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



                                   FORM 10-QSB

(Mark One)

[X]  Quarterly report under section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the quarterly period ended March 31, 2003
                                              --------------

[ ]  Transition report under section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the transition period from                   to
                                           -----------------    -------------

Commission file number       001-15643
                       ---------------------

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

                California                             95-4597370
                ----------                             ----------
      (State or other jurisdiction of               (I.R.S. Employer
       incorporation or organization)               Identification No.)

4349 Baldwin Ave., Unit A, El Monte, CA                          91731
---------------------------------------                          -----
(Address of principal executive offices)                       (Zip Code)

                     Issuer's telephone number (626)636-2530
                                               -------------


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

            Number of  shares  outstanding  of the  issuer's  classes  of common
equity, as of May 14, 2003:

                  7,472,673 Shares of Common Stock (One Class)
                  --------------------------------------------

Transitional Small Business Disclosure Format: Yes     No X
                                                  ---    ---


<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

                                TABLE OF CONTENTS
                                                                         Page
                                                                         ----
PART I  - FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS

         Condensed Balance Sheets as of March 31, 2003 (unaudited)
         and June 30, 2002 ..................................................3

         Condensed Statements of Operations for the Nine Months Ended
         March 31, 2003 and 2002 (unaudited).................................4

         Condensed Statements of Operations for the  Three Months Ended
         March 31, 2003 and 2002 (unaudited).................................5

         Condensed Statements of Cash Flows for the Nine Months Ended
         March 31, 2003 and 2002(unaudited)..................................6

         Notes to Condensed Financial Statements (unaudited).................7

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION......10

     ITEM 3.  CONTROLS AND PROCEDURES........................................14

PART II - OTHER INFORMATION..................................................14

     ITEM 1.  LEGAL PROCEEDINGS..............................................14

     ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS......................15

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES................................15

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS..........15

     ITEM 5.  OTHER INFORMATION..............................................15

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...............................15

SIGNATURES...................................................................16

                                       2
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                         CYBER MERCHANTS EXCHANGE, INC.
                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                         March 31,       June 30,
                                                                           2003            2002
                                                                       ------------    ------------
                                                                       (Unaudited)
ASSETS
<S>                                                                  <C>             <C>

Current assets:
  Cash and cash equivalents                                            $    134,451    $    709,791
  Accounts receivable, net                                                  482,524         150,370
  Inventory                                                                 374,580         233,912
  Convertible note and interest receivable                                  600,000         600,000
  Related party note and interest receivable                                     --         407,000
  Prepaid expenses                                                            7,075         173,214
                                                                       ------------    ------------
                                                                          1,598,630       2,274,287
Total current assets

Property and equipment, net                                                  12,481          31,011
Investments in overseas joint ventures, net
                                                                            688,526         612,695
Other assets                                                                 14,972           7,222
                                                                       ------------    ------------

Total assets
                                                                       $  2,314,609    $  2,925,215
                                                                       ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses
                                                                       $    518,321    $    233,687
  Loan payable, bank                                                         40,000              --

                                                                       ------------    ------------
  Total Current Liabilities                                                 558,321         233,687


Stockholders' equity:
  Common stock, no par value; 40,000,000
   shares authorized; 7,472,673 shares
   issued and outstanding                                                 9,995,387       9,995,387
  Additional paid-in capital                                              3,624,461       3,624,461
  Accumulated deficit                                                   (11,863,560)    (10,928,320)
                                                                       ------------    ------------

Total stockholders' equity                                                1,756,288       2,691,528
                                                                       ------------    ------------

Total liabilities and stockholders' equity                             $  2,314,609    $  2,925,215
                                                                       ============    ============
</TABLE>
            See accompanying notes to condensed financial statements

                                       3
<PAGE>

                         CYBER MERCHANTS EXCHANGE, INC.

                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>


                                                                        Nine Months Ended
                                                                             March 31
                                                                ---------------------------------
                                                                      2003              2002
                                                                --------------    ---------------
                                                                   (Unaudited)       (Unaudited)
<S>                                                             <C>               <C>
Revenues:
   Transaction sales                                            $   2,010,106     $    1,412,356
   Cost of goods sold                                               1,710,104          1,268,290
                                                                --------------    ---------------
   Net revenues from transaction sales                                300,002            144,066
   Tradeshow revenue                                                  901,807            425,271
   Subscriber fees                                                      4,158             13,353
                                                                --------------    ---------------

Net revenues                                                        1,205,967            582,690

