|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended June 30, 1999
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 333-60487
CYBER MERCHANTS EXCHANGE, INC.
(Name of small business issuer in its charter)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|California
(State or other jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|600 S.Lake Ave., Suite 405, Pasadena, CA
(Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Issuer's telephone number (626)793-5000
Securities registered under Section 12(b) of the Exchange Act:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Title of each classNone                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Securities registered under Section 12(g) of the Exchange Act:None
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. [X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. [X]
As of June 30, 1999, the Company had revenue in fiscal year 1999 of $47,810. The
Company was not publicly traded on June 30, 1999; therefore, there is no market value
data available as of that date. The number of shares of voting stock held by
non-affiliates of the registrant on August 26 was 1,864,671 at a closing
price of $4.81 per share, giving the Company a $8,969,077 aggregate market
value. As of Aug 26, the Company had 6,086,173 shares outstanding.
Documents incorporated by Reference
The Exhibit Index is found in Item 13


Table of Contents
Form 10-KSB
Table of Contents
PART I
- Item 1: Description of Business
- Item 2: Description of Property
- Item 3: Legal Proceedings
- Item 4: Submission of Matters to a Vote of Security Holders
PART II
- Item 5: Market for Common Equity and Related Stockholder Matters
- Item 6: Management's Discussion and Analysis or Plan of Operation
- Item 7: Financial Statements
- Item 8: Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure
PART III
- Item 9: Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act
- Item 10: Executive Compensation
- Item 11: Security Ownership of Certain Beneficial Owners and
Management
- Item 12: Certain Relationships and Related Transactions
- Item 13: Exhibits and Reports on Form 8-K
SignaturesReports of Independent Certified Public Accountants

PART I

Item 1. Description of Business.
Cyber Merchants Exchange, Inc. d.b.a C-ME.com (the "Company" or "C-ME") is a
business-to-business e-commerce company serving the worldwide retail industry.

Summary
Originally named World Wide Magic Net, Inc., C-ME was founded in 1996 and provides
Internet turnkey solutions to streamline the retailers' merchandise sourcing (front-end)
activities. The company's solutions include its proprietary Internet Sourcing Network
("ISN") -- a private extranet that links the company's retail partners with their
vendors. The ISN provides retailers a desktop solution to reduce the cost of
front-end merchandise sourcing activities while expanding the retailer's vendor
base. Other services include Internet EDI (Electronic Data Interchange) (upon retailers'
request) -- a platform
that provides a back-end efficiency to process purchase orders, invoices, packing lists
and shipping documents, the Virtual Trade Show ("VTS"), located at www.c-me.com - a
product showcase forum that allows retail buyers to quickly search among thousands of
vendors' products, Wholesale Auction Center ("WAC") (planned launch: Spring 2000) - a place where vendors list closeouts, odd lots in bulk quantity and allows smaller
retailers, jobbers and others instant access, and Factory Outlet Mall ("FOM") (planned
launch: Spring 2000) - a full e-commerce package that will consist of secure credit card
transaction processing and shopping cart functions including automatic calculation of
freight and sales tax, Manufacturers will be able to sell goods directly to consumers. Currently,
C-ME.com's major retail partners include Factory 2-U Stores (NASDAQ:FTUS) and Burlington
Coat Factory (NYSE:BCF).

Overview
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'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 vendor
representative. The Company's related software products and services are designed to make this
sourcing function substantially more effective and efficient.
When utilized to their full capability and employed on a wide-scale basis, the Company
believes that its products can reduce a retailer's cost of sourcing and, more
importantly, substantially expedite the sourcing process and more effectively manage
the quality performance of vendors. Consequently, the Company's software products
and services enable merchandising, purchasing and shipping decisions to be made by all
parties at dates closer to the selling season, helping such parties make better informed
and more timely business decisions. The objective is to enable its retail partners that
source products through the Company's software and services to obtain lower costs,
increased sales volume, faster inventory turnover, fewer involuntary price discounts and
improved margins and profitability.

Company History
The following is a brief chart of major events of the Company since inception:

|June 1996       | Incorporated in California under World Wide Magic Net, Inc.,
d.b.a. Cyber Merchants Exchange.
|--------------- | ---------------------------------------------------------------------------------------------
|October 7, 1998 | Corporate legal name changed to Cyber Merchants Exchange, Inc. d.b.a.
C-ME.com               
|May 14, 1999    | SB-2 filing was effected by the SEC                                                          
|June 1, 1999    | IPO - Escrow Opened                                                                          
|June 20, 1999   | IPO - Escrow Closed                                                                          
|July 22, 1999   | Company began trading on OTC-BB under the symbol "CMEE"                                      



