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

                                  FORM 10-KSB
                [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

                                       or

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

                          COMMISSION FILE NO. 0-27359

                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                 (Name of small business issuer in its charter)

         Texas                                                74-2653437
------------------------                              --------------------------
(state of incorporation)                              (IRS Employer I.D. Number)

                   500 North Shoreline Drive, Suite 701 North
                            Corpus Christi, TX 78471
                   ------------------------------------------
                      (Address principal executive offices)

                    Issuer's telephone number: 361-887-7546

         Securities registered under Section 12(b) of the Exchange Act:

                           Title of each class: None.

                Name of each exchange on which registered: None.

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 par value
                         ------------------------------
                                (Title of class)

                        Preferred Stock, $0.001 par value
                        ---------------------------------
                                (Title of class)


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

     Check  if  there  is no disclosure of delinquent filers in response to Item
405  of  Regulation  S-B  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]


<PAGE>
State  issuer's  revenues  for  its  most  recent  fiscal  year:  $100.

     State the aggregate market value of the voting and non-voting common equity
held  by  non-affiliates  computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a specified date within the past 60 days:  $827,002 computed by reference to the
$0.27  average of the bid and asked price of the company's Common Stock on March
25,  2002.

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as of March 29, 2002:  6,143,974 shares of Common Stock, $0.001
par  value.

DOCUMENTS  INCORPORATED  BY  REFERENCE

     If  the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which  the  document is incorporated: (1) any annual report to security holders;
(3) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule  424(b)  or (c) of the Securities Act of 1933 ("Securities Act").  The list
documents  should be clearly described for identification purposes (e.g., annual
report  to  security  holders  for fiscal year ended December 24, 1990).   None.

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













                                       ii
<PAGE>
                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----

Item     1.     Description  of  Business                                      1
                Business  Development                                          1
                Business  of  the  Company                                     4
                          Live  Tissue  Bonding  Equipment                     4
                          Anaerobic  Farm-Waste  Disposal  Equipment           5
                          Carbon  Dioxide  Separator                           8
                          CSMG  Gastech  LLC                                   8
                Raw  Materials  and  Suppliers                                 9
                Distribution  Methods                                          9
                Competition                                                   10
                Patents,  Trademarks  and  Licenses                           10
                Government  Approval  and  Regulations                        11
                Research  and  Development                                    11
                Cost  of  Compliance  with  Environmental  Laws               11
                Seasonality                                                   11
                Employees                                                     11

Item     2.     Properties                                                    11

Item     3.     Legal  Proceedings                                            12

Item     4.     Submission  of  Matters to a Vote of Security Holders         12

Item     5.     Market for Common Equity and Related Stockholder Matters      12
                Holders                                                       13
                Dividends                                                     13
                Recent  Sales  of  Unregistered  Securities                   14

Item     6.     Management's  Discussion  and  Analysis                       15

                Sales                                                         15
                Selling,  General  and  Administrative  Expenses              16
                Net  Loss                                                     16
                Liquidity  and  Outlook                                       16

Item     7.     Financial  Statements                                         17

Item     8.     None

Item     9.     Directors,  Executive  Officers,  Promoters and
                Control Persons; Compliance  with  Section  16(a)
                of  the  Exchange  Act                                        32

Item     10.     Executive  Compensation                                      34

                                      iii
<PAGE>

Item     11.     Security Ownership of Certain Beneficial Owners and
                 Management                                                   34

Item     12.     Certain  Relationships  and  Related  Transactions           35

Item     13.     Exhibits  and  Reports  on  Form  8-K                        35

                 Signatures                                                   39


















                                       iv
<PAGE>

ITEM     1.     DESCRIPTION  OF  BUSINESS.

Business  Development
---------------------

     We  were  incorporated  on  November  17,  1992  in the State of Texas.  We
conduct  our  business  from  our  headquarters  in  Corpus Christi, Texas; from
offices in Oklahoma City, Oklahoma; and from offices in Kiev, Ukraine.  We first
had  revenues  from  operations  in  1995.

     We  believe  we  are  unique  in  our  business mission.  We facilitate the
transfer  to the U.S. and other developed countries of technologies developed by
the  scientists  and  engineers  of  Ukraine.

     We  have  a  formal  relationship with several prestigious organizations in
Ukraine.  They have, as their stockholders or members, many of Ukraine's leading
scientists, engineers and technicians.  We formalized our relationship with them
in  February  1994  when  we  registered  with  the Ukraine Government a Ukraine
company  owned  50  percent  by  us and 50 percent by the Ukraine organizations.

     The  Ukraine  company's  name is United Engineering Company. It is called a
"joint  stock  company  with  a  foreign investor."  The foreign investor is us.
United  Engineering Company is authorized by Ukraine law, among other things, to
perform  classified  and  secret  construction  works  related  to  the national
security  of  Ukraine.

     The  50 percent of the stock of United Engineering Company owned by Ukraine
organizations  is  owned  by  the  following  companies  or  organizations:

     -    The State Property  Fund of Ukraine. It owns all state enterprises and
          property  of  the  state,  and  it  is  represented  by:

     -    Yuzhnoye  (Southern)   Machine  Building  Plant.    This  is  a  giant
          manufacturing complex located in Dniepropetrovsk. It built many of the
          missiles  and  nuclear missiles for the former Soviet Union. Today, it
          manufactures  commercial  satellites,  farming  tractors  for  export,
          trolley  cars,  and  other  heavy  products.

     -    Design  Bureau "Yuzhnoye".  This organization was established in 1954.
          It  developed  and turned over to the Ukraine Army several generations
          of  missiles  (specifically,  SS-18  "Satan"  satellite and the launch
          rockets  "Cyclone" and "Zinet"), space carrier rockets, and artificial
          satellites.  Design  Bureau  employs  several thousand researchers and
          production  engineers and is the leading enterprise in Ukraine for the
          development  of  rocket  and other jet systems. It also is the leading
          enterprise  for  the  elimination  of  launching sites in Ukraine. The
          Bureau  also  works  on conversion projects, trolley busses, pumps for
          the  oil industry, small-sized vehicles for cleaning city streets, and
          devices  for  manufacturing  margarine,  oils,  etc.  It  is under the
          direction of Academician Stanislav Nikolayevich Konyukhov, who also is
          president  of  United  Engineering  Company.

                                        1
<PAGE>
     -    Trust  No.  5  for  Special  Construction  Works.   This  organization
          believes  itself  to  be  the  highest  technical  and  most qualified
          engineering  firm  in  the  former  Soviet  Union.  It was involved in
          building  all  of  the  former  Soviet Union's nuclear and non-nuclear
          missile  launching  pads  and silos, the Soviet space station, several
          chemical  and   oil  industry   plants  and   pipelines,   and   other
          installations  requiring the highest technologies of the former Soviet
          Union.

     -    E.O.  Paton  Institute  of  Electric  Welding.  This  organization was
          founded in 1934 by the Academy of Sciences of the Ukraine S.S.R. It is
          headed  today  by  Professor Boris Paton, the president of the Ukraine
          Academy  of  Sciences.  It developed the collapsible, titanium-welded,
          building-structure technology that was used in the construction of the
          Soviet  space station "MIRE." We believe the Paton Institute is one of
          the  world's  most prominent scientific institutions involved in metal
          casting  and   bonding  ceramics,  microwave  bonding  of  metals  and
          plastics,  explosive   welding  and  cutting,  welding  in  space  and
          underwater,  electro  metallurgy,  protective  coatings,  and  bridge
          building  and  coating.  It  employed  at  one  time  more  than 5,000
          scientists and engineers and employs today more than 200 engineers and
          executives. It has joint ventures with several multinational companies
          and  governmental agencies including the U.S. Department of Energy and
          NASA.

     -    Spivdruznist  Business  Association.  This was formed by major defense
          enterprises  to develop and implement methods of dismantling munitions
          and  converting  the  metals and explosive by-products to commercially
          marketable  products.  It  is  composed  of  6  large  manufacturing
          facilities  that  developed  and  manufactured explosives, weapons and
          military  equipment  during  the  Cold  War.

     -    Pivdenexo, Ltd.  This is a research, development and production-design
          "think  tank."

     The  above organizations, working with us as their equal partners in United
Engineering  Company,  as  well  as other organizations in Ukraine look to us to
fill  two  roles:

     -    Inside  Ukraine.  When  they negotiate with western nation enterprises
          expecting to do business in Ukraine, we bring to the negotiating table
          our  experience  in  negotiating  agreements  with  market-oriented
          enterprises.

     -    Outside  Ukraine.  After  we  first identify technologies developed in
          Ukraine  that  appear  to  have  promising  commercial application, we
          introduce  companies  in  the U.S. and in other developed countries to
          these  technologies  and  attempt  to  negotiate  technology  transfer
          agreements  between  them  and  the  Ukraine  organizations.

     There  are no specific funding arrangements required of the stockholders of
United  Engineering  Company.  Projects  are funded on a case-by-case basis.  An
aggregate of $2,078,072 in costs have been contributed to projects by us and the

                                        2
<PAGE>
Ukraine  shareholders of United Engineering.  Of this $2,078,072, we contributed
$601,788  plus  $692,563 in distributions to which we were entitled but chose to
reinvest  rather  than  to  receive.

     We  have recovered $218,176 of our share of the costs of United Engineering
projects.  We  wrote  off  $323,612  of  these costs because we do not expect to
recover  this amount of these costs within one year, even though we do expect to
recover  these  funds  over  the  next  several  years.

     The  reasons we have reinvested $692,563 rather than receive these funds as
distributions  are that our Ukraine co-shareholders also made such reinvestments
and  that  such  reinvestments avoided United Engineering's borrowing funds from
Ukraine  banks at interest rates that ranged between 35 percent to 190 percent a
year.

     Business in Ukraine is built on personal relationships and trust as well as
dealing with people who have the authority to make a project work.  In late 1992
and  early  1993  we  dealt with middle management people who had good ideas but
could  not  make anything happen.  We then developed personal relationships with
partners  such  as  the  President  of  the Academy of Science, Yuzhnoye Machine
Building,  Yuzhnoye  Design Bureau and the 43rd missile army.  We were then able
to  reach  the proper leaders and decision-makers to make our progress easier in
working  through  the  bureaucratic  process.

     Ukraine  requires  a  good  deal of documentation for both the national and
regional  governments.  We  have  found  these  problems  are best solved by our
Ukraine  partners,  who are accustomed to dealing with these issues and know how
to  work  through  the  bureaucratic  process.

     The  economic  laws  in Ukraine change often, and our offices deal with the
changing  laws  on  a weekly basis.  In Ukraine and throughout the former Soviet
Union  there  is  constant  change  in  the  economic conditions as well as high
inflation.  We  have  seen bank loan interest rates fluctuate from a high of 190
percent  per  annum  to  a  low  of  35  percent  per annum.  We and the Ukraine
shareholders  in United Engineering Company reinvest the majority of our profits
to  avoid  paying  these  high  loan  rates.

     The  local currency falling on the international currency markets has had a
strong  negative  impact on our balance sheet.  The exchange rate fell from 1.54
Hryvna  to  the  dollar  in  1997  to  5.47  Hryvna  to  the  dollar  in  2000.

