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


                               AMENDMENT NO. 1 TO
                                   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  December  31,  2000.

[ ] 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. D.B.A. C-ME.COM
                 ----------------------------------------------
                 (Name of small business issuer in its charter)

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

600 S. LAKE AVE., SUITE 405, PASADENA, CA                           91106
-----------------------------------------                           -----
(Address of principal executive offices)                          (Zip Code)

                     Issuer's telephone number (626)793-5000
                                               -------------


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
                               December 31, 2000:
           7,589,669 SHARES OF COMMON STOCK, NO PAR VALUE (ONE CLASS)
           ----------------------------------------------------------

Transitional  Small  Business  Disclosure  Format:  Yes     No  X
                                                        -       -


<PAGE>

                                TABLE OF CONTENTS

PART  I  -  FINANCIAL  INFORMATION. . . . . . . . . . . . . . . . . . . . . . .3

     Item  1.  Financial  Statements. . . . . . . . . . . . . . . . . . . . . .3

          Balance  Sheet  (unaudited) as of December 31 and June 30, 2000 . . .3

          Statement  of  Operations (unaudited) for three months and six
          months  ended  December  31,  2000  and  December  31,  1999. . . . .4

          Statement  of  Cash  Flows  (unaudited)  for six months ended
           December  31,  2000  and  December  31,  1999. . . . . . . . . . . .5

          Notes  to  Financial  Statements  (unaudited). . . . . . . . . . . . 6

     Item  2.  Management's  Discussion and Analysis or Plan of Operation . . .9

PART  II  -  OTHER  INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .15

     Item  1.  Legal  Proceedings. . . . . . . . . . . . . . . . . . . . . . .15

     Item  6.  Exhibits  and  Reports  on  Form  8-K . . . . . . . . . . . . .15

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


                                        2
<PAGE>
<TABLE>
<CAPTION>
                         CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                              PART I - FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS

                                        BALANCE SHEETS


                                                                    June 30,     December 31,
                                                                      2000           2000
                                                                  ------------  -------------
                                                                                 (Unaudited)

                                                                                 (Restated)
<S>                                                               <C>           <C>
ASSETS


Current assets:
 Cash and cash equivalents                                        $ 1,274,395   $     11,493
 Certificates of deposit                                            3,900,000      4,294,024
 Stock subscription receivable                                      1,481,240              -
 Accounts receivable, net of allowance for doubtful accounts of
  $5,990 and $2,590 as of June 30, 2000 and December 31,
  2000, respectively                                                   54,693          9,417
 Accrued interest                                                           -         17,716
 Prepaid expenses                                                       5,367          4,895
                                                                  ------------  -------------

Total current assets                                                6,715,695      4,337,545

Furniture, fixtures and equipment, net                                 63,937         90,110

Investments in overseas joint ventures                                (49,573)       669,210
Investment in ABNet                                                 1,000,000        894,690
Other assets                                                            3,619          7,222
                                                                  ------------  -------------

Total assets                                                      $ 7,733,678   $  5,998,777
                                                                  ============  =============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accrued expenses                                                 $   691,114   $     62,463
                                                                  ------------  -------------

Total current liabilities                                             691,114         62,463
                                                                  ------------  -------------

Commitments and contingency

Shareholders' equity:
Common stock, no par value; 40,000,000 shares authorized;
 7,589,669 and 7,589,669 shares issued and outstanding              8,550,777     10,032,017
  Additional paid-in capital                                        3,332,827      3,575,225
 Common stock subscribed                                            1,481,240              -
 Unearned stock compensation                                       (1,180,196)      (903,721)
 Accumulated deficit                                               (5,142,084)    (6,767,207)
                                                                  ------------  -------------

Total shareholders' equity                                          7,042,564      5,936,314
                                                                  ------------  -------------

Total liabilities and shareholders' equity                        $ 7,733,678   $  5,998,777
                                                                  ============  =============
</TABLE>

                 See accompanying notes to financial statements.


