FULLER, TUBB, POMEROY & STOKES
                           A PROFESSIONAL CORPORATION
                                ATTORNEYS AT LAW
                      201 ROBERT S. KERR AVENUE, SUITE 1000
                            OKLAHOMA CITY, OK 73102
G.  M.  FULLER  (1920-1999)                              TELEPHONE  405-235-2575
JERRY  TUBB                                              FACSIMILE  405-232-8384
DAVID  POMEROY
TERRY  STOKES
    ------

OF  COUNSEL:
MICHAEL  A.  BICKFORD
THOMAS  J.  KENAN
ROLAND  TAGUE
BRADLEY  D.  AVEY

                                 March 22, 2002





Steven  C.  Duvall,  Assistant  Director
Division  of  Corporation  Finance
Securities  and  Exchange  Commission
450  Fifth  Street,  N.W.,  Mail  Stop  0404
Washington,  DC   20549-0404

ATTENTION  SUSAN  REILLY,  SENIOR  ATTORNEY

          Re:     Consortium  Service  Management  Group,  Inc.
                  Amendment  No.  2  to  Form  10-SB  and
                    subsequent  Exchange  Act  filings
                  Commission  File  No.  0-27359

                  Your  comment  letter  of  01-04-02

Dear  Mr.  Duvall:

     In  response  to your comment letter of January 02, 2002 with regard to the
referenced  filings,  please  be  advised  as  follows:

Form  10-KSB  for  the  Period  Ended  12-31-00  and  filed  12-04-01
---------------------------------------------------------------------

Item  1.  Description  of  Business,  page  1
---------------------------------------------

1.     The material terms of the agreement with Western Waste Management are now
set  forth,  as  is  the  fact  of its rescission, on page 7 in the next-to-last
paragraph  under  "Business  of  the  Company  -  Anaerobic  Farm-Waste Disposal
Equipment."  The  agreement  was  earlier  filed  as  Exhibit  10.6.

<PAGE>
Steven C. Duvall                        2                         March 22, 2002



Live  Tissue  Bonding  Equipment,  page  4
------------------------------------------

2.     The  fourth paragraph of this section now identifies the party that filed
the  patents  and  the  exhibit  number  of  the  agreement  that assigns to the
registrant  the  rights  to  the  patents.

3.     The  fifth  and  sixth  paragraphs  of  this  section  have been updated.

Anaerobic  Farm-Waste  Disposal  Equipment,  pages  6  and  7
-------------------------------------------------------------

4.     This paragraph does not need updating.  As written, it is still accurate.

5.     The  sentence that begins "Of major public relations importance" has been
changed  to  refer  to  "a  reduction of foul odors" rather than "the near total
elimination  of  foul  odors."  The  two  sentences  that  follow  provide  the
explanation  for  such  reduction  of  foul  odors.

6.     The last paragraph of this section has been updated and includes the date
the  application  was  filed  and  the  status  of  the  application.

Carbon  Dioxide  Separator,  page  8
------------------------------------

7.     All  but  the  first  paragraph  of  this  section  has  been  updated.

Competition  -  Anaerobic  farm  waste  disposal  plants,  page  9
------------------------------------------------------------------

8.     The  last sentence of this paragraph has been amended to read, "It is our
belief that the design now in operation will prove to be. . .". Also, the entire
paragraph  under  "CO2  Separator"  has  been  similarly  revised.

Government  Approval  and  Regulations,  page  10
-------------------------------------------------

9.     The  objectionable  sentence  has  been  struck.

10.    The  objectionable  sentence  has  been  struck.

11.     The  objectionable  sentence  has  been  struck.

Cost  of  Compliance  with  Environmental  Laws,  page  11
----------------------------------------------------------

12.     This  section  has  been  rewritten  to  clarify  the  language.

Item  3.  Legal  Proceedings,  page  11
---------------------------------------

13.     This  paragraph  has  been revised to disclose the matters raised by the
Texas  Department  of  Securities.  Also, a new, next-to-last paragraph has been
added  under  "Carbon  Dioxide  Separator"  on  page  8.

<PAGE>
Steven C. Duvall                        3                         March 22, 2002



Market  for  Common  Equity  and  Related  Stockholder  Matters,  page  12
--------------------------------------------------------------------------

14.     This  section  has  been updated with information obtained from the Pink
Sheets.

Recent  Sales  of  Unregistered  Securities,  page  13
------------------------------------------------------

15.     Footnotes  4  and  5  have  been  corrected.

16.     The  last  four  lines  in the first table on page 13 under this heading
have  two  footnotes  each.  One footnote, number 3, is referenced on each line,
and  the footnote states that the shares were sold to accredited investors in an
offering  exempt  from  registration  pursuant  to  Regulation  D,  Rule  506.

Item  12.  Certain  Relationships  and  Related  Transactions,  page  32
------------------------------------------------------------------------

17.     I  stand  corrected.  The  persons  identified  as "parents" control the
registrant  directly,  not  through  intermediaries.  The second paragraph under
this  heading  has  been  eliminated.


     If you have any questions that might be properly handled by conversing with
the  undersigned,  please  do so at my telephone number 405-235-2575, fax number
405-232-8384,  or  e-mail  at  kenan@ftpslaw.com.