     We  have  experienced  hyperinflation  during  some  years.  This  has been
neutralized  somewhat  as a result of the UEC contracts being negotiated in U.S.
dollars  and  UEC's  having  been  able  to  take advantage of the exchange rate
fluctuations.  Once  the U.S. funds are received by UEC and converted to Hryvna,
the  exchange  rate  works  against us, as the amount of profit and dividends is
adjusted  to  the December 31 currency exchange rate.  The primary step taken to
offset  the  currency  exchange problem and inflation problem is for UEC to hold
the U.S. currency as long as possible before converting to Hryvna.  UEC has also
invested  in  a  number of inflation sensitive assets that it uses in day-to-day
operations,  such  as  ownership  of  its  offices  in Kiev, Dneipropetrovsk and
Pervomyisk.  Other  difficulties such as language barrier and local customs have
been  solved by hiring quality Ukrainian, bi-lingual, English-speaking staff and
training  them  to  meet  our  standard  and  expectations  of  doing  business.

                                        3
<PAGE>
     There  are  no restrictions related to our investment in United Engineering
Company  including  restrictions on its ability to declare and record dividends.

     Inside  Ukraine,  we  have  assisted  United  Engineering  Company  in  its
negotiation  of  contracts  for  the  dismantling  of  the  Ukraine  nuclear and
non-nuclear  missiles,  silos,  and  related  equipment.  This  dismantling  is
required by the treaty known as START and will be paid for by the U.S. and other
western  countries.  The  Ukraine  members  of UEC designed, built and commanded
these  missiles  and silos, are logical organizations to dismantle them, and are
expected  to  receive  a substantial portion of the contracts to dismantle them.

     Since  1995  United  Engineering  Company has completed contracts with U.S.
contractors  for  more  than  $6.0 million with respect to ICBM dismantlement in
Ukraine  and for more than DM4.7 million in contracts with the German Government
and  German  contractors  for  new  methods  of  dismantling  ICBM  silos.

     Outside  Ukraine,  we  have  identified several promising Ukraine-developed
technologies.  We  have  been  both  successful  and unsuccessful in negotiating
technology  transfer agreements between United Engineering Company or one of its
constituent  Ukraine   organizations  and   companies  in  the  U.S.    We  have
successfully  negotiated  technology  transfer  agreements  for the projects set
forth  below.

Business  of  the  Company
--------------------------

     Live  Tissue  Bonding Equipment.  The E.O. Paton Electric Welding Institute
of  Kiev,  Ukraine developed equipment that bonds blood vessels and soft tissues
in substantially less time than other technologies take and apparently leaves no
or  minimal  trace  scar  tissues  after  a  lapse  of  six  to  seven  months.

     The  equipment  bonds  the  soft biological tissue with a special miniature
surgical  tool.  No  glues,  sutures,  staples or other foreign matter are used.
The  process  is best described as a welding process.  The scar tissue is either
minimal  or  non-existent.  Tests  conducted  in  Louisville,  Kentucky  by U.S.
surgeons  on  rabbits'  stomachs resulted in scar tissue only forty microns wide
six months after surgery.  It appears that the Ukraine scientists have developed
a  superior,  all-purpose,  seamless  method of bonding soft biological tissues,
which  method  is  characterized  by simple manipulation applicable to different
surgical operations and the fast restoration of tissues without the formation of
coarse  scars.  Apparently  there  is  no need for prolonged special training of
surgeons  and  surgical  personnel.

     The  Ukraine  prototype  for the equipment was successfully demonstrated to
physicians  and  surgeons  in the U.S. in June 1996 on the blood vessels, nerves
and  stomachs  of  rats  and  rabbits.  Additional, subsequent demonstrations on
animals  were  performed  in  Ukraine  by Ukraine surgeons with U.S. surgeons in
attendance.  In  1998 the U.S. surgeons performed successful tests on animals in
Louisville, Kentucky.  Testing on humans in Ukraine began in mid-year 1998.  One
patient  had  a  blood  vessel  welded,  and the other patient had a torn uterus
repaired  using  minimally  invasive  surgery  tools.  According  to the Ukraine
doctors,  both  patients  recovered in the normal amount of healing time without
side  effects.

                                        4
<PAGE>
     E.O. Paton Institute of Electric Welding of the Ukraine National Academy of
Sciences  and  International Association of Welding filed U.S. and international
patent  applications  on  the process in February 1999, but no patents have been
issued.  We  have  been  assigned  an exclusive license to all the rights of the
patents  -  should  they  be issued - for the U.S. and Europe and, as additional
areas  of the world become identified as economically viable, the first right to
obtain  exclusive  licenses  for  such areas.  See Exhibit 10.3 filed as part of
this  Form  10-SB.

     We  have  submitted  no  applications,  requests  or testing results to the
Federal  Drug Administration.  We have not marketed the bonding equipment in the
Ukraine or any other non-U.S. country and have no plans at this time to do this.
Our  plans  are  to  manufacture  prototypes only in Ukraine and to set up fully
controlled clinical trials in Ukraine for comprehensive human testing.  We began
this  clinical  work in May 2000.  We estimated that we would need approximately
$260,000 for this work in Ukraine.  We are currently negotiating with a group of
private  investors  who  are  familiar  with  our  company  for  these  funds.

     We estimate that in excess of $1.5 million have been expended in developing
the  project and that $1.5 million of additional funds must be expended to bring
this  product  to market.  We estimate that the first surgical equipment will be
manufactured  in  the  U.S.  when  the U.S. patent applications are approved and
patents  are  issued.

     This  project is still in the development stage, even though the Ukrainians
have  created  a  finished  product  in  their  special miniature surgical tool.
Improvements  in  the tool are possible, and testing on live tissue of humans to
U.S.  testing  standards  is required.  Approval of the process and equipment by
the  Federal  Drug  Administration  is  required.

     Anaerobic Farm-Waste Disposal Equipment.  We are marketing a closed system,
no  lagoon,  anaerobic  plant  that:

          -  processes  farm-animal  waste into a high grade organic fertilizer,

          -  captures  the  methane  gas  for  commercial  use,

          -  reduces  the  odor,  and

          -  prevents  all  runoff  and  contamination  of  the  environment.

     This  processing  plant  was developed in Ukraine before the breakup of the
Soviet  Union.  The  developer  is  a more-than-100-year-old Ukraine joint stock
company that is the Ukraine's largest enterprise that manufactures equipment for
the  petroleum  and  chemical  industries.  The  company's  name  is Sumy Frunze
Machine-Building Science-and-Production Association, called herein "Frunze."  We
have  obtained  the  exclusive,  worldwide  rights  to market Frunze's anaerobic
farm-waste  disposal  plant.

                                        5
<PAGE>
     Frunze developed the processing plant to solve the above-mentioned problems
that  were  associated  with  a 3,000-head swine farm located in the center of a
city  of  400,000  people.  The  plant  has  operated successfully for more than
twelve  years.

     This  technology was patented in 1991 in U.S.S.R.  Patent applications have
not  been  filed  in the U.S.  Frunze has assigned to us the worldwide rights to
market, distribute, license and service products covered by the U.S.S.R. patents
and any upgrades of the 17-year-duration patents.  This assignment extends until
June  4,  2019  but  will  become  non-exclusive  if,  after  the first plant is
installed  and  fully  operational in the U.S., we fail to place orders annually
for  at  least  $1 million in plant and equipment to be manufactured in Ukraine.
We  are  required  to  pay  royalties  equal to five percent of the costs of all
equipment  manufactured  in  Ukraine.

     Under our license agreement with United Engineering Company and the Ukraine
inventor,  Ivan  Semenenko,  the  Ukrainians  are

     -  to  design  each  anaerobic  farm-waste disposal facility after visiting
        the  site  where  it  is  to  be  placed,

     -  to  construct  all  of  the  facility in Ukraine except for the electric
        motors,  generators,  tanks  and  computer  controls,

     -  to  oversee  the  installation  and  startup  of  the  facility  at each
        project  site,  and

     -  to  provide  equipment  warranties  acceptable  to  us.

     Our  obligations  are

     -  to  obtain  contracts  for  the  installation  of  the  facilities,

     -  to  pay  the  expenses  of  the  Ukrainians' visits to the U.S. or other
        countries in the performance  of  their  obligations  under the license,

     -  to  pay  for  and  arrange for the delivery to the facility sites of all
        equipment  not  manufactured  in  Ukraine,  and

     -  to  act  as  a  liaison  between  the  Ukrainians  and  persons  in  the
        countries  where  facilities  are  to  be  installed.

     United  Engineering  Company  coordinates  our  relations  with Frunze, the
manufacturer,  in  Ukraine.  The  plants  will be custom designed for each user.
The  major  portion  of  each plant will be manufactured initially, at least, by
Frunze in Ukraine.  The electric motors, generators, tanks and computer controls
will  be  obtained in the U.S.  Approximately 70% of the cost of a plant will be
for  Ukraine-manufactured parts at a cost far less than could be obtained in the
U.S.

     We  are  attempting  to market this technology ourselves in Oklahoma and in
other  states.  We  are  negotiating  contracts  now.  We expect contracts to be
executed  during  the  fourth  fiscal  quarter  of  2002.

                                        6
<PAGE>
     We  believe  a  considerable  market  exists  for  the  plant, should it be
accepted  by the industry.  At the end of 1997 there were 1,520 U.S. swine farms
with  5,000  head  or  more.

     The  cost of a Farm Waste Anaerobic Plant can be recovered by the farmer or
producer  over  time  from:

     -  organic  fertilizer  sales,

     -  methane  gas  converted  to  electricity  used  on  the  farm  and  sold
        commercially,

     -  elimination  of  waste  lagoon  expense,  and

     -  reduction  of  other  operating  costs.

     Of  major  public  relations  importance is a reduction of foul odors.  The
only  exposure  of  the  animal  waste  to the atmosphere is the one-day-or-less
period  that  elapses  before  it  is  hosed  or  scraped  to  the pump site for
transportation  to the closed storage tanks or directly to the processing plant.
Little  decomposition  and  emission  of gases occur during this initial period.

     Of  major  health  importance  are:

     -  the  elimination  of  the  volatile organic acids, which are consumed by
        the  gas-producing  bacteria,

     -  the  elimination  of  surface  and  ground  water  contamination,  and

     -  the  dramatic  reduction  of  pathogen  populations  in  the  heated
        digesters.

     We have met resistance from swine and dairy farmers, in our efforts to sell
our  Farm  Waste  Anaerobic  Plant,  due to the long period of time required for
small  farms  to  recover the costs of the plant and due to falling milk prices.
We  entered  into a marketing agreement for six Western U.S. states with Western
Waste  Management, Inc. of Boise, Idaho.  It was to market and manage our plants
in  its  territory in exchange for a commission of ten percent of the sale price
of  the  plants and for 50 percent of the net proceeds we would receive from the
sale of the products of such plants - methane gas and fertilizer.  Western Waste
Management  obtained  two  contracts  to  lease  plants to dairy farms near Twin
Falls,  Idaho, but both farms cancelled the contracts and forfeited $10,000 each
for the engineering and design services we had performed, all due to fallen milk
prices.  The  marketing  agreement  with Western Waste Management was rescinded.