                                        3
<PAGE>
<TABLE>
<CAPTION>
                         CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                                    STATEMENTS  OF  OPERATIONS


                                                           Three Months Ended          Six Months Ended
                                                               December 31,              December 31,
                                                       --------------------------  --------------------------
                                                           1999          2000          1999          2000
                                                       ------------  ------------  ------------  ------------
                                                       (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)

                                                                      (Restated)                 (Restated)
<S>                                                    <C>           <C>           <C>           <C>
Revenues:
 Subscribers' fees                                     $    31,525   $    15,294   $    41,675   $    28,194
                                                       ------------  ------------  ------------  ------------

Operating costs and expenses:
 Cost of revenue                                            29,139       130,855        52,591       200,387
 General and administrative expenses                       252,761       571,139       374,383       992,758
 Stock-based compensation                                        -       259,849             -       518,873
                                                       ------------  ------------  ------------  ------------

 Operating loss                                           (250,375)     (946,549)     (385,299)   (1,683,824)
                                                       ------------  ------------  ------------  ------------

Other income (expenses):
 Interest income, net                                       29,491        85,494        47,624       161,876
 Equity in loss of C-ME/Taiwan                                   -       (45,534)            -       (84,834)
 Equity in loss of E-SEA                                         -       (11,683)            -       (12,615)
 Equity in loss of GP.com                                        -       (29,987)            -       (50,434)
 Other expenses                                             (5,974)      (13,980)       (5,974)      (15,434)
 Gain from amortization of negative
  goodwill                                                       -        83,333             -       166,666
 Write-down on investments in ABNet                              -      (105,310)            -      (105,310)
                                                       ------------  ------------  ------------  ------------

Loss before income taxes                                  (226,858)     (984,246)     (343,649)   (1,623,909)

Income taxes                                                   800           800           800         1,214
                                                       ------------  ------------  ------------  ------------

Net loss                                               $  (227,658)  $  (985,016)     (344,449)  $(1,625,123)
                                                       ============  ============  ============  ============

Basic and diluted net loss per share                   $     (0.04)  $     (0.13)  $     (0.06)  $     (0.21)
                                                       ============  ============  ============  ============

Weighted-average number of common                        6,161,173     7,589,669     6,161,173     7,589,669
  shares outstanding                                   ============  ============  ============  ============
</TABLE>

                See accompanying notes to financial statements.


                                        4
<PAGE>
<TABLE>
<CAPTION>
                         CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                                  STATEMENTS OF CASH FLOWS
                         INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT

                                                                                    Six Months Ended
                                                                                      December 31,
                                                                                --------------------------
                                                                                    1999         2000
                                                                                ------------  ------------
                                                                                 (Unaudited)  (Unaudited)
                                                                                               (Restated)
<S>                                                                            <C>           <C>
Cash flows from operating activities:
 Net loss                                                                      $  (344,449)  $(1,625,123)
 Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization                                                    16,601        23,382
   Gain from amortization of negative goodwill                                           -      (166,666)
   Stock compensation expense                                                            -       518,872
   Loss on investments                                                                   -       253,193
   Changes in current assets and liabilities:
     Accounts receivable                                                           (21,555)       27,560
     Prepaid expenses                                                                    -           472
     Other assets                                                                        -        (3,603)
     Accrued expenses                                                             (212,070)     (628,650)
     Deferred Revenue                                                               (3,510)            -
                                                                                ------------  -----------

Net cash used in operating activities                                             (564,983)   (1,600,563)
                                                                                ------------  -----------

Cash flows from investing activities:
 Purchase of office equipment                                                      (35,549)      (49,555)
 Proceeds from maturity of certificates of deposit                               1,400,200      (394,024)
 Increase in deposits and others                                                   (32,476)
 Investment in GP.com                                                                    -      (600,000)
 Investment in E-SEA                                                                     -      (100,000)
                                                                                ------------  -----------

Net cash provided by (used in) investing activities                              1,332,175    (1,143,579)
                                                                                ------------  -----------

Cash flows from financing activities:
 Proceeds from stock subscribed and exercise of stock options                      100,984     1,481,240
                                                                                ------------  -----------

Net cash provided by financing activities                                          100,984     1,481,240
                                                                                ------------  -----------

Net increase (decrease) in cash and cash equivalents                               868,176    (1,262,902)

Cash and cash equivalents, beginning of period                                     595,265     1,274,395
                                                                                ------------  -----------

Cash and cash equivalents, end of period                                       $ 1,463,441   $    11,493
                                                                               ============  ============
</TABLE>

                 See accompanying notes to financial statements.


