock purchase warrants issued in 1998, 1999, 2000 and 2001 exercisable
within 60 days following March 25, 2002 (or by May 24, 2002).  This number
also includes 56,250 shares held by the Kruy Family Trust, for which Mr.
Kruy's wife and children are the beneficial owners.  Mr. Kruy disclaims
beneficial ownership of these shares.  Of these shares of common stock,
979,239 are subject to the terms of a stock pledge agreement dated as of
January 18, 2000 (the "Kruy Pledge Agreement"), among Joseph F. Kruy, Cambex
and the Sovereign Lenders.  Provided that Cambex is not in default under the
series 1 bridge note purchase agreement dated as of January 18, 2000 (the
"Bridge Note Purchase Agreement"), among Cambex and the Sovereign Lenders,
the series 1 bridge financing notes issued pursuant to the Bridge Note
Purchase Agreement, or the Kruy Pledge Agreement, Mr. Kruy has the right to
vote the pledged shares.

(4) Includes 1,342,000 shares issuable upon exercise of stock purchase
warrants exercisable within 60 days following March 25, 2002(or by May 24,
2002).

(5) Consists of 1,700,000 shares issuable to B.A. Associates, Inc., a
corporation of which Bruce D. Rozelle, is the President, upon exercise of

                          23
<PAGE>

stock purchase warrants exercisable within 60 days following March 25,
2002(or by May 24, 2002).

(6) Includes 960,164 shares owned by CyberFin Corporation, a corporation
wholly owned by Peter J. Kruy, the son of Joseph F. Kruy, and 135,000 shares
subject to currently exercisable options. Of these shares of common stock,
730,228 are subject to the terms of a stock pledge agreement dated as of
January 18, 2000 (the "CyberFin Pledge Agreement"), among CyberFin, Cambex,
and the Sovereign Lenders.  Provided that Cambex is not in default under the
Bridge Note Purchase Agreement, the series 1 bridge financing notes, or the
CyberFin Pledge Agreement, CyberFin has the right to vote the pledged shares.

(7) Consists of 627,985 shares issuable upon the exercise of two series 1
bridge financing notes and a total of 240,000 shares issuable upon exercise
of two common stock purchase warrants. Mr. Barry Herman, the President of
SovCap Equity has both voting and investment control over these shares. Mr.
Herman disclaims beneficial ownership of these shares.

(8) Includes 642,000 shares issuable upon exercise of stock purchase warrants
exercisable within 60 days following March 25, 2002(or by May 24, 2002). Some
of these warrants are held by family members and Mr. Snowday disclaims
beneficial ownership of those shares.

(9) Includes 390,000 shares of common stock issuable upon exercise of
stock purchase warrants issued in November 1999 and 2000 exercisable within
60 days following March 25, 2002(or by May 24, 2002).

(10) Consists of 44,500 shares subject to options and warrants exercisable
within 60 days following March 25, 2002 (or by May 24, 2002).

(11)	Includes 1,734,603 shares subject to options and warrants exercisable
within 60 days following March 25, 2002 (or by May 24, 2002).  See
footnotes (3), (9) and (10) above.

Solely for the purpose of calculating the aggregate market value of voting
stock held by non-affiliates of the Company as set forth on the Cover Page,
it was assumed that only directors and executive officers on the calculation
date together with spouses and dependent children of such persons constituted
affiliates.

          Item 12.  Certain Relationships and Related Transactions.

On June 1, 1998, we borrowed approximately $1,060,000, including
approximately $460,000 from Joseph F. Kruy, our Chairman of the Board,
President and Chief Executive Officer, $250,000 from each of H. Terry
Snowday, Jr. and Richard E. Calvert, each greater than 5% shareholders of
Cambex, in exchange for the issuance of 10% Subordinated Convertible
Promissory Notes (the "10% Notes").  Under the terms of the 10% Notes, which
are due on April 30, 2003, the holders may convert the 10% Notes into shares
of common stock at a conversion price of $0.22 per share.  In addition to the
10% Notes, each holder, including Messrs. Kruy, Snowday and Calvert, were
issued a Stock Purchase Warrant, the exercise of which will allow the warrant
holder to purchase one share of common stock, at $0.50 per share, for each
dollar loaned to us.  Additional Stock Purchase Warrants to purchase 96,373
shares of common stock, at an exercise price of $0.50 per share, were issued
to the holders of 10% Notes on June 1, 1999 in relation to interest due on
the June 1, 1998 notes.  We believe that the borrowing arrangements we made
with Messrs. Kruy, Snowday and Calvert and others are on terms at least as
favorable to us as we would have expected from lenders unrelated to us and
Messrs. Kruy, Snowday and Calvert.

                            24
<PAGE>

On June 1, 1998, we entered into a Master Lease with CyberFin Corporation, a
corporation wholly owned by Peter J. Kruy, our former Executive Vice
President, Treasurer and Chief Financial Officer and the son of Joseph F.
Kruy.  Under the Master Lease we are renting from CyberFin an IBM 2003 S/390
Multiprise Processor and related software and maintenance at the rate of
$3,787.64 per month for a period of three years.  We also purchased computer
memory from CyberFin for $141,920 in 1998 and $73,000 in 1999.  We believe
that lease and the purchase arrangements we made with CyberFin are on terms
at least as favorable to us as we would have expected from an equipment
lessor unrelated to us, CyberFin and Dr. Kruy for equipment of comparable
quality.

On November 9, 1998, we entered into a Loan and Security Agreement with
B.A. Associates, Inc. (BAA), which is a corporation owned by Bruce D.
Rozelle, a son-in-law of Joseph F. Kruy, our Chairman, President and Chief
Executive Officer.  This Loan and Security Agreement, as amended by a First
Amendment to Loan and Security Agreement dated March 15, 1999, and further
amended through December 27, 2001 (as so amended, the "BAA Loan Agreement"),
allows us to borrow up to $1,100,000, which is the maximum that may be
outstanding at any one time. Under the BAA Loan Agreement, we granted BAA a
first priority security interest in all of our accounts, instruments,
documents, general intangibles, equipment, inventory, and proceeds of any of
the foregoing.  We pay all amounts that we receive from collections of our
accounts receivable to BAA not less frequently than each week until the
outstanding loan amount plus interest, which accrues at a 12% annual rate, is
fully paid.  Under the terms of the BAA Loan Agreement, originally BAA
received a warrant for the purchase of 1.3 million shares of common stock, at
an exercise price of $0.22 per share.  In consideration for increasing the
amount of available funds, the Company agreed to issue an additional warrant
to BAA for the purchase of 400,000 shares of our common stock, at an exercise
price of $1.25.  We believe that the borrowing arrangements we made with BAA
are on terms at least as favorable to us as we would have expected from
lenders unrelated to us and relatives of Mr. Kruy.

From June 1, 1999 through August 18, 1999, we raised $210,000 in exchange for
the issuance of 10% Subordinated Convertible Promissory Notes. During this
time period Joseph F. Kruy loaned us $100,000, and Messrs. Snowday and
Calvert each loaned us $55,000 of the total amount that we borrowed.  In
exchange for these loans, we issued 10% Subordinated Convertible Promissory
Notes, including 10% Subordinated Convertible Promissory Notes to Messrs.
Kruy, Snowday and Calvert.  We believe that the borrowing arrangements we
made with Messrs. Kruy, Snowday and Calvert are on terms at least as
favorable to us as we would have expected from lenders unrelated to us and
Messrs. Kruy, Snowday and Calvert.

In November 1999, we borrowed $125,000 from Joseph F. Kruy and $125,000 from
Philip C. Hankins, a member of our board of directors, and $100,000 from each
of Messrs. Snowday and Calvert.  We also entered into separate Loan and
Security Agreements with each of Messrs. Kruy, Hankins, Calvert and Snowday.
At that time, we entered into one other Loan and Security Agreement with a
person unrelated to the company (the "Other 1999 Lender") pursuant to which
we borrowed an additional $100,000.  Our payment obligations under these Loan
and Security Agreements (the "1999 Loan Agreements") are evidenced by 12%
Notes due in November 2001.  Under the 1999 Loan Agreements, we granted each
of Messrs. Kruy, Hankins, Snowday and Calvert and the Other 1999 Lender a
first priority security interest in all of our accounts, instruments,
documents, general intangibles, equipment, inventory, and proceeds of any of
the foregoing.  Originally, under the terms of the 1999 Loan Agreements,
Messrs. Kruy, Hankins, Calvert and Snowday and the Other 1999 Lender received
a warrant to purchase up two shares of common stock for each dollar loaned to

                      25
<PAGE>

us, at an exercise price of $2.00 per share.  When we extended the term of
the loans in November 2000, the Company agreed to issue additional warrants
to Messrs. Kruy, Hankins, Snowday and Calvert and the Other 1999 Lender to
purchase one share of our common stock for each dollar loaned to us at an
exercise price of $1.25 per share.  We believe that the borrowing
arrangements we made with Mr. Kruy and others are on terms at least as
favorable to us as we would have expected from lenders unrelated to us and
Mr. Kruy.