     Our  efforts at this time are concentrated on building a demonstrator plant
at the agriculture branch of Guelph University near Ridgetown, Ontario Province,
Canada.  Canada has a government program that could finance half the cost of the
plant,  and officials at the University have shown interest in funding the other
half.  Ridgetown  College,  the  college  of  agriculture  of Guelph University,
submitted  an  application  in December 2000 with the Canadian government agency
for  half  the  funds  needed  to  build  the  demonstrator plant.  We await the
decision  of  the  government  of  Ontario  Province   for  a  decision  on  the
application.

                                        7
<PAGE>
     Carbon  Dioxide Separator.  We own the exclusive and perpetual world rights
to  service,  license  and  market  certain unpatented equipment manufactured in
Ukraine that separates carbon dioxide and other impurities from the gas produced
in landfills.  The equipment converts the remaining gas to a cleaner, 98-percent
pure  methane  gas for use in internal combustion engines or for sale to natural
gas  companies.  This  equipment  was  developed for us by the Institute of Gas,
Ukraine  National  Academy  of  Sciences and will be manufactured for us only by
Sumy  Frunze  in  Sumy,  Ukraine.  We  are  now  marketing  this  equipment.

     The manufacturing costs of our CO2 separator plants are substantially lower
than the costs of competitive units.  We have executed a joint venture agreement
with  Resource  Technology  Corporation  of  Chicago,  Illinois, to exploit this
technology.  Our  first  plant  will  be  placed  on a landfill in Mount Vernon,
Alabama.  The plant will be manufactured in Ukraine.  The landfill operator will
provide  all  other  equipment  needed as well as the operations.  Our agreement
with  Resource Technology Corporation requires us to provide the plant and bring
it  to  the  U.S.  We  require approximately $600,000 to fulfill our obligations
under  the  agreement.  Resource  Technology  Corporation  will  contribute  all
necessary government approvals, all piping, tanks and other auxiliary equipment,
the  cost  of  which  is  estimated  to  be  approximately  $1,200,000.

     CSMG  Gastech  LLC.  In February 2001 CSMG, as its manager, formally formed
CSMG  Gastech  LLC  ("Gastech") as a Texas limited liability company.  Gastech's
purpose  was  to  raise  the  funds needed to buy CO2 Gas Separator equipment to
install  on  landfills to be operated by Resource Technology Corporation ("RTC")
or  other  entities.  We had entered into an agreement with RTC whereby we would
pay  for  and furnish the CO2 Separator equipment made in Ukraine, and RTC would
furnish  all  other  equipment  and  expenses  needed to install and operate the
equipment.  From the monthly gross proceeds of sales of methane gas, each of RTC
and  CSMG  are to first recover its monthly expenses related to the facility and
its  equipment  costs amortized over an eight-year period.  The net proceeds are
then  to  be  shared  50-50  by  RTC  and  us.

     We  assigned  our  interest in the RTC agreement to Gastech and proposed to
potential  investors  in  Gastech that they contribute $800,000 for a 40-percent
interest  in  Gastech.  After Gastech had raised $226,000 from ten investors, in
March 2001 the Texas Securities Commission commenced an investigation of Gastech
and  wrote  letters  to its investors asking them if they had been advised by us
that  RTC  was  a  chapter  11  debtor  in  a  proceeding in Chicago.  The Texas
Securities  Commission  then  required  us  to  offer  to rescind the securities
purchases  of  the  ten  investors.  We  did  so.  Two  investors  accepted  the
rescission  offer,  and each was returned his $10,000 investment.  We regard the
Texas  Securities  Commission  matter  closed.

                                        8
<PAGE>
     No  further  interests in Gastech were sold, due to the action of the Texas
Securities  Commission.  To  cover  the shortfall in funds needed to pay for the
first  CO2 Separator to be used in a landfill to be operated by RTC, we borrowed
$551,000  in  increments  from  StoneGate LLC of Florida on one-year notes at 10
percent  interest  due  as  follows:  $115,000 plus interest is due in May 2002,
$362,000  plus  interest is due in July 2002 and $74,000 plus interest is due in
August  2002.

     The  CO2  Separator  equipment  was  designed by the Gas Institute National
Academy  of  Sciences  of  Ukraine  during  the latter part of 2000.  A purchase
contract  was  executed in February 2001 with Sumy-Frunze Joint Stock Company of
Ukraine  for  a  purchase  price  of $685,484.  The price included all necessary
certifications,  all  necessary equipment for operation, shipping to the Port of
Houston  and  supervision  personnel  for  installation.   The  tonnage  of  the
equipment  is  177  metric  tons.  No  additional  equipment  is  needed.

     The  equipment  was fully paid for using the funds of Gastech and the funds
borrowed  from  StoneGate  LLC.  The  equipment  arrived  in  Houston,  Texas on
November  22,  2001.  It will be installed at the Chastang Landfill near Mobile,
Alabama  during  the  second fiscal quarter of 2002.  Natural gas production and
sales  should  occur  by  June  2002.

     The eight investors in Gastech that invested $206,000 will get 10.3 percent
of  our  and  Gastech's  share  of  the  monthly proceeds from production of the
Chastang  facility  and  we  will get 89.7 percent of this share.  We propose to
assign  part  of  this  89.7 percent interest to persons - as yet unidentified -
that  provide  the  funds  that repay to StoneGate LLC the $551,000 it loaned us
plus  interest  on  the  loans.

     In  December  2001  the  U.S.  Bankruptcy  Court  in Chicago affirmed RTC's
contract  rights  at Chastang.  RTC is operating as a debtor-in-possession under
its own management, not a trustee.  We were recently advised by the president of
RTC  that  RTC  expects  to  emerge  from  chapter  11,  through  a  plan  of
reorganization,  in  June  2002.

     Raw  Materials,  Supplies  and  Manufacturing
     ---------------------------------------------

     No  manufacturer  has  been  selected  for  the  tissue  bonding equipment.

     The  anaerobic  plants  will  be  manufactured in Ukraine by Sumy Frunze in
cooperation  with  United  Engineering  Company  at a cost far less than what it
would  cost  in  the  U.S.

     The  carbon  dioxide separator plants will be manufactured in Kiev, Ukraine
by Sumy Frunze in cooperation with International Welding Association, again at a
cost  far  less  than  what  it  would  cost  in  the  U.S.

     Distribution  Methods
     ---------------------

     We  propose  to negotiate with a medical equipment manufacturing company to
market  and  distribute  the  live  tissue  bonding  equipment once Federal Drug
Administration  approval is obtained.  We have no specific manufacturing company
to  do  this  at  this  time.

                                        9
<PAGE>
     We  have organized a majority-owned subsidiary, Anaerobic Farm Waste, Inc.,
to  own  and lease the anaerobic farm waste disposal equipment.  The officers of
our  company  are  also  the  principal  officers  of  the  subsidiary  company.

     We are marketing our CO2 separator equipment through the joint venture with
Resource  Technology  Corporation.

     Competition
     -----------

          Live  tissue  bonding  equipment.  We  have  the only equipment in the
world that bonds live tissues with little or no scarring.  We are in competition
only  with  older  surgical  methods  of  closing  tissue  openings.

          Anaerobic  farm  waste  disposal plants.  There are ten companies that
offer  various types of anaerobic systems in the U.S.  Based upon our experience
in  the  industry,  it  is  our  belief that none of these systems processes the
manure  and  water  to  the  extent of the Ukraine-made plant.  The plant now in
operation  in  Ukraine  is  the  product of years of experience in designing and
building  various  types  of anaerobic plants.  It is our belief that the design
now  in  operation  will  prove  to  be  the  most  effective and economical for
anaerobically  processing  animal  wastes.

          CO2  Separator.  Numerous  companies  make  CO2 separators in the U.S.
but,  based upon our experience in the industry, we believe none will be able to
compete  with  the  quality  of  our  separators  or  with our price.  It is our
observation  that  their prices are multiples of what we believe we will be able
to  charge  for  our  plants.  Their  separators produce no better than 75 to 90
percent pure methane; based on the CO2 separator plants in operation in Ukraine,
we  believe  ours  will  produce  98-percent  pure  methane.

     Patents,  Trademarks  and  Licenses
     -----------------------------------

     The  live  tissue  bonding  equipment  is the subject of patents and patent
applications  filed  by the Ukraine inventor in the Ukraine, the U.S., and other
countries.  The  patents  and the patent applications for the U.S., the European
Patent  Convention,  Australia,  Canada  and  Japan  have  been  assigned to us.

     The  anaerobic  farm-waste  disposal  equipment was patented in U.S.S.R. in
1991 but is not the subject of any patent application filed in the U.S.  The CO2
separator  equipment  is  not the subject of any existing patent; the technology
has  been  known  for  more  than  30  years.

     We  have  been assigned the exclusive world rights to license, manufacture,
market,  and distribute both the anaerobic farm waste disposal equipment and the
CO2  separator  equipment.  We will pay a five percent royalty to the Ukrainians
when  the  equipment  is  installed  and fully operational based on the adjusted
retail  price  of  the  equipment.

                                       10
<PAGE>
     Government  Approval  and  Regulations
     --------------------------------------

     The  live  tissue bonding equipment must obtain the approval of the Federal
Drug  Administration  before  it  can  be  sold to be used on humans in the U.S.

     The  anaerobic  farm  waste  disposal  plants  and the CO2 separator plants
require  no  governmental approval before being placed into use, but the results
of  their  usage  are  subject  to  the oversight authority of the Environmental
Protection  Agency.

     Research  and  Development
     --------------------------

     During  2001,  we  expended  no  funds  on  research  and  development.

     Cost  of  Compliance  with  Environmental  Laws
     -----------------------------------------------

     Our  anaerobic  farm  waste disposal plants are designed to dispose of farm
waste  in  a  manner that meets all environmental regulations.  The same is true
with  regard  to  our  CO2  separator  plants.  All  costs  of  complying  with
environmental  regulations are costs of the projects and reduce our share of the
gross  revenue  produced  from  the  installation  and  use  of  our  equipment.

     Seasonality
     -----------

     There  is  no  seasonal  aspect  of  our  business.

     Employees
     ---------

     We  employ three persons full time in the U.S. and two persons full time in
Kiev,  Ukraine.

ITEM     2.     PROPERTIES

     We  lease  office  space  in  the  following  cities  as  follows:
<TABLE>
<CAPTION>
                                  Approximate      Monthly     Term  of
                                 Square  Feet      Rental        Lease
                                 ------------      -------     --------
<S>                                  <C>           <C>        <C>
     Corpus  Christi,  TX            1,000         $   999    12-31-2004
     Oklahoma  City,  OK               500         $   500    Month-to-Month
     Kiev,  Ukraine                    800         $ 1,200    Month-to-Month
</TABLE>

                                       11
<PAGE>

<PAGE>
ITEM     3.     LEGAL  PROCEEDINGS

     The  Texas  Department  of  Securities  investigated  our sale of ownership
interests  in CSMG Gastech LLC, the entity we created to assist our financing of
our  share  of  the costs of the CO2 separator projects with Resource Technology
Corporation  or  other entities.  The Texas enforcement agency took the position
that  we  were  selling  securities  by means of representations that omitted to
state  a  material  fact  - that Resource Technology Corporation is a chapter 11
debtor.  We  were asked to make a rescission offer to all investors.  We did so.
Two  investors  accepted  the  rescission  offer,  and we returned to them their
$10,000 investments.  We have heard nothing further from the Texas Department of
Securities.