Operating expenses:
   General and administrative expenses                              2,232,504          1,544,983
   Stock-based compensation                                                -            101,097
   Depreciation and amortization                                       18,530             35,150
                                                                --------------    ---------------

Total operating expenses                                            2,251,034          1,681,230
                                                                --------------    ---------------

Loss from operations                                               (1,045,067)        (1,098,540)

Other income (expense):
   Interest income, net of interest expense                            34,796             83,545
   Equity in losses on investments in overseas joint ventures        (174,169)          (321,328)
   Amortization of software sales                                     250,000            250,001
   Impairment write-down on investment in ABNet                            -             (21,762)
                                                                --------------    ---------------
Total other income (expense)                                          110,627            (9,544)
                                                                --------------    ---------------

Loss before income taxes                                             (934,440)        (1,108,084)

Income taxes                                                              800                800
                                                                --------------    ---------------

Net loss                                                        $    (935,240)    $   (1,108,884)
                                                                ==============    ===============

Basic and diluted net loss available to common
    Stockholders per share                                      $       (0.13)    $        (0.15)
                                                                ==============    ===============

Weighted-average number of common shares outstanding                7,472,673          7,583,673
                                                                ==============    ===============
</TABLE>
            See accompanying notes to condensed financial statements.

                                       4
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                           March 31,
                                                                ---------------------------------
                                                                     2003               2002
                                                                --------------    ---------------
<S>                                                           <C>                <C>
(Unaudited) (Unaudited)
Revenues:
   Transaction sales                                            $     677,766     $      335,734
   Cost of goods sold                                                 532,435            322,300
                                                                --------------    ---------------
   Net revenues from transaction sales                                145,331             13,434
   Tradeshow revenues                                                 489,301            425,271
   Subscriber fees                                                        933              5,413
                                                                --------------    ---------------

Net revenues                                                          635,565            444,118

Operating expenses:
   General and administrative expenses                              1,036,295            982,117
   Stock-based compensation                                                 -                  -
   Depreciation and amortization                                        5,579             11,717
                                                                --------------    ---------------

Total operating expenses                                            1,041,874            993,834
                                                                --------------    ---------------

Loss from operations                                                 (406,309)          (549,716)

Other income (expense):
   Interest income, net of interest expense                            11,023             19,076
   Equity in losses on investment in overseas
     joint ventures                                                   (49,879)          (107,326)
   Amortization of software sales                                      83,334             83,333
                                                                --------------    ---------------
Total other income (expense)                                           44,478              4,917
                                                                --------------    ---------------

Net loss                                                        $    (361,831)    $     (554,633)
                                                                ==============    ===============

Basic and diluted net loss available to common
    Stockholders per share                                      $       (0.05)    $        (0.07)
                                                                ==============    ===============

Weighted-average number of common shares outstanding                7,472,673          7,583,673
                                                                ==============    ===============
</TABLE>

See accompanying notes to condensed financial statements.

                                       5
<PAGE>

                         CYBER MERCHANTS EXCHANGE, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                        Nine Months Ended
                                                                            March 31,
                                                                 --------------------------------
                                                                      2003              2002
                                                                 -------------     --------------
                                                                  (Unaudited)        (Unaudited)
<S>                                                             <C>               <C>
Cash flows from operating activities:
   Net loss                                                      $   (935,240)     $  (1,108,884)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
     Depreciation and amortization                                     18,530             35,150
     Amortization of software sales                                  (250,000)          (250,000)
     Stock compensation expense                                            -             101,097
     Equity in losses on investments in overseas
      joint ventures                                                  174,169            321,328
     Impairment write-down on investment in ABNet                          -              21,762
      Changes in assets and liabilities:
         Accounts receivable, net                                   (332,154)           (110,875)
         Interest receivable                                               -              28,474
         Inventory                                                   (140,668)           (81,930)
         Prepaid expenses                                             166,139             (2,355)
         Other assets                                                  (7,750)             4,275
         Accounts payable and accrued expenses                        284,634           (104,304)
                                                                 -------------     --------------

Net cash used in operating activities                              (1,022,340)          (924,513)
                                                                 -------------     --------------

Cash flows from investing activities:
   Proceeds from maturity of certificates of deposit                       -           1,478,657
   Investment in related party note receivable                             -            (400,000)
   Collection of related party note and
    interest receivable                                               407,000                 -
   Purchases of property and equipment                                     -              (4,613)
   Investment in E-Sea                                                     -             (21,337)
                                                                 -------------     --------------

Net cash provided by investing activities                             407,000          1,052,707
                                                                 -------------     --------------