In March through May 2001, we borrowed $50,000 from Joseph F. Kruy and
$300,000 from Richard E. Calvert.  We also entered into separate Loan and
Security Agreements with Messrs. Kruy and Calvert. Our payment obligations
under these Loan and Security Agreements (the "2001 Loan Agreements") are
evidenced by 12% Notes due in March through May 2002.  Under the 2001 Loan
Agreements, we granted each of Messrs. Kruy and Calvert a first priority
security interest in all of our accounts, instruments, documents, general
intangibles, equipment, inventory, and proceeds of any of the foregoing.
Under the terms of the 2001 Loan Agreements, Messrs. Kruy and Calvert
received a warrant to purchase up two shares of common stock for each dollar
loaned to us, at an exercise price of $0.50 per share. We believe that the
borrowing arrangements we made with Mr. Kruy and others are on terms at least
as favorable to us as we would have expected from lenders unrelated to us and
Mr. Kruy.

In July through September 2001, we borrowed $100,000 from Joseph F. Kruy and
$100,000 from Richard E. Calvert.  We also entered into separate Loan and
Security Agreements with Messrs. Kruy and Calvert. Our payment obligations
under these Loan and Security Agreements (the "2001 Loan Agreements") are
evidenced by 12% Notes due in January 2002.  Under the 2001 Loan Agreements,
we granted each of Messrs. Kruy and Calvert a first priority security
interest in all of our accounts, instruments, documents, general intangibles,
equipment, inventory, and proceeds of any of the foregoing.  Under the terms
of the 2001 Loan Agreements, Messrs. Kruy and Calvert received a warrant to
purchase up one share of common stock for each dollar loaned to us, at an
exercise price of $0.25 per share. We believe that the borrowing arrangements
we made with Mr. Kruy and others are on terms at least as favorable to us as
we would have expected from lenders unrelated to us and Mr. Kruy.


                      26
<PAGE>






                                   PART IV


  Item 13.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

       (a)   The following documents are filed as part of this report:

             (1)   The financial statements listed in the index to
                   financial statements appearing at page F-1 of this
                   report, which index is incorporated in this item by
                   reference.

             (2)   The financial statement schedules as set forth in the
                   above-mentioned index to financial statements.

             (3)   See the exhibit index following on page A-1.

(b)   On November 7, 2001, we filed a Report on Form 8-K
             disclosing that we have entered into a letter of intent
             with Super PC Memory, Inc., a privately-held company,
             pursuant to which Super PC Memory would become a
             wholly-owned subsidiary of Cambex Corporation. On March 27,
             2002, we filed a Report on Form 8-K disclosing that we
             had completed the acquisition of Super PC Memory, Inc.










                              27
<PAGE>




                                EXHIBIT INDEX

The following exhibits are filed herewith or incorporated by reference
herein.

Exhibit

3.1	Restated Articles of Organization of Cambex Corporation (included as
Exhibit 3.1 to the Company's Registration Statement on Form SB-2,
declared effective with the Commission on November 7, 2000, Reg. No.
333-43294, and incorporated herein by reference).

3.2	Restated By-laws of Cambex Corporation (included as Exhibit 3.2 to the
Company's Registration Statement on Form SB-2, declared effective with
the Commission on November 7, 2000, Reg. No. 333-43294, and
incorporated herein by reference).

4.1	Specimen Stock Certificate (included as Exhibit 4.1 to the Company's
Registration Statement on Form SB-2, declared effective with the
Commission on November 7, 2000, Reg. No. 333-43294, and incorporated
herein by reference).

4.2	Registration Rights Agreement among the Company and the Purchasers
identified therein (the "Sovereign Purchasers") dated as of January 18,
2000 (included as Exhibit 4.1 to the Company's Amendment to Quarterly
Report on Form 10-Q/A for the quarter ended April 1, 2000, and
incorporated herein by reference).

4.3	Registration Rights Agreement between the Company and Thumberland
Limited dated as of July 14, 2000 (included as Exhibit 4.3 to the
Company's Registration Statement on Form SB-2, declared effective with
the Commission on November 7, 2000, Reg. No. 333-43294, and
incorporated herein by reference).

4.4	Amendment to Registration Rights Agreement between the Company and
Thumberland Limited dated as of November 8, 2000 (included as Exhibit
4.4 to the Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 2000 and incorporated herein by reference).

10.1	Employment Agreement between Joseph F. Kruy and the Company,
dated as of November 18, 1994 (included as Exhibit 10.1 to the
Company's Amendment to Quarterly Report on Form 10-Q/A for the quarter
ended April 1, 2000, and incorporated herein by reference).

10.2	Incentive Bonus Plan (included as Exhibit 10.2 to the Company's
Registration Statement on Form SB-2, declared effective with the
Commission on November 7, 2000, Reg. No. 333-43294, and incorporated
herein by reference).

                                       A-1
                                        28
<PAGE>

                           EXHIBIT INDEX(CONTINUED)


10.3	1987 Combination Stock Option Plan (included as Exhibit 10.8 to
the Company's Annual Report on Form 10-K for the fiscal year ended
August 31, 1987, and incorporated herein by reference).

10.4	2000 Equity Incentive Plan (included as Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1999, and incorporated herein by reference).

10.5	Series 1 Bridge Note Purchase Agreement among the Company and the
Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit
10.7 to the Company's Amendment to Quarterly Report on Form 10-Q/A for
the quarter ended April 1, 2000, and incorporated herein by reference).

10.6	Escrow Agreement among the Company, the Sovereign Purchasers and
Suntrust Bank, Atlanta dated as of January 6, 2000 (included as Exhibit
10.8 to the Company's Amendment to Quarterly Report on Form 10-Q/A for
the quarter ended April 1, 2000, and incorporated herein by reference).

10.7	Placement Agent Agreement between the Company and Sovereign
Capital Advisors, LLC ("Sovereign Advisors") dated as of January 18, 2000
(included as Exhibit 10.9 to the Company's Amendment to Quarterly
Report on Form 10-Q/A for the quarter ended April 1, 2000, and
incorporated herein by reference).

10.8	Guaranty Agreement among Joseph F. Kruy, the Company and the
Sovereign Purchasers dated as of January 18, 2000. (included as Exhibit 10.10
to the Company's Amendment to Quarterly Report on Form 10-Q/A for the
quarter ended April 1, 2000, and incorporated herein by reference).

10.9	Guaranty Agreement among CyberFin Corporation, the Company and
the Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit
10.11 to the Company's Amendment to Quarterly Report on Form 10-Q/A for
the quarter ended April 1, 2000, and incorporated herein by reference).

10.10	Stock Pledge Agreement by Joseph F. Kruy in favor of the
Sovereign Purchasers dated as of January 18, 2000  (included as Exhibit
10.12 to the Company's Amendment to the Quarterly Report on Form 10-Q/A
for the quarter ended April 1, 2000, and incorporated herein by
reference).

10.11	Stock Pledge Agreement by CyberFin Corporation in favor of the
Sovereign Purchasers dated as of January 18, 2000 (included as Exhibit
10.13 to the Company's Amendment to the Quarterly Report on Form 10-Q/A
for the quarter ended April 1, 2000, and incorporated herein by
reference).

10.12	Series 1 Bridge Financing Note in favor of SovCap Equity
Partners, Ltd. dated as of January 18, 2000 (included as Exhibit 10.14
to the Company's Amendment to the Quarterly Report on Form 10-Q/A for
the quarter ended April 1, 2000, and incorporated herein by reference).

                                      A-2

                                      29
<PAGE>


                          EXHIBIT INDEX(CONTINUED)

10.13	Series 1 Bridge Financing Note in favor of Correllus
International, Ltd. dated as of January 18, 2000 (included as Exhibit
10.16 to the Company's Amendment to the Quarterly Report on Form 10-Q/A
for the quarter ended April 1, 2000, and incorporated herein by
reference).

10.14	Common Stock Purchase Warrant in favor of SovCap Equity Partners,
Ltd. dated as of January 18, 2000 (included as Exhibit 10.18 to the
Company's Amendment to the Quarterly Report on Form 10-Q/A for the
quarter ended April 1, 2000, and incorporated herein by reference).

10.15	Common Stock Purchase Warrant in favor of Correllus
International, Ltd. dated as of January 18, 2000 (included as Exhibit
10.19 to the Company's Amendment to the Quarterly Report on Form 10-Q/A
for the quarter ended April 1, 2000, and incorporated herein by
reference).

10.16	Sovereign Warrant Agreement between the Company and Sovereign
Advisors dated as of January 18, 2000 (included as Exhibit 10.20 to the
Company's Amendment to the Quarterly Report on Form 10-Q/A for the
quarter ended April 1, 2000, and incorporated herein by reference).

