SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                   __________________________________________
                                   FORM 10-KSB
(Mark one)

[X]   Annual report under section 13 or 15(d) of the Securities
      Exchange Act of 1934
                     For the fiscal year ended June 30, 2001
                                       OR
[ ]   Transition report under section 13 or 15(d) of the Securities
      Exchange Act of 1934
                For the transition Period from _______ to _______

                        Commission file number 001-15643

                         Cyber Merchants Exchange, Inc.
                      ------------------------------------
                 (Name of small business issuer in its charter)

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



600 S. Lake Avenue, Suite 208   Registrant's telephone number:
    Pasadena, California              (626) 793-5000                91106
-----------------------------                                   ---------------
(Address of principal executive offices)                          (Zip Code)


Securities registered under Section 12(b) of the Act:
                (Title of Class)                       Name of exchange on which
                                                               registered

                     None                                         None
                     ----                                         ----

Securities registered under Section 12(g) of the Act: Common Stock, no par value
                                                      --------------------------
                                                            (Title of class)

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

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

Registrant's net revenue for its most recent fiscal year:  $82,822

The  aggregate  market  value  of the voting stock held by non-affiliates of the
registrant  on September 30, 2001, computed by reference to the closing price of
that date, was $2,317,837, assuming solely for purposes of this calculation that
all  directors  and  executive  officers  of  the issuer are "affiliates."  This
determination  of affiliate status is not necessarily a conclusive determination
for  other  purposes.

On  September  30, 2001, the registrant had 7,583,673 shares of Common Stock, no
par  value  per  share.

DOCUMENTS  INCORPORATED  BY  REFERENCE

Portions  of  the  registrant's definitive proxy statement under Regulation 14A,
which  statement  will  be  filed  not  later than 120 days after the end of the
fiscal  year  covered  by this report, are incorporated by reference in Part III
hereof.


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<PAGE>
<TABLE>
<CAPTION>
                                          CYBER MERCHANTS EXCHANGE, INC.

                                                     INDEX TO
                                           ANNUAL REPORT ON FORM 10-KSB
                                           FOR YEAR ENDED JUNE 30, 2001

PART  I                                                                                                      PAGE
<S>       <C>                                                                                                <C>
Item  1   Description  of  Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   3
Item  2   Description  of  Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
Item  3   Legal  Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  27
Item  4   Submission  of  Matters  to  a  Vote  of  Security  Holders. . . . . . . . . . . . . . . . . . . .  28

PART  II
Item  5   Market  for  Common  Equity  and  Related Stockholder Matters. . . . . . . . . . . . . . . . . . .  29
Item  6   Management's  Discussion  and  Analysis  of  Financial Condition and Results  of  Operations . . .  30
Item  7   Financial  Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
Item  8   Changes  In  and  Disagreements  With  Accountants on Accounting and Financial  Disclosure . . . .  34

PART  III
Item 9    Directors, Executive Officers, Promoters and Control Persons; Compliance With
          Section 16(a) of the Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
Item  10  Executive  Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
Item  11  Security  Ownership  of  Certain  Beneficial  Owners and Management. . . . . . . . . . . . . . . .  35
Item  12  Certain  Relationships  and  Related  Transactions . . . . . . . . . . . . . . . . . . . . . . . .  35
Item  13  Exhibits  and  Reports  on  Form  8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  36

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38

REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS. . . . . . . . . . . . . . . . . . . . . . . . . . .  F-2
</TABLE>


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<PAGE>
                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS
-----------------------------------

Certain  statements  contained  in  this  Report, including, without limitation,
statements containing the words, "believes," "anticipates," "expects," and other
words  of  similar  import,  constitute  "forward-looking statements" within the
meaning  of  Section  27A of the Securities Act of 1933, as amended, and Section
21E  of  the  Securities Exchange Act of 1934, as amended.  Such forward-looking
statements  involve  known  and  unknown risks, uncertainties and other factors,
which  may  cause  the  actual  results,  performance  or  achievements  of
Cyber-Merchants  Exchange,  Inc.  to  be  materially  different  from any future
results,  performance,  or  achievements  expressed  or  implied  by  such
forward-looking  statements.  These factors include, but are not limited to, the
factors  discussed under the caption "Company Risks" elsewhere in Item 1 of this
Report.  Given  these  uncertainties,  readers  are cautioned not to place undue
reliance  on  such  forward-looking  statements.  Cyber-Merchants Exchange, Inc.
disclaims  any obligation to update any such factors or to announce publicly the
results  of  any  revision  of  the  forward-looking  statements  contained  or
incorporated  by  reference  herein  to  reflect future events or developments.

OUR  COMPANY

Cyber  Merchants  Exchange,  Inc.  (the "Company" or "C-Me") is an international
business-to-business  electronic  trading  company that creates efficiencies for
retailers  worldwide  to  source  and  finance international purchases.  C-Me, a
California  corporation,  was  formed  in  July  1996.

OVERVIEW

The  Company  provides its customers with an Internet-based communication 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 allows retailers to manage on-line communications
and  transactions  with their vendors.  The front-end communications and trading
process  is  generally  referred  to in the retail industry as "sourcing".  High
volumes  of  product  and  transaction  data are exchanged between retailers and
their  vendors  in  order for buy-sell transactions to be initiated, negotiated,
and  consummated.  This  critical  sourcing  process  typically  requires  a
substantial  amount of time and attention from both the retail merchandise buyer
and  the  salesperson  of a vendor.  The Company's related software products and
services  are  designed  to  make  the  sourcing  and  transaction  function
substantially  more  effective  and  efficient.

C-Me  has  adopted  a  buyer-centric  business  focus  by creating a proprietary
Internet  Sourcing  Network(TM)  which consists of specialized private extranets
for  retailers  that centralizes the merchandise review and search process.  Its
current  retail  partners  are  Burlington Coat Factory, Factory 2-U Stores, and
Bermo  Enterprises,  among others.  Additional retailers have benefited by using
C-Me's  services including but not limited to Value City Department Stores, Ames
Department  Stores,  Ross  Stores,  and  99  cents  only  Stores.

In  fiscal  year  2001,  many  Internet-based businesses, including those in the
business-to-business e-commerce industry, have experienced difficulties with the
acceptance  of  their  products  /  services.  This is particularly true for the
retail-based  e-commerce  businesses  who  are  finding  the  retail industry in
general  is technologically behind other industries.  Retailers are reluctant to
move away from their existing systems and processes, and they prefer to interact
with  a  salesperson.  The  Company  found  that universal implementation of our
product  by  a large retailer is time consuming and expensive.  The Company also
found  that  many  vendors  and manufacturers are so small they don't even own a
computer.  In January 2001, the Company began to focus and continues to focus on
sourcing  overseas  goods  for  small  retailers and off-price retailers such as


                                        3
<PAGE>
Value  City  Department Stores, Ross Stores, Factory 2-U Stores, Ames Department
Stores  and  others who do not have their own import departments. The Company is
using email to show the overseas' closeout merchandise in a standard format, and
then  C-Me's sales staff personally presents pre-qualified goods to the retailer
who  responds to our email marketing. The management team believes, that the mix
of  electronic trading and a national sales force is the future of the Company's
success.

In  January 2001, C-Me announced a tri-party financial platform in alliance with
CIT  Commercial  Services  and  Bank  SinoPac  in  Taiwan.  The  agreement  will
eliminate  the  need  for  letters  of  credit  by allowing exporters in foreign
countries  to  ship merchandise to U.S. retailers with pre-approved credit lines
established  by  CIT.  Letters  of credit have historically been the predominant
means  of  payment for cross border trading, but are rapidly being supplanted by
more  creative  and  flexible  financing mechanisms such as tri-party agreements
that  assure less risk for both exporters and retailers.  The Company has a U.S.
patent  pending  for  this  financing  method.

C-Me  continues to expand internationally.  As of June 30, 2001, the Company has
formed  joint  ventures  in Taiwan, China, Thailand and the Philippines.  C-Me's
strategy  is  to  partner  with  reputable  local  companies  and key government
entities  to establish local companies.  Through these joint ventures, localized
merchandise-sourcing  offices  are  established.  Subsequently,  C-Me has formed
joint  ventures  in  Hong  Kong and Korea.  In addition to these joint ventures,
C-Me  has  sourcing  agents in Turkey, Pakistan, Vietnam, Bangladesh, Sri Lanka,
and  Indonesia.  Through these localized offices, C-Me's retail partners will be
able  to  source  international  merchandise directly.  The Company believes its
business  model  will be successful by leveraging retailers' purchasing power to
increase  their vendor base, and providing a direct, global merchandise-sourcing
channel  for  retailers.

BUSINESS  DEVELOPMENT  STRATEGY

C-Me  has  developed  to  become  an  international  electronic trading company.
During  the  last  four  years  of  development,  the  Company  has successfully
established its technologies and methodologies.  The Company's Internet Sourcing
Network  ("ISN") and Virtual Trade Show ("VTS") have proven to be a valuable and
effective  tool  for  its  retail  partners to source overseas merchandise.  The
Company's  patent pending Global Financial Platform ("GFP") has been widely used
by its U.S. retail partners to purchase overseas merchandise without the need of
issuing foreign Letters of Credit (see detail on page 15).  The establishment of
multiple  joint  ventures  with  localized sourcing offices during the last four
years  is  another  major  achievement.

It is the management's belief that the Company's accomplishments during the last
four  years  combined  with  the  newly hired national sales force will help the
Company  become  an  international  electronic  trading  company.  The  Company
realized its business plan by having multiple foreign localized sourcing offices
find  close  out and/or stock lot deals to post on the Company's ISN, which then
push over to the Company's retail partners.  The Company's staff also send these
deals  by  a standardized format of e-mail marketing to those retailers that are
interested  in  buying  from overseas directly which have not yet signed up with
C-Me  as  its partner.  Once the interested retail buyer responds to this pushed
information,  the  Company's national sales force will approach them with actual
samples.  The  Company will then mirror the retailer's order to the manufacturer
at  a  lower  price  for  its  gross  profit  margins.

Beginning  January  2001 through June 30, 2001, C-Me has successfully transacted
electronic  international  sales of approximately $726,000 with an average of 7%
gross  profit  margin.  The Company has a back log approximately $200,000 of net
revenues  resulting  from  $1,000,000  of orders from stores such as Factory 2-U
stores,  Burlington  Coat Factory, Value City Department Stores, Ames Department
Stores,  Ross  Stores,  and  others.


                                        4
<PAGE>
Management  estimates  that  with  the anticipation of growth in revenue, higher
gross  profit margin, and reduced operational costs, the Company will break even
or  be  profitable  by  the  end  of  fiscal  year  of  2002.

INDUSTRY  BACKGROUND

The  retail  industry is characterized by intense competition, consolidation and
tightening  of  profit  margins.  Consumers are increasingly more discerning and
consequently  demand  that  retailers  offer  more  value  in  return  for their
purchasing  dollar.

To  attract and keep consumers, retailers must offer more desirable products and
prices,  while  optimizing  factors  such as product variety, inventory carrying
costs,  retail  prices  and  costs of goods.  The average large department store
carries  a large number of Stock Keeping Units ("SKUs") at any time, each unique
in  terms  of  product  style,  size,  color, features, packaging, and so forth.
Retailers  need  to source these SKUs from hundreds, or in some cases thousands,
of  vendors  worldwide.  Retail  industry  vendors  include  direct  factories,
suppliers,  manufacturers,  jobbers  and  importers.

Sourcing-related  communications  between  retailers  and  their  vendors  is  a
continuous  flow  of  information regarding products, pricing, delivery, special
promotions,  packaging  and  other  issues.  To  date, these communications have
largely  been  carried  out  through  paper  flow,  telephone calls, facsimiles,
courier  services,  or  through  travel  and  personal  visits.  This  manner of
maintaining  retail-supply  communications  is  time-consuming,  challenging and
expensive.  In  addition,  retailers are decreasing the number of their vendors,
primarily  leveraging  certain  vendor  relationships  to be able to enhance and
control  the  management  of  their  supply  chain.

Pressure  on retailers affects all players in the sourcing environment. Emerging
technologies,  such  as  C-Me's,  now offer dramatic improvements in efficiency,
costs  and  business  process management. Purchasing automation efforts, such as
EDI,  currently  address the back-end efficiency. The front-end sourcing process
should  be  automated  as  well.  However,  retailers  appear to be reluctant to
explore  automated merchandise sourcing solutions at this time. It is our belief
that  retailers  need  to  address  internal management and control processes to
effectively  utilize  Internet  sourcing capabilities. Currently, many retailers
are  structured without needed flexibility for the retail buyer to easily access
and  utilize  the  benefits  of  the  Internet.

Letters  of  credit  have  been  used  in  connection  with  international trade
transactions  between  sellers and buyers for some time but the Company believes
that  the  letter  of  credit  is  not  the  most  desirable  way  to  transact
international  purchases.  A  buyer  may  place  an order with a seller, but the
seller  may  not  ship  or even begin to produce ordered goods until a letter of
credit  is  in  place.  Additional  problems  associated  with letters of credit
include  a  limited  credit  line,  and  a  time  consuming,  cumbersome  and
administrative  challenging  process  of  obtaining  a  letter  of  credit.
Furthermore,  there  are  risks,  not  just  monetary costs related to letter of
credit  fraud for both buyers and sellers.  The Company, through its creation of
the  GFP eliminates the need for letters of credit and thus the burdens involved
with  them.  In  addition,  the  Company's financial platform provides financing
alternatives  to  improve  manufacturers'  cash  flow.

BUSINESS-TO-BUSINESS  E-COMMERCE  IN  RETAIL

Retail  buyers  spend 60 to 80 percent of their time sourcing (searching for and
locating)  merchandise  and  vendors.  The  buying  process  is  complex  and
multi-faceted.  A  buyer's decision process involves selecting qualified vendors
based  on  production  volume,  delivery,  quality,  and  price.  The  buyer's
objectives  include  achieving  pre-set  goals for sales, turnover rate, expense
levels,  margins  and  profitability,  and  updating  product  selection to meet
fashion  trends.


                                        5
<PAGE>
The  market  for  E-commerce sourcing solutions for retailers is at a very early
stage.  However, both retailers and vendors are beginning to turn to information
technology  to  better  manage their relationships and merchandise flow.  Retail
organizations must change established business practices and conduct business in
new  ways.  C-Me  believes  that  the e-commerce market is at the beginning of a
long-term  expansion driven by adoption of the Internet as a marketing venue and
data  highway.

The challenge is coming up with an affordable e-commerce solution that addresses
both  the  front-end  and  back-end  problems facing the retailer and its supply
chain  vendors.  C-Me's  services  are  designed  specifically  to  meet  these
challenges.

SERVICES

Overview  of  the  C-Me  System

The  Company's  Internet-based  solutions  were  designed  to  meet  the general
merchandising  needs  of  retailers  and their vendors, with an initial emphasis
placed on the bargain, or "off-price," apparel market segment.  To that end, the
Company  has  developed five interrelated services solutions:  Internet Sourcing
Network, Virtual Trade Show, Global Financial Platform, International Electronic
Trade,  Web Design and Hosting.  The Company has also developed a patent pending
financing  method  that  eliminates  the need for traditional letters of credit.