|NAME             | AGE | POSITION                                                     
|---------------- | --- | -------------------------------------------------------------
|Howard W. Moore  | 68  | Vice-Chairman                                                
|Frank S. Yuan    | 50  | Chief Executive Officer, President, and Chairman of the Board
|Charles Rice     | 55  | Director                                                     
|Deborah Shamaley | 39  | Director                                                     
|Robert Lee       | 41  | Director                                                     
|Robert Hsieh     | 50  | Director                                                     
|Peter Lin        | 28  | Director                                                     
|David Rau        | 43  | Chief Financial Officer                                      
|James Zheng      | 31  | Chief Technology Officer                                     
|James K. Ho      | 48  | Advisor                                                      
|Joseph Sloan     | 42  | Advisor                                                      



|                            | Long Term Compensation
|--------------------------- | ----------------------
|                            | Annual Compensation   
|(a)                         | (b)                   
|Name and Principal Position | Year                  
|Frank Yuan, CEO             | 1998                  
|All Executives as a Group   | 1998                  
|Frank Yuan, CEO             | 1999                  
|All Executives as a Group   | 1999                  



|Executive Officers, Directors, and 5% Stockholders(1) | Shares Beneficially Owned | Percentage of Common Shares Outstanding
|----------------------------------------------------- | ------------------------- | ---------------------------------------
|Frank S. Yuan Family Trust(2)                         | 2,700,000                 | 44.98%                                 
|Charles Rice                                          | 60,000                    | 1.00%                                  
|Deborah Shamaley                                      | 300,000                   | 5.00%                                  
|Robert H.J. Lee                                       | 250,000                   | 4.16%                                  
|Robert Hsieh                                          | 62,500                    | 1.04%                                  
|Peter Lin                                             | 295,000                   | 4.91%                                  
|David Rau (3)                                         | 30,000                    | 0.50%                                  
|James Zheng (4)                                       | 50,000                    | 0.83%                                  
|UNI, L.P.                                             | 474,000                   | 7.90%                                  
|All Officers, Directors, and 5% Shareholders as Group | 4,221,500                 | 70.32%                                 
|All Other Stockholders                                | 1,781,670                 | 29.68%                                 
|Shares Outstanding as of June 30,1999                 | 6,003,170                 | 100.00%                                

|(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | All officers, directors, and five-percent shareholders of the Company
may be reached at Cyber Merchants Exchange, Inc., 600 S. Lake Ave., Ste. 405, Pasadena,
CA 91106.                                   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Frank Yuan and Vicky Yuan are the trustees of the Frank S. Yuan Family Trust. Jerome
Yuan is the beneficiary of the Frank S. Yuan Family Trust.                                                           
|(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Assumes the exercise by David Rau of his stock options for 25,000 shares of common
stock as of June 30,1999 (after a 1-for-2 reverse stock split), which Mr. Rau has since
exercised at a cost of $10.    
|(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Assumes the exercise by James Zheng of his stock options for 50,000 shares of common
stock as of June 30,1999 (after a 1-for-2 reverse stock split), which Mr. Zheng has since
exercised at a cost of $10.
|Stock Options
The Company has adopted a 1996 non-qualified Stock Option Plan covering 250,000 shares
of the Company's Common Stock, pursuant to which directors, officers, key employees, and
consultants working for the Company are eligible to receive stock options. The plan is
administered by the Board of Directors and the President of the Company (the
"Administrator"). The selection of participants, allotment of shares, determination of
price and other conditions of purchase of the stock options are determined by the
Administrator in order to attract and retain persons instrumental to the success of the
Company.  As determined by the Administrator, payment upon exercise of options may be in
cash or other payment method.  Generally, the vesting, exercise and termination schedules
are determined by the Administrator at the time of grant, as is the exercise price.  The
stock options, in most cases, are terminated if the Grantee resigns, terminates, or no
longer holds his/her position with the Company prior to vesting. The table below reflects
stock options granted by the Company to executive officers and other persons.  The table
covers all options granted by the Company through June 30, 1999.  As of June 30, 1999, no
options have been exercised.