Cash flows from financing activities:
   Net proceeds (repayments) of borrowings
    under line of credit                                               40,000           (325,000)
                                                                 -------------     --------------

Net cash provided by (used in) financing activities                    40,000           (325,000)
                                                                 -------------     --------------

Net decrease in cash and cash equivalents                            (575,340)          (196,806)

Cash and cash equivalents, beginning of period                        709,791            205,384
                                                                 -------------     --------------

Cash and cash equivalents, end of period                         $    134,451      $       8,578
                                                                 =============     ==============

</TABLE>
            See accompanying notes to condensed financial statements

                                       6
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

                   NOTES TO THE CONDENSED FINANCIAL STATEMENTS

CERTAIN  STATEMENTS  CONTAINED IN THIS REPORT,  INCLUDING,  WITHOUT  LIMITATION,
STATEMENTS CONTAINING THE WORDS, "BELIEVES," "ANTICIPATES," "EXPECTS," AND OTHER
WORDS OF SIMILAR  IMPORT,  CONSTITUTE  "FORWARD-LOOKING  STATEMENTS"  WITHIN THE
MEANING OF SECTION 27A OF THE  SECURITIES  ACT OF 1933, AS AMENDED,  AND SECTION
21E OF THE  SECURITIES  EXCHANGE ACT OF 1934, AS AMENDED.  SUCH  FORWARD-LOOKING
STATEMENTS  INVOLVE KNOWN AND UNKNOWN  RISKS,  UNCERTAINTIES  AND OTHER FACTORS,
WHICH  MAY  CAUSE THE  ACTUAL  RESULTS,  PERFORMANCE  OR  ACHIEVEMENTS  OF CYBER
MERCHANTS  EXCHANGE,  INC. TO BE MATERIALLY  DIFFERENT FROM ANY FUTURE  RESULTS,
PERFORMANCE,  OR  ACHIEVEMENTS  EXPRESSED  OR  IMPLIED  BY SUCH  FORWARD-LOOKING
STATEMENTS. THESE FACTORS INCLUDE, BUT ARE NOT LIMITED TO, THE FACTORS DISCUSSED
UNDER THE CAPTION  "COMPANY  RISKS"  ELSEWHERE IN ITEM 1 OF THIS  REPORT.  GIVEN
THESE  UNCERTAINTIES,  READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH
FORWARD-LOOKING  STATEMENTS.   CYBER  MERCHANTS  EXCHANGE,  INC.  DISCLAIMS  ANY
OBLIGATION TO UPDATE ANY SUCH FACTORS OR TO ANNOUNCE PUBLICLY THE RESULTS OF ANY
REVISION  OF  THE  FORWARD-LOOKING   STATEMENTS  CONTAINED  OR  INCORPORATED  BY
REFERENCE HEREIN TO REFLECT FUTURE EVENTS OR DEVELOPMENTS.

NOTE 1 - BASIS OF REPORTING

Basis of Presentation
---------------------

The accompanying  unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim  financial  information  and with the  instructions  to Form
10-QSB and Article 10 of Regulation S-B. Accordingly, they do not include all of
the  information  and  footnotes  required by  accounting  principles  generally
accepted in the United States of America for complete financial  statements.  In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
adjustments)  considered  necessary for fair  presentation  have been  included.
Operating results for the three-month and nine-month period ended March 31, 2003
are not necessarily  indicative of the results that may be expected for the year
ending June 30, 2003. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB for
the year ended June 30, 2002.

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

Net revenues include amounts earned under product  transaction sales,  tradeshow
revenue  and  subscriptions.   Product  transaction  revenues  are  recorded  in
accordance with EITF 99-19 "Reporting Revenue Gross as a Principal versus net as
an Agent." The Company  recognizes net revenues from product  transaction  sales
when title to the product passes to the customer, net of factoring fees. For all
product transactions with its customers, the Company acts as a principal,  takes
title to all products sold upon  shipment,  and bears  inventory risk for return
products that the Company is not able to return to the supplier,  although these
risks are mitigated through  arrangements with factors,  shippers and suppliers.
Due  to  the  Company  not  bearing  credit  risk,   the  Company   records  the
corresponding  revenue on a net basis. However, for financial reporting purposes
the Company presents the details of gross transaction sales and related costs of
sales in the  accompanying  condensed  statements  of  operations.  The  Company
recognizes  revenue  from the ASAP trade show held twice a year in February  and
August.  The ASAP trade show generates  revenue through  exhibitor booths sales,
corporate sponsorship,  and advertising.  This revenue is recognized at the time
of the related  trade show.  The Company  also  recognizes  revenue from monthly
subscription fees. Subscriber fees represent revenue generated through one-time,
non-refundable setup fees and monthly hosting fees.  Subscription and subscriber
fees are recognized as revenue after the services have been provided.