     1.   Internet  Sourcing  Network  ("ISN")

          The  cornerstone  of C-Me's services is the proprietary ISN, comprised
          of  private  extranets  developed  in  accordance  with  each  retail
          partner's merchandising specifications. The Web-based turnkey solution
          automates  the front-end merchandise sourcing activities of retailers,
          and  provides  them  with  time and cost savings. The solution the ISN
          creates  is  a  simple  one.  The ISN enables retailers and vendors to
          conduct  business  privately,  using  any  Internet connection without
          investing  in  expensive hardware, software or training. Once a vendor
          subscribes  to  a  retailer's  ISN,  they  can  receive feedback about
          merchandise  reviewed  by  buyers, offers and long-term and short-term
          merchandising needs. The vendor can then change its strategies to meet
          these  needs by updating its product line - all over the same Internet
          connection. Vendors also receive an "open-to-buy" broadcast, of what a
          retailer  is  sourcing  during a particular time period. Vendors pay a
          monthly subscription fee to display products on the ISN. Retailers are
          charged  a  nominal  percentage  for  each  sales  transaction.

     2.   Virtual  Trade  Show  ("VTS")

          The  progenitor  of  C-Me's  diverse  services  is the VTS, which is a
          centralized  product showcase that features a multitude of products in
          easily understandable and searchable categories. The appeal of the VTS
          is its ability to enable direct marketing to a wide universe of retail
          buyers.  Vendors  may  display  product  free  of charge, if they also
          display  on  an  ISN.

     3.   Global  Financial  Platform  ("GFP")

          The  Company's  innovative  GFP  eliminates  the  need for traditional
          letters  of  credit for international purchases made by retailers. The
          Company  created  the  tri-party  financial  platform  in which CIT, a
          global  source  for factoring, financing and leasing capital, and Bank
          SinoPac  in Taiwan participate to allow exporters in Taiwan, Hong Kong
          and  Vietnam to ship merchandise to C-Me's retailers with pre-approved
          credit  established  by  CIT.  Each  party makes an effort to expedite


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          transactions  between an exporter and retailer while guaranteeing that
          the  terms  of  the  contract  are  fulfilled.  In  addition,  foreign
          manufacturers can obtain potential working capital financing from Bank
          SinoPac.  It  is  through  the  GFP  that  exporters,  retailers,
          international  banks  and  CIT  will  be linked to the platform, which
          provides  rapid  access  to  the  innovative  payment method of global
          purchasing.  The  GFP  can  be  employed  for  any international sales
          transaction  provided  the  retailer's  credit  is  approved with CIT.
          Retailers that do not source through C-Me's ISN or VTS may utilize the
          GFP.  C-Me charges a percentage transaction fee on all purchase orders
          written  under  the  GFP.

     4.   International  Electronic  Trade

          C-Me  utilizes  its  ISN  and  email  marketing  to push the Company's
          overseas  close  out  and/or  stock  lot items to the potential retail
          buyers.  Once  the  buyer  shows  interest  in  a particular item, the
          Company's  sales  force  will hand carry the sample to gain a purchase
          order.  Through  C-Me's  GFP,  a  US  buyer  can  purchase  overseas
          merchandise  without  issuing  a letter of credit, and without a worry
          about  the  quality  of  the goods that they purchase. The Company can
          earn  the  difference  between  the price sold to the retailer and the
          cost  from  the  overseas manufacturer, which equates to 7% to 20% per
          transaction  without  risk  to  C-Me.

          It  is  the  Company's  opinion  that  retailers  are more comfortable
          interacting  personally  with  C-Me's sales staff. Management believes
          that  the  idea of US retailers purchasing overseas goods directly and
          without  issuing a letter of credit will attract more transactions and
          retail  partners in a near future. As of today, the Company sold goods
          to  the  following  retailers:  Factory  2-U  Stores,  Burlington Coat
          Factory,  Value  City  Department  Stores,  Ross Stores, 99 cents only
          Stores,  Ames  Department  Stores  and  other  discount  chains.

     5.   Web  Design  And  Hosting

          Many vendors do not have an Internet commerce strategy and most do not
          have a Web presence. C-Me solves this by providing a free template Web
          page  and  shared  domain  name.  Additionally,  C-Me offers fee-based
          customized  Web  design  and  hosting  services to meet the e-commerce
          needs  of  its  customers.

Two  additional  services  in  development  are the Wholesale Auction Center and
Factory  Outlet  Mall.

     1.   Wholesale  Auction  Center  ("WAC")

          C-Me's  WAC  will provide a Web community for vendors to liquidate odd
          lots  and  closeouts  in  bulk  quantity.  The  WAC  will  feature the
          Company's patent-pending auction process, which, by a partnership with
          CIT utilizes the benefits of accounts receivable factoring for sellers
          and  credit checks for buyers to eliminate the possibility of fraud in
          the  auction  transaction.  The Company has filed a patent application
          for  the  WAC  process.  Sellers  using  the  WAC will pay transaction
          commission  fees.  The Company has halted its plans to release the WAC
          until  market  conditions  improve.


     2.   Factory  Outlet  Mall  ("FOM")

          The FOM is a public vertical marketplace, which will enable vendors to
          sell  merchandise  directly  to  consumers. The FOM supplements C-Me's
          business-to-business  solutions  by  giving  vendors  a  direct
          business-to-consumer  e-commerce  package, consisting of secure credit
          card  transactions,  shopping cart functions and automatic calculation


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<PAGE>
          of  sales tax and freight charges. Vendors selling on the FOM will pay
          transaction  commission  fees.  The  Company  has  halted its plans to
          release  the  FOM  until  market  conditions  improve.

Cost Benefits of the ISN to Retailers and Vendors

C-Me  believes  its primary value exists in its ISN, which creates a merchandise
sourcing  and information pipeline for the retail industry.  The retail industry
is  fragmented, with thousands of buyers and sellers connecting sporadically and
inefficiently.  C-Me  believes  its  virtual  pipeline  can  eliminate  cost,
redundancy, and system integration barriers now faced by retailers, and expedite
the  flow  of  usable product information to retailers from vendors who will use
its  low-cost,  low-technology,  real-time  feedback  communication system.  The
Company's management understands not only the individual retailer's business but
also  the retail industry as a whole.  It is our belief that the retail industry
is  slow  to  accept  computer  technology  and  Internet  platforms as business
solutions.  Management  feels  it is enabled to effectively create and implement
services  that  precisely  meet the needs of retailers and their vendors as they
adjust  and  evolve  to  this  technological  age.

Benefits  of  the  ISN  to  Retailers

C-Me  believes its services create time and cost efficiencies for retailers that
lead  to  increase  merchandise turnover and higher gross margins.  Key benefits
include  the  following:

     -    Efficiency  -  C-Me  builds  and  maintains  a  Web-based  system that
          streamlines  and  automates the front-end merchandise sourcing process
          and provides instantaneous visual access to available merchandise on a
          24/7  basis.  Buyers  only  view  products  within their merchandising
          categories;

     -    Cost  -  The  solution is delivered at no cost to the retailer without
          legacy system integration and without eliminating the "touch-and-feel"
          necessary  to  retail  buyers;

     -    Expediency  -  The ISN pushes the most updated product information and
          pictures  to the Company's retailer partners in a standardized format.
          The  buyers  can  immediately  view  the  most updated product with no
          difficulties;

     -    Scalability  -  The  ISN is completely scalable to service hundreds of
          buyers  in  thousands  of  buying  categories;

     -    Sourcing  Benefits - The ISN facilitates new relationships from C-Me's
          international database of vendors. Each electronic transaction through
          ISN  may  be  completed  in  less than one week rather than the normal
          three to four-week cycle. The shortened transaction time is especially
          important  for  off-price retailers with faster turning inventory, and
          for  vendors  who  turn  idle  inventory  to  immediate cash flow; and

     -    Open  to  Buy  Broadcasts - Retailers can utilize the ISN to broadcast
          their Open to Buy for immediate needs and future made-to-order through
          the  Company's ISN. In this way, C-Me's international vendor community
          will  respond  to  their  broadcasts  in  a  proactive  manner.


                                        8
<PAGE>
Benefits  of  the  ISN  to  Vendors

C-Me's  services give vendors direct access to targeted retail buyers, foresight
into  the  retailer's  procurement  cycle,  the  ability  to  receive  broadcast
open-to-buy  information  from  retailers,  and  24-hour,  real-time  ability to
diversify  their  product  lines  by  adding,  changing  and  updating  product
information.  C-Me  creates  value  for  vendors  by:

     -    Matching  Buyers  and Sellers Securely - The Company's system works by
          guaranteeing  that  the right buyer views every product a vendor wants
          to  sell,  making  business  more  time  and  cost  efficient;

     -    Offering  Dynamic  Response  -  The Company creates value by providing
          specific feedback from retailers on products, making strategic product
          design  and  marketing  more  exact;

     -    Providing  an Affordable and Complete Solution - Vendors pay a nominal
          subscription  fee  for  a  complete  E-commerce  solution.  Auxiliary
          services  including  Web  design and hosting free template home pages;
          and

     -    Delivering Open-to-Buy Requests - The Company brings significant value
          to  vendors by delivering a retailer's buying needs ("Open-to-Buy") to
          vendors  on a weekly basis, providing a proactive not reactive selling
          opportunity.

Cost Benefits of the GFP to Retailers and Vendors

C-Me  believes  that  the  GFP has dramatically simplified the import process by
replacing traditional letters of credit ("L/C") with CIT credit assurance of its
retail  partners.  Key  benefits  include  the  following:

     -    Time  Savings  - The GFP completely eliminates the time it takes for a
          buyer  to  obtain  a  letter  of  credit.  Transaction  delays  may be
          detrimental  to the buyer that needs the ordered items quickly. In the
          meantime,  it  may  also  be  detrimental  to  the  seller's cash flow
          associated  with the transaction that is not forthcoming caused by L/C
          processing  delays;

     -    Efficiency - The GFP streamlines the transaction cycle. As long as the
          buyer's credit is approved by CIT and the purchase order is written to
          C-Me, C-Me will mirror the purchase order to the seller. The seller is
          responsible  for  shipping  quality  goods,  on  a  timely  basis;

     -    Standard  Payment  Terms  -  The  computer  and  high  tech industries
          successfully  purchase overseas merchandise with net 30 days or longer
          payment  term, without issuing L/C; traditional commodity business can
          now  enjoy  the  same  benefit;

     -    Landed  Duty  Paid ("LDP") Quotations - The benefits of LDP quotations
          are  to  eliminate  US  Buyers  as  the importer of record and all the
          hassles  associated  with  it.  The  GFP  requires  that  the  foreign
          manufacturer  becomes  the importer of record and owns the goods until
          they  are  inspected and approved by the US buyer. LDP Price quotation
          is  easier  for  Buyers  to  compare  the  true  cost;

     -    Cost and Savings - There are no extra costs to implement the GFP. It's
          free  and is a component of the services included with an order placed
          through  the  C-Me  system.  Bank  charges  typically  associated with
          letters  of  credit  are  eliminated;


                                        9
<PAGE>
     -    Increased  Line  of Credit - Retailers can enjoy an additional line of
          credit  offered  by  CIT  that  is  without any collateral or security
          required;

     -    Cash  Advances  for Vendors - C-Me vendor partners with overseas banks
          can receive accounts receivable financing for up to 80% once they have
          shipped  the  merchandise;  and

     -    Decreased  Risk  -  C-Me's  GFP  eliminates the risk of fraud for both
          buyers and sellers. It is the vendor's responsibility to make sure the
          quality  of  the merchandise is equivalent to the samples presented to
          the  buyer.  The  buyer  will  pay CIT when the invoice is due. If the
          buyer  does  not  pay  due  to financial reasons, CIT will pay. On the
          other hand, if the quality of the merchandise received by the buyer is
          not  as  per  the  samples provided, the buyer then has the ability to
          charge  back  the  vendor  for  the  disputes.

SUPPORTING  TECHNOLOGY

The Company has developed three proprietary technologies designed to improve the
efficiency  of  its  services:

     1.   Product  Driven  Search  Engine

     The  Company  believes the keyword search functions employed by traditional
     search  engines  are  impractical  for  merchandise  sourcing.  Rather, the
     Company  developed  a  product  driven  search engine, which simplifies the
     search  process.  This  search  engine is linked to dynamic listings of the
     vendor's  product  catalog  and line sheets, complete with detailed product
     descriptions  and  digital photographs. These products are then indexed and
     separated into easily recognizable categories that facilitate quick product
     searches  by  retail  buyers.

     2.   Focused  Broadcasting  ("FOCASTING(TM)")

     The  Company's  FOCASTING(TM)  software  enables  retail  buyers  to create
     individual Web pages filled with only those products that fall within their
     buying  responsibilities, thereby limiting unnecessary "surfing". After the
     buyer  creates  his  or her customized Web page, the FOCASTING(TM) software
     will  "push"  or  broadcast  all  products  contained  within the Company's
     database  directly  to  the  buyer's desktop. For example, if a men's jeans
     buyer created a customized Web page using FOCASTING(TM) and selected "men's
     jeans,"  the  FOCASTING(TM)  software will transmit all the information and
     images  relating  to men's jeans within the Company's database to the buyer
     each  time  he  or  she  logs  on.

     3.   Dynamic  End-User  Profile  System  ("DEPS(TM)")

     The  DEPS(TM)  software  provides  retail  buyers and vendors with numerous
     interactive  functions.  Featured  in  the Company's ISN, the DEPS software
     allows  the  user  to  maneuver  and manipulate (delete, restore, etc.) the
     product  information  contained  within his or her own product database. In
     addition,  DEPS  alerts  the  user  whenever "new" or "close-out" items are
     added to the user's database. For the vendor, DEPS enables them to remotely
     change,  upload and delete their product information based on user requests
     as  well  as  receive  business  critical  announcements  from  the buyers.
     Additionally,  DEPS(TM)  will  allow  the  buyer  to  send bulk or personal
     e-mails  to  all  vendors  in  the  ISN.  These may be used to announce the
     buyer's  "Open  to  Buy  position",  request special products, and announce
     merchandise buying and planning goals. These interactive features available
     through  DEPS(TM)  give  vendors a competitive edge in providing a means of
     rapid  response  to  buyers'  needs  and  vendors'  products.


                                       10
<PAGE>
RESEARCH  AND  DEVELOPMENT

The Company currently provides two technical services to its customers: Internet
Sourcing  Network and Virtual Trade Show. Both services are embedded with custom
Web-site design. The Company also has three supporting technologies: (i) Product
Driven  Search  Engine;  (ii)  Focused  Broadcasting; and (iii) Dynamic End-User
Profile  System.  All  these  technologies  were  developed in 1997 and 1998. In
fiscal  year  2001,  the  Company  spent an insignificant amount on research and
development,  but  spent  substantial  amounts  on  website  maintenance  costs
(approximately  $350,000).  The  Company's  expertise  is  in  Internet-based
business-to-business  automation  processes.  Any  funding  of  research  and
development  will  be  used  to  develop  the  services  offered  and supporting
technologies  mentioned  in  the  preceding  sections.

The  Company  is  expected  to  spend  an  insignificant  amount on research and
development  in  the  near  future  as  the  Company is evaluating the potential
benefits  of  two  services:  Wholesale  Auction Center and Factory Outlet Mall.
Development  of  these  services  has  currently  halted until market conditions
improve.  Until  the  Internet  Sourcing  Network  receives  significant  retail
industry implementation, the Company will evaluate three options to launch these
two  services:  (i)  internal development, (ii) outsourcing, or (iii) purchasing
on-shelf  software.  The  decision  of  spending  a large amount of resources on
research  and  development  will  be  based upon competition situations, product
availability,  and  relative  costs  and  performance.