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

     None

ITEM     5.     MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER
                MATTERS

     The  company's Common Stock was but is no longer quoted on the OTC Bulletin
Board.  Its  symbol  was  "CTUM" until October 1999 at which time the symbol was
changed  to  "CTUME.OB."  The  symbol  change  reflected  the  fact that the OTC
Bulletin  Board  would remove the company's stock from its system on November 4,
1999  unless,  prior to such date, the company should have entered the financial
statements  reporting  system  of  the  Securities  and Exchange Commission.  On
November  4,  1999  our  stock  was  removed  from  the  Bulletin  Board.

     We filed a registration statement with the Commission that became effective
November  15,  1999.  At  such  time  as the Commission's staff has reviewed the
statement  and  we  have  amended  the  statement to satisfy any comments of the
Commission's  staff,  we  will  become  eligible  again to have our common stock
quoted  on  the  OTC  Bulletin  Board.  Until such date when we have amended our
registration  statement  to  satisfy  any comments of the Commission's staff, we
anticipate  that  our  common  stock  will  be  quoted in the Pink Sheets of the
National  Quotation  Bureau.

     It  first  traded  on  April  21,  1998.  The  range  of  high  and low bid
information  for  our  Common  Stock  is  set  forth below.  The sources of this
information  are  the  OTC  Bulletin Board (through Q3 1999) and the Pink Sheets
(from  Q4  1999).  The  quotations  reflect  inter-dealer  prices without retail
markup,  markdown  or  commissions  and  may  not represent actual transactions.


                                       12
<PAGE>
<TABLE>
<CAPTION>
                                  High                 Low
                                  ----                 ---
     1998
     ----
<S>                               <C>                  <C>
          2nd  Qtr.               2                    1.125
          3rd  Qtr.               1.3125               0.5
          4th  Qtr.               0.2813               0.1500

     1999
     ----
          1st  Qtr.               1.6875               0.1500
          2nd  Qtr.               1.1875               0.5000
          3rd  Qtr.               1.1250               0.5
          4th  Qtr.               0.625*               0.25*

     2000
     ----
          1st  Qtr.               0.25                 0.125
          2nd  Qtr.               0.51                 0.25
          3rd  Qtr.               0.30                 0.30
          4th  Qtr.               1.60                 0.30

     2001
     ----
          1st  Qtr                0.90                 0.35
          2nd  Qtr.               0.75                 0.47
          3rd  Qtr.               0.705                0.35
          4th  Qtr.               0.40                 0.15
</TABLE>

     *On  November  4,  1999  our stock was removed from the OTC Bulletin Board.
The  information  from  Q4  1999  through  Q4  2001  is  from  the  Pink Sheets.

     On  December  31,  2001,  there  were  6,199,000  shares  of  Common  Stock
outstanding.  There  are  1,450,000  shares  subject  to  outstanding options to
purchase,  or  securities  convertible  into,  such  shares  of  stock.

Holders
-------

     As  of  December 31, 2001 there were approximately 203 holders of record of
our  Common  Stock.  Some  1,046,340 shares of Common Stock are held by numerous
other  shareholders  in brokerage accounts under the record name of "Cede & Co."

Dividends
---------

     We have paid no dividends to our common stockholders and do not plan to pay
dividends on our Common Stock in the foreseeable future.  We currently intend to
retain  any  earnings  to  finance  future  growth.

                                       13
<PAGE>
Recent  Sales  of  Unregistered  Securities
-------------------------------------------

     During  the  past  three  years  our  company sold the following securities
without  registering  the  securities  under  the  Securities  Act  of  1933:

<TABLE>
<CAPTION>
                               No.  of
                               Common
                               Shares               Offering
           Date                 Sold                 Price
          ------               ---------            ---------
<S>                            <C>                  <C>
          4-6-99               602,362(1)           304,155
          12-30-99             169,455(2)           153.243
          2000                  12,000(2)(3)          7,500
          2000                 423,350(2)(4)        257,093
          2000                 111,174(2)(5)         67,659
          2000                 337,800(2)(6)        211,125
          2001                 863,723(2)           540,528
--------------------------
</TABLE>

(1)       The shares were  sold  pursuant  to  the  exemption  from registration
          provided  by  Regulation D, Rule 504. The securities were sold through
          the  efforts  of  our officers and also through the NASD broker-dealer
          firm  of  Atlantic Pacific Financial, Inc. A commission of ten percent
          of  the proceeds of sales was paid to Atlantic Pacific Financial, Inc.
          for  sales  made by it. No commissions were paid with respect to sales
          made by the officers of the company. With regard to the above Rule 504
          public  offering sales, we furnished each prospective investor with an
          offering  memorandum  that described our company and generally met the
          disclosure  requirements  of  Form  1-A of the Securities and Exchange
          Commission.

(2)       These shares were  sold  to accredited investors in an offering exempt
          from  registration  pursuant to Regulation D, Rule 506. The securities
          were  sold  by officers of the corporation who received no commissions
          with  regard  to  the  sales.

(3)       These shares were  issued in exchange for the cancellation of interest
          owed  on  notes  payable.  The  notes were held by shareholders of the
          company  who  had  loaned  money  to  the  company.

(4)       These shares were issued in exchange for the cancellation of the notes
          payable  to  the  same  persons  identified  in  footnote  4  above.

(5)       These shares were  issued  for  services rendered to the company.  The
          persons who rendered the services and the nature of their services was
          as follows:


                                       14
<PAGE>
<TABLE>
<CAPTION>
Date         Name                     No. of Shares    Nature  of  Services
----         ----                     -------------    --------------------
<S>          <C>                         <C>           <C>
04-07-00     Charles  Smith               2,000        Fee  for  loan
04-07-00     Olympus  C  R  Account      20,000        Consulting
04-07-00     Steve  Isenhour              4,300        Fee  for  loan
04-07-00     Celtic  Cross  Ltd          13,150        Fee  for  loan
04-07-00     John  Creedon                  880        Consulting
05-04-00     Norma  Wilke                 6,000        Fee  for  loan
05-04-00     Olympus  C  R  Account      20,000        Fee  for  loan
05-04-00     Lou  Pleshe                  2,000        Fee  for  loan
05-04-00     James  Prejean               5,250        Fee  for  loan
05-04-00     Celtic  Cross  Ltd          17,498        Fee  for  loan
05-22-00     Samuel  J.  Carpenter       12,000        Fee  for  loan
05-22-00     Olympus  C  R  Account      60,000        Fee  for  loan
05-22-00     Celtic  Cross  Ltd          34,000        Fee  for  loan
10-25-00     Craig  Adamson               1,500        Fee  for  loan
10-25-00     William  Dodge              20,000        Fee  for  loan
10-25-00     John  Crooch                 6,000        Fee  for  loan
12-08-00     Olympus  C  R  Account      45,000        Fee  for  loan
12-08-00     Vyacheslay  Vaszlevskyz     10,000        Fee  for  administration
12-08-00     John  Creedon                8,696        Consulting and accounting
</TABLE>

(6)     These  shares  were  issued  for  cash.

ITEM     6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS

     The  following  discussion  and analysis should be read in conjunction with
the  financial statements and the accompanying notes thereto. It is qualified in
its  entirety  by  the  foregoing  and  by  more  detailed financial information
appearing  elsewhere.  See  "Financial  Statements."

     Sales
     -----

     We  had  revenues of only $100 in FY 2001 compared with revenues of $33,636
in  FY  2000.  The  $33,636  income  in  2000  represents  -

-  $9,000  received  from a group in Russia for a study made for it by CSMG with
   regard  to an anaerobic  farm waste project to be used in a chicken husbandry
   project  there,

-  $14,636 received  from a group  in Canada  with regard to a study made for an
   animal  husbandry  anaerobic  farm  waste  project  proposed  in  Canada, and

-  $10,000  received as a forfeiture for an abandoned dairy project in Idaho.

We  did  report $122,993 in FY 2001 and $101,816 in FY 2000 as our fifty percent
interest  in  the  income  of  an  unconsolidated subsidiary, United Engineering

                                       15
<PAGE>
Company,  a  Ukraine  company  that  represents  a  joint venture between us and
several  Ukraine entities.  This income represents our share of the profits from
the  missile  site  conversion  activities  of  United Engineering Company. This
accrued,  but  not  received,  income  in 2001 was augmented by foreign currency
gains  of $3,370 and was offset by foreign currency losses of $9,801 in FY 2000.

     Selling,  General  and  Administrative  Expenses
     ------------------------------------------------

     Our selling, general and administrative expenses were $1,683,101 in FY 2001
compared with $973,817 during FY 2000.  The major items of these expenses were -
<TABLE>
<CAPTION>
     Item                                   2000          2001
     ----                                   ----          ----
<S>                                       <C>          <C>
     Interest  expense                    $327,584     $   221,627
     Consulting  services                   83,384          47,650
     Office  overhead  and  salaries       324,457       1,204,352
     Travel                                 79,115          87,328
     Accounting                             15,466          37,405
</TABLE>

     The  activities  which  these  expenses  were  intended to benefit were our
anaerobic  farm-waste  disposal  equipment project, our carbon dioxide separator
project and our human tissue bonding project.  The first two of these projects -
both  of  which are based upon excellent Ukraine-developed equipment that can be
manufactured  in  Ukraine,  brought  to  the  U.S. and installed at considerable
savings  to the employment of U.S. equipment of comparable or inferior quality -
represent  a  substantial  part  of  our  business  plan  for  the  future.

     Net  Loss
     ---------

     In  fiscal  year  2001  we  had a net loss of $1,598,453, or $0.32 a share,
compared with a net loss of  $945,571 in FY 2000, or $0.28 a share.  There was a
significant  increase  in  our  operations  in  2001 in our three projects - our
tissue  bonding  project, our anaerobic farm waste project and our CO2 separator
project.

     Liquidity  and  Outlook
     -----------------------

     We  have  never  operated  at  a profit.  We were able to stay in operation
during  2001  only from the proceeds of $495,528 from the sale of  common stock,
from  the  proceeds  of $206,050 in membership interests in CSMG Gastech LLC, an
increase  in  Notes  Payable  of  $621,541  and  the issuance of common stock in
exchange  for  preferred   stock  valued  at  $755,555,  which  preferred  stock
represented  several  years of unpaid salaries to officers. We were able to stay
in  operation during 2000 only from the proceeds realized from loans of $512,500
made  to  us by our shareholders, from the sale of $211,215 of capital stock and
from the issuance of $67,659 worth of stock in lieu of compensation for services
and  $257,903 worth of stock issued in lieu of cash payments on interest owed on
notes  payable  to  stockholders.

     Management  believes  our prospects for financial liquidity depend upon the
following:

     -  obtaining  contracts  for  the  leasing  of  our  anaerobic  farm  waste
        equipment;

                                       16
<PAGE>
     -  obtaining  contracts  for  the  joint  venturing  of  our CO2 separator;

     -  the  sale  of  capital  stock  in  either our company or our subsidiary,
        Anaerobic  Farm  Waste,  Inc.;  and

     -  loans  to  finance  the  purchase  of anaerobic farm waste units and CO2
        separators.