10.17	Warrant Certificate registered in the name of Sovereign Advisors
dated January 18, 2000 (included as Exhibit 10.21 to the Company's
Amendment to the Quarterly Report on Form 10-Q/A for the quarter ended
April 1, 2000, and incorporated herein by reference).

10.18	Series 1 Bridge Financing Note in favor of Arab Commerce Bank
Ltd. dated as of February 9, 2000 (included as Exhibit 10.22 to the
Company's Amendment to the Quarterly Report on Form 10-Q/A for the
quarter ended April 1, 2000, and incorporated herein by reference).

10.19	Common Stock Purchase Warrant in favor of Arab Commerce Bank Ltd.
dated as of February 9, 2000 (included as Exhibit 10.24 to the
Company's Amendment to the Quarterly Report on Form 10-Q/A for the
quarter ended April 1, 2000, and incorporated herein by reference).

10.20	Series 1 Bridge Financing Note in favor of SovCap Equity
Partners, Ltd. dated as of February 9, 2000 (included as Exhibit 10.25
to the Company's Amendment to the Quarterly Report on Form 10-Q/A for
the quarter ended April 1, 2000, and incorporated herein by reference).

10.21	Common Stock Purchase Warrant in favor of SovCap Equity Partners,
Ltd. dated as of February 9, 2000 (included as Exhibit 10.27 to the
Company's Amendment to the Quarterly Report on Form 10-Q/A for the
quarter ended April 1, 2000, and incorporated herein by reference).

10.22	Common Stock Purchase Agreement between the Company and
Thumberland Limited dated as of July 14, 2000 (included as Exhibit
10.22 to the Company's Registration Statement on Form SB-2, declared
effective with the Commission on November 7, 2000, Reg. No. 333-43294,
and incorporated herein by reference).


                                 A-3

                                30
<PAGE>

                              EXHIBIT INDEX(CONTINUED)

10.23	Amendment to Common Stock Purchase Agreement between the Company
and Thumberland Limited, dated as of November 8, 2000 (included as
Exhibit 10.23 to the Company's Quarterly Report on 10QSB for the
quarter ended September 30, 2000, and incorporated herein by
reference).

10.24	Escrow Agreement among the Company, Thumberland Limited and
Epstein, Becker & Green, P.C., dated as of July 14, 2000 (included as
Exhibit 10.23 to the Company's Registration Statement on Form SB-2,
declared effective with the Commission on November 7, 2000, Reg. No.
333-43294, and incorporated herein by reference).

10.25	Stock Purchase Warrant in favor of Thumberland Limited dated as
of July 14, 2000 (included as Exhibit 10.24 to the Company's
Registration Statement on Form SB-2, declared effective with the
Commission on November 7, 2000, Reg. No. 333-43294, and incorporated
herein by reference).

10.26	Stock Purchase Warrant in favor of Ladenburg Thalmann & Co. Inc.
dated as of July 14, 2000 (included as Exhibit 10.25 to the Company's
Registration Statement on Form SB-2, declared effective with the
Commission on November 7, 2000, Reg. No. 333-43294, and incorporated
herein by reference).

10.27	Loan and Security Agreement, as amended, by and between the
Company and BA Associates, Inc. (included as Exhibit 10.27 to the Company's
Registration Statement on Form SB-2 filed with the Commission on November 29,
2000, Reg. No. 333-50936, and incorporated herein by reference.)

10.28 Fifth Amendment to Loan and Security Agreement, as amended, by and
between the Company and B.A. Associates, Inc., dated as of December 27, 2000
(included as Exhibit 10.28 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000, and incorporated herein by
reference).

10.29 Form of Warrant Certificate between the Company and B.A. Associates,
Inc. (included as Exhibit 10.29 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2000, and incorporated herein by
reference).

10.30 Sixth Amendment to Loan and Security Agreement, as amended, by and
between the Company and B.A. Associates, Inc., dated as of December 27, 2001.

10.31 Stock Purchase and Sale Agreement dated as of January 31, 2002 by
and among Cambex Corporation, Super PC Memory, Inc., Son T. Pham,
Simon Le and Richard G. Schaefer (included as Exhibit 2.1 to the Company's
Current Report on Form 8-K dated March 27, 2002, and incorporated herein by
reference).

21.1	List of subsidiaries of the Company.

23.1	Consent of Sullivan Bille, P.C.

99.1  Risk Factors.
                                    A-4

                                     31
<PAGE>

                     CAMBEX CORPORATION AND SUBSIDIARIES


                 (Information required by Part II, Item 8 and
                        Part IV, Item 14 of Form 10-KSB)


                             FINANCIAL STATEMENTS

                                                                Page

Report of Independent Public Accountants                        F - 2

Consolidated Balance Sheets - December 31, 2001 and 2000        F - 3

Consolidated Statements of Operations for the Years
       Ended December 31, 2001 and December 31, 2000            F - 5

Consolidated Statements of Stockholders' Investment
       for the Years Ended December 31, 2001 and
       December 31, 2000                                        F - 6

Consolidated Statements of Cash Flows for the
       Years Ended December 31, 2001 and December 31, 2000      F - 7

Notes to Consolidated Financial Statements                      F - 8


                            SUPPLEMENTARY SCHEDULE

                   FOR THE YEARS ENDED DECEMBER 31, 2001
                          AND DECEMBER 31, 2000

Schedule Number


       II         Valuation and Qualifying Accounts             F-26


Schedules other than those referred to above have been omitted, as they are
not required or the information is included elsewhere in the financial
statements or the notes thereto.





                                                               F-1
                         32
<PAGE>


                 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Cambex Corporation

We have audited the accompanying consolidated balance sheet of Cambex
Corporation (a Massachusetts corporation) and subsidiaries as of December 31,
2001 and 2000, and the related consolidated statements of operations,
stockholders' investment and cash flows for the years then ended.  These
consolidated financial statements and the schedule referred to below are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the consolidated financial statements.  An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall consolidated financial
statement presentation.  We believe that our audits provide a reasonable
basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Cambex
Corporation and subsidiaries as of December 31, 2001 and 2000 and the results
of their operations and their cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States
of America.

As discussed in Note 2 to the consolidated financial statements, the
consolidated financial statements for the year ended December 31, 2000 have
been restated to reflect the recording of premiums and penalties relating to
certain notes payable.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  As discussed in
Note 1 to the consolidated financial statements, the Company has suffered
recurring losses from operations that raises substantial doubt about its
ability to continue as a going concern.  Management's plans in regard to
these matters are also described in Note 1.  The consolidated financial
statements do not include any adjustments relating to the recoverability and
classification of asset carrying amounts or the amount and classification of
liabilities that might result should the Company be unable to continue as a
going concern.

Our audits were made for the purpose of forming an opinion on the basic
consolidated financial statements taken as a whole.  The schedule listed in
the index of the consolidated financial statements is presented for the
purpose of complying with the Securities and Exchange Commission's rules and
is not part of the basic consolidated financial statements.  This schedule
has been subjected to the auditing procedures applied in our audits of the
basic consolidated financial statements and, in our opinion, fairly states,
in all material respects, the financial data required to be set forth therein
in relation to the basic consolidated financial statements taken as a whole.


                                 SULLIVAN BILLE, P.C.
                                 CERTIFIED PUBLIC ACCOUNTANTS
Tewksbury, Massachusetts
February 11, 2002                          F-2

                                            33
<PAGE>
                       CAMBEX CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                       DECEMBER 31, 2001 AND DECEMBER 31, 2000

                                      ASSETS

                                                DECEMBER 31,   DECEMBER 31,
                                                     2001          2000
                                                                (RESTATED)

CURRENT ASSETS:

   CASH AND CASH EQUIVALENTS                    $   209,573   $   234,512

   ACCOUNTS RECEIVABLE,
   Less Reserves of $58,000
   in 2001 and 2000                                 240,384       322,888


   INVENTORIES                                      472,910       460,620

   PREPAID EXPENSES                                  56,729        67,301

      TOTAL CURRENT ASSETS                      $   979,596   $ 1,085,321

PROPERTY AND EQUIPMENT, at cost:
   MACHINERY AND EQUIPMENT                      $ 3,052,887   $ 3,052,887
   FURNITURE AND FIXTURES                           162,625       162,625
   LEASEHOLD IMPROVEMENTS                           602,092       602,092
                                                $ 3,817,604   $ 3,817,604

 LESS - ACCUMULATED DEPRECIATION
             AND AMORTIZATION                     3,772,186     3,721,481

 NET PROPERTY AND EQUIPMENT                     $    45,418   $    96,123

OTHER ASSETS
      DEFERRED OFFERING COSTS                   $   427,975   $   476,886
      OTHER                                          37,830        37,830

        TOTAL OTHER ASSETS                      $   465,805   $   514,716

  TOTAL ASSETS                                  $ 1,490,819   $ 1,696,160

The accompanying notes are an integral part of these consolidated financial
statements.