                                       7
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

In December 1999, the Security and Exchange  Commission  issued Staff Accounting
Bulletin  101  ("SAB  101"),  "Revenue  Recognition"  which  outlines  the basic
criteria  that  must  be met to  recognize  revenue  and  provide  guidance  for
presentation  of revenue  and for  disclosure  related  to  revenue  recognition
policies in financial  statements  filed with Security and Exchange  Commission.
Management  believes the Company's revenue  recognition  policies conform to SAB
101.

Segments of an Enterprise and Related Information
-------------------------------------------------

The Company has adopted  Statement of  Financial  Accounting  Standards  No. 131
("SFAS  131"),   "Disclosures  About  Segments  of  an  Enterprise  and  Related
Information." SFAS 131 changes the way public companies report information about
segments of their  business in their annual  financial  statements  and requires
them to report selected segment information in their quarterly reports issued to
shareholders.  It also requires  entity-wide  disclosures about the products and
services an entity provides, the material countries in which it holds assets and
reports revenues and its major customers (see Note 2).

Recent Accounting Pronouncements
--------------------------------

Recent accounting pronouncements discussed in the Notes to the June 30, 2002 and
2001  financial  statements  filed  previously  with the Securities and Exchange
Commission in Form 10-KSB that were required to be adopted during the year ended
June  30,  2003 did not  have a  significant  impact  on the  Company  financial
statements.

Stock Based Compensation
------------------------

At March 31, 2003,the Company has two stock-based  employee  compensation  plans
(the  "Plans").  The Company  accounts for the Plans under the  recognition  and
measurement  principles of APB 25, and related  interpretation.  No  stock-based
compensation  cost is  recognized in net loss.  Stock options  granted under the
Plans have exercise  prices equal to the market value of the  underlying  common
stock on the dates of grant.  The following table  illustrates the effect on net
income and loss per share if the Company had applied the fair value  recognition
provisions of SFAS 123 to stock-based employee compensation.


                                                          2003          2002
                                                      ------------  ------------

Net loss:
   As reported                                        $  (935,240)  $(1,108,884)
   Deduct: Total stock based employee compensation
         expense determined under fair value based
         Method for all awards                            (30,000)     (220,000)
                                                      ------------  ------------
   Pro forma                                          $  (965,240)  $(1,328,884)
                                                      ============  ============


Basic and diluted net loss per share:
   As reported                                        $     (0.13)  $     (0.15)
                                                      ============  ============
   Pro forma                                          $     (0.13)  $     (0.18)
                                                      ============  ============


The  above  pro  forma  effects  of  applying  SFAS  123  are  not   necessarily
representative of the impact on reported net loss for future.


                                       8
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

NOTE 2 - BUSINESS SEGMENTS

Reportable  business  segments for the three and nine month  periods ended
March 31, 2003 are as follows:
<TABLE>
<CAPTION>

                                                         3 Months        9 Months
                                                     Ended 03/31/03   Ended 03/31/03
<S>                                                 <C>               <C>
Net sales from continuing operations:
   Transaction sales                                  $    145,331     $    300,002
   ASAP Show                                               489,301          901,807
   Other                                                       933            4,158
                                                      -------------    -------------
                                                      $    635,565     $  1,205,967
                                                      =============    =============

Operation profit (loss) from continuing operations:
   Transaction sales                                  $   (225,986)    $   (668,913)
   ASAP Show                                              (179,401)        (374,597)
   Other                                                      (922)          (1,557)
                                                      -------------    -------------
                                                      $   (406,309)    $ (1,045,067)
                                                      =============    =============

Depreciation and amortization - continuing operations:
   Transaction sales                                  $      5,579     $     18,530
   ASAP Show                                                    -                -
   Other                                                        -                -
                                                      -------------    -------------
                                                      $      5,579     $     18,530
                                                      =============    =============

Identifiable assets - continuing operations:
   Transaction sales                                  $  2,314,609     $  2,314,609
   ASAP Show                                                    -                -
   Other                                                        -                -
                                                      -------------    -------------
                                                      $  2,314,609     $  2,314,609
                                                      =============    =============

Capital expenditures:
   Transaction sales                                  $         -      $         -
   ASAP Show                                                    -                -
   Other                                                        -                -
                                                      -------------    -------------
                                                      $         -      $         -
                                                      =============    =============
</TABLE>

                                       9
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.