At  this time, we have not identified the sources for additional equity capital.

     We  have  executed a contract to install one carbon dioxide separator plant
at the Chastang landfill near Mobile, Alabama.  The plant is now being installed
and  should  be  producing  methane  gas  for  sale  in  June  2002.

ITEM     7.     FINANCIAL  STATEMENTS

     Independent  Auditors  Report                                            18
     Balance  Sheet  December  31, 2001 and 2000                              19
     Statement  of  Cash  Flows  Year  Ended  December  31,
          2001  and  2000                                                     21
     Statement  of  Operations  Year  Ended  December  31,
          2001  and  2000                                                     22
     Statement  of  Changes  in  Stockholders'  Equity  from
     January  1,  2000  to  December  31,  2001                               23
     Notes  to  Financial  Statements                                         24









                                       17
<PAGE>

                          INDEPENDENT AUDITORS REPORT



To  the  Shareholders  and  board  of  Directors
Consortium  Service  Management  Group,  Inc.  and  Subsidiaries

I  have  audited  the  accompanying  consolidated  balance  sheets of Consortium
Service  Management  Group,  Inc.  and  Subsidiaries as of December 31, 2000 and
December  31,  2001,  and  the  related  statements  of  operations,  changes in
stockholders'  equity  and cash flows for the years then ended.  These financial
statements are the responsibility of the Company's management. My responsibility
is  to express an opinion on these financial statements based on my  audit.

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

In  my  opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Consortium Service
Management Group, Inc. and Subsidiaries as of December 31, 2000 and December 31,
2001, and the results of its operations and cash flows for the years then ended,
in  conformity  with  generally  accepted  accounting  principles.

The  accompanying  consolidated financial statements have been prepared assuming
that  the  Company  will continue as a going concern.  As discussed in Note 2 to
the  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  2.  The financial statements do not include any adjustments that might
result  from  the  outcome  of  this  uncertainty.



                                             /s/Gary  Skibicki

Oklahoma  City,  Oklahoma                    Gary  Skibicki
March  28,  2002                             Certified  Public  Accountant



                                       18
<PAGE>
                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                                AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                  December 31



                      ---------------ASSETS---------------

<TABLE>
<CAPTION>
CURRENT  ASSETS                                         2001          2000
---------------                                      -----------   -----------
<S>                                                  <C>           <C>
Cash                                                 $    14,397   $     1,492
Dividends  Receivable                                          -         8,155
                                                     -----------   -----------
  Total  Current  Assets                             $    14,397   $     9,647


FIXED  ASSETS
-------------

Furniture  And  Equipment                                 61,409        74,909
  Less:  Accum.  Depr.                                   (43,461)      (35,751)
                                                     -----------   -----------
  Total  Fixed  Assets                               $    17,948   $    39,158


OTHER  ASSETS
-------------

Investment  -
  United  Engineering  Co.,  Inc.                        433,980       307,217
Investment  -
  Anaerobic  Farm  Waste,  Inc.                                -           880
Investment  -  C02  Equipment                            607,250        27,889
Employee  Advances                                             -         1,752
Tissue  Bonding  Patent                                   28,979         8,667
  Less:  Accumulated  Amortization                          (966)         (482)
                                                     -----------   -----------
  Total  Other  Assets                               $ 1,069,243   $   345,923
                                                     -----------   -----------

  Total  Assets                                      $ 1,101,588   $   394,728
                                                     ===========   ===========
</TABLE>




    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       19
<PAGE>
                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                                AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS (Continued)
                                  December 31


                    ---------------LIABILITIES---------------

<TABLE>
<CAPTION>
CURRENT  LIABILITIES                                    2001          2000
---------------                                      -----------   -----------
<S>                                                  <C>           <C>
Accounts  Payable                                    $    84,169   $    43,661
Interest  Payable                                        179,538        83,332
Payroll  Taxes  Payable                                   22,659        23,896
Notes  Payable  to  Stockholders                       1,655,777       990,264
                                                     -----------   -----------

  Total  Current  Liabilities                        $ 1,942,143   $ 1,141,153


STOCKHOLDERS  EQUITY
--------------------
Preferred  Stock,  $.001  Par                                  -   $        76
Value,  10,000,000  Shares
Authorized;  75,669  Shares
Issued  and  Outstanding
at  December  31,  2001

Common  Stock  $.001  Par  Value,                          6,199         3,927
40,000,000  Shares  Authorized;
3,927,374  Shares  Issued  and
5,993,976  Shares  Issued  And
Outstanding  at  December  31,  2001

Membership  Capital                                      206,000             -

Additional  Paid  in  Capital                          3,748,807     2,452,680

Accumulated  Other
Comprehensive  (Loss)                                   (343,187)     (346,957)

Accumulated  (Deficit)                                (4,458,374)   (2,856,151)

  Total  Stockholders  Equity                           (840,555)     (746,425)
                                                     -----------   -----------

  Total  Liabilities  and
  Stockholders  Equity                               $ 1,101,588   $   394,728
                                                     ===========   ===========
</TABLE>


                      SEE ACCOUNTANT'S COMPILATION REPORT

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       20
<PAGE>
                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                             YEAR ENDED DECEMBER 31

<TABLE>
<CAPTION>
                                                      2001           2000
                                                  -----------    -----------
<S>                                               <C>            <C>
Revenues                                          $       100    $    33,636
General  and  Administrative  Expenses              1,683,101        973,817
  Funded  R  &  D                                           0              0
  Cost  of  Funded  R  &  D                            43,129        100,881
  Net  R  &  D  Cost                                   43,129        100,881
                                                  -----------    -----------
Operating  (Loss)                                  (1,726,130)    (1,041,062)

(Loss)  on  Investments                                     -        (30,000)

Interest  Income                                          914          2,476

Interest  in  Income  of
Unconsolidated  Companies                             122,993        101,816

Foreign  Currency  Gain  (Loss)                         3,370         (9,801)
                                                  -----------    -----------

(Loss)  from  Continuing  Operations               (1,598,453)      (976,571)

Income  Taxes                                               -              -

(Loss)  Before  Extraordinary  Item
Cancellation  of  Liability  Income                         -         31,000

Net  (Loss)                                       $(1,598,453)   $  (945,571)

Net  (Loss)  Per  Share  Common  Stock
Before  Extraordinary  Gain                              (.32)          (.29)

Net  (Loss)  Per  Share  Common
Stock  After  Extraordinary  Gain                           -           (.28)

Weighted  Average  Common  Shares
Outstanding                                         5,063,187 Shs  3,425,645 Shs
</TABLE>

Basic  and  Diluted  earnings  per  share  are  the  same.  The
corporation  is  reporting  a  net  loss  for  the  reporting
period  and  any  potentially  dilutive  securities  are
antidilutive  (reduce  loss  per  share)  and  therefore  not
presented.

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       21
<PAGE>
                   CONSORTIUM SERVICES MANAGEMENT GROUP, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
CASH  FLOWS  FROM  OPERATING  ACTIVITIES                  2001           2000
----------------------------------------               -----------     ---------
<S>                                                    <C>             <C>
Net  Loss                                              (1,598,453)     (945,571)
Bad  Debt  Expense                                              -           600
Equity  Income  From  Investees                          (122,993)     (101,816)
Depreciation                                                7,710         7,710
Amortization                                                  484         8,313
Dividends  From  Investee                                       -        11,906
Foreign  Exchange  Loss  (Gain)                            (3,770)        9,801
Decrease  (Increase)  In  Dividends  Receivable             8,155        (8,155)
Interest  Expense  For  Common  Stock                      91,212       257,093
Compensation  for  Common  Stock                          755,555        67,661
Increase  (Decrease)  In  Accounts  Payable                40,508       (14,139)
(Decrease)  Increase  In  Federal  Payroll
  Taxes  Payable                                           (1,237)        3,269
Increase  In  Interest  Payable                            96,206        65,269
Cancellation  Of  Indebtedness  Income                          -       (31,000)
Decrease  Bank  Overdraft                                                    (8)
                                                       ----------      --------
Net  Cash  Used  In  Operating  Activities               (726,623)     (669,067)

CASH  FLOWS  FROM  INVESTING  ACTIVITIES
----------------------------------------

Consolidated  Anaerobic  Farm                                 880             -
Investment  In  C02  Equipment                           (579,361)      (27,889)
(Sell)  Purchase  Equipment,
  Furniture                                                13,500       (16,391)
(Decrease)  Increase  Employee  Advances                    1,752          (119)
Acquire  Tissue  Bonding  Patent                          (20,312)       (8,667)
                                                       ----------      --------
Cash  Used  From  Investing  Activities                  (583,541)      (53,066)

CASH  FLOWS  FROM  FINANCING  ACTIVITIES
----------------------------------------

Increase  In  Membership  Capital                         206,000             -
Increase  In  Stock  Issue                                495,528       211,125
Increase  Notes  Payable                                  621,541       512,500
                                                       ----------      --------
Increase  Cash  From  Financing  Activities             1,323,069       723,625

Net  Increase  In  Cash                                    12,905         1,492
Cash  At  Beginning  Of  Period                             1,492             0
Cash  At  End  Of  Period                                  14,397         1,492

NON  CASH  FINANCING  ACTIVITIES
--------------------------------

In  2000  $7,500  in  shareholder  notes  were
converted  to  $7,500  in  common  stock.  In
2001  $45,500  in  shareholder  notes  were
converted  to  common  stock.
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       22
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                          ACCUMULATED
                                                                                            OTHER
                                   NO                                  MEMBER-    ADD'L     COMPRE-       ACCUMU-
                                PREFERRED   PAR    NO. COMMON   PAR     SHIP     PAID IN    HENSIVE        LATED
DESCRIPTION                       SHARES   VALUE   SHARES(ea)  VALUE   CAPITAL   CAPITAL    DEFICIT       DEFICIT       TOTAL
--------------------------------------------------------------------------------------------------------------------- -----------
<S>                              <C>       <C>     <C>         <C>     <C>      <C>         <C>         <C>            <C>
Balance December 31, 1999        76,669    $76     3,043,050   $3,043           $1,910,187  $(337,156)  $(1,920,381)   $  (344,231)
Common  Shares  Exchanged
For  Notes  During  2000                              12,000       12                7,488                                   7,500
Common  Shares  Issued  For
Interest  During  2000                               423,350      423              256,670                                 257,093
Common  Shares  Issued  For
Services  During  2000                               111,174      111               67,548                                  67,659
Common  Shares  Sold
During  2000                                         337,800      338              210,787                                 211,125
Net  (Loss)  Year  Ended
December  31,  2000
                                                                                                (9,801)     (935,770)     (945,571)
                                 ------    ---     ---------   ------  -------  ----------   ----------   -----------  -----------
Balance  December  31,  2000     76,669    $76     3,927,374   $3,927           $2,452,680   $(346,957)  $(2,856,151)  $  (746,425)

Common  Shares  Exchanged       (76,669)   (76)       76,669      $76
For  Preferred  Stock

Common  Shares  Issued
For  Services                                      1,135,000    1,135              755,555                                 756,690
Exchange  $45,000  In  Notes
For  Common  Stock                                    72,193       73               45,427                                  45,500
Exchange  $500  Of
Interest  For  Common  Stock                             960        1                  499                                     500
Sell  Membership  Interest  In
Limited  Liability  Company
Subsidiary                                                             206,000                                             206,000
Common  Shares  Sold  2001                           986,804      987              494,646                                 495,633
Net  (Loss)  Income  Year
Ended  December  31,  2001                                                                       3,770    (1,602,223)   (1,598,453)
                                 ------    ---     ---------   ------  -------  ----------   ----------   -----------  -----------
Balance  December  31,  2001                       6,199,000   $6,199 $206,000  $3,748,807   $(343,187)  $(4,458,374)    $(840,555)
</TABLE>





    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       23
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001

                                     NOTE 1
                        SIGNIFICANT ACCOUNTING POLICIES

Nature  of  Operations

Consortium  Service Management Group, Inc. (the "Company"), a Texas corporation,
was  incorporated  on  November 17, 1992.  The planned operations of the Company
are  to  develop  business  and investment opportunities worldwide by licensing,
marketing  and  distributing rights in advanced technologies developed primarily
in  the  Ukraine.