SALES  AND  MARKETING

C-Me  has  targeted  its service solutions to off-price and discounts retailers,
and  their  merchandise  suppliers.  The  Company  adopted  a  plan  to identify
retailers  with  the  same  merchandising strategies as those implemented by our
partners Factory 2-U Stores, Inc. and Burlington Coat Factory.  C-Me now markets
its  merchandise directly to individual buyers within these retail organizations
for  transaction-based  sales.

Beginning  2001, C-Me established an internal sales and marketing force in order
to build direct relationships with our retailer customers, and better facilitate
customer  product  feedback  and  program  needs.  The  Company  will  explore
opportunities to expand its transaction-based services with new retailers.  C-Me
will  continue prospecting for new retailers to add to the ISN through a team of
national  sales  executives  located  in  key  market  areas.  The  Company will
leverage  existing  retailer  and  vendor  relationships  by offering additional
services  provided by C-Me, such as program development, Web design and hosting,
open  to  buy  broadcasts  and  product  marketing.

In  fiscal 2000, C-Me developed a strategic relationship with Retex in an effort
to  expand  sales  and  marketing  of  our  interrelated  sourcing  solutions to
non-discount  retailers.  Retex has over 2,000 active members that utilize their
buying  consortium  services  and technologies.  They have five National Account
Managers  that  actively  solicit  retailers  for  C-Me.

The  Company also markets the ISN directly to retailers and vendors.  C-Me's ISN
provides  a  valuable  sales  tool  and  means  for multiple vendors to exchange
company  and  product information with multiple retailers on a widespread basis.

Marketing  the  Company's  GFP financial platform and global sourcing consortium
through its foreign offices will be key to the development of long-term retailer
and vendor relationships.  The Company's overseas joint ventures will expand its
efforts to identify and target key overseas manufacturers to subscribe to C-Me's
ISN.


                                       11
<PAGE>
POTENTIAL  REVENUE  STREAMS

The  Company's sources of revenue are anticipated to be transaction-based profit
margins  generated  by retailers' purchases of the Company's goods.  The Company
has  moved  into this role primarily because of the slow acceptance of retailers
to  engage  directly  with  the  ISN.  C-Me  has found that domestic vendors are
unwilling  to pay subscription fees for the ISN due to an insufficient number of
retailers  utilizing the system.  Until significant masses of retailers actively
implement  the  network,  the Company will be unable to depend solely on revenue
generated  from  subscription  fees  paid  by  vendors.  The  Company  envisions
made-to-order  and  programmed goods as a viable new source of revenue for 2002.

The  Company also anticipates generating revenue in the form of transaction fees
associated  with  buyers utilizing the GFP to finance their purchases outside of
our  ISN.

KEY  CONTRACTS  AND  COLLABORATIVE  PARTNERS

Management has established or is in the process of establishing affiliations and
contracts  with  several retailers.  To date, the Company has two primary retail
partners:  Burlington Coat Factory Warehouse Corporation ("BCF") and Factory 2-U
Stores,  Inc.  ("F2U").  Under  the  terms  of the BCF contract, the Company has
built  an exclusive ISN for BCF free of charge.  In return, BCF will provide the
Company  with a list of its existing vendors and assist the Company in marketing
the  ISN  to  these  vendors.  BCF  also  will receive 50 percent of the monthly
hosting fees collected from vendors who join BCF's ISN.  BCF has a stock warrant
whereby  BCF  has  the  discretion  to  purchase  an equity interest of up to 10
percent  of  the  Company.

The  Company's  second  retail  partner  is  F2U.  Under  the  terms  of the F2U
contract, the Company has built an exclusive ISN free of charge.  In return, F2U
has  agreed to mandate its vendors to join the ISN.  F2U will receive 33 percent
of  the  subscription fees collected from vendors who join F2U's ISN.  F2U has a
stock  warrant  whereby F2U has the discretion to purchase an equity interest of
up  to  10  percent  of  the  company.

In  January  2001, C-Me announced a tri-party financial platform and alliance in
which  CIT,  the  leading  global  source  for  factoring, financing and leasing
capital,  and  Bank  SinoPac  in  Taiwan  will advance up to 80% of the goods to
exporters  in Taiwan when they ship merchandise to pre-approved retailers in the
United  States.  Foreign  manufacturers  can  obtain  potential  working capital
financing.  It is through the GFP that exporters, retailers, international banks
and  CIT  will  be  linked  to  the  platform,  which  provides  rapid access to
innovative  global  purchasing  without  a  letter  of  credit.

In  addition,  C-Me  executed  an  agreement  with  RETEX,  a  technology-buying
consortium  with  more than 2,000 retail members, which provides the opportunity
to  build  and  maintain  ISNs  for  RETEX  members.

COMPETITION

The  distinction  between  merchandise  sourcing (front-end) and the procurement
function  (back-end)  is  important  to a discussion on competition.  Currently,
standardized  EDI  transaction  sets,  including  purchase  orders,  are common.
However,  EDI  is  costly  and does not solve the front-end issue of merchandise
sourcing.  On the back-end, the emergence of Internet Protocol ("I/P") standards
creates  an opportunity for tighter inter-operation between the business systems
of  supply  chain  trading  partners.


                                       12
<PAGE>
The  Company's  primary  competitors  are  as  follows:

     -    QRS  enables  retailers  and vendors to list, buy and sell merchandise
          through  a  staged  auction  process over the Internet. All buyers and
          sellers  are  pre-registered  and  authorized  to  trade by QRS. After
          registering,  customers will be provided with a Tradeweave 'Passport,'
          which  authenticates  them  as  an approved trader in the marketplace.
          Sellers  will  issue  'Visas' to selected approved buyers to formalize
          trading  relationships.  Sellers  benefit  by  increasing their market
          reach,  drawing  more  competitive  bids and gaining more control over
          their  brand  and  the sales process. Buyers benefit by having broader
          access to merchandise at attractive prices through a central location.
          Both sellers and buyers benefit from an integrated e-commerce back-end
          using  existing QRS services. All industry players will have access to
          Tradeweave's  retail  trade  news,  content  and  directories.

     -    SOURCING  LINK is a business-to-business electronic commerce solutions
          provider  for  the  retail industry. They developed an Internet-based,
          hosted  solution  that  provides  an online location for retailers and
          merchandise  suppliers  to  manage  their  sourcing,  or  pre-order
          merchandise procurement activities. Its proprietary software organizes
          and  automates  a  broad  range  of sourcing activities, significantly
          improving  productivity  and reducing costs and buying lead-times. The
          solution  is provided on a turnkey basis, including project management
          for  buyer  rollout,  and both online and global help desk support for
          buyers  and suppliers. IBM Corporation sells, distributes and supports
          the  Sourcing  Link  service,  which  is  positioned  as  a  strategic
          procurement  solution  in  the  IBM  Supply Chain Solutions Portfolio.

     -    GLOBAL SOURCES is an enabler of global merchandise trade. They develop
          and  operate independent net marketplaces and offer software solutions
          that  facilitate  cross-border  transactions  in  public  and  private
          environments.  Global  Sources  cataloging  software  and  content
          management  infrastructure  support these offerings, while their trade
          magazines  remain  a  key  complementary  component  of  their  total
          solution.  The Company enables trade for an established, independently
          certified  community  of  more  than  259,000  active  buyers  in  230
          countries  and  territories.  These  buyers  purchase  direct goods in
          volume  for  resale  and  generate  more  than  2.7  million inquiries
          annually  for  over  110,000  suppliers through Global Sources Online.
                                                          ----------------------

     -    PURCHASEPRO  is  a  B2B  e-commerce  software  company  that  provides
          solutions  that  help  businesses  of  all sizes buy, sell, and market
          better.  PurchasePro  also operates a commerce network interconnecting
          more  than  250,000  businesses  and  powering hundreds of private and
          public  marketplaces  with  its  highly  scalable,  hosted  e-commerce
          software.  PurchasePro  offers  fully  functional  marketplaces  with
          thousands  of  buyers  and  sellers  ready to transact business can be
          operational  in  45  days  or  less.  The  company  offers  four
          industry-leading  marketplace  products:  e-Source,  e-MarketMaker,
                                                    ---------  --------------
          e-Procurement,  v-Distributor.  Customers  buy memberships in order to
          --------------  --------------
          access buying and selling communities, or "e-marketplaces". One of its
          services  is  the  group-buying  discount.

     -    VERTICALNET  is  an enterprise software provider that helps businesses
          leverage  the  Internet to increase efficiencies in their internal and
          external  business processes. Additionally, VerticalNet's Small/Medium
          Business  Group  provides industry specific online sales and marketing
          products and services to small-and-medium sized suppliers. They supply
          enablement, with marketing solutions that connect suppliers with large
          pools  of  buyers  within its 59 industry-specific marketplaces, other
          public  marketplaces,  and private buying communities. The company has
          also enhanced its Web- sites with online auction capabilities.


                                       13
<PAGE>
     -    QRS  CORPORATION  uses its technology to alter the face of merchandise
          management.  It  provides  electronic  data  systems  and services for
          retailers,  vendors  and  shippers.  Its  catalog  services  include a
          database  of  67  million  products  from more than 8,700 vendors. The
          database  lists  products by their Universal Product Codes. Additional
          products marketed by QRS include networking stems that provide two-way
          electronic  transmission  of  business  data  and Internet access, Web
          security  and  Web development, management tools for tracking products
          by  sales  and  store  location,  motor  freight shipment tracking and
          delivery  performance reporting and education and consulting services.

     -    ARIBA makes operating resource management ("ORM") products, which help
          companies  track  and  manage  supply  purchases over the Internet and
          corporate  intranets.  Its  scalable ORM software automates e-commerce
          transactions  and  contains  modules for creating customized forms and
          managing  expense  reports.  Its  Ariba.com network connects buyers to
          suppliers,  helps  suppliers provide product catalogs and routes order
          transactions.  Ariba's  customers  include  AMD,  Chevron,  Merck  and
          Staples.

     -    COMMERCE  ONE  offers software and services that connect global buyers
          with  suppliers  of business goods and services over the Internet. Its
          BuySite  software  simplifies  the buying process by providing product
          catalogs  from different suppliers, automating approvals and enforcing
          buyer-  and  seller-specific  policies.  Its  MarketSite.net  Web-site
          enables  buyers  and  sellers using different software applications to
          seamlessly  connect  and  perform e-commerce transactions. The company
          also  provides  services  including  content  management,  order
          availability  information,  status  tracking  and transaction support.

     -    RETEK  provides  inventory  management  software  that  lets retailers
          interact  across  the  Web with suppliers, wholesalers, transportation
          companies  and  other links in the supply chain. Customers include Ann
          Taylor,  Eckerd,  CBRL  Group  and  Lanc  me.

Additional auction competitors of Cyber Merchants Exchange, Inc. are as follows:
Merchandise-online.com,  Redtagbiz.com  and  Retailexchange.com.

Although  the competitors detailed in the preceding paragraphs may offer similar
services  to  C-Me,  the Company believes that no other company has its range of
services,  approach  to  serving  the industry or such an experienced management
team.  C-Me  is  focused  on  the  front  end  of merchandise sourcing, overseas
expansion,  the  Global  Financial  Platform, aggressive buyer centric marketing
including  a  sales  and marketing force to present merchandise to buyers plus a
complete  e-commerce  solution for vendors.  Because of its focus, C-Me believes
that  it will be able to compete effectively by providing a complete merchandise
sourcing  solution  to the marketplace hence generating revenue from transaction
sales.

INTELLECTUAL  PROPERTY  RIGHTS

The  Company  has  two  patents  pending  business  processes:

     1.   Global Financial Platform ("GFP") (patent pending)

     C-Me's  GFP eliminates the need for letters of credit by allowing small- to
     medium-sized  enterprises  (SMEs) in other countries to ship merchandise to
     pre-approved  retailers  in  the  United  States.  Letters  of  credit have
     historically  been  the  predominant  means  of  payment  for international
     trading.


                                       14
<PAGE>
     C-Me  pioneered  this process by establishing the first tri-party agreement
     with  The  CIT  Group  and  Bank  SinoPac  in  Taiwan.  By virtue of C-Me's
     international factoring agreement, SMEs, retailers, international banks and
     CIT  are linked to its Global Financial Platform. Through this arrangement,
     each  of  the  tri-party  participants  plays  an integral role. First, CIT
     guarantees  the  credit  worthiness  of  the U.S. retailers. Secondly, Bank
     SinoPac  provides  working  capital  financing  and acts as the conduit for
     foreign  SMEs to receive payment. Through C-Me's GFP (patent pending), U.S.
     retailers can purchase overseas merchandise, just as they purchase domestic
     merchandise,  with  open  terms  and  without  the  need to open letters of
     credit.  Overseas  SMEs  ship merchandise to pre-approved retailers without
     payment  risk.  SMEs can also utilize the platform for advancing cash flow.

     2.   Non-Fraudulent Online Auction (patent pending)

     Statistics  show  that approximately 25% of all online auction transactions
     are  fraudulent.  Under  current  auction  models,  the seller must receive
     payment  from  the  highest  bidder before the merchandise is shipped. This
     creates  the  opportunity  for  fraudulent  or  disputed  transactions.  In
     fraudulent  transactions,  the  buyer  may  not receive the merchandise per
     specifications  posted  by  the  seller.  The wrong merchandise may arrive,
     quality  may  not  be  as represented, or the merchandise may never even be
     shipped. On the sellers' side, if the highest bidder does not make payment,
     the  seller  will  be  unable  to  locate the second highest bidder and the
     transaction  will  be  lost. There are companies such as I-escrow, E-escrow
     and some insurance companies that are attempting to resolve these problems.
     C-Me  believes  that  I-escrow  and E-escrow companies cannot resolve, in a
     cost  effective manner, these issues primarily because of the logistics and
     inspection  costs  involved.  Insurance  companies  charge  premiums  that
     approximate  a  10%  fee  of  the  transaction  amount.

     C-Me  has  applied  for  patent protection for its Wholesale Auction Center
     ("WAC"), which is under development. Among other things, the WAC eliminates
     fraudulent  transactions  in on-line auctions. The process involves sellers
     that  have  an  agreement  with  C-Me and with a factoring corporation that
     collects for the seller. The seller also provides payment terms of at least
     net  30  days.  Each  buyer,  before  entering  the  WAC  for  bidding,  is
     pre-approved  by  the  factoring  corporation and uses pre-approved auction
     dollars.  In  this way, the buyer will not pay for merchandise until it has
     had  30  days  to  evaluate that the merchandise received is of the same or
     better  quality  as  the item posted by the seller. The seller will have no
     payment  risk because the factoring corporation has assumed the credit risk
     of  the  pre-approved  buyer.

The  Company  has  trademarked its DEPS(TM), FOCASTING(TM) and Internet Sourcing
Network.  Patent  applications  are  pending  for  Wholesale  Auction Center and
Global  Financial  Platform.

EMPLOYEES

As  of  June  30, 2001, the Company had 14 employees.  None of the employees are
subject  to  a  collective  bargaining  agreement, and the Company believes that
relations  with  its  employees  are  good.