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

The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the financial  statements and the
related notes thereto  included  elsewhere in this quarterly report for the nine
months  ended  March  31,  2003.   This  quarterly   report   contains   certain
forward-looking  statements  and the Company's  future  operating  results could
differ materially from those discussed herein.  Certain statements  contained in
this Report,  including,  without  limitation,  statements  containing the words
"believes,"  "anticipates," "expects" and the like, constitute  "forward-looking
statements"  within the meaning of Section 27A of the Securities Act of 1933, as
amended,  and Section 21E of the  Securities  Exchange Act of 1934,  as amended.
Such forward-looking  statements involve known and unknown risks,  uncertainties
and  other  factors  which  may  cause  the  actual   results,   performance  or
achievements of the Company to be materially  different from any future results,
performance  or  achievements  expressed  or  implied  by  such  forward-looking
statements.  These  factors are  discussed  in more  detail in the Risk  Factors
section of the Company's  Annual Report on Form 10-KSB for the fiscal year ended
June 30, 2002.  Given these  uncertainties,  readers are  cautioned not to place
undue reliance on such  forward-looking  statements.  The Company  disclaims any
obligation to update any such factors or to announce publicly the results of any
revisions  of  the  forward-looking  statements  contained  or  incorporated  by
reference herein to reflect future events or developments.

STATUS OF OPERATIONS

Background
----------

Cyber  Merchants   Exchange  ("C-Me"  or  the  "Company")  is  an  international
electronic trading and logistics company that is initially targeting the apparel
industry. C-Me has set the standard for apparel global trade and built the model
for other leading  industries by adhering to a simple  formula for success.  The
following four  interlocking  services make the company  unique:  1) ASAP Global
Sourcing  Show - a trade show for U.S.  buyers to meet  hundreds  of  ready-made
garment  exhibitors  under one roof - held  twice a year in Las  Vegas.  2) C-Me
builds private extranets,  or Internet Sourcing Networks ("ISN"), for its retail
partners.  The ISN  matches and pushes  merchandise  to the  appropriate  buyers
computer desktop.  3) C-Me's Global Financial  Platform ("GFP":  Patent Pending)
allows U.S. buyers to purchase overseas  merchandise without the need of issuing
a Letter of Credit  ("L/C").  4)  Logistics,  warehouse,  shipping,  and billing
service for the overseas  manufacturers.  The company presently has branches and
affiliate  offices  located in 25 countries  throughout  Asia,  Africa,  and the
Middle East to facilitate international transactions.

Services
--------

ASAP GLOBAL SOURCING SHOW
The world economic  marketplace has  dramatically  changed in the past few years
due to the unsafe  environment  for travel.  This will  continue to  drastically
change as the trade barriers and deregulations are lifted between countries. The
U.S. buyer community immediately recognized the ASAP Show as the World's Largest
Garment and Textile Sourcing Show.

Marketing  a brand  new  international  trade  show of this  magnitude  has been
accomplished by the presence of 25 C-Me overseas  offices  throughout the world.
Additionally,  C-Me has aligned  itself with foreign  government  alliances  and
endorsements,  which see the ASAP  Show as the  first  step  their  country  can
participate in to see an immediate increase of apparel exports to the U.S. Other
industry leading trade shows such as auto parts, house wares, hardware, athletic
equipment,  and poolside  supplies have  approached C-Me and asked the company's
expertise to build each  industry's  specific global sourcing shows after seeing
such success achieved in the ASAP Show.

                                       10
<PAGE>

                         CYBER MERCHANTS EXCHANGE, INC.

ELECTRONIC COMMERCE, A NEW WAVE OF INTERNATIONAL TRADE
C-Me has utilized the  convenient and powerful  Internet to communicate  between
buyers and sellers internationally.  The ISN was built with the buyer in mind to
make it user friendly to gain global apparel information.  C-Me has successfully
represented,  Fruit of the Loom,  Kellwood,  Factory 2-U Stores, Value City, and
others  to be their  buyer's  agent.  The ASAP Show  helps  promote  C-Me's  ISN
transaction model to these buyers.

GLOBAL FINANCIAL PLATFORM
C-Me developed a patent-pending  global financial platform,  levied with CIT - a
factoring accounts  receivable  guarantee service.  This process allows overseas
sellers to gain cash  advances  through  their local bank and eliminate the need
for  Letters  of  Credit  to sell  international  merchandise.  The  benefit  of
eliminating  L/C's to purchase  international  merchandise is the ultimate dream
for U.S. buyers.