                              Sincerely,

                              /s/  Thomas  J.  Kenan
                              -----------------------------------
                              Thomas  J.  Kenan
                              e-mail:  kenan@ftpslaw.com

Enclosure

cc:     Donald  S.  Robbins
        Gordon  Allison
        Gary  Skibicki,  C.P.A.









<PAGE>
                         FULLER, TUBB, POMEROY & STOKES
                           A PROFESSIONAL CORPORATION
                                ATTORNEYS AT LAW
                      201 ROBERT S. KERR AVENUE, SUITE 1000
                            OKLAHOMA CITY, OK 73102
G.  M.  FULLER  (1920-1999)                              TELEPHONE  405-235-2575
JERRY  TUBB                                              FACSIMILE  405-232-8384
DAVID  POMEROY
TERRY  STOKES
    ------

OF  COUNSEL:
MICHAEL  A.  BICKFORD
THOMAS  J.  KENAN
ROLAND  TAGUE
BRADLEY  D.  AVEY

                                 March 21, 2002



Steven  C.  Duvall,  Assistant  Director
Division  of  Corporation  Finance
Securities  and  Exchange  Commission
450  Fifth  Street,  N.W.,  Mail  Stop  0404
Washington,  DC   20549-0404

ATTENTION  ANNE  McCONNELL

          Re:     Consortium  Service  Management  Group,  Inc.
                  Amendment  No.  2  to  Form  10-SB  and
                    subsequent  Exchange  Act  filings
                  Commission  File  No.  0-27359

                  Your  accounting  comments  letter  of  02-15-02

Dear  Mr.  Duvall:

     In  response  to  your accounting comments letter of February 15, 2002 with
regard  to  the  referenced  filings,  please  be  advised  as  follows:

Form  10-SB/A#2
---------------

MD&A  -  Results  of  Operations,  page  13
-------------------------------------------

1.     When  I  filed Amendment No. 2 to Form 10-SB, in my letter dated December
3, 2001 that  set  forth  how  the  registrant had  responded to your accounting
comments set forth in your letter of April 5, 2000, I requested - in response to
accounting  comment  number  7  and  in  accordance  with  Note 4 of Item 310 of
Regulation  S-B  -  that the Commission permit the omission of the 1996 and 1997
financial  statements,  earlier  audited  and reported on by its former auditor,

<PAGE>
Steven C. Duvall                        2                         March 21, 2002


Jaak  Olesk.  Without  thinking,  I had the registrant state in the amended Form
10-SB  that  the  financial  statements  for fiscal years 1996 and 1997 were not
prepared  in  accordance  with  GAAP  and  have  been  omitted from this amended
registration   statement  "with  the  permission  of  the  Commission  as  being
consistent  with  the protection of investors."  I am embarrassed that I did not
think  this  matter  through, because the amended Form 10-SB - when filed - even
though  it  had not cleared the Commission was still required to state the truth
as  of  the filing date.  I was anticipating that the Commission would grant the
request  in  my  letter.  I  assure  you, I was not trying to mislead either the
Commission  or the public.  I hope you will accept my apology.  It did not occur
to  me that the Commission could neither grant nor deny my request but allow the
deficient  Form  10-SB  not  to  be  amended further due to the passage of time.

     The  registrant  is  filing  Amendment  No.  3  to  Form 10-SB in which the
language  quoted  in  the  previous  paragraph  has  been  struck.

Form  10-KSB  for  the  year  ended  12-31-00

Statement  of  Cash  Flows  and  Statement  of  Operations
----------------------------------------------------------

2.     The  financial  statements  now  include  statements  of  cash  flows and
statements  of operations for each of the two fiscal years preceding the date of
the  audited  balance  sheet.

Statement  of  Changes  in  Stockholders'  Equity
-------------------------------------------------

3.     The  financial  statements   now   include  statements   of  changes   in
stockholders' equity for each of the two years preceding the date of the audited
balance  sheet  -  not  from  inception.

     Note:     The  remaining  responses  to  your  comments were drafted by the
registrant's  independent  accountant,  Gary  Skibicki.

Revenue  Recognition
--------------------

4.     The revenue recognition policy of the registrant is accurate, because the
registrant  recognizes  income  of  the foreign investee as earned in accordance
with  the equity accounting method.  At the request of the Commission, the first
sentence  of  the  registrant's revenue recognition policy has been relocated to
its  "policy  for  equity  in  investments  in unconsolidated companies."  Other
income  is  recognized  when  received  in  compliance  with SAB 101, since four
criteria  must  be  met  -  one  being collectibility being reasonably assured -
before  revenue  is  recognized.  It  has  been the registrant's experience that
collectibility  is  always  doubtful.  For  example,  in  2000  only $33,636 was
collected.  Long  and  uncertain  collection  time  frames  are the norm, and to
recognize  revenue on an accrual basis would contradict the letter and spirit of
SAB 101.  Page 18 of SAB 101 directs that revenue recognition generally involves
some  level  of  judgment,  and it is the registrant's judgment that recognizing
revenue  in  some  other  way  would  not  be  realistic.