                                        5
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                        NOTES TO THE FINANCIAL STATEMENTS

NOTE  1  -  ORGANIZATION  AND  BUSINESS

Cyber  Merchants Exchange, Inc. d.b.a. C-ME.com (the "Company" or "C-ME.com") is
a business-to-business e-commerce company serving the worldwide retail industry.
C-ME.com,  a  California  corporation,  was  formed  in  July  1996.

The  Company provides its customers with an Internet-based communications system
that enables retailers and vendors to conduct negotiations and to electronically
facilitate  the  sourcing, and the purchase and sale of merchandise, on a global
basis.  Using  C-ME.com's  proprietary  software, the Company maintains a secure
yet  open  electronic  network  that  enables  retailers  to  conduct  on-line
communications  and  transactions  with  their  vendors.  The  front-end
communications  and  trading  process  is  generally  referred  to in the retail
industry  as  "sourcing."  High  volumes  of  product  and  transaction data are
exchanged between retailers and their vendors in order for buy-sell transactions
to  be  initiated,  negotiated  and consummated.  This critical sourcing process
typically  requires  a  substantial  amount  of time and attention from both the
retail merchandise buyer and the salesperson of a vendor.  The Company's related
software  products  and  services  are  designed  to make this sourcing function
substantially  more  effective  and  efficient.

C-ME.com's value lies in its intermediary abilities; specifically in its ability
to create an information pipeline for the retail industry.  The Company believes
its  virtual  pipeline  can  eliminate  cost, redundancy, and system integration
barriers  now  faced  by  retailers,  and  expedite  the  flow of usable product
information  to  retailers  from vendors who will benefit from its low cost, low
technology, real time feedback communication system. By providing retailers with
direct  access  to  foreign vendors, the Company can support its existing retail
partnerships  and  attract  new  retailers  to  join.  C-ME.com's strategy is to
set-up joint ventures.  Each joint venture will set up multiple sourcing offices
within  their  region  to market to vendors and international manufacturers that
would  like  to  sell  directly to large U.S. retailers by joining and utilizing
C-ME.com's  Internet  Sourcing  Networks  (ISN's).  By  establishing  localized
merchandise  sourcing  offices,  C-ME.com is fulfilling its mission of being the
retailers'  global sourcing solution by making international commerce convenient
and feasible for many manufacturers who know how to make quality products but do
not  have  technological  knowledge  or  Internet access.  Currently, Taiwan has
opened  three  local  offices,  China has five, and the Philippines and Thailand
each  have one office.  In addition, C-ME.com has independent sourcing agents in
Hong Kong, Korea, Indonesia, Singapore and Turkey.  C-ME.com plans to expand its
operations  to  Central  and  South  America  and  Europe.

NOTE  2  -  BASIS  OF  PRESENTATION

The  accompanying unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting  principles  for  interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation  S-X.  Accordingly,  they  do  not include all of the information and
footnotes  required  by  generally  accepted  accounting principles for complete
financial statements.  In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for fair presentation have
been  included.  Operating  results  for the six-month period ended December 31,
2000  are not necessarily indicative of the results that may be expected for the
year  ending  June 30, 2001.  For further information, refer to the consolidated
financial  statements  and  footnotes  thereto  included in the Company's annual
report  on  Form  10-KSB  for  the  year  ended  June  30,  2000.


                                        6
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com


NOTE  3  -  INVESTMENTS  IN  OVERSEAS  JOINT  VENTURES

During  the  quarter ended December 31, 2000, the Company amortized the negative
goodwill  of  $25,000,  $25,000, and $33,333 for C-ME/Taiwan, E-SEA, and GP.com,
respectively,  based  on the straight-line method over the estimated useful life
of three years. Using the equity accounting method, the Company picked up equity
in  the  loss of joint ventures of $45,534 in C-ME/Taiwan, $11,683 in E-SEA, and
$29,987  in  GP.com,  respectively.