LOGISTICS, WAREHOUSE, SHIPPING AND INVOICE SERVICES
C-Me's receiving,  shipping,  warehousing, and logistics services can assist the
overseas manufacturers to ship U.S. buyer's merchandise directly.


Revenue Model
-------------

The ASAP Show

Currently, the ASAP Show charges $58 per square foot to exhibitors. The cost per
square foot is considered  costly in the U.S.  trade show  industry.  The reason
ASAP exhibitors are willing to pay this high price is because C-Me's  management
always partners with overseas governments to subsidize 50-100% of the exhibition
costs.  C-Me's unique marketing  concepts,  services,  educational  seminars and
relationships set the company apart from competitors.

E-commerce Transactions

The Company charges a minimum of 5-10% commission when  representing U.S. buyers
who wish to utilize C-Me as their  buying agent to source their goods  overseas.
C-Me can also act as the principle to purchase the pre-sold  merchandise  with a
minimum profit margin of 20%. The demands for C-Me's  sourcing  abilities by the
U.S.  apparel  buyers have arrived at stages where C-Me must pick and choose who
they want to represent.

Global Financial Platform

CIT charges 1.5% of the invoice value as their non-recourse  factoring fee while
C-Me charges 0.5%.  The overseas  bank charges  interest for their cash advances
made to the seller.  The potential of eliminating  the Letter of Credit business
represents billions of dollars per year.

Accumulated Losses
------------------

The Company has incurred  significant  losses since its  inception and may never
generate or substain a profit.  Through the third  quarter ended March 31, 2003,
the Company  generated  losses of $11,863,560.  The Company devotes  significant
resources  to  developing,  enhancing,  selling and  marketing  its products and

                                       11
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

services. As a result, the Company will need to generate significant revenues to
maintain  profitability.  The Company may not continue its historical  growth or
generate sufficient revenues to sustain or increase profitability on a quarterly
or annual basis in the future.

RESULTS OF OPERATION

NINE MONTHS ENDED MARCH 31, 2003 AND 2002

Revenue
-------

Net gross revenues on transaction sales for the nine months ended March 31, 2003
were $2,010,106, an increase of $597,750 or 42% compared to the same period last
fiscal year. The Company expects the volume of gross sales  transactions and the
gross profit margin  percentage to maintain and grow, as it continues to utilize
its overseas sourcing network and its external sales force.

The gross profit from transaction sales for the nine months ended March 31, 2003
was $300,002 an increase of $155,936,  or 108%  compared to the same period last
fiscal year. The gross profit margin is approximately 15% for transaction sales.

The ASAP Show division's  gross revenue for the nine months ended March 31, 2003
was  $901,807,  an increase of $476,536 or 112% compared to the same period last
fiscal year.

Subscriber fees for the nine months ended March 31, 2003 were $4,158, a decrease
of $9,195 or 69% compared to the same period last fiscal year,  due to the shift
in focus on the revenue  received from the users of the  Company's  VTS, ISN and
Web design services to transaction  sales and revenue generated through the ASAP
Show.

Operating Costs and Expenses
----------------------------

General and administrative expenses increased by $687,521, or 45%, to $2,232,504
for the nine months ended March 31, 2003, as compared to $1,544,983 for the same
period last fiscal year. The increase in general and administrative  expenses is
primarily  due to the increase in the ASAP Show  expenses of $481,272.  The ASAP
Show expenses for the nine months ended March 31, 2003 were $1,276,404  compared
to $795,132  for the same  period last fiscal year end.  The reason for the ASAP
show costs  increasing  was due to two shows  held in the  fiscal  year 2003 and
there was only one show in fiscal year 2002.

No non-cash  stock  compensation  expenses were  recognized  for the nine months
ended March 31, 2003.

Net Loss
--------

The Company  recorded a net loss of $935,240 for the nine months ended March 31,
2003, a reduction of $173,644,  as compared to a net loss of $1,108,884  for the
same period last fiscal  year.  Such a reduction in net loss is mainly due to an
increase in net revenues  from  transaction  sales of  $155,936,  an increase in
tradeshow  revenues  of  $476,536,  a  reduction  in equity  losses on  overseas
investments  of  $147,159  and offset by an increase  of  tradeshow  expenses of
$481,272.  Loss per share as of March 31, 2003 was $0.13 as compared to $0.15 as
of March 31,  2002,  due to a decrease in net loss and a reduction in the number
of outstanding shares of common stock.