Investments  in  Unconsolidated  Companies
------------------------------------------

5.     It  is  the  registrant's  belief  that  its  stated  policy  regarding

<PAGE>
Steven C. Duvall                        3                         March 21, 2002


investments  in  unconsolidated  companies,  as  explained  in  "the  nature  of
operations,"  complies  exactly  with  APB  18  in  that  entities  in which the
registrant has an equity interest of at least 20 percent are accounted for under
the  equity  method.  This has consistently been the registrant's stated policy,
and  it  complies  with  APB  18,  because  -  as explained under investments in
unconsolidated  companies  -  under the equity method income or loss from equity
investees  is  included  on  the  registrant's  operating  statement pro rata to
ownership  interest.  Specifically, the investment in United Engineering Company
("UEC")  was  recorded at acquisition cost; the registrant's share of income pro
rata  increases  the  investment  account with income and pro rata decreases the
investment  account  if  losses  occur.  When  dividends  are  received  by  the
investor,  they decrease the investment account.  Majority-owned companies where
ownership  exceeds  50  percent are accounted for as consolidated entities.  The
registrant  revised  its stated policy to specifically explain this under nature
of  operations.

     The registrant believes it complies with paragraph 19(h) of APB 18, because
its  share  of  the net assets of the investee equals the net investment account
reported  on the balance sheet.  The investment account equals the book value of
the  assets  of  the  Ukraine  company  minus  its liabilities converted to U.S.
dollars,  using  the exchange rate on the last day of the reporting period.  The
assets  of  the  Ukraine company are those assets that would be recognized under
U.S.  GAAP  reduced  by  the  liabilities  recognized  by  U.S.  GAAP.  The  UEC
investment  account  is  a  U.S.  GAAP  accounting  of  the original investment,
increased  or  decreased  by the pro rata share of income or loss and reduced by
dividends  paid,  all  of  which are converted to U.S. dollars.  The income that
accrues  to  the  registrant  is  based upon the average rate.  Accordingly, the
actual  net  investment asset account could differ at the end of the fiscal year
or  December 31.  To reconcile this difference so the registrant's proportionate
share  of  the  assets  agrees with the converted U.S. dollar net asset value at
December  31,  a  foreign  exchange  gain  or loss is calculated and accumulated
separately  as other comprehensive income.  It is the registrant's determination
that paragraph 19(h) of APB 18 indicates that a loss in the value of investments
which  is  other than temporary should be recognized the same as a loss in value
of  other  long-term assets, while foreign currency translations adjustments are
reported  as  a  separate  component  of  equity  in  accordance  with  FAS 130.
Companies that are majority owned are consolidated, and this statement was added
under  "Nature  of  Operations."

6.     Provided  supplementally  is  the  accounting literature relied on by the
registrant  in deferring the $78,307 differential between the investment account
and the net assets of UEC over ten years.  Specifically, this was discussed with
another  CPA  firm  in Tulsa, and the enclosed GAAP Practice Guide - Example 3 -
explains  the process equalizing the investment account to the underlying equity
in  net  assets  of  the  investee when there is a difference.  In addition, the
differential  is  discussed  in  the  CPA  study guide as well as a multitude of
textbooks  regarding  the amortization of the investment account when there is a
difference  between  it  and  the  underlying  net  assets  of the investee.  No
professional  guidance  could  be  found  directing  the  differential  to be an
immediate  write-off.

Foreign  Operations
-------------------

7.     Paragraph 13 of SFAS 52 states that if an entity's functional currency is
a  foreign  currency,  the  currency  translation  adjustment  that results from

<PAGE>
Steven C. Duvall                        4                         March 21, 2002


translating  that  entity's  financial statements into the reporting currency is
not included in determining income but is reported separately and accumulated in
a  separate  component  of  equity.  The  translation  adjustments have not been
included in net income but instead have been reported as a separate component of
equity.  We  have  revised  the  equity section of the balance sheet to show the
accumulated  adjustments  in  accordance  with  SFAS  52.

Loss  Per  Share
----------------

8.     Provided  supplementally  is  the  first page of FAS 4 which directs that
gains and losses occurring when debt is extinguished shall be aggregated and, if
material,  classified  as  an  extraordinary  item  net  of  income  taxes.  The
registrant's  management  considers  this  an  extraordinary item.  Although the
amount  is  only  $31,000,  it  is  material  to  the  registrant inasmuch as it
represents  almost as much as the annual revenue in the year being reported.  It
is  recognized  that  $31,000  may  not  be  material  for most registrants, but
including  this as a separate or aggregated item in the aggregate operating loss
reported  by  this registrant could give potential investors or stockholders the
impression  that  this  was  an  item  of  earned  income.

Note  4  -  Investment  -  United  Engineering  Company
-------------------------------------------------------

9.     Provided  supplementally  are  the financial statements of UEC.  They are
difficult to understand.  On the financial statements for the year ended January
1,  2001,  the  page  reporting  financial  results  shows a profit of 1,784,900
gryvna.  One-third  would  be  approximately  594,000  gryvna,  whereas  the
registrant's  financial  statements  report $101,816, which is not equivalent to
594,000 gryvna.  The differences between U.S. GAAP and Ukraine principles can be
demonstrated  from  this,  because  where  the  word "profit" appears in the UEC
financial  statements is equivalent to gross profit under U.S. GAAP, rather than
net  income.  The  word  "profit"  also appears on UEC's balance sheet, which is
different  from  the above; so to determine net income by U.S. GAAP, an analysis
as  described  in  the  following  paragraph  has  to  be  made.