As  of  December  31,  2000,  the  investment  in  respective  joint  venture is
summarized  as  follows:

<TABLE>
<CAPTION>
                                  C-ME/Taiwan     E-SEA       GP.com        Total
-------------------------------------------------------------------------------------
<S>                              <C>            <C>         <C>          <C>

Investment                       $    300,000   $ 400,000   $1,000,000   $ 1,700,000
Negative goodwill                    (300,000)   (300,000)    (400,000)   (1,000,000)
Amortization of negative
    goodwill                           75,000      50,000       66,666       191,666
Equity in loss of joint venture      (159,407)    (12,615)     (50,434)     (222,456)
-------------------------------------------------------------------------------------
Net investment                   $    (84,407)  $ 137,385   $  616,232   $   669,210
=====================================================================================
</TABLE>

Previously issued financial statements reported a net loss of $1,054,493 for the
quarter ended December 31, and a net loss of $1,777,932 for the six months ended
December  31,  2000.   During  fiscal  year  2000,   the  Company  entered  into
transactions  with  its joint ventures for the sale of the Company's proprietary
software. Previously issued financial statements reflect these transactions as a
sale  occurring  in fiscal year 2000 rather than as a reduction in the Company's
investment  in  the  joint  ventures to be recognized as income ratably over the
life  of  the  software. The Company subsequently changed its judgment regarding
the  recognition  of  revenue  and  determined  that  it was more appropriate to
recognize  this  amount  over  the life of the software sold. The effect of this
restatement  is  to reduce the Company's net loss for the quarter ended December
31,  2000 by $87,333 and for the six months ended December 31, 2000 by $170,666,
and  reduce  the loss per share by $0.01 for the quarter ended December 31, 2000
and  reduce  the  loss  per share by $0.02 for the six months ended December 31,
2000.

NOTE  4  -  INVESTMENT  IN  ABNET

During  the  quarter  ended  December 31, 2000, the Company took a write down of
$105,310  for its  investment  in  ABNet.

NOTE  5  -  TRANSACTION  IN  SHAREHOLDERS'  EQUITY

In May 2000, the Company commenced a private placement to issue 1,255,900 shares
of  its  common  stock at $4.878 per share. The offering closed on June 30, 2000
with  net  proceeds  of $5,186,959, netting issuance expenses of $939,377. Among
the  net  proceeds of $5,186,959, $1,475,240 was received by the Company on July
30,  2000.

During  the  three-month  period  ended September 30, 2000, the Company received
proceeds  of  $6,000  from  options  exercised.

During  the  three-month  period ended September 30, 2000, the Company granted a
total  of 335,596 options under its 1999 Option Plan to employees, officers, and
non-employees.  The  exercise  prices  of  options  granted  vary and range from
$4.878  to $6.080.  The Company applies APB Opinion No. 25 "Accounting for Stock
Issued  to  Employees"  and  related interpretations in accounting for its stock
option  plans.  As a result, the Company recognized a total compensation expense
of $239,615 for options granted to employees.  Based on their respective vesting
terms,  this  amount  will  be  amortized  over  two  years  with $119,540 being
amortized  the  first  year  and  $120,076  being  amortized  the  second  year.


                                        7
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

NOTE  5  -  TRANSACTION  IN  SHAREHOLDERS'  EQUITY  (CONTINUED)

During  the  three-month  period  ended December 31, 2000, the Company granted a
total  of  17,420 options under its 1999 Option Plan to employees, officers, and
non-employees. The exercise prices of options granted vary and range from $4.910
to  $5.190.  The Company applies APB Opinion No. 25 "Accounting for Stock Issued
to  Employees"  and  related interpretations in accounting for its stock options
plans.  As  a  result,  the  Company  recognized a total compensation expense of
$2,782  amortized  over  3  years, which related to employees and non-employees.
During  the  quarter ended December 31, 2000, the Company recognized $259,849 in
stock-based  compensation  expense.