                                       12
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

THREE MONTHS ENDED MARCH 31, 2003 AND 2002

Revenue
-------

Gross revenues from transaction  sales for the three months ended March 31, 2003
were $677,766,  an increase of $342,032 or 102% compared to the same period last
fiscal year. The gross profit from transaction  sales for the three months ended
March 31, 2003 was  $145,331,  an increase of $131,897,  or 982% compared to the
same  period  last fiscal  year.  The Company  expects the volume of gross sales
transactions to grow and the gross profit margin  percentage to maintain,  as it
continues to utilize its overseas sourcing network and its external sales force.

The ASAP Show  division  gross revenue for the three months ended March 31, 2003
was  $489,301,  an increase  of $64,030 or 15%  compared to the same period last
fiscal year.

Subscriber  fees for the three months ended March 31, 2003 were $933, a decrease
of $4,480 or 83% compared to the same period last fiscal year,  due to the shift
in focus on the revenue  received from the users of the  Company's  VTS, ISN and
Web design services to transaction  sales and revenue generated through the ASAP
Show.

Operating Costs and Expenses
----------------------------

General and administrative  expenses increased by $54,178,  or 5%, to $1,036,295
for the three months ended March 31, 2003,  as compared to $982,117 for the same
period last fiscal year. The increase in general and administrative  expenses is
primarily due to the decrease in the ASAP Show expense of $126,431,  an increase
of handling  expenses of $39,124,  increase of  tradeshow  bad debt of $120,193,
increase of  professional  fees of $11,227,  and  increase of IR/PR  expenses of
$10,065 as compared to the same period last fiscal year.

No non-cash  stock  compensation  expenses were  recognized for the three months
ended March 31, 2003.

Net Loss
--------

The Company recorded a net loss of $361,831 for the three months ended March 31,
2003, a decrease of $192,802 in net loss,  as compared to a net loss of $554,633
for the same period last fiscal year.  The decrease in net loss is mainly due to
a reduction on loss of ASAP show of $179,031 and a reduction in equity losses on
overseas  investments of $57,447.  Loss per share as of March 31, 2003 was $0.05
as  compared  to $0.07 as of March 31,  2002 due to a decrease in net loss and a
reduction in the number of outstanding shares of common stock.

LIQUIDITY AND CAPITAL RESOURCES

The Company's net working capital  decreased from $2,040,600 as of June 30, 2002
to $1,040,309 as of March 31, 2003,  primarily due to cash used in operations of
$1,022,340.  During the current  fiscal  year,  the Company had average  monthly
general and administrative  expenses of approximately  $105,000  (excluding ASAP
Show related  expenses) as compared to $83,000 in the same period of last fiscal
year.  The  Company  will keep  implementing  its  cost-minimizing  plan,  which
includes,  reduction of professional  consulting  fees,  investor  relations and
marketing costs. With working capital of approximately  $1.0 million and average
monthly  expenses  of  approximately  $105,000,  and average  monthly  ASAP Show
expense of approximately $142,000,  coupled with cash generated from growing net

                                       13
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

revenue from transaction  sales and tradeshow  revenue,  the Company believes it
has sufficient capital to operate its business over the next 6 months.

The  company is in the process of offering  its  preferred  stock with 8% coupon
annual interest plus 50% common stock warrants at 0.50 per share.  This offering
will be for a total amount of $1,250,000 with an anticipated closing date before
July 15, 2003. The offering is being lead by C.K. Cooper & Co., a Newport Beach,
CA based investment banker.


EFFECT OF FLUCTUATION IN FOREIGN EXCHANGE RATE

The Company's current joint ventures are located in countries outside the United
States.  The  functional  currency  for  each  foreign  operation  is the  local
currency.  The carrying value of the Company's investments in the Pacific Rim is
subject to the risk of foreign  currency  fluctuations.  Any dividends  received
from the Company's  international joint ventures will also be subject to foreign
exchange risk.

ITEM 3.  EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

The  management of the Company  including  Mr. Frank S. Yuan as Chief  Executive
Officer and as Chief Financial  Officer have evaluated the Company's  disclosure
controls and procedures. Under rules promulgated by the SEC, disclosure controls
and procedures are defined as those  "controls or other  procedures of an issuer
that are  designed to ensure that  information  required to be  disclosed by the
issuer  in the  reports  filed or  submitted  by it under  the  Exchange  Act is
recorded, processed,  summarized and reported, within the time periods specified
in the  Commission's  rules and forms." Based on the evaluation of the Company's
disclosure  controls and  procedures,  it was determined  that such controls and
procedures  were  effective as of May 1, 2003, the date of the conclusion of the
evaluation.