The technologies involve live tissue bonding, C02 (carbon dioxide) separation of
landfill  gas  and  anaerobic  animal  waste  disposal.  The live tissue bonding
focuses  on  bonding  living  soft biological tissue used in surgical procedures
that  eliminates the need for sutures, staples, sealants or glues.   The Company
has  an  agreement  with  the  E.  O. Paton Institute of Electric Welding of the
Ukraine  National  Academy  of Sciences and International Association of Welding
and  owns  the  exclusive  world  rights on licensing, patenting, manufacturing,
development  and  distribution  of  this technology.  The live biological tissue
bonding  process  is a U.S. and international patent pending technology approved
by  the  Ukraine  Ministry  of  Health  for  human  surgical  procedures.

The  CSMG,  Inc.  owned  carbon  dioxide separator technology, also developed in
Ukraine,  promotes  the  economical  separation  of  C02  gas  from  methane gas
emanating  from  landfills.  Landfills  generate a commingled mixture of methane
and  carbon  dioxide gas which prevents it from being commercially sold as fuel.
The  Ukraine technology has developed an economical C02 separator which isolates
methane  gas  to  the extent that it can be sold to utility companies as well as
other industrial and commercial customers with the first unit being installed in
2002  in Mobile, Alabama.  Carbon dioxide separator equipment exists in the U.S.
however  it  is more expensive than Ukraine technology necessitating methane gas
to  be  burned  or flared on site for environmental purposes as opposed to being
sold  for  fuel.

The  third  technology developed in Ukraine is an anaerobic animal waste process
which  via  a   closed  loop  system   eliminates   animal  waste,   odors   and
microorganisms.  The  marketing  and  distribution rights for this equipment are
owned  exclusively  by  CSMG  which  as  part of the process produces an organic
fertilizer  also  planned  to  be marketed in the U.S. and Canada in accord with
rights  owned  by  CSMG,  Inc.

The Company does not internally separate financial information including results
of operations by segments such as geographic areas, products, major customers or
operating  segments.  With  the  major  component  of  income  being from United
Engineering  Company's  earnings  management considers it impractical to further
segment  financial  information.

                                       24
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


Investments  in companies in which Consortium Service Management Group, Inc. has
an  equity  interest  of at least 20% are accounted for under the equity method.
Under  this method the Company records its share of income or losses as Interest
In  Income Or Losses of Unconsolidated Companies with corresponding increases or
decreases  in  the  investment  account.  In  2000  the  Company  made a $27,888
investment  for  C02 separator equipment that on February 1, 2001 was used as an
initial  capital  investment  for  a 55% ownership interest in CSMG Gastech LLC.
CSMG Gastech LLC was formed to manage methane gas sales when  planned operations
begin.  Also  in  2000  CSMG's 50% equity interest in United Engineering Company
decreased  to 33 1/3% due to several key Ukrainian employees purchasing stock in
United  Engineering  Company  as  a  means  of  rewarding  them  for  profitable
operations.  In  year  2000  United  Engineering  Company  recorded  a profit of
1,506,000  gryvna which using an average annual exchange rate of .18265 converts
to  $275,107  in  U.S.  dollars.  In  2001 United Engineering Company recorded a
profit  of  2,110,000  gryvna  which  using  an  average exchange rate of .18601
converts  to  $392,481  in  U.S.  dollars.


Cash  and  Cash  Equivalents

For  purposes  of the statements of cash flows, the Company considers all highly
liquid  investments  with  maturities  of  less  than  three  months  to be cash
equivalents.


Revenue  Recognition

CSMG  has  experienced long and uncertain collection time frames and accordingly
the  general  policy  is  revenue  is  recognized  as  received.


Furniture,  Fixtures  and  Equipment

Furniture,  fixtures  and  equipment  are  stated  at  cost and are straightline
depreciated  over  the  estimated  economic  lives of the assets, primarily five
years.  Equipment  with  no  continuing  value  is  written  off.


Investments  in  Unconsolidated  Companies

Income  is  recognized  as  earned  by  the foreign investee, United Engineering
Company.  Specifically investments in entities where the ownership percentage is
between  20%  and  equal  to  or less than 50% earnings are recognized under the
equity  method  of  accounting.  In  2000  the Company's ownership percentage in
United  Engineering  Company  decreased  from  50%  to  33  1/3% resulting in an
investment  differential  of  $78,307 between the investment account and the net
assets  of  UEC.  The accounting policy is to equalize this differential with an

                                       25
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


amortization  write  off  over the next 10 years of $7,831 per year beginning in
2000  and  ending  in  2009.

Majority  owned  companies  are  accounted  for  on  a  consolidated  basis.


Foreign  Operations

Foreign  currency transactions and financial statements are translated into U.S.
dollars  in  accordance  with Statement of Financial Accounting Standards No. 52
"Foreign Currency Translation".  All balance sheet accounts have been translated
using  the  exchange  rate at the balance sheet date.  Income Statement accounts
have been translated using the average exchange rates for the year.  The Company
owns  a  33.3% interest in United Engineering Company which was organized in and
operates  in  the  Ukraine.  In  2000  the  average exchange rate used to record
income  was .18265 functional currency to U.S. dollars and the year end exchange
rate  used  to  value  the  United  Engineering  investment  account  was  .1840
functional  currency to U.S. dollars.  In 2001 the average exchange rate used to
record  income  was  .18601 functional currency to U.S. dollars and the year end
exchange rate used to value the United Engineering investment account was .18680
functional  currency  to  U.S.  dollars.


Loss  Per  Share

The  computation  of  loss  per  share  of common stock is based on the weighted
average number of shares outstanding.  The Company had net losses of $945,571 in
2000 and $1,598,453 in 2001 and accordingly basic and diluted earnings per share
are  the  same  because any dilutive or potentially dilutive securities would be
antidilutive.  In 2000 the Company reported an extraordinary gain of $31,000 and
as  presented  on  the  Statement  of  Operations  the  net  loss per share when
considering  this  gain decreases from 29 cents per share to 28 cents per share.
The  extraordinary  gain  of $31,000 is due to an accounts payable reported as a
short term liability for professional services incorrectly booked by the Company
at  the  end  of  1999.


Issuance  of  Shares  for  Services

Valuation  of shares for services is based on the fair market value of services.
During  2000  the  Company  issued 111174 shares of common stock in exchange for
management,  marketing and research services.  The cost of the services has been
charged  to  operations  and  additional  paid  in capital has been increased by
$67,548,  representing the excess of the cost of the services over the par value
of  the common stock issued.  In 2000, the Company also issued 423,350 shares of

                                       26
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


common stock for interest on notes payable to shareholders with the cost charged
to operations and additional paid in capital increased by excess of the interest
expense  over  the  par value of the common stock issued, $256,670.  In 2001 the
Company  exchanged 1,210,704 shares of common stock for $756,690 in compensation
expense  charged  to  operations and additional paid in capital increased by the
excess  of  compensation  expense over the par value of the common stock issued,
$755,555.


Preferred  Stock

On  December  28,  1995  the  Company authorized the issuance of 75669 shares of
Series  A  preferred stock, $10.00 face amount, .001 Par which pays a cumulative
dividend  on  net  corporate  profit  equal  to  8%  of  the  face amount of the
outstanding  stock.  If  the  Company  does  not realize profits preferred stock
dividends  are  not  accruable.  Such preferred Series A stock is preferred over
all  common  stock  in the event of corporate liquidation and dissolution to the
extent  of  its  unredeemed  face  amount.

On  September  29,  2000  the  Board  of  Directors approved Mr. Robbins and Mr.
Allison  converting  all  of  their preferred shares which represent 100% of the
preferred  shares  outstanding  to  common stock.  In 2001 their combined 75,669
preferred  shares  were converted to 1,210,704 common shares as compensation for
unpaid  services recorded as $756,690 in compensation expense with corresponding
entries  to  common  stock  and  paid  in  capital.


Use  of  Estimates

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


Accounting  Pronouncements  Adopted  in  2000

During  2000,  the  Financial  Accounting  Standards  Board issued the following
Statements  of  Financial  Accounting  Standards  ("SFAS").  Adoption  of  these
Standards  did  not have a material effect on its financial position, results of
operations  or  on  disclosures  within  the  financial  statements.

(1)     SFAS No. 138 - Accounting for Certain Derivative Instruments and Certain
Hedging  Activities  -  An  amendment  of  FASB  Statement  No.  133.

(2)     SFAS  No.  139  -  Rescission of FASB Statement No. 53 and Amendments to
FASB  Statements  No.  63,  89  and  121.

                                       27
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


(3)     SFAS  No.  140  -  Accounting  for  Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities (a replacement of FASB Statement 125).


Accounting  Pronouncements  Adopted  in  2001

During  2001,  the  Financial  Accounting  Standards  Board issued the following
Statement of Financial Accounting Standards ("SFAS").  Adoption of this standard
did  not have a material effect on its financial position, results of operations
or  on  disclosures  within  the  financial  statements.

(1)     SFAS  No.  141  -  Business  Combinations.


Income  Taxes

The  Company  records  its  income tax provision in accordance with Statement of
Financial  Accounting  Standards  No.  109, "Accounting for Income Taxes".  (See
Note  3).


                                     NOTE 2
                BASIS OF PRESENTATION AND CONSIDERATIONS RELATED
                     TO CONTINUED EXISTENCE (GOING CONCERN)

The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of  liabilities  in  the  normal course of business.  The Company incurred a net
loss  of  $945,571  for  the year ended December 31, 2000 and $1,598,453 for the
year  ended  December  31,  2001  and these factors combined with prior year net
losses,  raises  substantial  doubt  as  to the Company's ability to obtain debt
and/or  equity  financing  and  achieve  profitable  operations.