                                       F-3

                                       34
<PAGE>



                          CONSOLIDATED BALANCE SHEETS

                     DECEMBER 31, 2001 AND DECEMBER 31, 2000

                    LIABILITIES AND STOCKHOLDERS' INVESTMENT

                                                DECEMBER 31,     DECEMBER 31,
                                                    2001             2000
                                                                  (RESTATED)
CURRENT LIABILITIES:
LOAN AGREEMENT                                $   1,057,991  $   1,032,443
NOTES PAYABLE                                     2,850,000      2,500,000
ACCOUNTS PAYABLE                                    826,852        584,726
OBLIGATIONS FOR TRADE-IN MEMORY                     240,000        240,000
OTHER LIABILITIES-SHORT
 TERM PORTION                                     2,629,765      1,692,733
ACCRUED EXPENSES                                  1,950,672      1,460,042

 TOTAL CURRENT LIABILITIES                    $   9,555,280  $   7,509,944

LONG TERM DEBT                                $   1,273,730  $   1,273,730
OTHER LIABILITIES-LONG
 TERM PORTION                                        84,642      1,044,560

STOCKHOLDERS' INVESTMENT:
PREFERRED STOCK, $ 1.00 PAR VALUE PER SHARE
AUTHORIZED - 3,000,000 SHARES
	ISSUED - NONE

COMMON STOCK, $ .10 PAR VALUE PER SHARE
AUTHORIZED - 25,000,000 SHARES
 ISSUED -11,484,738 shares in 2001, and
  11,287,847 shares in 2000                   $   1,148,474  $   1,128,785
CAPITAL IN EXCESS OF PAR VALUE                   16,268,677     16,024,049
ACCUMULATED OTHER
   COMPREHENSIVE INCOME                             102,677        102,465
RETAINED EARNINGS (DEFICIT)                     (26,053,690)   (24,510,407)
LESS - COST OF SHARES HELD IN TREASURY
      1,545,258 in 2001,and
      1,537,980 in 2000                            (888,971)      (876,966)

TOTAL STOCKHOLDERS' INVESTMENT                $  (9,422,833) $  (8,132,074)
TOTAL LIABILITIES AND
 STOCKHOLDERS' INVESTMENT                     $   1,490,819  $   1,696,160

The accompanying notes are an integral part of these consolidated financial
statements.

                                   F-4

                                    35
<PAGE>



                      CAMBEX CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE YEARS ENDED DECEMBER 31, 2001 AND DECEMBER 31, 2000


                                                Year Ended    Year Ended
                                               December 31,  December 31,
                                                    2001         2000
                                                              (restated)

REVENUES                                         $ 1,855,011 $ 2,400,252
COST OF SALES                                        892,297   1,130,793

Gross profit                                     $   962,714 $ 1,269,459

OPERATING EXPENSES:
   Research and development                      $ 1,030,241 $ 1,363,141
   Selling                                           504,399   1,110,424
   General and administrative                        420,357     466,169
   Total operating expenses                      $ 1,954,997 $ 2,939,734

OPERATING INCOME (LOSS)                          $(  992,283)$(1,670,275)

OTHER INCOME (EXPENSE):
    Interest expense                                (551,000) (1,010,618)
    Interest income                                     -           -
    Other income (expense)                              -           -
INCOME (LOSS) BEFORE INCOME TAXES
  AND EXTRAORDINARY ITEMS                        $(1,543,283)$(2,680,893)
   Provision for income taxes                           -           -
INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS         $(1,543,283)$(2,680,893)
  Extraordinary Items(Note 15)                          -        102,406
NET INCOME (LOSS)                                $(1,543,283)$(2,578,487)
OTHER COMPREHENSIVE INCOME,NET OF TAX:
    Foreign Currency translation Adjustments             212         476
OTHER COMPREHENSIVE INCOME                       $       212 $       476
TOTAL COMPREHENSIVE INCOME (LOSS)                $(1,543,071)$(2,578,011)

INCOME(LOSS) PER COMMON SHARE                    $     (0.16)$     (0.27)

Weighted Average Common Shares Outstanding         9,890,000   9,680,000
Weighted Average Common and Common
Equivalent Shares Outstanding                      9,890,000   9,680,000

The accompanying notes are an integral part of these consolidated financial
statements.

                                    F-5
                                    36

<PAGE>



                         CAMBEX CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT


                   Common Stock  Capital in  Accumulated  Retained   Cost of
                     $.10        Excess of     Other      Earnings   Shares
                   Par Value     Par Value  Comprehensive (Deficit)  Held in
                                               Income               Treasury
BALANCE AT
 DECEMBER 31, 1999    $1,107,623 $15,970,199 $101,989 $(21,931,920)$(854,766)

ADD:
Net loss              $     -    $      -    $   -    $( 2,578,487)$    -
Exercise of employee
 stock options               800         160     -            -         -
Exercise of warrants      10,000      12,200     -            -         -
Purchase of shares for
 the treasury               -           -        -            -      (22,200)
Stock Purchase Plan Shares 8,539       1,707     -            -         -
Translation adjustment      -           -         476         -         -
Conversion of note payable 1,823      39,783     -            -         -

BALANCE AT DECEMBER
 31, 2000 (RESTATED)  $1,128,785 $16,024,049 $102,465 $(24,510,407)$(876,966)

ADD:
Net loss              $     -    $      -    $   -    $( 1,543,283)$    -
Issuance of warrants        -          1,400     -            -         -
Issuance of common stock     250       3,031     -            -         -
Purchase of shares for
 the treasury               -           -        -            -      (12,005)
Translation adjustment      -           -         212         -         -
Conversion of note payable19,439     240,197     -            -         -

BALANCE AT
 DECEMBER 31, 2001    $1,148,474 $16,268,677 $102,677 $(26,053,690)$(888,971)


The accompanying notes are an integral part of these consolidated financial
statements.

                                         F-6

                                         37
<PAGE>

                       CAMBEX CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOW
               FOR THE YEARS ENDED DECEMBER 31, 2001 AND DECEMBER 31, 2000

	                                           Year Ended    Year Ended
                                                 December 31,  December 31,
                                                    2001         2000
                                                                (restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                  $(1,543,283)$(2,578,487)
Adjustments to reconcile net income(loss)
to net cash provided by(used in)
operating activities:
 Depreciation                                      $    50,705 $    82,285
 Amortization of prepaid expenses                        7,225       7,210
 Common stock issued as compensation                     3,281        -
 Change in assets and liabilities:
  Decrease (increase) in accounts receivable            82,504    (120,422)
  Decrease(increase)in inventory                       (12,290)    161,810
  Decrease(increase)in prepaid expenses                  3,347      (8,516)
  Increase(decrease)in accounts payable                242,126     121,051
  Increase(decrease)in obligations
   for trade-in memory                                    -        (46,250)
  Increase(decrease)in accrued expenses                599,177     946,193
  Increase(decrease)in deferred revenue                   -       (100,116)
  Increase(decrease)in other liabilities               (22,886)   (554,805)
     Total adjustments                             $   953,189 $   488,440
Net cash provided by(used in) operating activities $  (590,094)$(2,090,047)

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchases of equipment, net                       $      -    $      -
 Net cash provided by(used in)investing activities $      -    $      -

CASH FLOWS FROM FINANCING ACTIVITIES:
 Increase(decrease) in notes payable               $   550,000 $ 1,950,000
 Proceeds from sale of common stock and warrants         1,400      75,012
 Purchase of common stock for the treasury             (12,005)    (22,200)
 Decrease(increase)in deferred offering costs, net        -       (476,886)
 Net borrowings(repayments) under loan agreement        25,548     431,414
 Net cash provided by
 (used in) financing activities                    $   564,943 $ 1,957,340
 Effect of exchange rate changes on cash                   212         476
 Net increase (decrease) in
  cash and cash equivalents                        $   (24,939)$  (132,231)
 Cash and cash equivalents at beginning of year        234,512     366,743
 Cash and cash equivalents at end of year          $   209,573 $   234,512

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest                                         $    50,000 $    67,618
  Income Taxes                                            -           -
Non-cash financing activity:
 Conversion of notes payable and accrued interest
 into common stock, net of deferred offering costs $   259,636 $    41,406

The accompanying notes are an integral part of these consolidated financial
statements.
                                  F-7

                                  38
<PAGE>

                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     December 31, 2001 and 2000 (RESTATED)

(1)   Liquidity


As further described in Note 13, from June 1, 1998 through August 18, 1999,
we raised $1,270,000 in cash from the issuance of 10% Subordinated
Convertible Promissory Notes. We also have a loan and security agreement
under which we may borrow up to $1,100,000 outstanding at any one time of
which $1,057,991 was outstanding as of December 31, 2001. During 1999, we
raised $550,000 in cash from the issuance of notes payable with interest at
12% per annum and maturities of November, 2001. During 2000, we raised
$2,000,000 in cash from the issuance of series 1 bridge financing notes that
matured in the third quarter of 2000. During 2001, we raised $550,000 in cash
from the issuance of notes payable with interest at 12% per annum.