RISK  FACTORS

Shareholders  and  prospective  purchasers  of the Company's Common Stock should
carefully  consider  the  following  risk  factors  in  addition  to  the  other
information  appearing  in  this  Annual  Report  on  Form  10-KSB.

     INVESTORS  ARE CAUTIONED AGAINST RELYING ON FORWARD-LOOKING STATEMENTS USED
     BY  THE  COMPANY  TO  DESCRIBE  ITS  FUTURE  FINANCIAL  CONDITION  AS THOSE
     PREDICTIONS  COULD  DIFFER  MATERIALLY  FROM  WHAT  ACTUALLY  RESULTS.


                                       15
<PAGE>
This  Annual  Report  on  Form  10-KSB contains forward-looking statements.  The
words  "anticipate",  "believe",  "expect",  "plan",  "intend",  "estimate",
"project",  "could",  "may",  "foresee"  and similar expressions are intended to
identify  forward-looking  statements.  The following discussion of risks should
be  read  in  conjunction  with the Company's financial statements and notes and
other financial information included elsewhere in this Form 10-KSB.  In addition
to  historical  information,  this  Form 10-KSB contains statements that involve
risks  and  uncertainties.  The Company's actual results could differ materially
from the results discussed in the forward-looking statements.  Some factors that
could  cause  or  contribute to such differences include those discussed in this
"Risk  Factors"  section  of  the  Form  10-KSB.

Industry  Risks

     THERE  IS  NO  ASSURANCE  OF  FUTURE  INDUSTRY  GROWTH.

There  can be no assurance that the marketplace in which the Company operates is
as  large as reported in market data or that such projected growth will occur or
continue.  Market  data  and  projections  are  inherently uncertain, subject to
change  and  often  dated.  In  addition,  the  underlying market conditions are
subject  to  change based on economic conditions, consumer preferences and other
factors  that  are beyond the Company's control.  A slower pace of growth within
the  industry  will  have a significant negative impact on C-Me's operations and
projections  for  growth.

     THE  INTERNET  INDUSTRY  IS  EXPERIENCING  CONSOLIDATION THAT MAY INTENSIFY
     COMPETITION.

The  Internet  industry has recently experienced substantial consolidation and a
proliferation of strategic transactions.  The Company expects this consolidation
and  strategic  partnering to continue.  Acquisitions or strategic relationships
could  harm  it  in  a  number  of  ways.  For  example:

     -    competitors  could  acquire  or  partner with companies with which the
          Company  has strategic relationships and discontinue its relationship,
          resulting  in  the loss of opportunities for its products and services
          or  the  loss  of  certain enhancements or value-added features to its
          products  and  services;

     -    a  competitor  could be acquired by a party with significant resources
          and  experience  that  could increase the ability of the competitor to
          compete  with  its  products  and  services;  and

     -    other  companies  with  related  interests  could combine to form new,
          formidable  competition,  which  could  preclude  the  Company  from
          obtaining  access  to  certain  markets  or  content,  or  which could
          dramatically  change  the  market  for  the  Company's  products  and
          services.

     THE  COMPANY'S  FUTURE  REVENUE  DEPENDS  SIGNIFICANTLY  ON  THE  VOLUME OF
     INTERNET  USE  AND  THE  ACCEPTANCE  OF  THE INTERNET AS A COMMERCE MEDIUM.

If  use  of  the  Internet  and  growth  of  the market for business-to-business
exchanges  do  not  continue,  the  Company may not achieve the critical mass of
customers necessary for sustaining revenues and achieving profitable operations.
The Company's future revenues and profits, if any, substantially depend upon the
widespread acceptance and use of the Internet as an effective medium of business
by target consumers. Rapid growth in the use of and interest in the Internet has
occurred  only  recently.  As  a  result, acceptance and use may not continue to


                                       16
<PAGE>
develop  at  historical  rates,  and  a sufficiently broad base of retailers and
vendors  may  not  use  the  Internet  and  other online services as a medium of
commerce.

The  Company's  future  revenue  will  depend  significantly  on  the widespread
acceptance  and  use  of the Internet as an information source and as a commerce
vehicle.  Rapid  growth  in Internet use is a recent trend and market acceptance
of  the  Internet  as  a  commercial  medium  is  highly  uncertain.

The Internet may not be accepted as a viable commerce medium for distribution of
information and engaging in commerce for a number of reasons, including, without
limitation:

     -    inadequate development of the network infrastructure;
     -    inadequate development of enabling technologies; and
     -    concerns about privacy and security among users.

     THE  COMPANY'S  BUSINESS  IS  DEPENDENT  ON  ITS ABILITY TO MAKE USE OF NEW
     COMPUTER  TECHNOLOGIES  AND  ON THE SUCCESS OF THE INTERNET AS A VEHICLE OF
     COMMERCE.

The  market for Internet access is characterized by rapidly changing technology,
evolving  industry  standards,  changes in users' needs and frequent new service
introductions.  The Company's future success will depend, in part, on the use of
leading  technologies to provide seamless access to and services through its Web
site.  There  can  be  no assurance that the Company will be successful in using
new  technologies  effectively,  developing  new  services or enhancing existing
services  on  a  timely  basis.

The  Company's  success  also  depends  on  continued  use  and expansion of the
Internet.  The  Internet  infrastructure  may not be able to support the demands
placed  on it by continued growth.  The growth in volume of Internet traffic may
create  instabilities  in  its structure such as shortages in Internet addresses
and overworked search engines.  Such instabilities may have an adverse affect on
its  operations and business if they are not addressed.  The Internet could also
lose its viability due to delays in the development or adoption of new standards
and  protocols  to  handle  increased  levels  of  Internet  activity, security,
reliability,  cost,  ease  of  use,  accessibility, and quality of service.  The
Company's  network infrastructure may be vulnerable to computer viruses, hacking
or  similar disruptive problems caused by users, other connected Internet sites,
the  interconnecting  networks  and  the  various  telephone networks.  Computer
viruses  or problems caused by third parties could lead to interruptions, delays
or  cessation  in  service  to  the  Company's  member  retailers.

The Company's success will depend, in large part, upon third parties maintaining
the  Internet  infrastructure  to  provide  a reliable network backbone with the
speed,  data  capacity,  security  and  hardware necessary for reliable Internet
access  and  services.

     THE  COMPANY'S  BUSINESS  WILL  BE  SEVERELY IMPACTED IF TELECOMMUNICATIONS
     CARRIERS  AND  OTHER  SUPPLIERS  ON  WHICH IT DEPENDS ARE UNABLE TO PROVIDE
     UNINTERRUPTED  SERVICES.

The  Company relies on providers such as the local telephone companies and other
companies  to provide data communications via local telecommunications lines and
leased  long-distance  lines.  The means of ordering and paying for products may
be  disrupted  or  eliminated if the Company experiences disruptions or capacity
constraints  in  its  telecommunications  services.  There  may  be  no means of
replacing  these  services  on  a  timely  basis  or  at  all.


                                       17
<PAGE>
In  addition,  the  inability or unwillingness of any third-party to provide the
Company point of presence access or its inability to secure alternative point of
presence  arrangements  could  significantly  limit  its  ability to service its
existing  customers  and  expand  to  new  markets, which could, in turn, have a
material  adverse  effect  on  its  business, financial condition and results of
operations.

     GOVERNMENT  REGULATION OF THE INTERNET COULD ADVERSELY AFFECT THE COMPANY'S
     PROFITABILITY.

Increased  government  regulation, or the application of existing laws to online
activities,  could inhibit Internet growth, expose the Company and other sellers
of  products  for use on the Internet to additional liabilities and increase the
cost  of  doing  business.  This  could  have  a  material adverse effect on the
Company's  profits  and  liquidity.  The  increasing  popularity  and use of the
Internet  and  other  online  services  may lead to the adoption of new laws and
regulations  in  the  United States and elsewhere covering issues such as online
privacy,  copyright  and  trademark,  sales taxes and fair business practices or
which  require  qualification to do business as a foreign corporation in certain
jurisdictions.

Existing  or future legislation could limit growth in use of the Internet, which
would  curtail  the Company's revenue growth.  Statutes and regulations directly
applicable  to  Internet  communications,  commerce and advertising are becoming
more prevalent.  The law remains largely unsettled, however, even in areas where
there  has  been legislative action.  It may take years to determine whether and
how  existing  laws governing intellectual property, privacy, libel and taxation
apply  to  the  Internet,  electronic  commerce and online advertising.  Any new
regulation or taxation of Internet commerce could damage the Company's business,
affect  the  profitability  and  perhaps the viability of the Company's business
plan,  and  cause  the  price  of  the  Company's common stock to decline.  Such
regulation  or  taxation  could  prove  to be burdensome, and impose significant
additional  costs  on  the  Company's  business  or  subject  it  to  additional
liabilities.

Most  of  the  laws  that  relate to the Internet have not yet been interpreted.
Changes  to  or  the  interpretation  of  these  laws  could:

     -    limit  the  growth  of  the  Internet;
     -    create uncertainty in the marketplace that could reduce demand for the
          Company's  products  and  services;
     -    increase  the  Company's  cost  of  doing  business;
     -    expose  the Company to significant liabilities associated with content
          available  on  its  Web-sites  or  distributed or accessed through its
          products  or  services;
     -    lead  to  increased  product  development costs, or otherwise harm the
          Company's  business;  and/or
     -    decrease  the  rate of growth of the Company's user base and limit its
          ability  to  effectively communicate with and market to its user base.

As  Internet  commerce  continues  to  evolve, increasing regulation by federal,
state,  or  foreign  agencies  becomes more likely.  Regulation is likely in the
areas  of  user privacy, pricing, content, and quality of products and services.
Taxation  of Internet use, or other charges imposed by government agencies or by
private organizations for accessing the Internet, may also be imposed.  Laws and
regulations  applying to the solicitation, collection, or processing of personal
or  consumer information could limit the Company's activities.  In addition, any
regulation  imposing  fees for Internet use could result in a decline in the use
of  the  Internet  and  the  viability  of Internet commerce, which could have a
material  adverse  effect  on the Company's business, results of operations, and
financial  condition.


                                       18
<PAGE>
Company  Risks

     THE  COMPANY  HAS  A LIMITED OPERATING HISTORY, WHICH MAKES IT DIFFICULT TO
     EVALUATE  THE  COMPANY'S  BUSINESS.

The  Company  was incorporated in July 1996 and has a limited operating history.
In  fiscal 2000, the Company developed and built its operating assets, including
its  proprietary software and its network server.  C-Me is a new company and has
no  history  of earnings or profit.  There is no assurance that the Company will
operate  profitably  in  the  future.  As  such,  there is no assurance that the
Company  will  generate  a  return  on  your  investment  in  the  future.

The  Company  has  limited  financial results on which you can assess its future
success.  The  Company's  prospects  must  be  considered in light of the risks,
expenses and difficulties frequently encountered by growing companies in new and
rapidly  evolving  markets.

To address the risks and uncertainties faced by the Company, it must:

     -    establish  and  maintain  broad  market acceptance of its services and
          convert  that acceptance into direct and indirect sources of revenues;

     -    maintain and enhance its presence as a viable and attractive option to
          retailers;

     -    continue  to  timely  and  successfully  develop new products, product
          features  and services, and increase the functionality and features of
          its  existing  products;

     -    successfully  respond  to  competition  from  others;  and

     -    develop  and  maintain  strategic  relationships  to  enhance  the
          distribution,  features  and  utility  of  its  products and services.

The  Company's  business  strategy  may  be unsuccessful and it may be unable to
address the risks it faces in a cost-effective manner, if at all.  The Company's
inability  to  successfully  address  these  risks  will  harm  its  business.

     THE  COMPANY  HAS  NOT PRODUCED A PROFIT AND CANNOT BE CERTAIN THAT IT WILL
     PRODUCE  A  PROFIT  OR  REMAIN  PROFITABLE  IF  IT  DOES GENERATE A PROFIT.

The  Company  is not profitable and may never become profitable.  If the Company
does achieve profitability, it cannot be certain that it will remains profitable
nor  that  profits  will  increase  in  the  future.  The  Company  has incurred
significant  losses  since  its  inception  and  may never generate or sustain a
profit. For the fiscal year ended June 30, 2001, the Company reported a net loss
of  $3,604,185.  The  Company  devotes  significant  resources  to  developing,
enhancing,  selling  and  marketing its products and services.  As a result, the
Company  will  need  to generate significant revenues to maintain profitability.
The  Company  may  not  continue  its  historical  growth or generate sufficient
revenues  to sustain or increase profitability on a quarterly or annual basis in
the  future.


                                       19
<PAGE>
     THE  COMPANY  EXPECTS  TO  DEPEND  ON  REVENUE  FROM  ITS  DOMESTIC  AND
     INTERNATIONAL  INTERNET  SOURCING  NETWORKS,  VIRTUAL TRADE SHOW, WHOLESALE
     AUCTION  CENTER  AND  WEB  DESIGN  AND  HOSTING.

The  Company  expects  to  depend  primarily  on  revenue  from  the  complete
implementation  of  its  domestic  and international Internet Sourcing Networks,
Wholesale  Auction  Center,  and  Factory  Outlet  Mall, and on revenue from the
existing  Virtual  Trade  Show,  and continuing revenue from Web-site design and
hosting  for  its  subscribers.  The Internet Sourcing Network has not generated
any  revenue  and  there  is  no  guarantee that it will generate revenue in the
future.  The  Wholesale  Auction  Center  and  Factory  Outlet  Mall  are  in
development;  there is no guarantee either of these services will be implemented
or generate any revenue.  The Virtual Trade Show and Web site design and hosting
have  generated  revenue in the past.  However, there is no guarantee that these
services  will  continue  to generate revenue or that that revenue will meet the
Company's  expectations.

     THE  COMPANY'S  OPERATING  RESULTS  ARE  LIKELY  TO FLUCTUATE SIGNIFICANTLY

As  a result of the Company's limited operating history and the rapidly changing
nature  of  the markets in which it competes, the Company's quarterly and annual
revenues  and  operating  results are likely to fluctuate from period to period.
These  fluctuations  may  be  caused  by  a number of factors, many of which are
beyond  the  Company's control.  These factors include the following, as well as
others  discussed  elsewhere  in  this  section:

     -    how  and  when  the  Company  introduces new products and services and
          enhances  its  existing  products  and  services;
     -    the  Company's  ability  to  establish  and  maintain  strategic
          relationships;
     -    the  Company's  ability  to  attract,  train and retain key personnel;
     -    the  Company's  ability  to form and maintain strategic alliances with
          retail  businesses;
     -    the  emergence  and  success  of  new  and  existing  competition;
     -    varying  operating  costs  and  capital  expenditures  related  to the
          expansion  of  the  Company's  business operations and infrastructure,
          domestically  and  internationally,  including  the  hiring  of  new
          employees;
     -    technical  difficulties  with the Company's products, system downtime,
          system  failures  or  interruptions  in  Internet  access;
     -    costs  related  to  the  acquisition  of businesses or technology; and
     -    costs  of  litigation  and  intellectual  property  protection.

In  addition,  because  the  market  for  the Company's products and services is
relatively new and rapidly changing, it is difficult to predict future financial
results.  To  the  extent that these predictions prove inaccurate, the Company's
revenues  and  operating  expenses  may  fluctuate.