|Name of Holder         | Granted     | No. of Shares         |                     | Exercise Price
|---------------------- | ----------- | --------------------- | ------------------- | --------------
|David Rau(1)           | 1996        | 25,000                | $10.00 (Total Cost)
|James Zheng(2)         | 1996        | 50,000                | $10.00 (Total Cost)
|Monica Cheang(3)       | 1997        | 10,000                | $0.40/share        
|Luz Jimenez(4)         | 1997        | 5,000                 | $0.40/share        
|David Rau(4)           | 1998        | 5,000                 | $0.40/share        
|Laura Mercado(4)       | 1998        | 5,000                 | $0.40/share        
|Catherine Jampierre(4) | 1998        | 5,000                 | $0.40/share        
|Howard W. Moore(5)     | 1998        | 15,000                | $0.40/share        
|Total Granted:         | 120,000     | $.40/share and $10.00
|Total Ungranted:       | 130,000 (6) |                      

|(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | David Rau was granted a restricted stock option to purchase 25,000 shares of
Common Stock for a total cost of $10.00 pursuant to an employment contract executed on
October 28, 1996.  The option vested two years after the execution of the employment
contract.  However, Mr. Rau can only exercise 50 percent of the option (12,500 shares)
within 15 days after the end of his second year of employment.  The remaining 50 percent
of the option (12,500 shares) is exercisable within 15 days after the end of his third
year of employment.  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | James Zheng was granted a restricted stock option to purchase 50,000 shares of Common
Stock for a total cost of $10.00 pursuant to an employment contract executed on November
1, 1996. The option vested two years after the execution of the employment contract.
However, Mr. Zheng can only exercise 50 percent of the option (25,000 shares) within 15
days after the end of his second year of employment.  The remaining 50 percent of the
option (25,000 shares) is exercisable within 15 days after the end of his third year of
employment.
|(3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Monica Cheang, who serves as the Company's Office Administrator, was granted a
restricted stock option to purchase 10,000 shares of Common Stock at $0.40 per share. Ms.
Cheang can only exercise 50 percent of her option (5,000 shares) within 15 days after the
end of her second year of employment.  The remaining 50 percent of the option (5,000
shares) is exercisable within 15 days after the end of her third year of employment.                                                                                                         
|(4)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Luz Jimenez, David Rau, Laura Mercado and Catherine Jampierre were each granted
restricted stock option to purchase 5,000 shares of Common Stock at $0.40 per share.
They can only exercise 50 percent of their option (2,500 shares) within 15 days after
the end of their second year of employment. The remaining 50 percent of the options
(2,500 shares) are exercisable within 15 days after the end of their third year of
employment.                                                                                                        
|(5)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | In consideration for serving as the Company's Vice-Chairman, Mr. Moore was granted a
restricted stock option to purchase 15,000 shares of Common Stock at $0.40 per share.                                                                                                                                                                                                                                                                                                                                                                           
|(6)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | The Board of Directors has empowered Management to grant the remaining 130,000 shares
of ungranted stock options to key employees.                                                                                                                                                                                                                                                                                                                                                                                                                   
|Stock Options exercisable in the next 6 months
Excluding the options granted to Howard Moore, there were 105,000 shares of stock options
listed in the above stock options table eligible for exercise within the next 6 months
based upon the 1996 non-qualified stock option plan. Among the 15,000 shares granted to
Howard Moore, 7,500 shares are exercisable within the next 6 months.


Item 12. Certain Relationships and Related
Transactions.
The Company maintains certain banking relationships such as checking, money market,
certificates of deposit accounts, with Evertrust Bank, of which the Company's Chairman and
President is a founder and shareholder. As of June 30, 1999, the cash and cash equivalent
balance at Evertrust Bank was $570,209, and certificates of deposit balance amounted to
$300,000. Management believes that Evertrust Bank offers competitive interest rates and
services.Item 13. Exhibits and Reports on Form 8-K.
On October 1, 1999 the Company filed a form 8-K to report a change in registrant's
certifying accountant from KPMG, LLP to BDO Seidman, LLP. The Company had no disagreements
with KPMG, LLP with regards to any accounting matter or otherwise. A letter from KPMG,
LLP addressed to the Commission was filed as an exhibit to the 8-K filing.
|Exhibit No.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Articles of Incorporation*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|3.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Bylaws*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Article II of Bylaws  (Reference is made to Exhibit 3.2)*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Warrant held by Burlington Coat Factory Warehouse Corporation*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|10.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Lease of registrant's facilities*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|10.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Participation Agreement with Burlington Coat Factory Warehouse
Corporation*                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Contract with Family Bargain Corporation*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|10.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Employment contract with David Rau*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|10.5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Escrow Agreement with Union Bank of California*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|10.6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 1996 World Wide Magic Net, Inc. Stock Option Plan*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|16.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Change of Certified Public Accountant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|23.2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Consent of Evers & Hendrickson, LLP*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|27.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|* Filed as an Exhibit to the Company's Registration Statement on Form SB-2,
Amendment No. 5 dated May 6, 1999, and incorporated herein by this reference.


Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

|Tag                        | Tag Value  
|-------------------------- | -----------
|PERIOD-TYPE                | 12-MOS     
|FISCAL-YEAR-END            | JUN-30-1999
|PERIOD-START               | JUL-01-1998
|PERIOD-END                 | JUN-30-1999
|CASH                       | 595265     
|SECURITIES                 | 1500200    
|RECEIVABLES                | 8150       
|ALLOWANCES                 | 5990       
|INVENTORY                  | 0          
|CURRENT-ASSETS             | 2200599    
|PP&E                       | 38540      
|DEPRECIATION               | 40281      
|TOTAL-ASSETS               | 2242282    
|CURRENT-LIABILITIES        | 233649     
|BONDS                      | 0          
|PREFERRED-MANDATORY        | 0          
|PREFERRED                  | 0          
|COMMON                     | 3,863,058  
|OTHER-SE                   | -1,854,425 
|TOTAL-LIABILITY-AND-EQUITY | 2242282    
|SALES                      | 47810      
|TOTAL-REVENUES             | 47810      
|CGS                        | 107824     
|TOTAL-COSTS                | 652132     
|OTHER-EXPENSES             | 0          
|LOSS-PROVISION             | 0          
|INTEREST-EXPENSE           | -17492     
|INCOME-PRETAX              | -694,654   
|INCOME-TAX                 | 800        
|INCOME-CONTINUING          | 0          
|DISCONTINUED               | 0          
|EXTRAORDINARY              | 0          
|CHANGES                    | 0          
|NET-INCOME                 | -695454    
|EPS-BASIC                  | -0.12      
|EPS-DILUTED                | -0.12      
|

|Signatures
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                  
|                                                                                                                                                                                  

|Reports of Independent Certified Public Accountants
Cyber Merchants Exchange, Inc. d.b.a. C-ME.com
_______________________
Report on Audited Financial Statements
For the Years Ended June 30, 1998 and 1999
_______________________

Reports of Independent Certified Public Accountants
Consolidated financial statements
Balance Sheets as of June 30, 1998 and 1999
Statements of Operations for the years ended June 31, 1998 and 1999
Statements of Shareholders' Equity for the years ended June 30, 1999 and 1998
Statements of Cash Flows for the years ended June 30, 1998 and 1999
Notes to Financial StatementsReport of Independent Certified Public Accountant
The Board of Directors
Cyber Merchants Exchange, Inc. d.b.a.C-ME.com
We have audited the accompanying balance sheet of Cyber Merchants Exchange, Inc. d.b.a.
C-ME.com (the Company) as of June 30, 1999 and the related statements of operations,
shareholders' equity and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Cyber Merchants Exchange, Inc. d.b.a.
C-ME.com as of June 30, 1999 and the results of its operations and its cash flows for
the year then ended in conformity with generally accepted accounting principles.
/S/ BDO Seidman, LLP
Los Angeles, California
September 28, 1999

The Board of Directors
Cyber Merchants Exchange, Inc.:
We have audited the accompanying balance sheets of Cyber Merchants Exchange, Inc.
(the Company) as of June 30, 1998 and the related statements of operations, shareholders'
equity and cash flows for the year then ended.  These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the account principles used and
significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Cyber Merchants Exchange, Inc. as of June 30,
1998 and the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern.  The Company has experienced operating losses and negative
cash flows from operating activities since inception.  These matters raise substantial
doubt about the Company's ability to continue as a going concern.  The financial
statements do not include any adjustments that might result from the outcome of this
uncertainty.
/s/ KPMG LLP
Los Angeles, California
October 16, 1998BALANCE SHEETS
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                               | June 30,           
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
|                                                                                                                                                               | 1998               
|                                                                                                                                                               |                    
|AssetsCurrent assets                                                                                                                                          
|- Cash and cash equivalents (Note 3)                                                                                                                           | $ 81,636           
|- Certificates of deposit (Note 3)                                                                                                                             | 300,000            
|- Stock subscription receivable                                                                                                                                | -                  
|- Accounts receivable, net of allowance for doubtful accounts of $3,600 and $5,990 as of December 31, 1998 and 1999, respectively                              | 7,477              
|                                                                                                                                                               |                    
|Total current assets                                                                                                                                           | 389,113            
|Property and equipment, net (Note 2)                                                                                                                           | 78,821             
|Other assets                                                                                                                                                   | 4,562              
|                                                                                                                                                               |                    
|Total assets                                                                                                                                                   | $ 472,496          
|Liabilities and Stockholders' EquityCurrent liabilities:                                                                                                       |                    
|- Accounts payable and accrued expenses                                                                                                                        | $ 47,502           
|- Deferred revenue                                                                                                                                             | 3,965              
|                                                                                                                                                               |                    
|Total current liabilities                                                                                                                                      | 51,467             
|Commitments and contingency (Note 5, 6 and 7)Shareholders' equity: (Note 5)                                                                                    |                    
|Common stock, no par value; 40,000,000 shares authorized; 5,750,000 shares and 6,003,170 shares issued and outstanding at June 30, 1998 and 1999, respectively | 1,550,000          
|- Additional paid-in capital                                                                                                                                   | 30,000             
|- Common stock subscribed                                                                                                                                      | -                  
|- Accumulated deficit                                                                                                                                          | (1,158,971)        
|                                                                                                                                                               |                    
|Total shareholders' equity                                                                                                                                     | 421,029            
|                                                                                                                                                               |                    
|Total liabilities and shareholders' equity                                                                                                                     | $ 472,496          
|                                                                                                                                                               |                    
|See accompanying notes to financial statements.