We have suffered recurring losses from operations that raise substantial
doubt about our ability to continue as a going concern. Our working capital
deficit is a significant threat to our ability to continue as a going
concern. Our ability to continue as a going concern is dependent upon several
factors including, but not limited to, our ability to generate revenues in
significantly greater amounts than in the past four fiscal years, our ability
to raise additional capital and the assumption that certain of our lenders
will accept shares of our common stock instead of cash in satisfaction of our
obligations. The additional financing, if obtained, will be used to fund our
continuing operations, particularly in development, sales and marketing. Our
management continues to work to establish new strategic alliances that it
believes will result in increased revenues through the sale of a greater
volume of products. These consolidated financial statements do not include
any adjustments relating to the recoverability and classification of asset
carrying amounts or the amount and classification of liabilities that might
result should we be unable to continue as a going concern.

We need additional capital and additional financing may not be available. If
our stock price and trading volume stay at current levels, we will not be
able to draw down any of the $10 million under the common stock purchase
agreement with Thumberland Limited which expires in June 2002. We believe
that the combination of current existing cash, available borrowing capacity
and our ability to obtain additional long-term indebtedness may not be
adequate to finance our operations for our current activities and foreseeable
future. Currently, our cash burn rate is approximately $40,000 per month or
$480,000 per year at the current sales levels. We believe that as a result of
the acquisition of Super PC Memory, Inc. the Cambex sales will increase from
the present levels thereby reducing the cash burn rate from the previously
expected $40,000 per month or $480,000 in 2002. However, there is no
assurance that the expected burn rate reduction will occur in 2002.For each
10 percent reduction in sales, our cash burn rate would increase by
approximately $10,000 per month. Conversely, for each 10 percent increase in
sales volume, our cash burn rate would decrease by approximately $10,000 per
month. In order to drawdown the minimum amount of $250,000 under our equity
drawdown facility, the average daily trading volume for the 45 trading days
prior to our drawdown notice multiplied by the average of the volume-weighted
average daily prices of our common stock for the 22 trading days prior to the
notice would have to equal or exceed $56,819. For example, if the average
volume-weighted average
                                                  F-8

                                                   39
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)
(1)Liquidity(continued)

daily price of our common stock was $1.00 and the average daily trading
volume for the 45 days prior to our drawdown notice was 56,819, we would be
able to draw down the minimum amount of $250,000. The closing price for our
common stock on March 25, 2002 was $0.60 per share and the average daily
trading volume for the 45 days preceding March 25, 2001 was 5,622 shares
which is not sufficient to allow us to be able draw down the minimum amount
of $250,000. The time period for which we believe our capital is sufficient
and the burn rate are estimates. The actual time period and burn rate may
differ materially as a result of a number of factors, risks and uncertainties
that are described herein. In addition, business and economic conditions may
not make it feasible to draw down under the facility at every opportunity,
and drawdowns are available only every 22 trading days. We are actively
pursuing raising additional capital but our ability to raise investment
capital during the term of the common stock purchase agreement is restricted
with regard to under market offerings, and if we need capital but are unable
to drawdown under the common stock purchase agreement for any reason, we may
not be able to meet our anticipated working capital requirements.

We are attempting to raise additional capital to cover the burn rate not
covered by incremental gross profit. This amount is dependent upon sales. If
sales do not increase or capital cannot be raised to cover the current burn
rate, we intend to reduce operating expenses as much as practicable to
continue operations until balance is established.

If we are not successful in raising additional capital or increasing our
sales to adequate levels, we will not be able to continue our current
operations and there is substantial doubt as to our ability to continue as a
going concern. There can be no assurance that we will be successful in
raising such additional capital at all or on terms commercially acceptable to
us or our shareholders.

In addition, the sale of equity securities could result in the dilution of
the percentage ownership of existing shareholders and could also adversely
affect the market price of our common stock.

(2)   Summary of Significant Accounting Policies

Restatement of 2000 Consolidated Financial Statements

The consolidated financial statements for year ended December 31, 2000 have
been restated to reflect the recording of $607,000 of premiums and penalties
relating to the Series 1 bridge financing notes. The effect of the
restatement was to increase interest expense and accrued expenses. The
premiums and penalties were incurred because the bridge notes matured before
we registered, under the Securities Act of 1933, as amended, the offer and
resale of shares of our common stock issuable upon conversion of the bridge
notes and exercise of the repricing warrants and the common stock purchase
warrants.



                                           F-9
                                           40
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)


(2)   Summary of Significant Accounting Policies - Continued

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
Cambex Corporation and its wholly-owned subsidiaries.  All material
intercompany transactions and balances have been eliminated in consolidation.

Revenue Recognition

We manufacture equipment for sale or lease.  We follow the guidance in Staff
Accounting Bulletin ("SAB") 101 in applying generally accepted accounting
principles to revenue recognition in consolidated financial statements. We
include items in revenue when the following criteria are met: persuasive
evidence of an arrangement exists, delivery has occurred or services have
been rendered, our price to the buyer is fixed or determinable and
collectibility is reasonably assured. Under certain equipment leases which
qualify as sales type leases, the present value of noncancelable payments is
currently included in revenues as sales, and all related costs, exclusive of
the residual value of the equipment, are currently included in cost of sales.
The unearned interest is recognized over the noncancelable term of the lease.
For equipment leased under operating lease agreements, revenue is recognized
over the lease term and the equipment is depreciated over its estimated
useful life. The "obligations for trade-in memory" were determined in each
contract when we took mainframe memory in trade when we installed our
mainframe memory in our customers' computers. The amount remaining in this
account is an obligation for product credit which was established when
mainframe memory was traded-in for the purchase of memory.

Inventories

Inventories, which include materials, labor and manufacturing overhead, are
stated at the lower of cost (first-in, first-out) or market and consist of
the following:
                                         December 31,       December 31,
                                             2001               2000

     Raw materials                     $   367,570        $   392,686
     Work-in-process                        59,591             20,453
     Finished goods                         45,749             47,481

                                       $   472,910        $   460,620







                                     F-10
                                     41
<PAGE>

                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)


(2)   Summary of Significant Accounting Policies - Continued

Property and Equipment

We provide for depreciation and amortization on a straight- line basis to
amortize the cost of property and equipment over their estimated useful lives
as follows:

             Leasehold improvements          2-10 Years
             Machinery and equipment         3- 8 Years
             Furniture and fixtures          3- 8 Years
             Leased equipment                3- 5 Years

Maintenance and repair items are charged to expense when incurred; renewals
or betterments are capitalized.

If property is sold or otherwise disposed of, our policy is to remove the
related cost and accumulated depreciation from the accounts and to include
any resulting gain or loss in income.

Depreciation expense of $50,705 and $82,285, was recorded for the periods
ended December 31, 2001 and December 31, 2000, respectively.

Deferred Offering Costs

Deferred offering costs represent the costs associated with the registration
of our common stock and are reduced as series 1 bridge financing notes are
converted.


Net Income (Loss) Per Common Share

Basic income (loss) per share amounts are based on the weighted average
number of common shares outstanding during each year. Diluted income (loss)
per share amounts are based on the weighted average number of common shares
and common share equivalents outstanding during each year to the extent such
equivalents have a dilutive effect on the income (loss) per share.

For the years ended December 31, 2001 and December 31, 2000, common share
equivalents were not included in diluted income (loss) per share because we
incurred a loss for the year.  The inclusion of the common stock equivalents
would have had an antidilutive effect on the computation of diluted income
(loss) per share.

Cash and Cash Equivalents

Cash and cash equivalents are recorded at cost which approximates market
value.  Cash equivalents include certificates of deposit, government
securities and money market instruments purchased with maturities of less
than three months.
                             F-11
                              42
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(2)   Summary of Significant Accounting Policies - Continued

Stock Options and Employee Stock Purchase Plan

Proceeds from the sale of newly issued stock to employees under our stock
option plans and Employee Stock Purchase Plan are credited to common stock to
the extent of par value and the excess to capital in excess of par value.
Income tax benefits attributable to stock options are credited to capital in
excess of par value.

Disclosures about the Fair Value of Financial Instruments

Our financial instruments consist mainly of cash, cash equivalents, accounts
receivable, investment in sales-type leases, property held for sale, accounts
payable, notes payable, and a revolving credit agreement.  The carrying
amounts of these financial instruments approximate their fair value due to
the short-term nature of these instruments.

Use of Estimates

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities as of the
date of the consolidated financial statements, and the reported amounts of
income and expenses during the reporting periods.  Actual results could
differ from those estimates.

Accounting for Impairment of Long-Lived Assets and for Long-Lived Assets To
Be Disposed Of

On January 1, 1996, we adopted Statement of Financial Accounting Standards
(SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets To Be Disposed Of".  SFAS No. 121 requires that long-lived
assets and certain identifiable intangibles to be held and used by an entity
be reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.