For  these  reasons,  you should not rely on period-to-period comparisons of the
Company's  financial  results  as  indications of future results.  The Company's
future  operating  results  could  fall  below the expectations of public market
analysts  or  investors  and significantly reduce the market price of its common
stock.  Fluctuations in the Company's operating results will likely increase the
volatility  of  its  stock  price.

     THE  COMPANY  FACES  INTENSE  COMPETITION  FROM  MANY  ENTITIES.


                                       20
<PAGE>
The  marketplace  for  business-to-business e-commerce is highly competitive and
relatively  new,  constantly  changing  and intensely competitive.  As retailers
depend more upon the Internet as a source for product, more companies will enter
the  market  and  compete  directly  with the Company.  The Company expects that
competition  will  continue  to  intensify.

The Company has identified and continues to identify numerous companies that are
better funded, have more experience and more significant resources and that have
entered  or  are planning to enter business-to-business e-commerce.  Barriers to
entry  are  minimal  and  current  and  new  competitors  can  launch sites at a
relatively  low  cost.  Should  these  companies  decide  to enter the Company's
specific  market,  there  is  no  guarantee  that it will be able to effectively
compete  with  them.  Currently, the Company's main on-line sourcing competitors
include  Sourcing  Link,  Purchase  Pro.com,  Vertical  Net,  Tradeout.com  and
Tradeweave.com.  Its  main  procurement  competitors  include  QRS  Corporation,
Ariba,  Commerce  One  and  Retek.  Price  concessions or the emergence of other
pricing  or  distribution  strategies  of competitors may diminish the Company's
revenues,  impact its margins or lead to a reduction in its market share, any of
which  will  harm  its  business.

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

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

The Company is subject to the normal risks of doing business internationally, as
well  as  risks  specific to Internet-based companies in foreign markets.  These
risks  include:

     -    delays  in  the  development  of  the  Internet  as  a  vehicle  for
          business-to-business  transactions  in  international  markets;
     -    difficulties  in  managing  operations  due  to distance, language and
          cultural  differences;
     -    unexpected  changes  in  regulatory  requirements;
     -    export and import restrictions, including those restricting the use of
          encryption  technology;
     -    tariffs  and  trade  barriers  and  limitations  on  fund  transfers;
     -    longer  payment cycles and problems in collecting accounts receivable;
     -    potential  adverse  tax  consequences;
     -    exchange  rate  fluctuations;
     -    increased  risk  of  piracy  and  limits  on  the Company's ability to
          enforce  its  intellectual  property  rights;  and
     -    other  legal  and  political  risks.

Any  of  these  factors  could  harm  the  Company's  business  operations.

     THE  COMPANY DEPENDS ON MARKET DEMAND FOR AN ACCEPTANCE OF ITS PRODUCTS AND
     SERVICES.

Much  of  the  Company's  success  depends  on  aggregating  a  critical mass of
subscribing  vendors  and establishing and maintaining strong relationships with
retail partners.  If market demand and acceptance for the Company's products and


                                       21
<PAGE>
services  is  not  in line with its expectations, it is likely that revenue will
not  meet the Company's expectations and the Company may not be able to fund its
operations.

     THE  COMPANY  DEPENDS  ON  RELATIONSHIPS  WITH  KEY RETAIL PARTNERS AND ITS
     ABILITY  TO  CREATE  MORE  SUCH  RELATIONSHIPS.

The  Company's business model is retailer-centric.  Successful implementation of
the  model  is  predicated on the Company's ability to create and nurture strong
partnerships  with  retailers.  If  the  Company  is unable to maintain existing
partnerships  or  establish  new  partnerships  with  retailers, its revenue and
profitably  will  not  meet  its expectations and it may not be able to fund its
operations.

     THE  COMPANY  MAY  BE  UNABLE  TO  PROTECT ITS INTELLECTUAL PROPERTY, TRADE
     SECRETS  AND  KNOW-HOW, WHICH WOULD REMOVE A BARRIER TO COMPETITION AND MAY
     DIRECTLY  AFFECT  THE  AMOUNT  OF  REVENUE  IT  GENERATES.

The  Company  depends  heavily  on continued service and software development to
maintain  the  quality  and reliability of its services and to continue to grow.
The Company is dependent on its ability to keep trade secrets and obtain patents
on business processes as well as on its ability to develop new processes to meet
its  customers'  sourcing  needs.

Although  the  Company  employs  various methods, including trademarks, patents,
copyrights  and confidentiality agreements with employees, consultants and third
party  businesses, to protect its intellectual property and trade secrets, there
can  be no assurance that it will be able to maintain the confidentiality of any
of  its  proprietary  technology, know-how or trade secrets, or that others will
not  independently  develop substantially equivalent technology.  The failure or
inability  to  protect  these rights could have a material adverse effect on the
Company's  operations.

     THE  COMPANY'S  FAILURE  TO  ATTRACT,  TRAIN  OR  RETAIN  HIGHLY  QUALIFIED
     PERSONNEL  COULD  HARM  ITS  BUSINESS

The  implementation  of  the  Company's  business plan and its continued success
relies  on  key members of the management team and sales, marketing, and finance
personnel.  There is no guarantee that these employees will continue to work for
the  Company.  In  addition, there is no guarantee that the Company will be able
to replace these employees with personnel of similar caliber, should they not be
able  to  work,  or  decide  not  to  work  for  the  Company.

The  loss  of the services of executive officers or key employees could harm the
Company's  business.  None  of  the  Company's executive officers has a contract
that  guarantees  employment.  The  Company  does not maintain "key person" life
insurance  policies.

The  Company's  success also depends on its ability to attract, train and retain
qualified  personnel, specifically those with management and product development
skills.  In  particular,  the  Company  must  hire  additional  skilled software
engineers to further its research and development efforts.  Competition for such
personnel  is  intense.  In  making  employment  decisions,  particularly in the
Internet and high-technology industries, job candidates often consider the value
of  stock  options they may receive in connection with their employment.  If the
Company does not succeed in attracting new personnel or retaining and motivating
its  current  personnel,  its  business  could  be  harmed.

     THE  COMPANY  MAY NOT BE ABLE TO EFFECTIVELY MANAGE ITS GROWTH, WHICH COULD
     HAVE  A  MATERIAL  EFFECT  ON  ITS  BUSINESS  OPERATIONS.


                                       22
<PAGE>
The  Company's  ability to manage its growth depends in part upon its ability to
develop and expand operating, management, information and financial systems, and
production  capacity,  which  may  significantly  increase  its future operating
expenses.  No  assurance can be given that it will grow in the future or that it
will  be  able  to  effectively manage such growth.  Its inability to manage its
growth  successfully  could  have  a  material  adverse  effect on its business,
financial  condition  and  results  of  operations.

The  Company  cannot  successfully  implement  its business model if it fails to
manage  its  growth.  The  Company  has  rapidly  and significantly expanded its
operations domestically and internationally and anticipates further expansion to
take advantage of market opportunities.  The Company has increased the number of
its full-time employees from 12 on June 30, 2000 to 14 on June 30, 2001.  If its
growth  continues,  it  will  need  to  continue  to  improve  its financial and
managerial  control  and  reporting  systems  and  procedures.

     THE  COMPANY  MAY  ENTER INTO NEW LINES OF BUSINESS WHICH INVESTORS ARE NOT
     GIVEN  THE  OPPORTUNITY  TO  EVALUATE

In  the  event  of a business combination, acquisition, or change in shareholder
control,  the  Company  may enter into a new line of business, which an investor
did  not anticipate and in which that investor may not want to participate.  The
Company  may make investments in or acquire complementary products, technologies
and businesses, or businesses completely unrelated to its current business plan.
Similarly, an asset acquisition or business combination would likely include the
issuance of a significant amount of the Company's common stock, which may result
in  a  majority  of  the  voting  power being transferred to new investors.  New
investors  may  replace the Company's management.  New management may decide not
to  continue to implement the Company's current business plan, and may decide to
enter into a business completely unrelated to the current business plan which an
investor  did  not  anticipate  and  in  which  that  investor  may  not want to
participate.  In  such  case,  an investor could lose its entire investment on a
business  decision  it  did  not get to evaluate at the time of investing in the
Company.

     POTENTIAL  BUSINESS  COMBINATIONS COULD BE DIFFICULT TO INTEGRATE AND COULD
     DISRUPT  BUSINESS  OPERATIONS.

Any  acquisition  of  or business combination with another company could disrupt
the  Company's  ongoing business, distract management and employees and increase
expenses.  If  the  Company acquires another company, it could face difficulties
in  assimilating  that company's personnel and operations.  In addition, the key
personnel  of  the  acquired  company  may  decide  not to work for the Company.
Acquisitions also involve the need for integration into existing administration,
services, marketing, and support efforts.  Any amortization of goodwill or other
assets,  or  other charges resulting from the costs of these acquisitions, could
limit  the  Company's  profitability  and  decrease  the value of its stock.  In
addition,  the Company's liquidity and capital resources may be diminished prior
to  or  as  a  result of the business combination and its capital may be further
depleted  by  the  operating  losses,  if any, of the business entity, which the
Company  may  eventually  acquire.

     THE  COMPANY  COULD  LOSE STRATEGIC RELATIONSHIPS THAT ARE ESSENTIAL TO ITS
     BUSINESS

The  loss  of  current  strategic  relationships,  the  inability  to find other
strategic  partners  or  the  failure of the Company's existing relationships to
achieve meaningful positive results for it could harm its business.  The Company
relies  in  part  on  strategic  relationships  to  help  it:


                                       23
<PAGE>
     -    maximize  adoption  of  its  products  and  services  among retailers;
     -    expand the range of commercial activities based on its technology; and
     -    increase  the  performance  and  utility of its products and services.

Many of these goals are beyond the Company's traditional strengths.  The Company
anticipates  that  the  efforts  of  its  strategic  partners  will  become more
important  as  the  Internet  matures.  For example, the Company may become more
reliant  on  strategic  partners  to  provide  additional services, provide more
secure  and  easy-to-use  electronic  commerce solutions and build the necessary
infrastructure  for  business-to-business  transactions.  The Company may not be
successful  in forming strategic relationships.  In addition, the efforts of the
Company's  strategic partners may be unsuccessful.  Furthermore, these strategic
relationships  may  be  terminated  before  the  Company  realizes  any benefit.

     THE  COMPANY'S  BUSINESS  WILL  SUFFER  IF  ITS  SYSTEMS  FAIL  OR  BECOME
     UNAVAILABLE.

A  reduction  in  the performance, reliability and availability of the Company's
Web  sites  and  network  infrastructure will harm its ability to distribute its
products  and  services  to  its users, as well as its reputation and ability to
attract  and  retain  users and customers.  The Company's systems and operations
could  be  damaged or interrupted by fire, flood, power loss, telecommunications
failure,  Internet  breakdown,  earthquake  and  similar  events.  The Company's
systems  are  also subject to break-ins, sabotage, intentional acts of vandalism
and  similar  misconduct.  The  Company's  computer  and  communications
infrastructure  is  located  at  its  principal  executive  offices in Pasadena,
California.  The  Company  does  not  have  fully  redundant systems or a formal
disaster  recovery  plan,  and  does  not  carry  adequate business interruption
insurance  to  compensate  for  losses that may occur from a system outage.  The
Company's electronic commerce and digital distribution activities are managed by
sophisticated  software  and computer systems.  The Company may encounter delays
in  developing these systems, and the systems may contain undetected errors that
could  cause  system  failures.  Any  system  error  or  failure  that  causes
interruption  in  availability of products or content or an increase in response
time  could  result  in  a  loss  of  potential  or  existing  business services
customers,  users,  advertisers  or  content  providers.        If  the  Company
suffers  sustained  or  repeated  interruptions,  its products, services and Web
sites  could be less attractive to such entities or individuals and its business
would  be  harmed.

A  sudden  and  significant increase in traffic on the Company's Web sites could
strain  the  capacity  of  the software, hardware and telecommunications systems
that  it  deploys  or  uses.  This could lead to slower response times or system
failures.  The  Company's operations also depend on receipt of timely feeds from
its  content  providers, and any failure or delay in the transmission or receipt
of  such  feeds  could  disrupt  its  operations.  The  Company  depends  on Web
browsers,  ISPs and online service providers to provide Internet users access to
its  Web sites.  Many of these providers have experienced significant outages in
the  past,  and  could  experience outages, delays and other difficulties due to
system  failures  unrelated to the Company's systems.  In addition, certain ISPs
have  temporarily  interrupted  the Company's Web-site operations in response to
the heavy volume of e-mail transmission it generates and sends to its large user
base.  These  types  of  interruptions could continue or increase in the future.


Investment  Risks

     THE  COMPANY'S  COMMON  STOCK  HAS  LIMITED  LIQUIDITY.

At  the  present  time,  the  Company's common stock is not listed on The NASDAQ
Stock  Market, Inc. or on any national exchange.  Although dealer prices for the
Company's common stock are listed on the Nasdaq Over-the-Counter Bulletin Board,
trading has been limited since such quotations first appeared in July, 1999.  On


                                       24
<PAGE>
July  20,  2000,  the  Company  applied  to  have  its common stock approved for
quotation  on the Nasdaq SmallCap Market.  On March 6, 2001, Nasdaq notified the
Company that it has determined that it cannot approve the Company's application.
The  decision is based principally on the following factors: (1) public interest
concerns,  under  Rules 4300 and 4330(a)(3), raised by the nature and accounting
treatment  of  several  related-party  transactions;  (2) concerns regarding the
adequacy  of  disclosures  regarding  certain  related-party  transactions;  (3)
concerns  regarding  the  adequacy  of  the Company's internal controls; and (4)
concerns  about  the  Company's  failure  to  meet  Nasdaq's  initial  inclusion
requirements.  The  bid  price for the Company's common stock is currently below
$4.00  per  share  and  the recent trading history shows a pattern of failing to
maintain  the  minimum $4.00 bid price required by Rule 4310(c)(4).  The Company
already  took  steps to address comments raised by Nasdaq.  The Company plans to
reapply  once  its  stock  bid  price  is  above  the  minimum  requirement.

Whether  or  not shares of the Company's common stock are included in the Nasdaq
system,  the  Company cannot assure you that the public market for shares of its
common  stock  will  become  more  active or liquid in the near future.  In that
regard,  prospective  purchasers  of  the common stock should consider that past
shares  have been issued without underwriting arrangements typically found in an
initial  public offering of securities.  Such arrangements generally provide for
the  issuer of the securities to sell the securities to an underwriter which, in
turn, sells the securities to its customers and other members of the public at a
fixed  offering  price,  with  the  result that the underwriter has a continuing
interest  in  the  market  for  such  securities  following  the  offering.

     FUTURE  ISSUANCE  OF  STOCK  BY  THE  COMPANY MAY HAVE A DILUTIVE EFFECT ON
     OWNERSHIP  INTERESTS OF SHAREHOLDERS AND MAY NEGATIVELY IMPACT THE PRICE OF
     ITS  STOCK.

Any  additional issuances by the Company from its authorized but unissued shares
may  have  the  effect  of  diluting  the  percentage  interest  of  existing
shareholders.  Out  of  the  40,000,000 authorized common shares of the Company,
32,416,327,  or 81%, remain unissued.  The Board of Directors of the Company has
the  power  to  issue  such  shares  without  shareholder approval.  None of the
10,000,000  authorized  preferred  shares  of the Company are issued.  There are
outstanding  warrants  and  options  whose holders may acquire additional common
shares.  The  Company  fully  intends  to  issue  additional  common  shares  or
preferred  shares  in order to raise capital to fund its business operations and
growth  objectives.