STATEMENT OF OPERATIONS                                                                                     
|                                                                                                                                                               | Year ended June 30,
|                                                                                                                                                               | 1998               
|                                                                                                                                                               |                    
|Revenues - subscribers' feesOperating costs and expenses:                                                                                                      | $ 65,722           
|- Cost of revenues                                                                                                                                             | 139,680            
|- General and administrative expenses                                                                                                                          | 512,849            
|                                                                                                                                                               |                    
|Operating lossOther income (expenses):                                                                                                                         | (586,807)          
|- Loss on sale of fixed assets                                                                                                                                 | (91)               
|- Interest income                                                                                                                                              | 16,338             
|                                                                                                                                                               |                    
|Loss before income taxes                                                                                                                                       | (570,560)          
|Income taxes (Note 4)                                                                                                                                          | 800                
|                                                                                                                                                               |                    
|Net loss                                                                                                                                                       | $ (571,360)        
|                                                                                                                                                               |                    
|Basic and diluted net loss per share (Note 1)                                                                                                                  | $ (.11)            
|                                                                                                                                                               |                    
|Weighted-average number of common shares outstanding                                                                                                           | 5,281,889          
|                                                                                                                                                               |                    
|See accompanying notes to financial statements.


STATEMENT OF SHAREHOLDERS' EQUITY
YEARS ENDED JUNE 30, 1999 AND 1998                                        

|                                                                                                                          | Common Stock | Additional Paid-In Capital | Common Stock Subscribed | Accumulated Deficit | Net Shareholders' Equity
|------------------------------------------------------------------------------------------------------------------------- | ------------ | -------------------------- | ----------------------- | ------------------- | ------------------------
|                                                                                                                         
|Shares                                                                                                                    | Amount      
|                                                                                                                         
|Balance, July 31, 1997                                                                                                    | 4,750,000    | $ 1,050,000                | $ 30,000                | $ -                 | $ (587,611)             
|- Issuance of common stock                                                                                                | 1,000,000    | 500,000                    | -                       | -                   | -                       
|- Net loss                                                                                                                | -            | -                          | -                       | -                   | (571,360)               
|                                                                                                                          |             
|Balance, June 30, 1998                                                                                                    | 5,750,000    | 1,550,000                  | 30,000                  | -                   | (1,158,971)             
|- Issuance of common stock (Note 5)                                                                                       | 253,170      | 1,619,034                  | -                       | -                   | -                       
|- Subscription of common stock (Note 5)                                                                                   | -            | -                          | -                       | 664,024             | -                       
|- Net loss                                                                                                                | -            | -                          | -                       | -                   | (695,454)               
|                                                                                                                          |             
|Balance, June 30, 1999                                                                                                    | 6,003,170    | $ 3,169,034                | $ 30,000                | $ 664,024           | $ (1,854,425)           
|                                                                                                                          |             
|See accompanying notes to financial statements.


STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalent

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Year Ended June 30,
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 1998               
|Cash flows from operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                    
|- Net loss- Adjustments to reconcile net loss to net cash used in operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $ (571,360)        
|-- Depreciation and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 38,623             
|-- Loss on sale of fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 91                 
|-- Provision for doubtful accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 3,600              
|-- Changes in assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (1,517)            
|-- Other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 5,901              
|--- Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 21                 
|--- Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2,950              
|--- Deferred revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | (310)              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    
|Net cash used in operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | (522,001)          
|Cash flows from investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                    
|- Investment in certificates of deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | (300,000)          
|- Proceeds from maturity of certificates of deposit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | (23,421)           
|- Proceeds from sale of property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | 3,410              
|- Proceeds received from note receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 419,570            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    
|Net cash provided by (used in) investing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | 99,559             
|Cash flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                    
|- Proceeds from borrowings under line of credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | -                  
|- Repayments of borrowings under line of credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | -                  
|- Proceeds from stock subscriptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | -                  
|- Proceeds from issuance of common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 500,000            
|- Payments of issuance costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | -                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    
|Net cash provided by financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 500,000            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    
|Net increase in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 77,558             
|Cash and cash equivalents, beginning of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 4,078              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    
|Cash and cash equivalents, end of year                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | $ 81,636           
|Supplemental disclosure of cash flow information:- Cash paid during the year for:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                    
|-- Interest                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | $ -                
|-- Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 1,600              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                    
|Supplemental disclosure of noncash financing activities
- In June 1999, the Company received subscriptions for 83,003 shares of its common stock
at $8.00 per share, totaling $664,024.  As of June 30, 1999, $567,040 was received and
$96,984 remained outstanding.
See accompanying notes to financial statements.


NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated in July 1996 in the State of California and commenced its
operations in November 1996. Cyber Merchants Exchange, Inc. d.b.a. C-ME.com (the Company
and formerly known as World Wide Magic Net, Inc.) is engaged in developing and marketing
internet based business-to-business e-commerce network services to the retailers and their
worldwide vendors. The Company provides a private extranet sourcing network whereby a
retailer can go on-line, review vendors' product information, and make purchases through
the network developed and maintained by the Company. A vendor pays a one-time setup fee
and a monthly maintenance fee, through the network, to display its products to and receive
real time response, inquires, and/or orders from these retailers.
The Company also provides paid vendors with additional services such as customized web
design and hosting services, and Virtual Trade Show which is a continuous revolving
product forum showcase that allows buyers to freely search for products.

|(a) | Revenue Recognition
Subscriber's fees represent revenues generated through a one-time, nonrefundable setup
fee and monthly hosting fees. Revenues are recognized after the services have been
rendered and no significant vendor obligation remains. Unearned but billed revenues are
deferred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Cash and Cash Equivalents
The Company considers all highly liquid financial instruments with an original maturity
of three months or less to be cash and cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(c) | Property and Equipment
Property and equipment are stated at cost. Depreciation of property and equipment is
calculated on the straight-line method over the estimated useful lives of the assets,
generally three to five years. Leasehold improvements are amortized over the shorter of
the amortized useful lives or lease term.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(d) | Income Taxes
The Company accounts for income taxes using Statement of Financial Accounting Standards
(SFAS) No. 109 "Accounting for Income Taxes."  Under SFAS No. 109, deferred income taxes
reflect the impact of "temporary differences" between assets and liabilities for
financial reporting purposes and such amounts as measured by tax law and
regulations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(e) | Use of Estimates
Management of the Company has made a number of estimates and assumptions relating to the
reporting of assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles.  Actual results could differ from those
estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(f) | Stock Options
SFAS No. 123 allows entities to continue to apply the provisions of APB Opinion No. 25
and provide pro forma net income disclosure for employee stock option grants made in
1995 and future years as if the fair-value-based method defined in SFAS No. 123 had been
applied.  The Company has elected to continue to apply the provisions of APB Opinion No.
25 and provide pro forma disclosure provisions of SFAS No. 123.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(g) | Net Loss per Share
Basic and diluted net loss per share are computed using the weighted average number of
outstanding shares of common stock.  Pursuant to SEC Staff Accounting Bulletin No. 98,
common stock and convertible preferred stock issued for nominal consideration, prior to
the anticipated effective date of an initial public offering, are included in the
calculation of basic and diluted net loss per share as if they were outstanding for all
periods presented.
Net loss per share for the year ended June 30, 1998 does not include
the effect of 160,000 stock options with a weighted average exercise price of $.21 per
share and 944,444 common stock warrants with a weighted average exercise price of $4.00
per share because their effects are antidilutive.
Net loss per share for the year ended June 30, 1999 does not include the effect of
120,000 stock options with a weighted average exercise price of $.12 per share and
707,056 common stock warrants with a weighted average exercise price of $4.25 per share
because their effects are antidilutive.
|(h) | Recent accounting pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" which establishes accounting reporting standards for derivative
instruments including certain derivative instruments embedded in other contracts and
for hedging activities.  SFAS No. 133 was originally to be effective for fiscal years
beginning after June 15, 1999.  SFAS No. 137 has deferred the effective date of SFAS No.
133 to all fiscal quarters of fiscal years beginning after June 15, 2000.  Management
believes the adoption of this statement will not have a material impact on the Company's
financial statements.                                                                                                                                                                                                                                                                                                                                                                                                             
|(i) | Current Vulnerability due to Certain Concentrations
Certain financial instruments, principally trade receivable, potentially subject the
Company to credit risk.  The Company performs ongoing credit evaluations of its customers
but does not require collateral.  The Company maintains an allowance for doubtful
receivable and sales returns based upon factors surrounding the credit risk of specific
customers, historical trends and the Company's estimate of future product returns.
The Company invested $850,000, $500,000 and $700,000 in certificates of deposit at three
different banks, respectively, as of June 30, 1999.  These certificates mature from seven
to two hundred forty one days.  The amount invested at each bank exceeded the FDIC
insurance coverage limit ($100,000).                                                                                                                                                                                                                                                                                       

|NOTE 2 - PROPERTY AND EQUIPMENT
A summary of property and equipment at cost is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Depreciation expenses were $38,623 and $40,281 for the years ended
December 31, 1998 and 1999, respectively.