                                           F-12
                                             43
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     December 31, 2001 and 2000 (RESTATED)
                                 (Continued)

(2)   Summary of Significant Accounting Policies - Continued

The statement also requires that certain long-lived assets and identifiable
intangibles to be disposed of be reported at the lower of the carrying amount
or fair value less cost to sell.  Based on our review, we do not believe that
any material impairment of its long-lived assets has occurred.  Our review
was based on the assumption that we continue as a going concern.  The
consolidated financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the amount
and classification of liabilities that might result should we be unable to
continue as a going concern.

Comprehensive Income

On January 1, 1998, we adopted SFAS No. 130, "Reporting Comprehensive
Income." This statement requires that changes in stockholders' equity from
transactions and events other than those resulting from investments by and
distributions to stockholders be reflected in comprehensive income or loss.

Segment Reporting

SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
Information," became effective for periods beginning after December 31, 1997.
This statement requires the presentment of information about the identifiable
components comprising an enterprise's business activities.

We have determined that there are no separately reportable operating segments
and, therefore, do not present separate reporting segments in the
consolidated financial statements.

Stock-Based Compensation

SFAS No. 123, "Accounting for Stock-Based Compensation", encourages but does
not require companies to record compensation cost for stock-based employee
compensation plans at fair value.  We have chosen to continue to account for
such plans using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25.  Accordingly, compensation cost for stock
options is measured as the excess, if any, of the quoted market price of our
stock at the date of grant over the exercise price of the stock (See Note 9).




                                 F-13
                                 44
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(3)   Business Operations

We are a designer and supplier of fibre channel hardware and software
solutions for building Storage Area Networks (SAN).  Our products include
fibre channel host bus adapters, hubs, high availability software and disk
arrays for building SANs in heterogeneous open systems operating
environments.

We sell our equipment to end users, resellers, distributors and OEMs. Our
principal customers operate in a wide variety of industries and in a broad
geographical area. During 2001, two customers, Compaq and StorageTek,
accounted for 46% and 16%, respectively, of total revenues for the year.
During 2000, these two customers, Compaq and StorageTek, accounted for 18%
and 11%, respectively, of total revenues for the year. Foreign sales were 19%
in 2001 and 14% in 2000 of total revenues. In the year ended December 31,
2001, our top five customers accounted for approximately 74% of our total net
revenues, and in the year ended December 31, 2000, our top five customers
accounted for approximately 45% of our total net revenues.

(4)   Income Taxes

In accordance with SFAS No. 109, "Accounting For Income Taxes", deferred tax
assets and liabilities are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to
reverse.

The following table presents the components of income (loss) before income
taxes and extraordinary items:


                Year ended        Year ended
                December 31,      December 31,
                   2001             2000


Domestic         $(1,541,000)     $(2,653,000)

Foreign           (    2,000)      (   28,000)

                 $(1,543,000)     $(2,681,000)





                                             F-14
                         45
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     December 31, 2001 and 2000 (RESTATED)

                                 (Continued)


(4)   Income Taxes - Continued

The following table presents a reconciliation between taxes provided at the
statutory federal income tax rate and the actual tax provision recorded for
the following periods:



                              Year ended      Year ended

                               December        December
                                 2001            2000

Provision (credit) at
federal statutory rate        $( 524,700)     $ (857,300)

State tax provision
(credit), net of federal
tax benefit                    (  97,000)       (182,100)

Foreign and other losses
for which no benefits have
been recorded                        700           9,600

Change in valuation
allowances                       620,600       1,040,300

Other                                400        ( 10,500)
                              $    -0-        $    -0-







                                       F-15

                                        46
<PAGE>

                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)


(4)   Income Taxes - Continued


We have federal net operating loss carryovers totalling $22,720,000 which
expire through the year ended December 31, 2021.

The tax effects of the significant items which comprise the deferred tax
liability and tax asset, as of fiscal 2001 and 2000 are as follows:

                                   December       December
                                     2001           2000

Assets
Reserves not currently deductible
 for tax purposes                  $ 1,350,000    $ 1,335,000
State tax net operating loss
 carryforward                        2,225,000      2,263,000
Federal net operating loss
 carryforward                        6,998,000      6,274,000
Employee benefits                       32,000         47,000
Other                                   36,000         36,000

 Total deferred tax assets         $10,641,000    $ 9,955,000

Liabilities
Fixed asset basis difference       $         0    $         0
Other                                  104,000         96,000

 Total deferred tax liabilities    $   104,000    $    96,000

Net deferred tax asset             $10,745,000    $10,051,000
Valuation allowance                (10,745,000)   (10,051,000)
Tax asset                                   0             0

Tax refunds receivable                      0             0

Total tax asset                             0             0

Due to the uncertainty of the realizability of the deferred tax assets, we
have established a valuation allowance for the net deferred tax assets.




                                                   F-16

                                          47
<PAGE>

                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)


                                 (Continued)

(5)   Short Term Borrowings

We have a loan and security agreement with a related party referred to in
Note 13. The outstanding balance due to the related party was $1,057,991 and
$1,032,443 at December 31, 2001 and 2000, respectively.

Notes payable of $2,850,000 at December 31, 2001 include $1,100,000 of
advances payable which are due on demand. The $1,100,000 of advances payable
includes amounts of $1,000,000 from related parties. These notes are further
described in Note 13. The balance of $1,750,000, due on demand, represents
series 1 bridge financing notes issued in 2000. During the first quarter of
2000, we borrowed $2,000,000 in cash from the Sovereign Lenders in exchange
for, among other things, our issuance of series 1 bridge financing notes that
matured in the third quarter of 2000. We received net proceeds equal to
$1,737,900 from the Sovereign Lenders as a result of this bridge financing.
The series 1 bridge financing notes bore interest at the rate of 8% per annum
prior to maturity. Since maturity, interest is accruing on these notes at a
rate of 12% per annum. These bridge notes are convertible into shares of our
common stock at any time at a weighted average per share price of $4.08.
Because the bridge notes matured before we registered, under the Securities
Act of 1933, as amended, the offer and resale of shares of our common stock
issuable upon conversion of the bridge notes and exercise of the repricing
warrants and the common stock purchase warrants described above, the
Sovereign Lenders became entitled to premiums and penalties totaling
approximately $607,000 (in addition to the repayment of principal and
interest). Following conversion of the bridge notes, if the Sovereign Lenders
do not realize at least a 20% gain on shares of common stock that they choose
to sell during the 90 days following conversion, then the Sovereign Lenders
are entitled to acquire additional shares of common stock at a price of $0.10
per share through the exercise of repricing warrants.  In addition to these
bridge notes and the attached repricing warrants, we issued warrants to
purchase 300,000 shares of common stock. These warrants have a weighted
average exercise price of $4.54 per share. There is no value associated with
these warrants recorded on our books. In the fourth quarter of 2000, one of
our lenders, converted a portion of its Series 1 Bridge Financing Note
($50,000 of unpaid principal plus interest, premiums and penalties) into
18,232 shares of our common stock at a conversion price of $3.79.In the first
quarter of 2001, the same lender, converted the balance of its Series 1
Bridge Financing Note ($200,000 of unpaid principal plus interest, premiums
and penalties) into 74,335 shares of our common stock at a conversion price
of $3.79. They also exercised a repricing warrant and received 112,778 shares
of our common stock.

(6)   Long-Term Debt and Related Matters

Long-term debt at December 31, 2001 and 2000 consists of the following:

                                                     2001            2000
          Subordinated Convertible Notes
          with interest rate of 10%
          due April 30, 2003                       $1,273,730    $1,273,730

                                F-17
                                48
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(6)   Long-Term Debt and Related Matters - Continued

Under the terms of these 10% notes, the holders may convert the 10% notes
into shares of common stock at a conversion price of $0.22 per share. Of the
advances received for the notes, approximately $1,070,000 was received from
related parties and is discussed in Note 13.


The maturities of long-term debt for each of the succeeding five years
subsequent to December 31, 2001 are as follows:

                                   Year                 Amount

                                   2002                  -0-
                                   2003               $1,273,730
                                   Thereafter            -0-

                                   Total              $1,273,730

(7)   Earnings Per Share

Earnings per share are computed by dividing net income by the average number
of common shares and common stock equivalents outstanding during the year.
The weighted average number of common shares outstanding during the years
ended December 31, 2001 and 2000 were approximately 9,890,000 and 9,680,000,
respectively.

Common stock equivalents include the net additional number of shares that
would be issuable upon the exercise of the outstanding common stock options
and warrants (see Note 9), assuming that we reinvested the proceeds to
purchase additional shares at market value. Common stock equivalents also
include shares of common stock that would be issuable upon conversion of
subordinated promissory convertible notes.

Options and warrants to purchase 7,416,034 and 5,697,035 weighted average
shares of common stock during the years ended December 31, 2001 and December
31, 2000, respectively, were not included in the computation of diluted loss
per share because to do so would have had an antidilutive effect on the
computation of loss per share. Weighted average shares issuable from
convertible notes of 6,234,640 and 5,235,261 were not included in the diluted
earnings per share because to do so would have had an antidilutive effect on
the computation of earnings per share.