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

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

     POTENTIAL  BUSINESS  COMBINATIONS  MAY  DILUTE  SHAREHOLDER  VALUE.

If  the Company is not successful in developing a viable market for its service,
its  management  will  spend  a  significant  portion  of the time it devotes to
evaluating  other  business  opportunities that may be available to the Company.
In  the  event  of a business combination, the ownership interests of holders of
existing  shares  of  the  Company's  stock will be diluted.  Due to its limited


                                       25
<PAGE>
financial  resources,  the  only  way  the Company will be able to diversify its
activities,  should its business plan prove to be impractical, would be to enter
into  a  business  combination.

Any  asset acquisition or business combination would likely include the issuance
of  a  significant  amount of the Company's common stock, which would dilute the
ownership  interest  of holders of existing shares, and may result in a majority
of the voting power being transferred to new investors.  Depending on the nature
of  the  transaction,  the Company's shareholders may not have an opportunity to
vote  on  whether  to approve it.  For example, the Company's board of directors
may  decide  to  issue  a significant amount of stock to affect a share exchange
with another company.  Such a transaction does not require shareholder approval,
but  the  Company's  officers  and  directors must exercise their powers in good
faith  and  with  a  view  to  the  interests  of  the  corporation.

     THE  COMPANY  MAY  NEED ADDITIONAL FINANCING WHICH MAY NOT BE AVAILABLE, OR
     WHICH  MAY  DILUTE  THE  OWNERSHIP  INTERESTS  OF  INVESTORS

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

     THE  BOARD  OF  DIRECTORS'  AUTHORITY  TO  SET  RIGHTS  AND  PREFERENCES OF
     PREFERRED  STOCK  MAY  PREVENT  A  CHANGE IN CONTROL BY SHAREHOLDERS OF THE
     COMPANY'S  COMMON  STOCK.

Preferred  shares  may  be  issued  in  series  from  time  to  time  with  such
designation,  rights,  preferences  and limitations as the Board of Directors of
the  Company determines by resolution and without shareholder approval.  This is
an  anti-takeover  measure.  The  Board of Directors has exclusive discretion to
issue  preferred  stock  with  rights that may trump those of common stock.  The
Board  of  Directors  could  use an issuance of Preferred Stock with dilutive or
voting  preferences  to  delay,  defer  or  prevent  common  shareholders  from
initiating  a  change  in  control of the Company or reduce the rights of common
shareholders  to the net assets upon dissolution.  Preferred stock issuances may
also  discourage  takeover  attempts  that  may offer premiums to holders of the
Company's  common  stock.

     SHAREHOLDERS  DO  NOT  HAVE THE AUTHORITY TO CALL A SPECIAL MEETING THEREBY
     DISCOURAGING  TAKEOVER  ATTEMPTS

Pursuant  to the Company's by-laws, only the Board of Directors, the Chairman of
the  Board  or  the  President  of  the Company have the power to call a special
meeting  of  the  shareholders  thereby  limiting the ability of shareholders to
effect  a  change  in  control  of  the  Company.

     REQUIREMENTS  OF THE SEC WITH REGARD TO LOW-PRICED "PENNY STOCK" SECURITIES
     MAY ADVERSELY AFFECT THE ABILITY OF SHAREHOLDERS TO SELL THEIR STOCK IN THE
     SECONDARY  MARKET

"Penny  stocks" are low-priced, and usually highly speculative, stock selling at
less  than  $5.00 per share.  The Company's securities are subject to Rule 15g-9
under  the  1934  Act,  which  imposes additional sales practice requirements on
broker-dealers  who  sell  such  securities  to  persons  other than established
customers  and "accredited investors" (generally, an individual with a net worth
in  excess  of  $1,000,000  or  an annual income exceeding $200,000, or $300,000
together  with  his  or  her  spouse).  For transactions covered by this rule, a


                                       26
<PAGE>
broker-dealer  must  make  a special suitability determination for the purchaser
and  have  received  the purchaser's written consent to the transaction prior to
sale.  Consequently, the rule may adversely affect the ability of broker-dealers
to  sell  the  Company's  securities  and  may  adversely  affect the ability of
shareholders  to  sell  their  stock  in  the  secondary  market.

     LIMITED  LIABILITY  OF  EXECUTIVE  OFFICERS  AND  DIRECTORS  MAY DISCOURAGE
     SHAREHOLDERS  FROM  BRINGING  A  LAWSUIT  AGAINST  THEM

The  Company's  articles  of  incorporation  and by-laws contain provisions that
limit  the  liability  of  directors  for  monetary  damages  and  provide  for
indemnification  of  officers  and  directors.  These  provisions may discourage
shareholders from bringing a lawsuit against officers and directors for breaches
of  fiduciary  duty  and may also reduce the likelihood of derivative litigation
against  officers  and  directors  even though such action, if successful, might
otherwise  have  benefited  the  shareholders.  In  addition,  a  shareholder's
investment  in the Company may be adversely affected to the extent that costs of
settlement  and  damage  awards  against  officers  or directors are paid by the
Company  pursuant  to  the  indemnification  provisions  of  the  articles  of
incorporation and by-laws.  The impact on a shareholder's investment in terms of
the  cost  of  defending  a lawsuit may deter the shareholder from bringing suit
against  one  of  the  Company's  officers  or  directors.

ITEM  2.  DESCRIPTION  OF  PROPERTY
-----------------------------------

The Company leases its corporate headquarters located at 600 S. Lake Ave., Suite
208,  Pasadena,  CA  91106.  Its  telephone number is (626) 793-5000.  The lease
commenced on October 1, 2000, and expires on October 31, 2002, with an option to
renew  for  3-year  period.  The  Company  currently  leases approximately 2,002
square  feet  at  an  average  monthly  rent  of  approximately  $3,604.

ITEM  3.  LEGAL  PROCEEDINGS
----------------------------

The  Company has been named as a defendant, along with 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, Nassau County, New York
(Index  No.  98-006524).  Rosner  alleges  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  and  alleged
transactions  involving  the  Company  and  BCF.  Such  transactions and alleged
transactions  relate  to  the  Internet services that the Company may provide to
BCF,  and  contemplated 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.


                                       27
<PAGE>
ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
---------------------------------------------------------------------

None.



                                       28
<PAGE>
                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS
-------------------------------------------------------------------------

The  Company's  common  stock  is  traded on the Over-the-Counter Bulletin Board
(OTC-BB)  under  the  symbol  "CMEE."  The  following  table sets forth, for the
periods  indicated,  the  range  of  high  and low sales prices of the Company's
common  stock  as quoted by various market makers for the period of July 1, 1999
through  June  30,  2001.


          July 1, 1999 to June 30, 2000:   High    Low
                                          ------  ------
            First Quarter                 $11.00  $ 2.50
            Second Quarter                $ 8.00  $2.125
            Third Quarter                 $20.00  $ 7.00
            Fourth Quarter                $ 9.00  $ 3.50

          July 1, 2000 to June 30, 2001:   High    Low
                                          ------  ------
            First Quarter                 $ 7.06  $ 2.75
            Second Quarter                $5.375  $2.125
            Third Quarter                 $4.268  $0.281
            Fourth Quarter                $ 0.50  $0.156

On  August  15, 2001, the Company's common stock was held by 547 shareholders of
record  or  through  nominee  or  street  name  accounts  with  brokers.

The  Company  has  not  paid  dividends  in  prior years and has no plans to pay
dividends  in  the near future.  The Company intends to reinvest its earnings on
the  continued  development  and  operation  of  its  business.  Any  payment of
dividends  would  depend  upon  the  Company's pattern of growth, profitability,
financial  condition, and such other factors, as the Board of Directors may deem
relevant.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

In  June,  2000, the Company completed a private placement offering of 1,255,900
shares  of  its  Common  Stock  at an offering price of $4.878 per share.  Gross
proceeds  from the offering were $6,126,336.  This offering was made pursuant to
an exemption from the registration requirement under the Securities Act of 1933,
as  amended  (the  "Act").  The  exemption  relied  upon  was either Rule 506 of
Regulation  D or Regulation S of the Act.  The Company limited the manner of the
offering  and  provided  all  of  the  investors  with  an  offering memorandum.

LISTING  ON  THE  NASDAQ  SMALL  CAP  MARKET

In  March  2001, Nasdaq informed the Company that its application for listing on
the Nasdaq Small Cap market was disapproved.  Subsequently, the Company took all
necessary  steps  to  address  all  issues  that  were  mentioned  on the Nasdaq
disapproval  letter.  The  Company  plans  to  reapply  for the Nasdaq Small Cap
listing  in  the  future  once its stock bid price is above the Nasdaq's minimum
requirement.


                                       29
<PAGE>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
--------------------------------------------------------------------------------
OF  OPERATIONS
--------------

The following discussion of the financial condition and results of operations of
the  Company should be read in conjunction with the financial statements and the
related  notes  thereto-included  elsewhere in this annual report for the fiscal
year  ended  June 30, 2001.  This annual report contains certain forward-looking
statements,  (see  Certain  Factors  That  May  Affect  Future  Results) and the
Company's  future operating results could differ materially from those discussed
herein.

INTRODUCTION

The Company was formed in July 1996, to develop, establish, and market Web-based
E-commerce  solutions  for  retailers  and  their  supply  chains globally.  The
business  strategy  of  the  Company  is  focused  on  international  E-trade
transactions  through  establishing  collaborative relationships with U.S.-based
retailers  wherein  the  Company  will provide the retailer with Internet Source
Network  ("ISN")  and  Global  Financial  Platform  ("GFP").

In  January  2001,  the  Company  began  focusing  on  transacting international
closeout  merchandise  for  U.S. retailers.  This type of transaction became the
Company's core revenue business model.  Discount and off-price retailers such as
Burlington  Coat Factory, Factory-2-U stores, Ross Stores, Value City Department
Stores,  Ames Department Stores and others have historically purchased close-out
or  off-season  merchandise  from  domestic  jobbers,  wholesalers  and/or
manufacturers.  These  types  of  retailers  do  not typically buy from original
manufacturing  sources  located  in the Pacific Rim, Middle East and Central and
South  America.  The Company's management believes that the service it offers to
acquire  goods  from the original sources without the need of issuing letters of
credit  will  attract  more  retailers  than  through  the  traditional  method.

From  its  inception  to  December  2000, the Company successfully developed and
implemented all the necessary foundations of an international electronic trading
company.  The  Company  believes that it has achieved three fundamental steps to
be  a  successful  international electronic trading company.  These steps are as
follows:  1) established joint ventures in major production countries, currently
the  Company has joint ventures in China, Taiwan, Hong Kong, Korea, Thailand and
the  Philippines.  In  addition  to the joint ventures, the Company has sourcing
agents  in the Middle East, Europe and Indonesia, 2) technology development- the
Company  has proven its "ISN" and "VTS" software platform are equitable for U.S.
retailers to source merchandise globally, and 3) development of the GFP to allow
U.S. retailers to purchase international merchandise without the need of issuing
a letter of credit.  Management anticipates that through its unique facilitation
of  international electronic trading transaction activities, the Company will be
able  to  breakeven  for  the  fiscal  year  ending  June  30,  2002.

The  Company has successfully completed multiple international transaction sales
during  the  fourth  quarter  of  fiscal  year  2001, totaling $726,160 in gross
transaction sales with a 7% net revenue totaling $52,157.  Also, the Company has
back-logged  orders to be filled before October 2001 of approximately $1,000,000
with  an  expected  net  revenue  of  $200,000  or  20%.

The  Company has incurred losses during the first four years of development.  As
of  June  30, 2001, the Company had an accumulated net loss of $8,746,269, which
includes  $3,493,364  in  non-cash  compensation related to the recording of the
fair  value  of  warrants  and stock options issued by the Company to employees,
consultants,  directors  and  officers and strategic partners.  The Company does
not  expect  that  these  types of expenses will continue at the previous level.


                                       30
<PAGE>
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Fiscal year ended June 30, 2001, compared to year ended June 30, 2000

The following discussion sets forth information for the twelve months ended June
30, 2001, compared with the twelve months ended June 30, 2000.  This information
has  been  derived  from  audited  financial statements of the Company contained
elsewhere  in  this  Form  10-KSB.

REVENUES

Net revenues or transaction sales for the year ended June 30, 2001 were $52,157,
an increase of $52,157 from $0 in 2000.  During the year ended June 30, 2001 the
Company  had  net revenue of 7% on gross transactions.  The Company expects this
percentage  to grow, as it begins to fully utilize its overseas sourcing network
and  its  external  sales  force.

Subscriber  fees  decreased $24,865 or 45% to $30,665 in the year ended June 30,
2001  from  $55,530  in the prior year, due to the shift in focus on the revenue
received  from  the  users  of the Company's VTS, ISN and Web design services to
transaction  sales.

OPERATING  EXPENSES

General  and  administrative  expenses  consist primarily of salaries, marketing
program,  investor  relations,  and  professional  consulting fees.  General and
administrative  expenses  increased  $967,292  or  78% to $2,205,444 in the year
ended  June  30,  2001  from  $1,238,152  in  the  prior year.  Payroll expenses
increased  $846,186  or  234% to $1,207,818 in the year ended June 30, 2001 from
$361,632  in  the  prior  year.  The  increase  in  payroll expenses reflect the
increase  in  hiring  of  staff for the expansion of the Company's operation and
severance  payout  for two executives totaling $67,500.  Professional consulting
fees  increased $131,332 or 40% to $455,774 in the year ended June 30, 2001 from
$324,442  in  the  prior  year, due to professional fees incurred related to the
Nasdaq  small  cap  application.

During  the  fiscal  year ended June 30, 2001, the Company granted 353,016 stock
options,  under  its  1999 stock option plan.  In accordance with APB No. 25 and
SFAS  123,  the  Company recognized non-cash stock-based compensation expense of
$1,370,733  for  its 2001 grants and the amortization of unearned non-cash stock
compensation  from  the  prior year's grants.  For the year ended June 30, 2000,
the  Company recognized non-cash stock-based compensation expense of $2,122,631.
The  notes to the financial statements, specifically Notes 9 and 10, describe in
detail  the accounting required under accounting practices generally accepted in
United  States  of  America.

OTHER  INCOME  (EXPENSE)

Net  interest income increased by $213,375 or 217% to $311,580 in the year ended
June  30,  2001  from  $98,205  in the prior year.  The increase of net interest
income  was  mainly  due  to  an  increase  in  cash  investmented in short term
certificates  of  deposit.

Under  the  equity  method  of  accounting,  the loss in overseas joint ventures
increased  by  $450,985 or 605% to $525,558 in the year ended June 30, 2001 from
$74,573  in  the  prior  year. Each joint venture in E-SEA, Taiwan and China has
incurred significant development costs and amortization of the software acquired
from the Company associated with infrastructure development and market branding.
The  Company believes each overseas joint venture has begun to capitalize on its
expenditures  on market branding which will reduce cost and increase revenue for
the  fiscal  year  ended June 30, 2002. In addition, the Company's investment in
ABNet  is accounted for under the cost method and valued at the lower of cost or


                                       31
<PAGE>
net  realizable  value  with  any  impairment  being  recognized.  Based  on its
analysis,  management  determined  that  it  has  incurred an impairment loss of
$148,879  in  its  investment  in  ABNet, which was recorded in the accompanying
statements  of  operations  for  the  year  ended  June  30,  2001.