NOTE  6  -  COMMITMENTS  AND  CONTINGENCIES

As  disclosed  in  the  Company's Form 10-KSB, dated June 30, 2000, and filed on
September  29,  2000,  the  Company  was  named  as  a  co-defendant, along with
Burlington  Coat  Factory, in a lawsuit brought by Stanley Rosner, an individual
in  an  action  in the Supreme Court of the State of New York, Nassau County. To
date,  the Company has not received notice of the proposed transfer of venue and
has  not  filed  its responsive papers or otherwise moved against the complaint.



                                        8
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

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 three
months  ended  December  31,  2000.  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 below in the section
entitled  "Risk  Factors",  and 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,  2000.  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

The  Company's  current  business  model  focuses  on  the  retailer and forming
strategic  retail  relationships.  In  addition,  the  Company  is  aggressively
pursuing the establishment of international sourcing offices. This international
expansion  will  help  complement  the strategic retailer relationships that the
Company  anticipates attracting through the execution of its business model. The
Company  plans  to utilize the marketing power of its retail partners to attract
vendors  worldwide.


The  Company  believes that by providing retailers with direct access to foreign
manufacturers,  it  can support its existing retail partnerships and attract new
retail  partners.  The  Company's  goal  is to aggregate manufacturers to create
efficiencies  for  both  foreign manufacturers and U.S. retailers. The Company's
strategy  is  to  partner  with  companies  in  other  countries  that  have the
connections,  capital  and  ability  to form joint ventures. These joint venture
corporations  will open multiple merchandise sourcing offices in many countries,
beginning  in  the  Pacific  Rim's  major   manufacturing  centers.   The  local
merchandise sourcing offices will be used to market access to the Company's ISNs
to  allow  manufacturers  to  sell  directly  to  U.S.  retailers.

ACCUMULATED  LOSSES

From  its inception in 1996 through December 31, 2000, the Company has generated
an  accumulated  deficit  of  $6,749,351.  Since  its inception, the Company has
incurred  substantial costs towards the following: to develop its technology; to
create,  introduce and enhance its sourcing solution; to establish marketing and
distribution  relationships;  to  recruit and train a sales and marketing group;
and  to  build  an administrative organization.  The Company's prospects must be
considered  in  light  of  its operating history, and of the risks, expenses and
difficulties  frequently  encountered  by  companies  in  their  early  stage of
operations,  particularly  companies  in  new,  unproved  and  rapidly  evolving
markets.  The  limited  operating history of the Company makes the prediction of
future results of operations difficult or impossible and therefore, there can be
no  assurance  that  the Company will grow or that it will be able to achieve or
sustain  profitability.  The  Company's  success depends to a significant degree
upon  the  Company's ability to raise additional capital, and upon the continued
contributions  of  key  management,  sales,  marketing,  and  finance personnel,


                                        9
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

certain  of whom would be difficult to replace.  The loss of the services of any
of  the key personnel or the inability to attract or retain qualified management
and other personnel in the future, or delays in hiring required personnel, could
have  a  material adverse effect on the Company's business, operating results or
financial  condition.  Also,  the  Company's  success is highly dependent on its
ability to execute in a timely manner its new sales and marketing plan, of which
no  assurance  can  be  made.


RESULTS  OF  OPERATION

THREE  MONTHS  ENDED  DECEMBER  31,  2000  AND  1999

REVENUE

Total  operating  revenues for three months ended December 31, 2000 decreased to
$15,294, decreasing by $16,231 from $31,525, a 51% decrease, for the same period
last  year  with  revenue  consisting  of  subscribers'  fees.  The  decrease in
operating  revenue  was  due  to  the  decrease  in the number of subscribers to
C-ME.com's  software.

The  Company  anticipates  generating  revenues  from  fees paid by domestic and
global  vendors who subscribe to the ISN, and transaction fees to be paid by the
retailers  on  overseas  purchases  through  the  Company's  operating  system.


The  financial statements have been revised to restate the revenue recognized by
the  Company during the period covered by this report, as discussed in Note 3 to
the  financial  statements,  which  is  incorporated  herein  by  reference.

OPERATING  COSTS  AND  EXPENSES

The  cost  of  revenue increased $101,716 to $130,855 for the three months ended
December  31,  2000,  compared  to $29,139 for the same period last year, a 349%
increase.  The increase in the cost of revenue is attributable to an increase in
the  cost  of additional technical personnel to service customers as well as the
increased  costs of developing and servicing the Company's proprietary software.