As more fully described in Note 9, options and warrants to purchase 7,680,265
and 6,895,265 shares of common stock outstanding at December 31, 2001 and
2000, respectively, and 6,226,522 and 5,235,261 shares of common stock
issuable upon conversion of notes outstanding at December 31, 2001 and 2000
could potentially dilute basic income (loss) per share in the future.


                                                             F-18
                              49
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   December 31, 2001 and 2000 (RESTATED)

                                 (Continued)



(8)   Commitments and Contingencies

At December 31, 2001, we had minimum rental commitments under long-term,
noncancelable operating leases for facilities and other equipment as follows:

            Due during Fiscal Year


                  2002              $  381,924
                  2003              $  159,134
                                    $  541,058

Total rental expense, including the cost of short-term equipment leases, real
estate taxes and insurance paid to the landlord and charged to operations
approximated $113,000 for the year ended December 31, 2001 and $111,000 for
the year ended December 31, 2000.  During 1999 and 2000, we entered into
agreements to sublet portions of our facilities to unrelated parties.

In the ordinary course of business, we are involved in legal proceedings.  We
believe that the outcome of these proceedings will not have a material
adverse effect on our financial condition or results of operations.

(9)   Stock Options and Warrants

On March 24,1987, we established the 1987 Stock Option Plan and 75,620
options to purchase shares of our common stock were outstanding as of
December 31, 2001. On March 7, 1997, we established the 1997 Stock Option
Plan. As of December 31, 2001, there were 775,000 options to purchase shares
of our common stock outstanding under the 1997 Plan. On November 12, 1999,
the 1997 Plan was cancelled. On November 12, 1999, we established and on
December 23, 1999, shareholders approved the Year 2000 Equity Incentive Plan.
The Year 2000 Equity Incentive Plan provides for the issuance of up to
1,500,000 shares of our common stock and 252,000 options to purchase shares
of our common stock were outstanding as of December 31, 2001. The Year 2000
Equity Incentive Plan replaces the 1997 Plan for all future options. At
December 31, 2001, we had three stock option plans for officers and certain
employees under which 2,350,620 shares were reserved and options for
1,248,000 shares were available for future grants.  Options are granted at
not less than 85%, or in certain cases, not less than 100%, of the fair
market value of the common stock on the date of grant.  Options outstanding
have a term of ten years and become exercisable in installments as determined
by the Board of Directors. The plans' options vest between one through six
years and all expire between January 6, 2002 and May 16, 2011.




                                                   F-19
                                     50
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(9)   Stock Options and Warrants - Continued


Stock option activity for the two years ended December 31, 2001 was as
follows:


Option Shares                        Number of shares      Option Price
                                     of common stock       per share
                                     covered by options

      Outstanding at December 31, 1999  1,089,320           .12  -   1.67

	Granted                             301,000          1.25  -   5.30
	Exercised, cancelled or
	    Expired                        ( 72,700)          .12  -   3.00
	Outstanding at December 31, 2000  1,317,620           .12  -   5.30

	Granted                             240,000           .40  -    .62
	Exercised, cancelled or
	    Expired                        (455,000)          .26  -   5.30
	Outstanding at December 31, 2001  1,102,620           .12  -   5.30



As of December 31, 2001 and 2000, options for 598,020 and 352,520 shares were
exercisable at aggregate option prices of $122,594 and $78,702, respectively.

Had compensation cost for these plans been determined consistent with SFAS
No. 123, our net income(loss) and income(loss) per share would have been
changed to the following pro forma amounts:

                                      Year ended    Year ended
                                    December 31,  December 31,
                                          2001         2000

Net Income (Loss): As Reported (000's)    (1,543)      (2,578)
                   Pro Forma              (1,591)      (2,663)

Basic and Diluted EPS:As Reported         ( 0.16)      ( 0.27)
                      Pro Forma           ( 0.16)      ( 0.28)



                                                          F-20
                                 51
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(9)   Stock Options and Warrants - Continued

The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option pricing model with the following assumptions
for grants in the periods presented.

                                     Year ended    Year ended
                                     December 31,  December 31,
                                        2001           2000

Assumptions:
      Risk free interest rate           4.64%          6.13%
      Expected dividend yield              0%             0%
      Expected life in years              10             10


As of December 31, 2001 and 2000, warrants to purchase 6,577,645 and
5,577,645 shares of common stock at weighted average prices of $1.19 and
$1.33 per share, respectively, were outstanding and an equal number of shares
were reserved for issuance.

(10)   Incentive Bonus Plan and 401(k) Profit Sharing Retirement Plan

We have an incentive bonus plan under which certain key employees as a group
are entitled to receive additional compensation up to a maximum of 15% of our
pre-tax income, as defined.  There was no provision in 2001 or 2000.

On September 1, 1988, we established the Cambex Corporation 401(k) Profit
Sharing Retirement Plan (the Plan).  Under the Plan, employees are allowed to
make pre-tax retirement contributions.  In addition, we may provide matching
contributions based on pre-established rates. Each year the Board of
Directors determines whether matching contributions will be made and in what
amounts. Our contributions have been in the form of Cambex common stock since
fiscal 1994.

We offer no post-retirement benefits other than those provided under the
Plan.
                                                                F-21
                                 52
<PAGE>


                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     December 31, 2001 and 2000 (RESTATED)

                                 (Continued)


(11) Equity Line

During the third quarter of fiscal 2000, we signed a common stock purchase
agreement which expires in June 2002 with Thumberland Limited, a private
investor, for the future issuance and purchase of shares of our common stock.
The common stock purchase agreement was amended during the fourth quarter of
fiscal 2000.  The common stock purchase agreement establishes what is often
referred to as a structured equity line or an equity drawdown facility. In
general, the drawdown facility operates as follows:  the investor has
committed to provide us up to $10 million as we request it over an 18 month
period, in return for common stock we issue to the investor, subject to
registering in advance the shares of common stock issuable under the
Securities Act of 1933. Once every 22 trading days, we may request a draw of
up to $1 million of that money (except that our initial drawdown may be for
up to $2 million), subject to a maximum of 18 draws.  The maximum amount we
actually can drawdown upon each request will be determined by the volume-
weighted average daily price of our common stock for the 22 trading days
prior to our request and the average trading volume for the 45 trading days
prior to our request. Per the terms of this agreement, we are currently
unable to draw because we cannot meet the minimum draw amount of $250,000.

(12)  Employee Stock Purchase Plan

On December 20, 1993, we established the Cambex Corporation Employee Stock
Purchase Plan (the Plan), which was approved by the shareholders. On August
31, 1998, the Board of Directors voted, subject to shareholder approval, to
increase the number of shares to cover the number of shares purchased under
the Plan during the period of January 1, 1998 to June 30, 1998 and to
terminate the Plan. The termination became effective in 2000. Under the Plan,
employees could elect to have a specified percentage of their wages withheld
through payroll deduction and purchase common stock shares at 85% of the
lower of the fair market value of Common Stock on the first or last trading
day of each Purchase Period.  There were two (2) Purchase Periods each year -
the first six months and the last six months of each calendar year.  During
fiscal 2000, there were 85,383 shares issued under the Plan.

(13)  Related Party Transactions

On June 1, 1998, we borrowed approximately $1,060,000, including
approximately $460,000 from Joseph F. Kruy, our Chairman of the Board,
President and Chief Executive Officer, $250,000 from each of H. Terry
Snowday, Jr. and Richard E. Calvert, each greater than 5% shareholders of
Cambex, in exchange for the issuance of 10% Subordinated Convertible
Promissory Notes (the "10% Notes").  Under the terms of the 10% Notes, which
are due on April 30, 2003, the holders may convert the 10% Notes into shares
of common stock at a conversion price of $0.22 per share.  In addition to the
10% Notes, each holder, including Messrs. Kruy, Snowday and Calvert, were
issued a Stock Purchase Warrant, the exercise of which will allow the
warrant holder to purchase one share of common stock, at $0.50 per
share, for each dollar loaned to us.  Additional Stock Purchase
Warrants to purchase 96,373 shares of common
                                         F-22
                                          53
<PAGE>

                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                      December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(13)  Related Party Transactions - Continued

stock, at an exercise price of $0.50 per share, were issued to the holders of
10% Notes on June 1, 1999 in relation to interest due on the June 1, 1998
notes.  We believe that the borrowing arrangements we made with Messrs. Kruy,
Snowday and Calvert, and others are on terms at least as favorable to us as
we would have expected from lenders unrelated to us and Messrs. Kruy, Snowday
and Calvert.