The  Company's  management  intends  to raise additional operating funds through
equity and/or debt offerings and the sale of technologies. However, there can be
no  assurance  management  will  be  successful  in  its endeavors. The possible
consequences  of not obtaining additional funds either through equity offerings,
debt  offerings  or  sale  of  technologies is that there will not be sufficient
money  to fund the capital projects required to earn long term revenues. A major
component of planned future operations involves the construction of animal waste
and  disposal facilities for either sale and or lease and these undertakings are
only possible from outside financing. In 2001 carbon dioxide separator equipment
was  manufactured,  paid  for, shipped to Houston, Texas for delivery to Mobile,
Alabama.  Installation  is  currently in process that when completed will enable
the  Company to profitably sell methane gas as discussed in Note 1 under "Nature
of  Operations". Although proven successful in Ukraine this technology is new to
the  United  States and remains unclear if additional funding will be necessary.

                                       28
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


The  possible consequences of not obtaining additional financing for either farm
waste  disposal  or  carbon dioxide projects are operations ceasing resulting in
liquidation  of  the  Company.


                                     NOTE 3
                                  INCOME TAXES

The  Company  records  its  income tax provision in accordance with Statement of
Financial  Accounting  Standards  No.  109,  "Accounting for Income Taxes" which
requires  the  use  of  the  liability  method of accounting for deferred income
taxes.

With the Company not generating taxable income since inception, no provision for
income  taxes  has  been  provided.  At December 31, 2000 the net operating loss
carryforward  was in excess of $1,000,000 and at the end of December 31, 2001 it
will  exceed  $2,000,000.



                                     NOTE 4
                    INVESTMENT - UNITED ENGINEERING COMPANY

At  December  31, 1999 the Company was a 50% owner of United Engineering Company
("UEC"),  a  Ukraine  -  U.S.  joint  stock company registered under the laws of
Ukraine.  The other 50% of UEC's equity was owned by eight Ukraine organizations
representing  fourteen Ukraine organizations, three of which represent the State
Property  Fund  of  Ukraine.  All  UEC decisions require a 75% shareholder vote.
UEC is a Ukraine closed joint stock company with foreign investment, the Company
being  the  foreign  investor, and holds a Ukraine license to perform classified
and  secret  construction  works  relating  to  projects that are in the Ukraine
national  security   sector.    During  the  year   ending   December  31,  2000
approximately  9  employees  of  United  Engineering  Company   were  given  the
opportunity  to  purchase  stock  to  complete  its authorized capital by paying
26,100  gryvna (approximately 4,760 U.S. dollars) for 5,000 shares.  The sale of
stock  to  its  employees  completed  the  full complement of registered shares,
20,000,  authorized  by United Engineering Company with CSMG owning 6,666 shares
or  1/3%  ownership.  For  the  year  ended December 31, 2000 United Engineering
Company  had  revenues of $2,414,000 for a net income of $284,916.  For the year
ended  December  31,  2001 United Engineering Company had revenues of $2,153,000
with  a net income of $392,481.  At December 31, 2000 UEC had $781,000 in assets
and  $71,000  in  liabilities  representing a total net worth in U.S. dollars of
$710,300.  At  December  31,  2001  UEC had $1,382,000 in assets and $268,000 in
liabilities  for  a  net  worth  of  $1,114,000  in  U.S.  Dollars.

                                       29
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


A  portion  of  Investment  -  United  Engineering  Company  has previously been
reported  as a Founders Fund which represents a special priority in the event of
liquidation.  In  1994  the  Company  made  its  original  investment  in United
Engineering  Company which included contributing $73,843 in autos, equipment and
furniture.  The  agreement  between the Company and UEC was that in the event of
UEC  liquidating  $73,843 would be repaid in preference to all creditors.  As an
incentive  to encourage foreign investment the Ukraine government has guaranteed
repayment if upon liquidation UEC has insufficient funds to do so.  This special
funding arrangement continues to exist but for presentation purposes is included
as  part  of  the  UEC  investment  account  on  the  balance  sheet.


                                     NOTE 5
                                CSMG GASTECH LLC

In  2001 CSMG Gastech LLC was formed which the Company owns a 89.7% interest in.
The  consolidated  financial  statements  show  $206,000  in  Membership Capital
representing  the  investment  of 8 members.  Originally 10 membership interests
were  sold  but due to an inquiry by the Texas Security Commission each investor
had  to  be  given  the  opportunity  to  rescind their investment which two did
requiring  two  $10,000  capital contributions with interest to be returned.  It
was alleged that membership interests were sold without disclosing that Resource
Technology  Corporation,   the  Company   owning   landfill  contracts   at  C02
installation  sites,  was  in chapter 11 business reorganization.  All investors
were  contacted  by  both  the  Company and the Texas Securities Commission with
eight  reaffirming  their  investments.


                                     NOTE 6
                          NOTES PAYABLE TO STOCKHOLDERS

Notes  to  shareholders  consist  of 27 short-term (generally one year) interest
bearing  unsecured  notes  with  varying  maturity  dates  with  the most common
interest  rate  being  11%  per  annum on the unpaid balance.  In 2000 $7,500 of
shareholder  notes payable were retired by being exchanged for common stock.  On
December  31,  2000 notes payable to shareholders totaled $990,264 with interest
expense  of  $343,354  broken  down  as  follows:
<TABLE>
<CAPTION>
<S>                                                   <C>
          a.  Cash  paid  to  noteholders             $       2,929
          b.  Common  stock  issued  for  interest          257,093
          c.  Accrued  interest  through  12/31/00           83,332
                                                      -------------
                                                      $     343,354
</TABLE>

                                       30
<PAGE>
           CONSORTIUM SERVICE MANAGEMENT GROUP, INC. AND SUBSIDIARIES
                          NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 2000, DECEMBER 31, 2001


On  December  31,  2001  notes  payable  to shareholders totaled $1,655,777 with
interest  expense  of  $221,629  broken  down  as  follows:

<TABLE>
<CAPTION>
<S>                                                   <C>
          a.  Cash  paid  to  noteholders             $      20,249
          b.  Common  stock  issued  for  interest           93,000
          c.  Accrued  interest  through  12/31/01          108,380
                                                      -------------
                                                      $     221,629
</TABLE>


















                                       31

ITEM     9.     DIRECTORS,  EXECUTIVE OFFICERS, PROMOTERS  AND  CONTROL PERSONS;
                COMPLIANCE  WITH  SECTION  16(a)  OF  THE EXCHANGE  ACT

     Set forth below are the names and terms of office of each of the directors,
executive officers and significant employees of the company and a description of
the  business  experience  of  each.

<TABLE>
<CAPTION>
                                                                      Director's
                                                            Director     Term
    Person                      Positions  and  Offices      Since      Expires
-----------------               -----------------------     --------  ----------
<S>                             <C>                             <C>       <C>
Esmeralda  G.  Robbins,  57     Chairman  of the Board          1992      2002
                                of  Directors

Donald  S.  Robbins,  57        President,  Chief               1992      2002
                                Executive  Officer  and
                                Director

Gordon  W.  Allison,  75        Executive  Vice  Presi-         1992      2002
                                dent,  Chief  Financial
                                Officer,  Secretary  and
                                Director

James  Workman,  74             Director                        1998      2002
</TABLE>

     Esmeralda  G.  Robbins.  From  1979  to 1993 Mrs. Robbins worked as Product
Consultant  and  Salon  Coordinator  for  Corpus Christi Beauty Supply, a family
owned  business  that  covered  a  500-mile  radius.  Mrs.  Robbins  consulted
boutiques,  beauty,  and  barber  salons  providing  the  equipment and products
necessary  for  them to start a new salon.  Working with furniture manufacturers
and  product  technicians she also coordinated large-scale seminars to introduce
shop  owners and their employees to new products and ideas to improve and update
their  services.  Mrs.  Robbins  would also oversee the day-to-day operations of
the  business  along with other family members.  In 1993 the business was closed
due  to  the  declining  health  of  elder  family  members.  Mrs. Robbins is an
original  founder  of  Consortium  Service  Management  Group  and  has been its
Chairman  of  the  Board  since  1992.  She has worked full time for the company
since  1993.  She  is the spouse of Donald S. Robbins, president of the company.

     Donald  S.  Robbins.  Mr.  Robbins commenced his business career by working
from 1969 until 1979 with several life insurance companies in the area of estate
and  retirement  planning.  From  1979  until  1983  he  was associated with the
financial  planning  division  of  E.F. Hutton, Hutton Financial Services.  From
1983  until  1988  he  was associated with Prudential Bache Securities as a vice
president  for  investments and financial planning.  From 1988 until 1995 he was
affiliated  with  the  broker-dealer  firm Royal Alliance Associates, Inc.  From
1983  until  1985  he  has  been  a guest speaker at numerous investor meetings,
continuing  medical  education  meetings,  medical  society  meetings and broker
seminars.  Mr.  Robbins was one of the founders of Consortium Service Management
Group  in 1992 and has been employed full time by the company since 1992.  He is
the  person who has negotiated for the company with respect to the marketing and

                                       32
<PAGE>
licensing  agreements  of  the  company  and  the person who negotiated with the
various organizations in Ukraine that, together with the company, founded United
Engineering  Joint Stock Company.  Mr. Robbins oversees the company's operations
offices  in  Ukraine  and devotes full time to the affairs of the company. He is
the  spouse  of  Esmeralda  G.  Robbins, the chairman of the board of directors.

     Gordon  W.  Allison.  Mr.  Allison has 35 years experience in the insurance
industry and 28 years experience as a corporate officer and a chief executive of
several companies.  From 1972 through 1987 he was the chief executive officer of
American  Trustee  Life  Corporation   and  affiliated  insurance  companies  in
Minnesota, Arizona, and Nebraska.  From 1982 through 1991 he was the partnership
manager  of  Cross  Timbers  Ranch  Ltd., a real estate development and ranching
operation  specializing in tax-sheltered cattle maintenance.  In 1988 he retired
from the insurance industry as an officer and director of companies but remained
in  sales  and financial planning.  From 1988 until 1991 he served as a director
of  Advantage  Marketing  System,  a public company.  In 1982 he was the elected
president  of the Association of Oklahoma Life Insurance Companies.  He has been
a bank director and a community and church leader in Oklahoma City for more than
30  years.  He  is one of the founders of Consortium Service Management Group in
1992  and  has  been  employed  full  time  by  the  company  since 1992.  He is
responsible for its operations in the U.S., particularly during periods when Mr.
Robbins  is  in  Ukraine.

     James  Workman.  An  agriculture entrepreneur and expert, James Workman has
spent  his  entire  working  life  in agriculture projects.  For 35 years he has
operated  and  owned  several thousand acres of farming.  He retired in 1993 and
sold his 26,000-acre farming operation in Mississippi specializing in soy beans,
rice, cotton, corn and wheat.  Prior to moving to Mississippi, James Workman had
operated  a  10,000-acre farm operation in Arkansas for a German company farming
rice,  cotton,  corn  and  soy  beans.  He  specialized  in  land clearing, land
precision leveling, drainage and irrigation for the German company.  Mr. Workman
has  worked  part  time  with  Consortium Service Management Group since January
1993.