General  and  administrative  expenses increased by $318,378 to $571,139 for the
three month ended December 31, 2000, as compared to $252,761 for the same period
last  year, a 126% increase. The increase in general and administrative expenses
is  primarily  due  to  the increase in professional consulting expense, payroll
expense,  and  marketing  expense.


The  Company  recognized  a  stock  compensation  expense  of  $259,849  for the
three-months  ended  December  31,  2000.   Of  the  $259,849,  $2,782 came from
options  granted  in  the  second  quarter  of  fiscal  year 2001, the remaining
$257,067  was  due  to amortization of unearned stock compensation recognized in
prior  periods.

NET  LOSS

The  Company recorded a net loss of $985,016 for the three months ended December
31, 2000, a $757,358 increase in net loss, as compared to a net loss of $227,658
for  the  same  period last year.  The increase in net loss is attributable to a
$16,231  decrease  in revenue compared to a $741,127 increase in operating costs
and  other  expenses.   Loss  per  share  as  of  December 31, 2000 was $0.13 as
compared  to  $0.04  as of December 31, 1999, due to an increase in net loss and
increase  in  the  number  of  outstanding  shares  of  common  stock.


                                       10
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

SIX  MONTHS  ENDED  DECEMBER  31,  2000  AND  1999

REVENUE

Total  operating  revenues  for  six months ended December 31, 2000 decreased to
$28,194, decreasing  by $13,481 from $41,675, or 32.4%, for the same period last
year,  with  revenue consisting of subscribers' fees.  The decrease in operating
revenue  was  due to the decreased number of subscribers to C-ME.com's software.


The  Company  anticipates  generating  revenues  from  fees paid by domestic and
global  vendors who subscribe to the ISN, and transaction fees to be paid by the
retailers  on  overseas  purchases  through  the  Company's  operating  system.

OPERATING  COSTS  AND  EXPENSES

The  cost  of  revenue  increased  $147,796 to $200,387 for the six months ended
December  31,  2000,  compared  to  $52,591  for  the same period last year. The
increase  in  the  cost of revenue is attributable to an increase in the cost of
additional  technical  personnel  to  service customers as well as the increased
costs  of  developing  and  servicing  the  Company's  proprietary  software.

General  and  administrative  expenses increased by $618,375 to $992,758 for the
six  months ended December 31, 2000, as compared to $374,383 for the same period
last  year. The increase in general and administrative expenses is primarily due
to  the  increase  in  professional  consulting  expense,  payroll  expense, and
marketing  expense.


The  Company  recognized  a  stock  compensation expense of $518,873 for the six
months  ended  December  31,  2000.

NET  LOSS

The  Company recorded a net loss of $1,625,123 for the six months ended December
31,  2000,  a  $1,280,674  increase  in  net  loss, as compared to a net loss of
$344,449  for the same period last year.  Loss per share as of December 31, 2000
was $0.21 as compared to $0.06 as of December 31, 1999 due to an increase in net
loss  and  increase  in  the  number  of  outstanding  shares  of  common stock.


LIQUIDITY  AND  CAPITAL  RESOURCES

The  Company's  cash  balances and certificates of deposit decreased by $868,878
from  $5,174,395  as  of  the 12 months ended June 30, 2000, to $4,305,517 as of
December  31,  2000.  This decrease in cash balances and certificates of deposit
is  primarily  due  to  the  Company's  expansion  and  losses  from operations.

Management  estimates  the monthly cash "burn rate" to be approximately $210,000
per month.  The Company believes it has sufficient cash resources to operate its
business  over  the  next  twelve months.  Depending on market acceptance of the
Company's current business model, the Company may raise additional funds, either
debt  or  equity,  to  augment  future  growth  of  the  business.


                                       11
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com


On  January 12, 2000, the Company entered into a line of credit agreement with a
bank  to  establish a $600,000 revolving line of credit.  Borrowings are secured
by  a $700,000 time certificate of deposit at the bank.  The line of credit will
expire on January 2, 2001.  The Company has this revolving credit line available
for  general working capital purposes.  As of December 31, 2000, the Company had
no  borrowing  under  this  facility.