On June 1, 1998, we entered into a Master Lease with CyberFin Corporation, a
corporation wholly owned by Peter J. Kruy, our former Executive Vice
President, Treasurer and Chief Financial Officer and the son of Joseph F.
Kruy.  Under the Master Lease we are renting from CyberFin an IBM 2003 S/390
Multiprise Processor and related software and maintenance at the rate of
$3,787.64 per month for a period of three years.  We also purchased computer
memory from CyberFin for $141,920 in 1998 and $73,000 in 1999.  We believe
that lease and the purchase arrangements we made with CyberFin are on terms
at least as favorable to us as we would have expected from an equipment
lessor unrelated to us, CyberFin and Dr. Kruy for equipment of comparable
quality.

On November 9, 1998, we entered into a Loan and Security Agreement with
B.A. Associates, Inc. (BAA), which is a corporation owned Bruce D. Rozelle, a
son-in-law  of Joseph F. Kruy, our Chairman, President and Chief Executive
Officer.  This Loan and Security Agreement, as amended by a First Amendment
to Loan and Security Agreement dated March 15, 1999, and further amended
through December 27, 2001 (as so amended, the "BAA Loan Agreement"), allows
us to borrow up to  $1,100,000, which is the maximum that may be outstanding
at any one time. Under the BAA Loan Agreement, we granted BAA a first
priority security interest in all of our accounts, instruments, documents,
general intangibles, equipment, inventory, and proceeds of any of the
foregoing.  We pay all amounts that we receive from collections of our
accounts receivable to BAA not less frequently than each week until the
outstanding loan amount plus interest, which accrues at a 12% annual rate, is
fully paid.  Under the terms of the BAA Loan Agreement, originally BAA
received a warrant for the purchase of 1.3 million shares of common stock, at
an exercise price of $0.22 per share.  In consideration for increasing the
amount of available funds, the Company agreed to issue an additional warrant
to BAA for the purchase of 400,000 shares of our common stock, at an exercise
price of $1.25.  We believe that the borrowing arrangements we made with BAA
are on terms at least as favorable to us as we would have expected from
lenders unrelated to us and relatives of Mr. Kruy.

From June 1, 1999 through August 18, 1999, we raised $210,000 in exchange for
the issuance of 10% Subordinated Convertible Promissory Notes.
During this time period Joseph F. Kruy loaned us $100,000, and H. Terry
Snowday, Jr. and Richard E. Calvert each loaned us $55,000 of the total
amount that we borrowed. In exchange for these loans, we issued 10%
Subordinated Convertible Promissory Notes, including 10% Subordinated
Convertible

                                                           F-23

                                             54
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                    December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(13) Related Party Transactions - Continued

Promissory Notes to Messrs. Kruy, Snowday and Calvert.  We believe that the
borrowing arrangements we made with Messrs. Kruy, Snowday and Calvert are on
terms at least as favorable to us as we would have expected from lenders
unrelated to us and Messrs. Kruy, Snowday and Calvert.

In November 1999, we borrowed $125,000 from Joseph F. Kruy and $125,000
from Philip C. Hankins, a member of our board of directors, and $100,000 from
each of H. Terry Snowday, Jr. and Richard E. Calvert.  We also entered into
separate Loan and Security Agreements with each of Messrs. Kruy, Hankins,
Calvert and Snowday.  At that time, we entered into one other Loan and
Security Agreement with a person unrelated to the company (the "Other 1999
Lender") pursuant to which we borrowed an additional $100,000.  Our payment
obligations under these Loan and Security Agreements (the "1999 Loan
Agreements") are evidenced by 12% Notes due in November 2001.  Under the 1999
Loan Agreements, we granted each of Messrs. Kruy, Hankins, Calvert and
Snowday and the Other 1999 Lender a first priority security interest in all
of our accounts, instruments, documents, general intangibles, equipment,
inventory, and proceeds of any of the foregoing.  Originally, under the terms
of the 1999 Loan Agreements, Messrs. Kruy, Hankins, Calvert and Snowday and
the Other 1999 Lender received a warrant to purchase up two shares of common
stock for each dollar loaned to us, at an exercise price of $2.00 per share.
When we extended the term of the loans in November 2000, the Company agreed
to issue additional warrants to Messrs. Kruy, Hankins, Calvert and Snowday
and the Other 1999 Lender to purchase one share of our common stock for each
dollar loaned to us at an exercise price of $1.25 per share.  We believe that
the borrowing arrangements we made with Mr. Kruy and others are on terms at
least as favorable to us as we would have expected from lenders unrelated to
us and Mr. Kruy.

In March through May 2001, we borrowed $50,000 from Joseph F. Kruy and
$300,000 from Richard E. Calvert.  We also entered into separate Loan and
Security Agreements with Messrs. Kruy and Calvert. Our payment obligations
under these Loan and Security Agreements (the "2001 Loan Agreements") are
evidenced by 12% Notes due in March through May 2002.  Under the 2001 Loan
Agreements, we granted each of Messrs. Kruy and Calvert a first priority
security interest in all of our accounts, instruments, documents, general
intangibles, equipment, inventory, and proceeds of any of the foregoing.
Under the terms of the 2001 Loan Agreements, Messrs. Kruy and Calvert
received a warrant to purchase up two shares of common stock for each dollar
loaned to us, at an exercise price of $0.50 per share. We believe that the
borrowing arrangements we made with Mr. Kruy and others are on terms at least
as favorable to us as we would have expected from lenders unrelated to us and
Mr. Kruy.

In July through September 2001, we borrowed $100,000 from Joseph F. Kruy and
$100,000 from Richard E. Calvert.  We also entered into separate Loan and
Security Agreements with Messrs. Kruy and Calvert. Our payment obligations
under these Loan and Security Agreements (the "2001 Loan Agreements") are
evidenced by 12% Notes due in January 2002.  Under the 2001 Loan Agreements,
we granted each of Messrs. Kruy and Calvert a first priority security
                                    F-24

                                    55
<PAGE>
                     CAMBEX CORPORATION AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                   December 31, 2001 and 2000 (RESTATED)

                                 (Continued)

(13) Related Party Transactions - Continued

interest in all of our accounts, instruments, documents, general intangibles,
equipment, inventory, and proceeds of any of the foregoing.  Under the terms
of the 2001 Loan Agreements, Messrs. Kruy and Calvert received a warrant to
purchase up one share of common stock for each dollar loaned to us, at an
exercise price of $0.25 per share. We believe that the borrowing arrangements
we made with Mr. Kruy and others are on terms at least as favorable to us as
we would have expected from lenders unrelated to us and Mr. Kruy.


(14)  Events Subsequent to date of Report of Independent Public Accountants

Subsequent to the end of 2001, Cambex Corporation completed the acquisition
of Super PC Memory, Inc., pursuant to the terms of the Stock Purchase and
Sale Agreement dated as of January 31, 2002 by and among Cambex Corporation,
a Massachusetts corporation, Super PC Memory, Inc., a California corporation,
Son T. Pham, Simon Le and Richard G. Schaefer.

Effective as of March 12, 2002, Super PC Memory, Inc. is a wholly-owned
subsidiary of Cambex Corporation. The sellers, Son T. Pham, Simon Le and
Richard G. Schaefer received 560,000 shares of Cambex Corporation common
stock and will receive fifteen percent (15%) of Super PC Memory, Inc.'s gross
profit for the period from March 12, 2002 through December 31, 2004, payable
in installment payments pursuant to the terms of the Stock Purchase and Sale
Agreement.

(15)  Credit Risk

We maintain cash balances at financial institutions located in Massachusetts.
Accounts at each institution are insured by the Federal Deposit Insurance
Corporation up to $100,000.  At December 31, 2001, our uninsured cash
balances total $102,813.

Our subsidiaries maintain cash balances at several financial institutions
located throughout Europe.  These cash balances are subject to normal
currency exchange fluctuations. At December 31, 2001, our overseas cash
balances total $5,330.


(16)  Extraordinary Items

Extraordinary income in 2000 consists of the payment of other liabilities at
a discount from face value.


                                            F-25
                                             56
<PAGE>







                                CAMBEX CORPORATION AND SUBSIDIARIES
                         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


                                           Additions
                                           Charged To
                               Balance at  (Recovered            Balance
                                Beginning     From)   Writeoffs/  at End
                                 of Year     Income   Deductions of Year
                                ---------- ----------- --------- -------




YEAR ENDED DECEMBER 31, 2000:

Reserve for doubtful accounts $  100,000  $   -     $  (42,000) $ 58,000




YEAR ENDED DECEMBER 31, 2001:

Reserve for doubtful accounts $   58,000  $   -     $     -     $ 58,000







                                                               F-26

                                   57
<PAGE>



                                  SIGNATURES



Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


CAMBEX CORPORATION


By:   /s/Joseph F. Kruy
         Joseph F. Kruy, President                         April 2, 2002



Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Company
and in the capacities indicated as of April 2, 2002.


By:   /s/   Joseph F. Kruy
            Joseph F. Kruy, Chairman of the Board, President
            (Principal Executive Officer)


By:   /s/   Robert J. Spain
            Robert J. Spain, Director


By:   /s/   Philip C. Hankins
            Philip C. Hankins, Director


By:   /s/   C. V. Ramamoorthy
            C. V. Ramamoorthy, Director