     Compliance  with  Section  16(a)  of  the  Securities  Exchange  Act.
     ---------------------------------------------------------------------

     Based  solely upon a review of Forms 3 and 4 furnished to the company under
Rule  16a-3(e) of the Securities Exchange Act during its most recent fiscal year
and Forms 5 furnished to the company with respect to its most recent fiscal year
and any written representations received by the company from persons required to
file  such  forms,  the  following  persons  -  either  officers,  directors  or
beneficial owners of more than ten percent of any class of equity of the company
registered  pursuant  to  Section  12 of the Securities Exchange Act - failed to
file  on  a  timely  basis  reports  required by Section 16(a) of the Securities
Exchange  Act  during  the  most  recent  fiscal  year  or  prior  fiscal years:

<TABLE>
<CAPTION>
                                                                 No. of Failures
                                            No. of Transactions      to File a
                       No. of Late Reports  Not Timely Reported  Required Report
                       -------------------  -------------------  ---------------
<S>                            <C>                  <C>                <C>
Esmeralda G. Robbins           None                 None               None
Donald S. Robbins              None                 None               None
Gordon W. Allison              None                 None               None
James Workman                  None                 None               None
</TABLE>


                                       33
<PAGE>
ITEM     10.     EXECUTIVE  COMPENSATION

     Set  forth  below  is  the aggregate compensation during fiscal years 1999,
2000 and 2001 of the chief executive officer of the company.  During the period,
no  executive  officer  of  the  company  received  compensation  that  exceeded
$100,000.
<TABLE>
<CAPTION>
          Name                 Fiscal Year   Annual Salary  Other Compensation
          ----                 -----------   -------------  ------------------
<S>                               <C>          <C>                <C>
Donald S. Robbins, President      2001          $99,678           $438,222
Gordon W. Allison,
  Exec. Vice Pres.                2001          $48,500           $317,333
Donald S. Robbins, President      2000         $131,295              None
Donald S. Robbins, President      1999          $43,457              None
</TABLE>


     Set  forth  below  is information concerning each exercise of stock options
during  the  last  fiscal  year  by each of the named executive officers and the
fiscal  year-end values of unexercised options, provided on an aggregated basis:

<TABLE>
<CAPTION>
                                            No. of Shares
                                              Underlying       Value of Unexercised
                                          Unexercised Options      In-the-Money
                     Shares                    at FY-End         Options at FY-End
                    Acquired     Value        Exercisable/          Exercisable/
       Name       or Exercised  Realized     Unexercisable          Unexercisable
       ----       ------------  --------  -------------------  ---------------------
<S>                     <C>        <C>         <C>                   <C>
Donald S. Robbins       0          0           425,000/0             $155,125/0
Gordon W. Allison       0          0           425,000/0             $155,125/0
</TABLE>

     Directors  of  the  company  receive  no compensation for their services as
directors.

ITEM     11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS  AND MANAGEMENT

     The  table  below sets forth, as of March 29, 2002, the number of shares of
Common  Stock  of the company beneficially owned by each officer and director of
the  company,  individually  and  as  a  group,  and by each person known to the
company  to  be  the  beneficial  owner  of more than five percent of the Common
Stock.
<TABLE>
<CAPTION>
                                            Number  of
                                            Shares  of
     Name  and  Address                    Common  Stock     Percent
     ------------------                    -------------     -------
<S>                                          <C>              <C>
     Esmeralda  G.  Robbins(1)(2)              250,000         4.1
     701  CCNB  North  Tower
     500  North  Shoreline
     Corpus  Christi,  TX  78471

     Donald  S.  Robbins(2)(3)               1,551,250        25.2
     701  CCNB  North  Tower
     500  North  Shoreline
     Corpus  Christi,  TX  78471
</TABLE>

                                       34
<PAGE>
<TABLE>
<CAPTION>
<S>                                          <C>              <C>
     Gordon  W.  Allison(4)                  1,583,800        25.8
     P.  O.  Box  770304
     Oklahoma  City,  Oklahoma  73177

     James  Workman                             60,000         1.0
     1826  War  Eagle  Street
     North  Little  Rock,  AR  72116

     Officers  and  Directors                3,445,050        56.1
     as  a  group  (4  persons)
     ---------------------------------
</TABLE>

(1)     These  shares  are  held  of  record  by the Esmeralda G. Robbins Family
Limited  Partnership.

(2)     Esmeralda  G.  Robbins  and  Donald  S.  Robbins  are  wife and husband.

(3)     These  shares are held of record by the Donald S. Robbins Family Limited
        Partnership.

(4)     859,500  of  these shares are held of record by Electronic Data Service,
        Inc., an  Oklahoma  corporation,  of  which  Mr. Allison  is an officer,
        director and 100  percent  beneficial  shareholder.

Changes  in  Control
--------------------

     There  are  no  arrangements which may result in a change in control of the
company.

ITEM     12.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     There  have  been  no  transactions  during the past two years, or proposed
transactions,  to  which  our  company  was  or  is  to be a party, in which any
director,  executive  officer,  nominee  for election as a director, a holder of
more  than  five  percent  of  our voting stock or any member of their immediate
family  had  or  is  to  have  a  direct  or  indirect  material  interest.

ITEM     13.     EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     Exhibits

     The following exhibits are filed, by incorporation by reference, as part of
this  Form  10-KSB:


                                       35
<PAGE>

     Exhibit  No.                    Description
     ------------                    -----------

         3           -     Amended  and  Restated  Articles of  Incorporation of
                           Consortium  Service  Management  Group,  Inc.*

         3.1         -     Bylaws  of Consortium Service Management Group, Inc.*

        10           -     Founders'  Agreement  of United Engineering Company*

        10.1         -     Statutes  (Bylaws)  of United Engineering Company*

        10.2         -     Agreement  of  April  24,  1996  between   Consortium
                           Service Management  Group, Inc. and The L Group, Inc.
                           concerning tissue bonding technology*  (rescinded  in
                           January  2000)

        10.3         -     Agreement  of   July  9,  1996   between   Consortium
                           Service  Management  Group,  Inc.  and  International
                           Welding concerning tissue bonding  technology*

        10.4         -     Agreement among Consortium Service  Management Group,
                           Inc.,   United   Engineering   Company   and  Ivan V.
                           Semenenko, the inventor of the anaerobic  farm  waste
                           technology*

        10.5         -     Agreement  of  June 9, 1998  among Consortium Service
                           Management  Group, Inc.,   The  Sumy  Frunze  Machine
                           Building  Science  and  Production  Association,  and
                           United Engineering Company  concerning  the anaerobic
                           farm waste technology*

        10.6         -     Agreement  between   Consortium  Service   Management
                           Group, Inc.  and   Western  Waste  Management,   Inc.
                           concerning the anaerobic farm waste  technology*

        10.7         -     Agreement  between   Consortium   Service  Management
                           Group,  Inc.  and   Aardema  Dairy   concerning   the
                           anaerobic farm waste technology*

        10.8         -     Agreement   between   Consortium  Service  Management
                           Group, Inc. and  John  and  Ruth  Beukers  concerning
                           the anaerobic farm waste technology*

        10.9         -     Agreement  of  December  1998  between  International
                           Welding Association  of  Kiev, Ukraine and Consortium
                           Service Management Group, Inc. concerning the  carbon
                           dioxide  separator  technology*


                                       36
<PAGE>
        10.10        -     Operating   Agreement   of   June  14,  2001  between
                           Consortium   Service  Management   Group,  Inc.   and
                           Resource Technology Corporation***

        10.11        -     Contract Agreement Effective August 14, 2000  between
                           Consortium Service  Management  Group/Anaerobic  Farm
                           Waste Co. and Rondeau Anaerobic***

        10.12        -     Contract     IAW-USA    002-PR-19.04.2000     between
                           International  Association  Welding,  Kiev  and  E.O.
                           Paton  Electric  Welding Institute  National  Academy
                           Science  Ukraine  and  Consortium  Service Management
                           Group,  Inc.***

        10.13        -     Contract     IAW-USA    003-PR-19.04.2000     between
                           International  Association  Welding,  Kiev  and  E.O.
                           Paton  Electric  Welding Institute  National  Academy
                           Science  Ukraine  and  Consortium  Service Management
                           Group,  Inc.***

        10.14        -     Contract     IAW-USA    004-PR-19.04.2000     between
                           International  Association  Welding,  Kiev  and  E.O.
                           Paton  Electric  Welding Institute  National  Academy
                           Science  Ukraine  and  Consortium  Service Management
                           Group,  Inc.***

        10.15        -     Contract     IAW-USA    005-PR-19.04.2000     between
                           International  Association  Welding,  Kiev  and  E.O.
                           Paton  Electric  Welding Institute  National  Academy
                           Science  Ukraine  and  Consortium  Service Management
                           Group,  Inc.***

        10.16        -     Contract     IAW-USA    006-PR-19.04.2000     between
                           International  Association  Welding,  Kiev  and  E.O.
                           Paton  Electric  Welding Institute  National  Academy
                           Science  Ukraine  and  Consortium  Service Management
                           Group,  Inc.***

        10.17        -     Contract     IAW-USA    007-PR-19.04.2000     between
                           International  Association  Welding,  Kiev  and  E.O.
                           Paton  Electric  Welding Institute  National  Academy
                           Science  Ukraine  and  Consortium  Service Management
                           Group,  Inc.***

        10.18        -     Contract   IAW-USA   008-PR   between   International
                           Association Welding,  Kiev,  Ukraine  and  Consortium
                           Service Management Group, Inc.***

        16           -     Letter dated  January 29, 2000 from Jaak (Jack) Olesk
                           to  Consortium Service  Management  Group,  Inc.  Re:
                           Termination as Auditor**


                                       37
<PAGE>

        99           -     Ukraine   Ministry   of   Health,  State  Department,
                           Certificate of  State  Registration  No.  1105-193***


     *Previously filed with Form 10-SB; Commission File No. 0-27359 incorporated
herein.

     **Previously  filed with Amendment No. 1 to Form 10-SB; Commission File No.
0-27359  incorporated  herein.

     ***Previously filed with Amendment No. 2 to Form 10-SB; Commission File No.
0-27359  incorporated  herein.

(b)  Reports  on  Form  8-K

     None




















                                       38
<PAGE>
                                   SIGNATURES


     In accordance with Section 15(d) of the Exchange Act, the registrant caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.

                                    CONSORTIUM  SERVICE  MANAGEMENT GROUP,  INC.


                                    By/s/Donald  S.  Robbins
Date:  April  11,  2002               ------------------------------------------
                                      Donald S. Robbins, Chief Executive Officer

     In  accordance  with  the  Exchange Act, this report has been signed by the
following  persons  on behalf of the registrant and in the capacities and on the
dates  indicated.


                                    /s/Donald  S.  Robbins
Date:  April  11,  2002             --------------------------------------------
                                    Donald  S.  Robbins,  President,  Chief
                                         Executive  Officer  and  Director


                                    /s/Esmeralda  G.  Robbins
Date:  April  11,  2002             --------------------------------------------
                                    Esmeralda  G.  Robbins,  Chairman  of  the
                                         Board  and  Director


                                    /s/Gordon  W.  Allison
Date:  April  11,  2002             --------------------------------------------
                                    Gordon W. Allison,  Chief Financial Officer
                                         and  Director


                                    /s/James  Workman
Date:  April  11,  2002             --------------------------------------------
                                    James  Workman,  Director











                                       39