Management  believes  that current cash balances and cash flows from operations,
if any, will be sufficient to meet present growth strategies and related working
capital and capital expenditure requirements. The current business plan proposes
significant  increases in spending when compared to the historical expenditures.
Management  may  decide  to  raise  additional  capital  through the issuance of
additional  debt  or  equity  securities, prior to achieving positive cash flows
from  operations.

In  July 2000, the Company injected $600,000 into Global Purchasing Dotcom, Inc.
(GP.com)  for  a  50%  equity  interest and $100,000 into E-SouthEast Asia, Inc.
(E-SEA)  for  a  40%  equity  interest.


The  Company  plans  to utilize a combination of internally generated funds from
operations,  potential  debt  and/or  equity  financings to fund its longer-term
growth  over  a  period  of  two  to  five  years.  The  availability  of future
financings  will  depend  on  market  conditions.

The  forecast  of  the  period  of  time  through  which the Company's financial
resources  will be adequate to support operations is a forward-looking statement
that  involves  risks  and  uncertainties.  The  actual funding requirements may
differ  materially  from this as a result of a number of factors including plans
to fully support the ISN and the Company's investments in systems infrastructure
and  staffing.

EFFECT  OF  FLUCTUATIONS  IN  FOREIGN  EXCHANGE  RATES


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.




RISK  FACTORS

     THE  COMPANY  HAS  NOT PRODUCED A PROFIT AND CANNOT BE CERTAIN THAT IT WILL
     PRODUCE  A  PROFIT.




The  Company  is  not  profitable  and  continues to produce a net loss.  If the
Company  does  achieve  profitability,  it cannot be certain that it will remain
profitable  nor  that  profits  will  increase  in  the  future. The Company has
incurred  significant  losses  since  its  inception  and  may never generate or
sustain  a  profit.  For  the  six  months  ended December 31, 2000, the Company
reported a net loss of $1,625,123.  The Company devotes significant resources to
developing,  enhancing,  selling  and  marketing its products and services. As a
result,  the  Company  will  need  to  generate  significant  revenues to become
profitable.  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.


     DUE  TO  MARKET  CONDITIONS  OVER  THE PAST SEVERAL MONTHS, THE COMPANY WAS
     UNABLE  TO  EXPAND  ITS  SOURCING NETWORK AS PLANNED AND, AS A RESULT, MUST
     RELY  ON  ITS  EXISTING  INTERNET  SOURCING  NETWORK  TO GENERATE OPERATING
     REVENUE.


                                       12
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

Due  to  market  conditions,  the Company has been unable to expand its Internet
Sourcing  Network  as  planned.  The  Company had planned to expand its Internet
Sourcing  Network  into  areas beyond those it currently has established through
joint  ventures in Asia. The Company must now focus its resources and operations
on  its  existing  Internet  Sourcing  Network  in  order  to generate operating
revenue.

     THE  INTERNET  SOURCING  NETWORK  HAS  NOT  GENERATED  ANY  REVENUE.

The  Company  expects  to  depend  primarily  on  revenue  from  the  complete
implementation  of  its  domestic  and international Internet Sourcing Networks.
The Internet Sourcing Network has not generated any revenue during the period of
this quarterly report and there is no guarantee that it will generate revenue in
the future.  If the Company does not generate revenue from its existing Internet
Sourcing  Network,  it  will  have  a  material  adverse  effect on its business
operations.

     THE  COMPANY  MAY  REQUIRE  ADDITIONAL  EQUITY  FINANCING, WHICH MAY NOT BE
     AVAILABLE  AND  MAY  DILUTE  THE  OWNERSHIP  INTERESTS  OF  INVESTORS.