Amortization  of negative goodwill increased by $308,332 or 1233% to $333,332 in
the  year  ended June 30, 2001 from $25,000 in the prior year.  The amortization
of  negative goodwill is resulted from the sales of the Company's ISN (software)
to  its  overseas  joint  ventures  in  Taiwan, South East Asia, and China.  The
software  sales  to  Taiwan, South East Asia, and China were $300,000, $300,000,
and  $400,000,  respectively.  The  Company amortizes the negative goodwill over
three  years.

NET  LOSS

The  net  loss  for the fiscal year ended June 30, 2001 increased by $316,526 or
10%  to  $3,604,185  from $3,287,659 in the prior year.  The increase in 2001 is
mainly  due  to  higher general and administrative expenses and higher losses in
overseas  joint  ventures  and  investments,  which  were  partially  offset  by
increases  in  net  revenues  and decreases in non-cash stock-based compensation
expenses.

Net loss per share decreased by $0.05 or 9% to $0.48 per share in the year ended
June  30,  2001  from  $0.53  in  the  prior  year.

RECENT  ACCOUNTING  PRONOUNCEMENT

In  July  2001,  FASB issued Statement of Financial Accounting Standards No. 141
("SFAS  No.  141"),  "Business  Combinations",  which  is effective for business
combinations initiated after June 30, 2001.  SFAS No. 141 eliminates the pooling
of interest method of accounting for business combinations and requires that all
business  combinations occurring on or after July 1, 2001 be accounted for under
the  purchase  method.  The  Company  does  not  expect  SFAS  No. 141 to have a
material  impact  on  its  financial  statements.

In  July  2001,  FASB issued Statement of Financial Accounting Standards No. 142
("SFAS  No. 142"), "Goodwill and Other Intangible Assets" which is effective for
fiscal years beginning after December 15, 2001.  Early adoption is permitted for
entities with fiscal years beginning after March 15, 2001 provide that the first
interim  financial  statements  have  not  been previously issued.  SFAS No. 142
address  how intangible assets that are acquired individually or with a group of
other  assets  should  be  accounted  for in the financial statements upon their
acquisition  and  after  they  have  been  initially recognized in the financial
statements.  SFAS No. 142 requires that goodwill and intangible assets that have
indefinite  useful lives not be amortized but rather be tested at least annually
for impairment, and intangible assets that have finite useful lives be amortized
over  their  useful  lives.  SFAS No. 142 provides specific guidance for testing
goodwill  and  intangible  assets that will not be amortized for impairment.  In
addition,  SFAS  No.  142 expands the disclosure requirements about goodwill and
other  intangible  assets  in  the  years  subsequent  to  their  acquisition.
Impairment  losses for goodwill and indefinite-life intangible assets that arise
due  to  the initial application of SFAS No. 142 are to be reported as resulting
from  a change in accounting principle.  However, goodwill and intangible assets
acquired after June 30, 2001 will be subject immediately to be provision of SFAS
No.  142.  The Company does not expect SFAS No. 142 to have a material effect on
its  financial  statements.

In  July  2001,  the FASB issued Statement of Financial Accounting Standards No.
143  ("SFAS  No. 143"), "Accounting for Asset Retirement Obligations".  SFAS No.
143  establishes standards associated with the retirement of tangible long-lived
assets  and  the associated asset retirement costs.  This statement is effective
for  financial statements issued for fiscal years beginning after June 15, 2002.


                                       32
<PAGE>
The  Company  has  not yet assessed the impact of this standard on its financial
statements,  but  does  not  expect  the  impact  to  be  material.

LIQUIDITY  AND  CAPITAL  RESOURCES

The  Company's net working capital decreased from $6,024,581 as of June 30, 2000
to  $2,617,046  as of June 30, 2001, primarily due to cash used in operations of
$2,465,359,  the  net  investment  in  overseas  joint ventures of $900,000, and
investment  of  $600,000  in  a convertible note receivable.  During the current
year,  the  Company  had  average  monthly  general  and administrative expenses
(excluding non-cash compensation expenses) of approximately $185,000 as compared
to  $105,000  in  2000.  During  the later part of fiscal year 2001, the Company
implemented  a cost reduction plan and focused on a transaction revenue business
model.  The  cost  reduction  plan includes reduction of its staff, professional
consulting  fees,  investor  relations and marketing costs.  Management believes
the  cost  reduction  plan  will  reduce  the  monthly expenses to approximately
$100,000 for the fiscal year ending June 30, 2002.  The Company also anticipates
an  average  net  revenue  of 20% on all its international E-trade transactions.
With  working capital of approximately $2.6 million and average monthly expenses
of  approximately  $100,000,  coupled  with  a  growing net revenue, the Company
believes  its operations can breakeven or become profitable by fiscal year 2002.

The  Company  believes  it  has sufficient cash to operate its business over the
next  12  months.  Depending  on  market  acceptance  of  the  Company's current
business  model,  the Company may raise additional funds, either debt or equity,
to  augment  future  growth  of  the  business.

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

On  May 21, 2001, the Company entered into a non-revolving line of credit with a
commercial  bank  for up to $900,000.  Borrowings under this line of credit bear
interest  at certain percentage over the CD rate per annum and is secured by two
$500,000 time certificate of deposit at the bank.  The line of credit expired on
June  22, 2001.  As of June 30, 2001 the Company has an outstanding loan balance
of  $400,000,  which  was  paid  off  in  July  2001.

CERTAIN  FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS

From  time  to time, information provided by the Company, statements made by its
employees,  or  information  included  in  its  filings  with the Securities and
Exchange Commission (including this Form   10-KSB) may contain statements, which
are  not  historical  facts,  known  as  "forward-looking  statements".  These
forward-looking  statements  are  made pursuant to the safe harbor provisions of
the  Private  Securities  Litigation  Reform  Act of 1995.  The Company's actual
future results may differ significantly from those stated in any forward-looking
statements.  Forward-looking  statements  involve  a  number  of  risks  and
uncertainties,  including,  but  not limited to, product demand, pricing, market
acceptance,  litigation,  intellectual  property  rights,  risks  in product and
technology  development,  product  competition, limited number of customers, key
personnel, potential transactions and other risk factors detailed in this Annual
Report  on  Form  10-KSB  and  in  the  Company's  other Securities and Exchange
Commission  filings.

In  light  of  the "safe harbor" provisions of the Private Securities Litigation
Reform  Act  of  1995, the Company hereby identifies the following factors which
could  cause  actual  results  to  differ materially from those reflected in any
forward  looking  statement  made  by  or  on behalf of the Company: reliance on
collaborative  retail  partners;  market  acceptance  of  Company  products  and
services;  changing  business  conditions or technologies in the industry, which


                                       33
<PAGE>
could  affect  demand  for  the  Company's  products and services; the impact of
competition;  problems  with  technology;  product  development  schedules;  and
regulatory  factors  beyond  the  Company's  control.

ITEM  7.  FINANCIAL  STATEMENTS
-------------------------------

Financial  statements  and  supplementary  data  are set forth on pages F-1 thru
F-20.


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING AND
--------------------------------------------------------------------------------
FINANCIAL  DISCLOSURE
---------------------

On  August  15,  2001,  the  Company  informed  BDO  Seidman,  LLP  ("BDO"), its
certifying  accountants,  that  the  Company  dismissed  BDO  as  its certifying
accountants  and  has  engaged  new  certifying accountants.  The new certifying
accountants  are  Corbin  & Wertz.  Pursuant to Item 304(a) Regulation S-K under
the Securities Act of 1933, as amended, and under the Securities Exchange Act of
1934,  as  amended, the Company reported on a Form 8-K filing on August 17, 2001
as  follows:

(a)  (i)    The Company dismissed BDO as its certifying accountant on August 15,
2001.

     (ii)   During  the past two years, the Company's financial  statements  did
not  contain  any  adverse  opinions  or  disclaimers  of  opinion, and were not
qualified  or modified as to uncertainty, audit scope, or accounting principles,
except  for  the  restatement  of  financial  statements  for 2000 to adjust the
Company's  accounting  for  its investment in its joint ventures as discussed in
Note  4  of  the  restated  10K  for  2000  dated  May  17,  2001.

     (iii)  The dismissal of BDO and engagement of Corbin & Wertz was approved
by  the  Corporation's  Audit  Committee  of  the  Board  of  Directors.

    (iv)    The  Company  and BDO did not have any disagreements with regard to
any  matter  of  accounting  principles  or  practices,  financial  statement
disclosure,  or  auditing  scope  or  procedure.

    (v)     During  the  Company's  two  most recent fiscal years and during the
interim period prior to the dismissal of BDO, the Company did not experience any
reportable events except for the restatement of the 2000 financial statements to
adjust  the  Company's  accounting  for  its  investment  in its joint ventures.

    (b)     On  August 15, 2001,  the  Company engaged Corbin & Wertz of Irvine,
California,  to  be  the  Corporation's  certifying  accountant.

    (i)     Corbin  &  Wertz  reviewed  the past financial  statements  for  the
Company  in  making its determination to accept the engagement with the Company.
Prior  to  August  15,  2001,  when the Company engaged Corbin & Wertz to be the
Company's  certifying  accountants, the Company had never consulted Corvin&Wertz
for  any  services,  be  they  accounting,  auditing  or  otherwise.

    (ii)     The  Company  did not have any disagreements with BDO and therefore
did  not  discuss  any  past  disagreements  with  Corbin  &  Wertz.

BDO agreed with the above statements in a letter dated August 15, 2001, filed as
an  exhibit  to  the  8K  filing  filed  on  August  17,  2001.


                                       34
<PAGE>
                                    PART III

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

The  information  required  by  this item is included under the caption entitled
"Election  of  Directors"  and  "Information  Concerning Directors and Executive
Officers"  in  the  Company's  definitive  proxy statement on Schedule 14A to be
filed  within  120  days  from  June  30,  2001,  and  is incorporated herein by
reference.

ITEM  10.  EXECUTIVE  COMPENSATION
----------------------------------

The  information  required  by  this item is included under the caption entitled
"Executive Compensation" in the Company's definitive proxy statement on Schedule
14A  to  be filed within 120 days from June 30, 2001, and is incorporated herein
by  reference.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
--------------------------------------------------------------------------------

The  information  required  by  this item is included under the caption entitled
"Security  Ownership  of  Certain  Beneficial  Owners  and  Management"  in  the
Company's definitive proxy statement on Schedule 14A to be filed within 120 days
from  June  30,  2001,  and  is  incorporated  herein  by  reference.

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS
-------------------------------------------------------------

The  information  required  by  this item is included under the caption entitled
"Certain  Relationships  and  Related  Transactions" in the Company's definitive
proxy  statement on Schedule 14A to be filed within 120 days from June 30, 2001,
and  is  incorporated  herein  by  reference.


                                       35
<PAGE>
<TABLE>
<CAPTION>
ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K
------------------------------------------------

EXHIBITS

EXHIBIT
NUMBER        DESCRIPTION
------        -----------
<S>           <C>
3.1*          Articles of Incorporation

3.2*          Bylaws

4.1**         Lock-Up Agreement

4.2*****      Specimen Stock Certificate for Shares of Common Stock of the Company

4.3*          Warrant expiring October 15, 2002 issued by the Company to Burlington Coat
              Factory Warehouse Corporation on October 15, 1997

4.4*****      Warrant expiring February 10, 2004 issued by the Company to Imperial Bank
              on February 10, 1999

4.5***        Warrant expiring May 25, 2005 issued by the Company to Factory 2-U on May
              25, 2000

10.1*         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

10.7*****     Employment contract with John F. Busey

10.8*****     Employment contract with Serena Kokjer-Greening

10.9*****     1999 Stock Option Plan

10.10*****    Software Sales Agreement to Global Purchasing Dotcom

10.11*****    Software Sales Agreement to eSEA Co., LTD

10.12*****    Software Sales Agreement to C-Me Taiwan

10.13*****    Joint Venture Agreement with Good Support International, Limited

10.14*****    Joint Venture Agreement with Vickem Patana Co., Ltd.


                                       36
<PAGE>
10.15*****    Joint Venture Agreement with Abest Tech Company, Ltd.

10.16*****    Factory 2-U Stores, Inc. - Joint Marketing and Cooperation Agreement

10.17*****    Retex Master Purchase Agreement

10.18*****    Individual Agreement - (IMA) Retex
<FN>

*      Filed  as  an Exhibit to the Company's Registration Statement on Form SB-2,
       Amendment  No. 5 on May 6, 1999, and incorporated herein by this reference.

**     Filed  on  January  27,  2000 as an Exhibit to a report by the Company on a
       Form  8-A  dated  January  27,  2000.

***    Filed  on July 18, 2000, as an Exhibit to a report by the Company on a Form
       8-K  dated  June  30,  2000.

*****  Previously  filed  with  the  Commission  on  September  29,  2000.
</TABLE>

REPORTS  ON  FORM  8-K

One  report on Form 8-K was filed by the Company during the fourth quarter ended
June  30,  2001.

On  May 21, 2001 Cyber Merchants Exchange, Inc. announced the resignation of two
of its directors, Philip M. Hawley and Howard Moore.  The Company also announced
that John F. Busey resigned as President of the Company effective June 30, 2001,
but  would continue as a member of the Board of Directors.  The Company does not
expect  to  replace  the  President  position  in  the  near  future.


                                       37
<PAGE>
                                   SIGNATURES

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

           By:  /s/  Frank  S.  Yuan               Date:  October  10,  2001
               --------------------------                 ------------------
               Frank  S.  Yuan
               Chief  Executive  Officer


           By:  /s/  John  F.  Busey               Date:  October  10,  2001
               --------------------------                 ------------------
               John  F.  Busey
               Director


           By:  /s/  Charles  Rice                 Date:  October  10,  2001
               --------------------------                 ------------------
               Charles  Rice
               Director


           By:  /s/  Deborah  Shamaley             Date:  October  10,  2001
               --------------------------                 ------------------
               Deborah  Shamaley
               Director


           By:  /s/  James  Vandeberg              Date:  October  10,  2001
               --------------------------                 ------------------
               James  Vandeberg
               Director


                                       38
<PAGE>
                         CYBER MERCHANTS EXCHANGE, INC.




                             _______________________




                     REPORT ON AUDITED FINANCIAL STATEMENTS


                   FOR THE YEARS ENDED JUNE 30, 2000 AND 2001



                             _______________________


<TABLE>
<CAPTION>
<S>                                                                                 <C>
REPORTS  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS                             F-1

REPORTS  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS                             F-2


CONSOLIDATED  FINANCIAL  STATEMENTS

     Balance  Sheets                                                                 F-3

     Statements  of  Operations  for  the  two years ended June 30, 2001             F-4

     Statements  of Shareholders' Equity for the three years ended June 30, 2001     F-5

     Statements  of  Cash  Flows                                                     F-6


   NOTES  TO  FINANCIAL  STATEMENTS                                                  F-7
</TABLE>


<PAGE>
                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT



The  Board  of  Directors
Cyber  Merchants  Exchange,  Inc.