NOTE 3 -- RELATED PARTY TRANSACTIONS
The Company maintains certain banking relationship, such as checking, money market,
certificates of deposit accounts, with a bank of which the Company's Chairman and
President is a founder and a shareholder.  As of June 30, 1999, the cash and cash
equivalent balance at the Bank was $570,209, and certificates of deposit balance
amounted $300,000. Management believes that the Bank offers competitive interest and
services.


NOTE 4 -- INCOME TAXES
Income tax expense is comprised of the minimum state franchise tax.  The difference
between the amount of income tax benefit recorded and the amount of income tax benefit
calculated using the U.S. Federal statutory rate of 34% is due to a valuation allowance
for any benefit from net operating losses.
The Company has gross deferred tax assets of $464,000 and $753,000 at June 30, 1998 and
1999, respectively, relating principally to tax effects of net operating loss
carryforwards.  In assessing the recoverability of deferred tax assets, management
considers whether it is more likely than not that the assets will be realized.
The ultimate realization of deferred tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences become
deductible.  Management considers projected future taxable income and tax planning
strategies in making this assessment.  Based upon the level of historical taxable loss
and projections for future taxable income over the periods in which the deferred tax
items are recognizable for tax reporting purposes, management does not believe it is
more likely than not the Company will realize the benefits of these differences at June
30, 1998 and 1999.  As such, management has recorded a valuation allowance for the full
amount of deferred tax assets at June 30, 1998 and 1999.
At June 30, 1999, the Company has available net operating losses of approximately
$1,794,000 and $1,792,000 for Federal and California state income tax purposes,
respectively, to offset future taxable income, if any, and expire at various dates
through the year 2014 for federal income tax purpose and through the year 2004 for
California state income tax purpose.  However, the utilization of net operating losses
may be subject to certain limitations as prescribed by Section 382 of the Internal Revenue
Code.


NOTE 5 -- SHAREHOLDERS' EQUITY
On May 14, 1999, the Company filed and effected its prospectus with the Securities and
Exchange Commission to offer 2,500,000 shares of its common stock to the public.  On June
1, 1999, the Company launched its initial public offering on a best effort basis.  The
Company issued 253,170 shares of common stock at $8.00 per share and received $1,619,034
in cash (net of $406,326 issuance cost).  The Company also received subscriptions for
83,003 shares of its common stock at $8.00 per share, totaling $664,024. As of June 30,
1999, $567,040 cash was received and the remaining $96,984 was received in July 1999.
In conjunction with its initial public offering the Company offered 7% commission to
all broker-dealers based on securities they sold.  The Company's Chairman and President
sold certain securities of the Company and received commission in the amount of $41,934
based on the same commission percentage.
The Company's 1996 stock option plan (the Plan) provides for the granting of stock
options to employees.  The Company has reserved 250,000 shares of common stock for
issuance under the Plan.  The terms and conditions of grants of stock options are
determined by the Board of Directors.  Generally, one-half of the granted option is
exercisable after the employee's second year of employment.  The remaining option is
exercisable after the end of the employee's third year of employment.
A summary of stock option activity is as follows:
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Balance at July 31, 1997                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Options granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Options exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Options exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Balance at June 30, 1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Options granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|Options terminated                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|Options exercised                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Balance at June 30, 1999                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|The following table summarizes information about the stock options
outstanding at June 30, 1999:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|Exercise Price | Number Outstanding | Number Exercisable
|-------------- | ------------------ | ------------------
|              
|$ .40          | 45,000             | 37,500            
|$ .00027       | 75,000120,000      | 75,000112,500     