     Providing  these  financial statements to investors can only result in much
confusion  and  misleading  information.  It  is  important  to  realize that to
determine  the  proper  U.S. GAAP profit requires virtually examining each asset
and  liability  account  at  UEC's general accounting office and then converting
each account to U.S. dollars at year-end for accounts that are considered assets
and liabilities under U.S. GAAP.  The changes in net equity from year to year in
terms  of  U.S. dollars applied to U.S. GAAP assets and liabilities are reported
as  either  the pro rata profit or loss on the registrant's financial statements
and  are  a  check  figure  when  working  with  UEC's  financial  reports.

Note  5  -  Texas  Security  Commission
---------------------------------------

9.     When  the  registrant's  audit  was  completed,  the amount of membership
interest  to  be  rescinded  in  2001  was  not  known.  All  ten investors were
contacted  regarding  rescission  with a potential capital decrease of $206,000.
Two  of  the  eight  investors  - representing a total of $20,000 - accepted the
rescission  while  the  other  eight  investors  affirmed  the  investment.
Accordingly,  the  capital structure regarding the Texas offer and rescission is

<PAGE>
Steven C. Duvall                        5                         March 21, 2002


considered  final.  The  capital repayments to the two investors were made, with
interest,  on June 15, 2001.  Since the other eight investors declined the offer
of  rescission  and  affirmed  the  investment, the matter is considered closed.

Forms  10-QSB  for  the quarterly periods ended March 31, June 30, and September
--------------------------------------------------------------------------------
30,  2001
---------

11.     Compensation  expense  was  determined  by  the fair market value of the
services  provided and equating that with the per share price quoted on the pink
sheets.  This  resulted  in  added compensation expense and additions to paid-in
capital.

12.     Notes  1  and  3  to  the  financial  statements  of the Form 10-QSB for
09-30-01  have  been,  respectively,  amended  and  added.


     If you have any questions that might be properly handled by conversing with
the  undersigned,  please  do so at my telephone number 405-235-2575, fax number
405-232-8384,  or  e-mail  at  kenan@ftpslaw.com.

                              Sincerely,

                              /s/Thomas  J.  Kenan
                              ------------------------------
                              Thomas  J.  Kenan
                              e-mail:  kenan@ftpslaw.com

Enclosures

cc:     Donald  S.  Robbins
        Gordon  Allison
        Gary  Skibicki,  C.P.A.

<PAGE>

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

                         AMENDMENT NO. 1 TO 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, 2000

                                       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: 512-887-7546

         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 [ ]  No
[X]

     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:  $10,000.

     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:  $3,049,422 computed by reference to
the  $0.65  average  of the bid and asked price of the company's Common Stock on
August  29,  2001.

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity, as of August 29, 2001:  5,624,218 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


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
                Raw  Materials  and  Suppliers                                 8
                Distribution  Methods                                          9
                Competition                                                    9
                Patents,  Trademarks  and  Licenses                            9
                Government  Approval  and  Regulations  .                     10
                Year  2000  Computer  Problems                                10
                Research  and  Development                                    11
                Cost  of  Compliance  with  Environmental  Laws               11
                Seasonality.                                                  11
                Employees                                                     11

Item     2.     Properties                                                    11

Item     3.     Legal  Proceedings                                            11

Item     4.     Submission  of  Matters to a Vote of Security Holders         11

Item     5.     Market for Common Equity and Related Stockholder Matters      12

                Holders                                                       13
                Dividends                                                     13
                Recent  Sales  of  Unregistered  Securities                   13

Item     6.     Management's  Discussion  and  Analysis                       14

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

Item     7.     Financial  Statements                                         16

Item     8.     None

Item     9.     Directors, Executive Officers, Promoters
                and Control Persons; Compliance with Section
                16(a)  of  the  Exchange  Act                                 29

Item     10.     Executive  Compensation                                      31

                                      iii
<PAGE>

Item     11.     Security Ownership of Certain Beneficial
                 Owners and Management                                        31

Item     12.     Certain  Relationships  and  Related  Transactions           32

Item     13.     Exhibits  and  Reports  on  Form  8-K                        32

                 Signatures                                                   36















                                       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.

     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.

                                        5
<PAGE>

     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  2001.

     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.

                                        6
<PAGE>

     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.


     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.

                                        7
<PAGE>

     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 cash, all
necessary government approvals, all piping, tanks and other auxiliary equipment,
the cost of which is estimated to be approximately $1,200,000.  Revenue from the
plant  will  be  shared  65  percent  for Resource Technology Corporation and 35
percent  for  us  until  payout  of  costs, at which time revenue will be shared

equally.  We  are  attempting to sell a 45-percent interest in our share of this

matter  for  the  $600,000  amount  of our obligations.  The consent of Resource
Technology  must  be  obtained  for  such  a  sale,  which  consent  "may not be
unreasonably  withheld."