Further,  there were no significant changes in the internal controls or in other
factors that could  significantly  affect these  controls after May 1, 2003, the
date of the conclusion of the evaluation of disclosure controls and procedures.


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The  Company  and Frank S. Yuan  ("Yuan")  filed a lawsuit  against  Yoram Dahan
("Dahan")  in the  Superior  Court of the  State of  California,  County  of Los
Angeles,  Central District (Case No. BC274550) on May 4, 2002. The claims by the
Company  against Dahan arose out of certain  activities  undertaken by him as an
employee of the Company  while  serving as the director of business  development
and President of the ASAP Show, a division of the Company.  The Company alleges,
among other things, that Dahan failed to fulfill his contractual  obligations as
an employee  and breached  his  fiduciary  duties to the company for a number of
reasons,  including by acting to usurp ownership  rights to the ASAP Show and by
attempting to operate the trade show  independently  from the Company.  Further,
Yuan and the Company charged in the lawsuit that Dahan defamed both Yuan and the
Company.

In  response  to the  lawsuit  filed  by Yuan  and the  Company,  Dahan  filed a
Cross-Complaint  against the Company and Yuan on June 26, 2002 in the same court
(Case No.  BC274550)  alleging breach of contract,  fraud,  misappropriation  of
confidential  information,  intentional  interference with prospective  economic
advantage,  and breach of implied  covenant of good faith and fair dealing,  all

                                       14
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

related to the ASAP Show. Dahan claims that he owns a certain  percentage of the
ASAP  Show  and  that  he is owed  certain  amounts  of  commissions  and  other
compensation  for work  performed by him.  The  Cross-Complaint  seeks  monetary
damages,  including a share of any profits that the Company might  generate from
the ASAP Show, and further seeks punitive damages for allegedly  fraudulent acts
by the Company in misappropriating the ASAP Show contract rights.

The Company  intends to pursue its  Complaint  for damages  against Dahan and to
vigorously  defend the  Cross-Complaint  brought by Dahan.  The Company believes
that it is not  obligated  to make any  payments  to Dahan  and has  meritorious
defenses to all of Dahan's allegations. However, if the Company does not prevail
and the Court awards the percentage  ownership rights to the ASAP Show or awards
any significant damage award to Dahan,  including  punitive damages,  this would
have a material adverse effect upon the Company.

Except as described above, the knowledge of the Company's executive officers and
directors,  the Company is not a party to any legal proceeding or litigation and
none of its  property  is the  subject  of a pending  legal  proceeding  and its
executive  officers and directors  know of no other  threatened or  contemplated
legal proceedings or litigation.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS'

None.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

None.

(b) Reports on 8-K

None


                                       15
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.


                                   SIGNATURES

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


CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com
(Registrant)


Date:    05/14/2003           /s/ Frank S. Yuan
-------------------           ----------------------------------------
                              Frank S. Yuan, Chairman, Chief Executive Officer






                                       16
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.

                    Certification of Chief Executive Officer
                        Pursuant to Section 302(a) of the
                           Sarbanes-Oxley Act of 2002

I, Frank S. Yuan, certify that:

1. I have  reviewed  this  quarterly  report on Form  10-QSB of Cyber  Merchants
Exchange Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3. Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's   board  of  directors  (or  persons   performing   the  equivalent
functions):


a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  May 14, 2003                       /s/ Frank S. Yuan
                                          Chairman, Chief Executive Officer and
                                          Principal Accounting Officer


                                       17
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.
                                                                    Exhibit 99.1

      CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I,  Frank S. Yuan,  certify,  pursuant  to 18 U.S.C.  Section  1350,  as adopted
pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002,  that the Quarterly
Report of Cyber Merchants Exchange,  Incorporation on Form 10-QSB for the fiscal
quarter  ended March 31, 2003 fully  complies with the  requirements  of Section
13(a) or  15(d)  of the  Securities  Exchange  Act of 1934 and that  information
contained  in such  Quarterly  Report  on Form  10-QSB  fairly  presents  in all
material  respects the  financial  condition  and results of operations of Cyber
Merchants Exchange Inc.

A signed  original of this  written  statement  required by Section 906 has been
provided  to  Cyber  Merchants  Exchange,  Inc.  and will be  retained  by Cyber
Merchants Exchange, Inc. and furnished to the Securities and Exchange Commission
or its staff upon request.
                                                 By:      /s/ Frank S. Yuan

                                                 Name:    Frank S. Yuan
                                                 Title:   Chairman, CEO and CFO



                                       18