|The options expire three months after termination of employment.
The Company applies APB Opinion No. 25 in accounting for its Plan.  Had the Company
determined compensation cost based on the fair value at the grant date for its stock
options under SFAS No. 123, the Company's net loss would have been increased to the pro
forma amount indicated below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net loss attributable to Common Stock - as reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net loss attributable to Common Stock - pro forma                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net loss per share - as reported                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net loss per share as pro forma                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|The compensation cost was calculated under the minimum-value method
using the assumption of a three-year weighted average expected life of the options and a
6% risk-free interest rate.
On January 29, 1998, the Company's Board of Directors approved a 1-for-2 reverse
split of the Company's common stock.  All common share amounts in the accompanying
financial statements have been adjusted retroactively.  On March 24, 1998, the Company's
amended its articles of incorporation to have authorized capital stock of 40,000,000
shares of common stock and 10,000,000 shares of preferred stock.
On February 10, 1999, the Company issued 20,000 common stock warrant, subject to
certain conditions and restrictions as defined in the warrant agreement, at $8.00 per
share to an unrelated bank in addition to the personal guarantee from the Chairman and
President of the Company in exchange for the extension of a line of credit with the Bank
(Note 6).  The warrant will expire on February 10, 2004.
The Company issued common stock warrants, subject to certain conditions and
restrictions as defined in the warrant agreement, to each of the participating
broker-dealers for securities they sold during the initial public offering period.
The exercise price is 165% of the Company's IPO price ($8.00 per share).  As of June 30,
1999, there were 10,815 warrants outstanding under these agreements.  The warrants will
expire in May 13, 2004.
On October 15, 1997, the Company entered into an agreement with Burlington Coat
Factory Warehouse Corporation (BCF).  Under the agreement, the Company and BCF jointly
develop a network whereby participants of the network can do business through Internet.
BCF agrees to use this proprietary network as its main internet sourcing method.
BCF agrees to assist in marketing and promoting this network service to its vendors.
In return, BCF is free to use the network designed and maintained by the Company and will
share a certain portion of the fee revenue generated by this network with the Company.
In addition, the Company granted a warrant to BCF to allow BCF to purchase up to 10% of the
outstanding shares (maximum 676,241 shares as of June 30, 1999) of common stock of the
Company on a fully diluted basis, subject to certain conditions and restrictions as
defined in the warrant agreement.  The common stock if issued to BCF will have certain
registration rights.  As of June 30, 1999, the exercise price was $4.00 per share.
This agreement will expire on October 15, 2002.


NOTE 6 -- LINE OF CREDIT
During the year ended June 30, 1999, the Company maintained a non-revolving line of
credit of $300,000 with a bank.  Borrowing under the line of credit beared interest at
the bank's prime rate plus 1.5% and was personally guaranteed by the Company's Chairman
and President.  The Company issued 20,000 Common Stock warrant to the bank (Note 5).
The line of credit expired on June 30, 1999.


NOTE 7 - COMMITMENTS AND CONTINGENCY
The Company leases office space under a noncancelable operating lease that will expire
on September 30, 1999.  The Company has entered into another noncancelable operating lease
agreement, expiring on September 30, 2002, to facilitate its principal place for business.
Future minimum lease payments under noncancelable operating leases as of June 30, 1999 are
as follows:

|Year ending June 30,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Amount   
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------
|2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $ 40,873 
|2001                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 42,250   
|2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 42,250   
|2003                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 10,562   
|Total minimum lease payments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | $ 135,935
|Rent expenses for the years ended June 30, 1998 and 1999 were approximately $38,000
for each year.
The Company has been named as a defendant, along with Burlington Coat Factory Warehouse
(BCF), in a lawsuit brought by Stanley Rosner (Rosner), an individual.  In March 1998,
Rosner commenced an action in the Supreme Court of the State of New York alleging breach
of oral and written contracts between the Company and Rosner and between BCF and Rosner
in 1997.  Rosner claims that he is due certain fees from both the Company and BCF for
services allegedly rendered in connection with certain transactions involving the Company
and BCF.  These transactions relate to the Internet services that the Company has and will
provide to BCF, and current and anticipated transactions arising from vendors of BCF.
Rosner claims that he is due damages in an amount not less than $5,000,000 plus unspecified
punitive damages from both the Company and BCF.
Rosner's attorney has agreed that the Company and BCF are entitled to have the venue of
the lawsuit transferred from Nassau County, New York to New York County (Manhattan), New
York; Rosner's attorney also agreed to arrange for the transfer.  Rosner's attorney also
agreed that the Company's and BCF's responsive papers would be due no later than ten (10)
days after notice of such transfer had been served.  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.
The Company intends to vigorously defend this action.  The Company believes that it is
not obligated to make any payments to Rosner and has meritorious defenses to all of
Rosner's allegations.  However, if the Company does not prevail and a significant damage
award against the Company is granted, this would have a material adverse effect upon the
Company.


NOTE 8 - SUBSEQUENT EVENT
On July 22, 1999, the Company's stock began trading on the Over The Counter Bulletin
Board (OTC-BB) under the Ticker Symbol "CMEE".