     To  promote  our CO2 separator technology, we created CSMG Gastech LLC as a
vehicle  to  raise  the  funds  required of us under our agreement with Resource
Technology  Corporation.  We proposed to investors that they contribute $675,000
to  CSMG  Gastech  for  a 45-percent interest in it and that it would enter into
agreements  with  Resource  Technology or other entities, to jointly develop CO2
separator  projects.

     Our  equipment  was designed in the latter part of 2000 and manufactured in
the third quarter of 2001.  The 117-metric tons of equipment were shipped to the
U.S.  and fully paid for, arriving in Houston, Texas in November 2001.  Resource
Technology has obtained all the necessary government approvals, and installation
will  occur in April and May 2002.  We expect to receive our first revenues from
this  project  in  June  2002.

     We  borrowed $551,000 from stockholders to pay for the equipment.  The loan
is  to be repaid in increments - $115,000 in May 2002, $362,000 in July 2002 and
$74,000  in  August  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.

     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.

                                        8
<PAGE>

     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.  None of these systems
processes  the  manure  and  water  to  the  extent  of  the Ukraine-made plant.
Further,  the  costs  of  design,  development, fabrication and construction are
higher  by  multiples in the U.S. than in Ukraine, where high-caliber scientists
and  engineers  are readily available.  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
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.

     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.


                                        9
<PAGE>

     Year  2000  Computer  Problems
     ------------------------------

     We  believe  we do not face material costs, problems or uncertainties about
the  year  2000  computer  problem.  This  problem  affects  many  companies and
organizations  and  stems from the fact that many existing computer programs use
only  two  digits  to  identify a year in the date field and do not consider the
impact  of  the  year  2000.  We  are  newly organized and use off-the-shelf and
easily replaceable software programs for our office work.  We have yet to devise
any software programs for our live tissue bonding, anaerobic farm-waste disposal
or  CO2  separator  projects.

     The animal-waste anaerobic plants will not be installed until 2001, and the
computer  controls for the facilities will not be designed, ordered or installed
until  2001.  The  CO2  separator plants also will not be delivered or installed
before  late  2000.

     The  worst  case  scenario  involving Year 2000 issues would be that United
Engineering  Company  -  the  manufacturer  of the anaerobic farm-waste disposal
facilities,  the  company  to be selected to manufacture the live tissue bonding
tools,  or  Sumy Frunze of Sumy, Ukraine - the manufacturer of the CO2 separator
plants  -  should experience significant Year 2000 problems that would delay the
delivery  of the equipment they are to manufacture.  We have no contingency plan
for  dealing  with  such  a  matter; we will simply have to delay our operations
until  any  such  Year  2000  problems  are  solved at the manufacturers' level.

     We  have  been orally advised by the Ukraine manufacturers of our anaerobic
farm  waste  plants  and  our  CO2  separator  plants  that  they  are Year 2000
compliant.  Should  either  of  them  not  be  Year  2000  compliant  and should
difficulties  arise,  we  will  have to delay our operations until they work out
their  problems.

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

     During  2000,  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.

                                       10
<PAGE>
     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            $   500       08-31-2001
     Oklahoma  City,  OK          500            $   500     Month-to-Month
     Kiev,  Ukraine               800            $ 1,200     Month-to-Month
</TABLE>

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.


                                       11
<PAGE>
<TABLE>
<CAPTION>
                                    High              Low
                                    ----              ---
<S>                                 <C>              <C>
     1998
     ----
          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
</TABLE>

     *On  November  4,  1999  our stock was removed from the OTC Bulletin Board.
The  information  from  Q4  1999  through  Q4  2000  is  from  the  Pink Sheets.


     On  December  31,  2000,  there  were  3,927,374  shares  of  Common  Stock
outstanding.  There  are  850,000  shares  subject  to  outstanding  options  to
purchase,  or  securities  convertible  into,  such  shares  of  stock.

Holders
-------

     As  of  December 31, 2000 there were approximately 182 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.

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:

                                       12
<PAGE>
<TABLE>
<CAPTION>
                               No.  of
                               Common
                               Shares               Offering
           Date                 Sold                 Price
           ----                -------              --------
<S>                           <C>                   <C>
          1998                174,515(1)(2)         $  39,451
          4-6-99              602,362(1)              304,155
          12-30-99            169,455(3)              153.243
          2000                 12,000(3)(4)             7,500
          2000                423,350(3)(5)           257,093
          2000                111,174(3)(6)            67,659
          2000                337,800(3)(7)           211,125
________________________
</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)     Of  these  shares, 12,965 shares were issued in June 1998 to Diversified
        Marketing  Co.  in  exchange  for  financial  public  relations services
        valued at $3,000.

(3)     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.


(4)     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.

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


(6)     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:
<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
</TABLE>

                                       13
<PAGE>
<TABLE>
<CAPTION>
<S>          <C>                         <C>           <C>
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>


(7)     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 $33,636 in FY 2000 compared with revenues of $10,000 in
FY 1999.  The 1999 revenues were from our tissue bonding activities conducted in
Louisville,  Kentucky  with Frantz Medical Research.  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  $101,816 in FY 2000 and $17,343 in FY 1999 as our fifty percent
interest  in  the  income  of  an  unconsolidated subsidiary, United Engineering
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.  However,
this  accrued, but not received, income was more than offset by foreign currency
losses  of  $9,801  in  FY  2000  and  $46,847  in  FY  1999.