The  Company's  ultimate  success will depend on its ability to raise additional
capital.  No  commitments  to  provide  additional  funds  have  been  made  by
management  or  other  shareholders.  The  Company  has  not  investigated  the
availability,  source  or  terms that might govern the acquisition of additional
financing.  When  additional capital is needed, there is no assurance that funds
will be available from any source or, if available, that they can be obtained on
terms  acceptable  to  the  Company.  If not available, the Company's operations
would  be  severely  limited,  and  it would be unable to implement its business
plan.  If  equity  financing  is  used  to raise additional working capital, the
ownership  interests  of  existing  shareholders  may  be  diluted.

     THE  COMPANY'S  OPERATING  RESULTS  ARE  LIKELY TO FLUCTUATE SIGNIFICANTLY.

As  a result of the Company's limited operating history and the rapidly changing
nature  of  the markets in which it competes, the Company's quarterly and annual
revenues  and  operating  results are likely to fluctuate from period to period.
For  this  reason,  you  should  not rely on period-to-period comparisons of the
Company's  financial  results  as  indications of future results.  The Company's
future  operating  results  could  fall  below the expectations of public market
analysts  or  investors  and significantly reduce the market price of its common
stock.  Fluctuations in the Company's operating results will likely increase the
volatility  of  its  stock  price.

     THE  COMPANY'S  DEPENDENCE  ON  ALLIANCES  WITH  BUSINESSES AND GOVERNMENTS
     OUTSIDE  OF  THE  UNITED  STATES  INVOLVES  RISKS.

The  Company  depends  on  its  ability  to  establish  and  maintain successful
alliances  with businesses and governments located outside of the United States.
If  the  Company is unable to establish and maintain such alliances, it will not
be  able to implement the business plan in its current configuration, which will
affect  both  its revenue stream and profit potential.  In addition, the Company
faces  political sovereign risks of conducting international business, including
risks  of  changing  economic  conditions  in  the Pacific Rim, which may have a
material adverse effect on its ability to provide global merchandise sourcing to
its  retail  partners.


                                       13
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

     THE  COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS TO COMMON SHAREHOLDERS IN
     THE  FORESEEABLE  FUTURE, WHICH MAKES INVESTMENT IN THE COMPANY SPECULATIVE
     OR  RISKY

The  Company  has not paid dividends on its common stock and does not anticipate
paying  dividends  on  its  common stock in the foreseeable future. The Board of
Directors  has  sole  authority  to  declare  dividends payable to the Company's
shareholders.  The  fact  that  the  Company  has  not  and does not plan to pay
dividends  indicates  that  the  Company  must use all of its funds generated by
operations for reinvestment in its operating activities and also emphasizes that
the  Company  may not continue as a going concern.  Investors also must evaluate
an  investment  in the Company solely on the basis of anticipated capital gains.


                                       14
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                           PART II - OTHER INFORMATION

ITEM  1.   LEGAL  PROCEEDINGS


As  disclosed  in  the  Company's Form 10-KSB, dated June 30, 2000, and filed on
September  29,  2000,  the  Company  was  named  as  a  co-defendant, along with
Burlington  Coat  Factory, in a lawsuit brought by Stanley Rosner, an individual
in  an  action in the Supreme Court of the State of New York, Nassau County.  To
date,  the Company has not received notice of the proposed transfer of venue and
has  not  filed  its responsive papers or otherwise moved against the complaint.

ITEM  6.   EXHIBITS  AND  REPORTS  ON  FORM  8-K

(A)  EXHIBITS

EXHIBIT
NUMBER    DESCRIPTION
------    -----------

10.1*     Tri-Party Assignment Agreement Between CIT, Commercial Services, Inc.,
          Bank SinoPac and Cyber Merchants Exchange  dated  November  16,  2000.

*  Previously  filed  with  the  Commission  on  February  14,  2000.


(B)  REPORTS  ON  FORM  8-K

None.


                                       15
<PAGE>
                 CYBER MERCHANTS EXCHANGE, INC. d.b.a. C-ME.com

                                   SIGNATURES

In  accordance  with  the requirement 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)


05/11/01                             /s/  Frank  S.  Yuan
--------                        ------------------------------------------------
                                Frank S. Yuan, Chairman, Chief Executive Officer


05/11/01                             /s/  John  F.  Busey
--------                        ------------------------------------------------
                                John F. Busey, President and Acting
                                Chief Financial Officer



                                       16
<PAGE>