                                       14
<PAGE>
     Selling,  General  and  Administrative  Expenses
     ------------------------------------------------

     Our  selling,  general and administrative expenses were $973,817 in FY 2000
compared with $372,469 during FY 1999.  The major items of these expenses were -
<TABLE>
<CAPTION>
     Item                            2000         1999
     ----                            ----         ----
<S>                                <C>          <C>
     Interest  expense             $327,584     $  73,130
     Consulting  services            83,384         4,500
     Office overhead and salaries   324,457       117,856
     Travel                          79,115        41,766,  and
     Accounting                      15,466        10,692
</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  2000  we  had  a  net loss of $945,571, or $0.28 a share,
compared with a net loss of  $443,799 in FY 1999, or $0.16 a share.  There was a
significant  increase  in  our  operations  in  2000 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  1999  only  from  the  proceeds  of  $149,989 in new loans made to us by
shareholders,  from  the sale of $304,155 of capital stock for payment on notes,
and from the sale of capital stock for $72,507 in cash, $17,032 for services and
$63,711  for  interest  payments.  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;

     -    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.

                                       15
<PAGE>

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
in Corpus Christi, Texas.  We expect to manufacture and install the plant during
the  fourth  quarter  of  2001  with  revenue  commencing  during  that quarter.

ITEM     7.     FINANCIAL  STATEMENTS

     Independent  Auditors  Report                                            17
     Balance  Sheet  December  31,  2000                                      18
     Statement  of  Cash  Flows  Year  Ended  December  31,
          2000  and  1999                                                     20
     Statement  of  Operations  Year  Ended  December  31,
          2000  and  1999                                                     21
     Statement  of  Changes  in  Stockholders'  Equity  from  Inception
          (November  19,  1992)  to  December  31,  2000                      22

     Notes  to  Financial  Statements                                         23








                                       16
<PAGE>



                          INDEPENDENT AUDITORS REPORT
                          ---------------------------



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


I  have  audited the accompanying balance sheet of Consortium Service Management
Group,  Inc.  as of December 31, 2000, and the related statements of operations,
changes  in  stockholders' equity and cash flows for the year 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 financial statements referred to above present fairly, in all
material  respects,  the  financial  position  of  Consortium Service Management
Group,  Inc. as of December 31, 2000, and the results of its operations and cash
flows  for the year then ended, in conformity with generally accepted accounting
principles.

The  accompanying  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
June  26,  2001                              Certified  Public  Accountant



                                       17
<PAGE>

                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                                  BALANCE SHEET
                                December 31, 2000


                                     ASSETS
                                     ------
<TABLE>
<CAPTION>
CURRENT  ASSETS
---------------
<S>                                                   <C>            <C>

Cash                                                  $     1,492
Dividends Receivable                                        8,155
                                                      -----------
    Total Current Assets                                             $   9,647
                                                                     ---------
FIXED  ASSETS
-------------

Furniture, Fixtures, Equipment                             74,909
  Less:  Accumulated Depreciation                         (35,751)
                                                      -----------
    Total Fixed Assets                                                  39,158
                                                                     ---------

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

Investment - United Engineering Co., Inc.                 307,217
Investment - Anaerobic Farm Waste, Inc.                       880
Investment - CO2 Equipment                                 27,889
Employee Advances                                           1,752
Tissue Bonding Patent                                       8,667
  Less:  Accumulated Amortization                            (482)
                                                      -----------
    Total Other Assets                                                 345,923
                                                                     ---------

    Total Assets                                                     $ 394,728
                                                                     =========
</TABLE>



    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       18
<PAGE>
                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                            BALANCE SHEET (Continued)
                                December 31, 2000


                                  LIABILITIES
                                  -----------
<TABLE>
<CAPTION>
CURRENT  LIABILITIES
--------------------
<S>                                                   <C>            <C>
Accounts Payable                                      $    43,661
Interest Payable                                           83,332
Federal Payroll Taxes Payable                              23,896
Notes Payable to Stockholders                             990,264
                                                      -----------

    Total Current Liabilities                                        $1,141,153

STOCKHOLDERS  EQUITY
--------------------

Preferred Stock, $.001 Par Value, 10,000,000 Shares
Authorized;  75,669 Shares Issued and Outstanding
at December 31, 2000                                                         76

Common Stock,  $.001 Par Value, 40,000,000 Shares
Authorized; 3,927,374 Shares Issued and Outstanding
at December 31, 2000                                                      3,927

Additional Paid-in Capital                                            2,452,680


Accumulated Other Comprehensive (Loss)                                 (346,957)
Accumulated Deficit                                                  (2,856,151)
    Total Stockholders Equity                                          (746,425)
                                                                     ----------


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

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       19
<PAGE>
                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                            STATEMENT OF OPERATIONS



<TABLE>
<CAPTION>
                                                            January 1 - December 31
                                                            ------------------------
                                                            2000                     1999
                                                            ----                     ----
<S>                                             <C>      <C>             <C>      <C>
Revenues                                                 $   33,636               $   10,000

General and Administrative Expenses                         973,817                  372,469
  Funded Research and Development                     0                  21,217
  Cost of Funded Research and Development       100,881                  73,063
                                                -------                  ------
  Net Research and Development Cost                         100,881                   51,846

Operating (Loss)                                         (1,041,062)                (414,315)
(Loss) on Investments                                       (30,000)                       -
Interest Income                                               2,476                       20
Interest in Income of Unconsolidated Companies              101,816                   17,343
Foreign Currency Loss                                        (9,801)                 (46,847)
                                                         ----------               ----------
(Loss) from Continuing Operations                          (976,561)                (443,799)

Income  Taxes
  Cancellation of Liability Income                           31,000                        -
Net Income (Loss)                                         $(945,571)               $(443,799)

Net Loss Per Share Common Stock Before
  Extraordinary Gain                                           (.29)                    (.16)
Net Loss Per Share Common Stock After
  Extraordinary Gain                                           (.28)                       -
Weighted Average Common Shares Outstanding                3,425,645                2,690,057
</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

                                       20
<PAGE>
                   CONSORTIUM SERVICES MANAGEMENT GROUP, INC.
                            STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>
CASH  FLOWS  FROM  OPERATING  ACTIVITIES
----------------------------------------
                                                        January 1 - December 31
                                                        -----------------------
                                                          2000           1999
                                                       ----------     ----------
<S>                                                    <C>            <C>
Net Loss                                               $(945,571)     $(443,799)
Bad Debt Expenses                                            600              -
Equity Income from Investees                            (101,816)       (17,343)
Depreciation                                               7,710          7,710
Amortization                                               8,313              -
Write Off Notes Receivable                                     -         17,800
Dividends from Investee                                   11,906          8,390
Foreign Exchange Loss                                      9,801         46,847
Increase in Dividends Receivable                          (8,155)             -
Interest Expense for Common Stock                        257,093         63,711
Compensation for Common Stock                             67,661         17,032
Increase (Decrease) in Accounts Payable
  & Accrued Expenses                                     (14,139)        44,611
Increase in Federal Payroll Taxes Payable                  3,269              -
Increase in interest Payable                              65,269              -
Cancellation of Indebtedness Income                      (31,000)             -
Bank Overdraft                                                (8)             6
                                                       ---------      ---------

Net Cash Used in Operating Activities                   (669,067)      (255,035)

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

Investment in Subsidiary - Anaerobic Farm Waste, Inc.          -         (1,000)
Investment in CO2 Equipment                              (27,889)             -
Purchase Equipment, Furniture                            (16,391)             -
Increase Employee Advances                                  (119)        (1,633)
Acquire Tissue Bonding Patent                             (8,667)             -
                                                       ---------      ---------
Cash Used from Investing Activities                      (53,066)        (2,633)

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

Increase in Stock Issue                                  211,125         57,500
Increase Notes Payable                                   512,500        149,989
                                                       ---------      ---------
Increase in Cash from Financing Activities               723,625        207,489

Net Increase in Cash (Decrease)                            1,492        (50,179)
Cash at Beginning of Period                                    0         50,179
                                                       ---------      ---------
Cash at End of Period                                      1,492              0

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

Shareholder Notes Payable Converted to Stock                   -        304,155
</TABLE>


    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

                                       21
<PAGE>
                    CONSORTIUM SERVICE MANAGEMENT GROUP, INC.
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
            FROM INCEPTION (NOVEMBER 19, 1992) TO DECEMBER 31, 2000

<TABLE>
<CAPTION>
                               NO. PREFERRED    PAR     NO. COMMON    PAR     ADDITIONAL    ACCUMULATED
DESCRIPTION                       SHARES       VALUE    SHARES(ea)   VALUE  PAID IN CAPITAL   DEFICIT      TOTAL
------------------------------------------------------------------------------------------------------------------
<S>                                  <C>        <C>     <C>         <C>       <C>             <C>        <C>
Balance  December  31,  1998         75,669     $76   2,271,233    $2,271     $1,453,561     $(1,813,738) $(357,830)

Common  Shares  Exchanged
for  Notes  During  1999                                602,362       602        303,553                    304,155
Common Shares Sold During 1999                           72,500        73         72,427                     72,500
Common  Shares  Issued
for  Services During 1999                                18,491        18         17,014                     17,032
Common  Shares  Issued
for  Interest During 1999                                78,464        79         63,632                     63,711
Net  Loss  Year  Ended  12/31/99                                                           $  (443,799)    (433,799)
                                     ------     ---   ---------    ------     ----------     -----------  ---------

Balance  December  31,  1999         75,669     $76   3,043,050    $3,043     $1,910,187   $(2,257,537)  $(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 12/31/00                                                               $  (945,571)    (945,571)
                                     ------     ---   ---------    ------     ----------   -----------    ---------

Balance December 31, 2000            75,669     $76   3,927,374    $3,927     $2,452,680   $(3,203,108)   $(746,425)
</TABLE>


                                       22
<PAGE>
                    Consortium Service Management Group, Inc.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


                                     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 customer with the first unit being installed in
2001  at  the  Elliot  Landfill in Corpus Christi, TX.  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.

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

                                       23
<PAGE>
                    Consortium Service Management Group, Inc.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


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.

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.   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.  The  company's decrease in ownership percentage from 50% to 33 1/3%
in  United Engineering Company resulted 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 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.  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.

                                       24
<PAGE>
                    Consortium Service Management Group, Inc.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


Loss  Per  Share

The  computation  of  loss  per  share  of common stock is based on the weighted
average  number  of shares outstanding during the period presented.  The Company
had  a  net  loss in 2000 of $945,571 and accordingly basic and diluted earnings
per  share  are the same because any dilutive or potentially dilutive securities
would  be  antidilutive.  The  Company  is  reporting  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.  Additionally, the Company issued 423,350 shares of
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.

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  of  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 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.    Specifically  their  combined  75,669
preferred  shares  is planned to be converted in 2001 to 1,210,704 common shares
as  compensation  for  unpaid  services which when finalized will be recorded as
$756,690  in  compensation  expense.

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.

                                       25
<PAGE>
                    Consortium Service Management Group, Inc.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


(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.

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

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 this factor 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.   The  possible  consequences  of  not
obtaining  additional  financing  are  current  and  planned  operations ceasing
resulting  in  a  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.

Since the Company has not generated 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.

                                       26
<PAGE>
                    Consortium Service Management Group, Inc.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


                                     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.  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.

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 now
included  as  part  of  the  UEC  investment  account  on  the  balance  sheet.


                                     NOTE 5
                            TEXAS SECURITY COMMISSION

Subsequent  to  the  audit  a  concern  has been initiated by the Texas Security
Commission  regarding  the  possible sale of membership interest in CSMG Gastech
LLC  without  disclosing  that Resource Technology Corporation, the company that
has  the  landfill  contract  with  the city of Corpus Christi, is in chapter 11
business reorganization.  The status of the inquiry is that the Texas Securities
Commission  mailed  each  of the CSMG Gastech LLC investors a questionnaire plus
verbally requested that each investor be given the opportunity to rescind his or
her investment including a refund of his or her investment money.  To date it is
not  known  how  many,  if any, investors responded to the questionnaire and one
investor  has  requested  that  his  $10,000  investment  be  refunded.

                                       27
<PAGE>
                    Consortium Service Management Group, Inc.
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2000


                                     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>





















                                       28
<PAGE>

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, 56    Chairman  of the Board       1992         2001
                            of  Directors

Donald S. Robbins, 57       President,  Chief            1992         2001
                            Executive  Officer  and
                            Director

Gordon W. Allison, 74       Executive  Vice  Presi-      1992         2001
                            dent,  Chief  Financial
                            Officer,  Secretary  and
                            Director

James Workman, 73           Director                     1998         2001
</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

                                       29
<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>

                                       30
<PAGE>
ITEM     10.     EXECUTIVE  COMPENSATION

     Set  forth  below  is  the aggregate compensation during fiscal years 1998,
1999 and 2000 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       2000           $131,295           None
Donald S. Robbins, President       1999            $43,457           None
Donald S. Robbins, President       1998            $48,000           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 December 31, 2000, 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                6.4
     701  CCNB  North  Tower
     500  North  Shoreline
     Corpus  Christi,  TX  78471

     Donald  S.  Robbins(2)(3)(4)               675,000               15.5
     701  CCNB  North  Tower
     500  North  Shoreline
     Corpus  Christi,  TX  78471
</TABLE>

                                       31
<PAGE>
<TABLE>
<CAPTION>
<S>                                           <C>                     <C>
     Gordon  W.  Allison(4)(5)                  797,300               18.3
     P.  O.  Box  770304
     Oklahoma  City,  Oklahoma  73177

     James  Workman                              60,000                1.5
     1826  War  Eagle  Street
     North  Little  Rock,  AR  72116

     Officers  and  Directors                 1,782,300               32.3
     as  a  group  (4  persons)(4)
     -----------------------------
</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)     This  does  not include 75,669 shares of Series A Preferred Stock of the
        company,  which  shares are owned by Mr. Robbins (43,869 shares) and Mr.
        Allison (31,800 shares), each share of which Preferred Stock is entitled
        to receive an $0.80 annual  dividend,  payable  quarterly, cumulative if
        not paid, has a face  value of  $10, is redeemable by the company out of
        profits, and is preferred over the company's  Common  Stock in the event
        of the liquidation and dissolution of the  company.

(5)     This  stock  is  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

                                       32
<PAGE>

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

     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

                                       33
<PAGE>

                          Service Management Group, Inc. concerning  the  carbon
                          dioxide  separator  technology*

        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.***

                                       34
<PAGE>

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

        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









                                       35
<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.



Date:  March  20,  2002            By/s/Donald S. Robbins
                                     -------------------------------------------
                                     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.



Date:  March  20,  2002            /s/Donald S. Robbins
                                   ---------------------------------------------
                                   Donald  S.  Robbins,  President,  Chief
                                        Executive  Officer  and  Director



Date:  March  20, 2002             /s/Esmeralda G. Robbins
                                   ---------------------------------------------
                                   Esmeralda  G.  Robbins,  Chairman  of  the
                                        Board  and  Director



Date:  March  20,  2002            /s/Gordon W. Allison
                                   ---------------------------------------------
                                   Gordon  W.  Allison,  Chief Financial Officer
                                        and  Director



Date:  March  20,  2002            /s/James Workman
                                   ---------------------------------------------
                                   James  Workman,  Director


                                       36