We have audited the accompanying balance sheet of Cyber Merchants Exchange, Inc.
(the  Company)  as  of  June  30, 2001 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 auditing standards generally accepted
in  the  United  States  of  America.  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.
as of June 30, 2001 and the results of its operations and its cash flows for the
year  then  ended in conformity with accounting principles generally accepted in
the  United  States  of  America.




                                      /S/  Corbin  &  Wertz


Irvine,  California
September  07,  2001


                                      F-1
<PAGE>
                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT



The  Board  of  Directors
Cyber  Merchants  Exchange,  Inc.
d.b.a.C-ME.com


We  have audited the accompanying statements of operations, shareholders' equity
and cash flows of Cyber Merchants Exchange, Inc. (the Company), d.b.a. C-ME.com,
for  the  year  ended  June  30,  2000.  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 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  results  of  operations  and  cash flows of Cyber
Merchants  Exchange,  Inc., d.b.a. C-ME.com, for the year ended June 30, 2000 in
conformity  with  generally  accepted  accounting  principles.




                                          BDO  Seidman,  LLP



Los Angeles, California
September 5, 2000, except for Note 5
as to which the date is April 26, 2001


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                         CYBER MERCHANTS EXCHANGE, INC.
                                  BALANCE SHEET
                                  JUNE 30, 2001

<S>                                                                <C>
ASSETS

Current assets:
   Cash and cash equivalents                                       $   205,384
   Certificates of deposit                                           2,800,000
   Accounts receivable, net of allowance for doubtful accounts of
     $4,000                                                            367,400
   Accrued interest receivable                                         37, 043
                                                                   ------------
Total current assets                                                 3,409,827

Property and equipment, net                                             71,247

Investment in ABNet                                                    851,121
Investments in overseas joint ventures                                 658,201
Convertible note receivable                                            600,000
Other assets                                                            11,497
                                                                   ------------
Total assets                                                       $ 5,601,893
                                                                   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                $   279,946
   Accrued expenses                                                    112,835
   Line of credit borrowings                                           400,000
                                                                   ------------
Total current liabilities                                              792,781
                                                                   ------------
Commitments and contingency

Shareholders' equity:
   Common stock, no par value; 40,000,000 shares authorized;
      7,583,673 shares issued and outstanding                       10,032,017
   Additional paid-in capital                                        3,523,364
   Accumulated deficit                                              (8,746,269)
                                                                   ------------
Total shareholders' equity                                           4,809,112
                                                                   ------------
Total liabilities and shareholders' equity                         $ 5,601,893
                                                                   ============
</TABLE>

       See independent auditors' reports and accompanying notes to financial
                                   statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                 CYBER MERCHANTS EXCHANGE, INC.

                                   STATEMENTS OF OPERATIONS

                                                                          Years Ended June 30,
                                                                       --------------------------
                                                                           2000          2001
                                                                       ------------  ------------
<S>                                                                    <C>           <C>
Revenues:
   Transaction sales                                                   $         -   $   726,160
   Cost of goods sold                                                            -       674,003
                                                                       ------------  ------------
   Net revenue from transaction sales                                            -        52,157

   Subscribers' fees                                                        55,530        30,665
                                                                       ------------  ------------
Net revenue                                                                 55,530        82,822
                                                                       ------------  ------------
Operating expenses:
   General and administrative expenses                                   1,238,152     2,205,444
   Stock-based compensation                                              2,122,631     1,370,733
   Depreciation and amortization                                            36,545        77,582
                                                                       ------------  ------------
Total operating expenses                                                 3,397,328     3,653,759
                                                                       ------------  ------------
Loss from operations                                                    (3,341,798)   (3,570,937)

Other income (expenses):
   Interest income, net of interest expense of
    approximately $7,000 and $4,000 respectively                            98,205       311,580
   Equity in losses on investments in overseas joint ventures              (74,573)     (525,558)
   Amortization of negative goodwill                                        25,000       333,332
   Impairment write-down on investment in ABNet                                  -      (148,879)
   Other                                                                     7,222        (2,923)
                                                                       ------------  ------------
Loss before income taxes                                                (3,285,944)   (3,603,385)

Income taxes                                                                 1,715           800
                                                                       ------------  ------------
Net loss                                                               $(3,287,659)  $(3,604,185)
                                                                       ============  ============
Basic and diluted net loss available to common
  stockholders per share                                               $     (0.53)  $     (0.48)
                                                                       ============  ============
Weighted-average number of common shares outstanding                     6,228,249     7,583,673
                                                                       ============  ============
</TABLE>

       See independent auditors' reports and accompanying notes to financial
                                   statements.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                         CYBER MERCHANTS EXCHANGE, INC.

                                       STATEMENTS OF STOCKHOLDERS' EQUITY
                                        YEAR ENDED JUNE 30, 2000 AND 2001

                                      Common Stock        Additional     Common                       Total
                                -----------------------    Paid-In        Stock      Accumulated   Stockholders'
                                  Shares      Amount       Capital      Subscribed     Deficit        Equity
                                ----------  -----------  ------------  ------------  ------------  ------------
<S>                             <C>         <C>          <C>           <C>           <C>           <C>
BALANCE, July 1, 1999           6,003,170   $ 3,169,034  $    30,000   $   664,024   $(1,854,425)  $ 2,008,633

Proceeds from stock                83,003       664,024            -      (664,024)            -             -
    subscribed
Issuance of common stock          111,000       999,980            -             -             -       999,980
Private placement               1,255,900     3,711,719            -     1,475,240             -     5,186,959
Options exercised with cash       105,000         6,020            -         6,000             -        12,020
    proceeds
Options exercised without cash     31,596             -      265,102             -             -       265,102
    proceeds
Compensation cost for options           -             -    2,352,987             -             -     2,352,987
    granted
Compensation for warrants               -             -      684,738             -             -       684,738
    granted
Unearned stock-based                    -             -   (1,180,196)                          -    (1,180,196)
    compensation
Net loss                                              -            -             -    (3,287,659)   (3,287,659)
                                ----------  -----------  ------------  ------------  ------------  ------------

BALANCE, June 30, 2000          7,589,669     8,550,777    2,152,631     1,481,240    (5,142,084)    7,042,564

Proceeds from stock                     -     1,481,240            -    (1,481,240)            -             -
    subscribed and options
    exercised with cash
    proceeds
Adjust options exercised in        (5,996)            -      (43,852)            -             -       (43,852)
    2000 without cash proceeds
Amortization of unearned                -             -      795,348                           -       795,348
    stock-based compensation
Compensation cost for options           -             -      619,237             -             -       619,237
    granted in 2001
Net loss                                -             -            -             -    (3,604,185)   (3,604,185)
                                ----------  -----------  ------------  ------------  ------------  ------------

BALANCE, June 30, 2001          7,583,673   $10,032,017  $ 3,523,364   $         -   $(8,746,269)  $ 4,809,112
                                ==========  ===========  ============  ============  ============  ============
</TABLE>

       See independent auditors' reports and accompanying notes to financial
                                   statements.


                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                      CYBER MERCHANTS EXCHANGE, INC.

                                         STATEMENTS OF CASH FLOWS

                                                                                    Year Ended June 30,
                                                                                --------------------------
                                                                                    2000          2001
                                                                                ------------  ------------
<S>                                                                             <C>           <C>
Cash flows from operating activities:
 Net loss                                                                       $(3,287,659)  $(3,604,185)
  Adjustments to reconcile net loss to net cash used in
   operating activities:
    Depreciation and amortization                                                    36,545        77,582
    Amortization of negative goodwill                                               (25,000)     (333,332)
    Equity in losses on investments in overseas joint ventures                       74,573       525,558
    Impairment write-down on investment in ABNet                                          -       148,879
    Provision for doubtful accounts                                                   7,803             -
    Compensation expense for options and warrants granted                         2,122,631     1,370,733
 Changes in operating assets and liabilities:
   Accounts receivable                                                              (54,346)     (312,707)
   Interest receivable                                                                    -       (37,043)
   Deposits and other                                                                (5,843)       (2,511)
   Accounts payable and accrued expenses                                            460,975      (298,333)
   Deferred revenue                                                                  (3,510)            -
                                                                                ------------  ------------
Net cash used in operating activities                                              (673,831)   (2,465,359)
                                                                                ------------  ------------

Cash flows from investing activities:
  Gross investment in certificates of deposit                                    (2,399,800)            -
  Sales of certificates of deposit                                                        -     1,100,000
  Investment in ABNet                                                            (1,000,000)            -
  Investment in overseas joint ventures, net of software sales                            -      (900,000)
  revenue received
  Investment in convertible note receivable                                               -      (600,000)
  Purchases of property and equipment                                               (61,942)      (84,892)
                                                                                ------------  ------------
Net cash used in investing activities                                            (3,461,742)     (484,892)
                                                                                ------------  ------------
Cash flows from financing activities:
  Proceeds from borrowings under line of credit                                     299,834       900,000
  Repayments of borrowings under line of credit                                    (299,834)     (500,000)
  Proceeds received from stock sales and collection of
  subscriptions receivable                                                        4,814,703     1,481,240
                                                                                ------------  ------------
Net cash provided by financing activities                                         4,814,703     1,881,240
                                                                                ------------  ------------
Net increase (decrease) in cash and cash equivalents                                679,130    (1,069,011)

Cash and cash equivalents, beginning of year                                        595,265     1,274,395
                                                                                ------------  ------------
Cash and cash equivalents, end of year                                          $ 1,274,395   $   205,384
                                                                                ============  ============
Supplemental disclosure of cash flow information:
 Cash paid during the year for:
   Interest                                                                     $     4,187   $     4,478
                                                                                ============  ============

   Income taxes                                                                 $       800   $       800
                                                                                ============  ============
</TABLE>

See  accompanying  notes  to  financial statements for additional information on
non-cash  investing  and  financing  activities.

       See independent auditors' reports and accompanying notes to financial
                                   statements.


                                      F-6
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Cyber  Merchants Exchange, Inc. (the "Company" or "C-Me"), was established under
the laws of the State of California in July 1996 and was formerly known as World
Wide  Magic  Net,  Inc.

C-Me  is  a  business-to-business  electronic international trading company that
creates  efficiencies  for  retailers  to  source  and  finance  international
purchases.  C-Me  builds  private extranets, Internet Sourcing Networks, for its
retail  partners.  Vendors  may  subscribe  to  a  retailer's ISN, by paying the
Company  a  subscription  fee and/or transaction fee.  The Company also provides
vendors with a Virtual Trade Show, a vertical marketplace for vendors to display
their  product  in an open environment accessible to any buyer around the world.
In  addition,  C-Me's  Global  Financial  Platform  (patent pending) allows U.S.
retailers  to purchase overseas merchandise without the need of issuing a Letter
of  Credit.  Under  this  platform,  a  retailer's credit is pre-approved by CIT
under  standard  net  30-day  terms  on international purchases and the overseas
manufacturer can get an advance of up to 80% of the cost of the merchandise from
Bank  SinoPac.

USE  OF  ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted  in the United States of America requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and  disclosure of contingent assets and liabilities at the date of
the  financial  statements  and  the  reported  amounts of revenues and expenses
during  the  reporting period.  Among the more significant estimates included in
these  financial  statements  are the estimated allowance for doubtful accounts,
the  realizability  of  the  Company's  investments  in affiliated companies and
convertible  note receivable and the valuation allowance for deferred income tax
assets.  Actual  results  could  differ  from  those  estimates.

RISKS  AND  UNCERTAINTIES

The  Company  operates  in  a  highly  competitive  consumer  product  and
high-technology  environment  that is subject to intense competition, government
regulation  and  rapid  change.  The  Company's  operations  are  subject  to
significant  risk  and  uncertainties including financial, operational and other
risks  associated  with  the  business, including the potential risk of business
failure.

CURRENT  VULNERABILITY  DUE  TO  CERTAIN  CONCENTRATIONS

Certain  financial  instruments,  principally  trade  receivables,  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 has invested $2,800,000 in certificates of deposit at five different
banks  as  of  June  30,  2001.  These  certificates  mature within the next six
months.  The  amount  invested  at each bank exceeds the FDIC insurance coverage
limit of $100,000, resulting in approximately $2,300,000 being uninsured at June
30,  2001.  At June 30, 2001, the Company has accrued interest income of $35,243
related  to  these  certificates  of  deposit.


                                      F-7
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)


Two  customers  account  for  approximately 83% of sales for fiscal 2001.  There
were  no  such concentrations for fiscal 2000.  Two customers account for 86% of
accounts receivable at June 30, 2001.  The loss of either of these customers may
have  a  material  impact  on  the  Company's  financial  statements.

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.

INVESTMENTS  IN  OVERSEAS  JOINT  VENTURES  AND  ABNET

Investments  in  overseas  joint  ventures  are  accounted  for under the equity
method.  Investment  in  ABNet is accounted for under the cost method and valued
at  the  lower  of  cost  or  net  realizable  value  with  any impairment being
recognized  in  the  statements  of operations at the time the impairment exists
(see  below).

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.

Maintenance,  repairs  and  minor  renewals  are  charged directly to expense as
incurred.  Additions  and betterments to property and equipment are capitalized.
When  assets  are  disposed  of,  the  related cost and accumulated depreciation
thereon are removed from the accounts and any resulting gain or loss is included
in  the  statement  of  operations.

IMPAIRMENT  OF  LONG-LIVED  ASSETS

Statement  of  Financial  Accounting  Standards  No.  121,  "Accounting  for the
Impairment  of  Long-Lived  Assets  and  Long-Lived  Assets  to be Disposed Of,"
establishes  guidelines  regarding  when impairment losses on long-lived assets,
which  include  property  and equipment, investments in overseas joint ventures,
convertible  note  receivable, and investment in ABNet, should be recognized and
how impairment losses should be measured.  The Company periodically reviews such
assets  for  possible  impairments  and  expected  losses,  if any, are recorded
currently.  Based on its analysis, management determined that it has incurred an
impairment  loss  of  $148,879 in its investment in ABNet, which was recorded in
the  accompanying  statement  of  operations  for  the year ended June 30, 2001.

REVENUE  RECOGNITION

Net  revenues  include  amounts  earned  under  product  transaction  sales  and
subscriptions.  Product  transaction  revenues  are  recorded in accordance with
EITF 99-19 "Reporting Revenue Gross as a Principal versus net as an Agent".  The
Company recognizes net revenues from product transaction sales when title to the
product  passes  to  the  customer,  net  of  factoring  fees.  For  all product
transactions with its customers, the Company acts as a principal, takes title to
all  products  sold upon shipment, bears inventory risk for return products that
the  Company  is  not  able  to return to the supplier, although these risks are
mitigated  through  arrangements with factorers, shippers and suppliers.  Due to
the  Company  not bearing credit risk, the Company records the respected revenue
on  a net basis.  However, for financial reporting purposes the Company presents
the  details  of  gross  transaction  sales  and  related  costs of sales in the
accompanying statements of operations.  The Company also recognizes revenue from
monthly  subscription fees.  Subscriber fees represent revenue generated through


                                      F-8
<PAGE>
one-time,  non-refundable setup fees and monthly hosting fees.  Subscription and
subscriber fees are recognized as revenue after the services have been provided.

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)

In  December  1999, the Security and Exchange Commission issued Staff Accounting
Bulletin  101  ("SAB  101"),  "Revenue  Recognition"  which  outlines  the basic
criteria  that  must  be  met  to  recognize  revenue  and  provide guidance for
presentation  of  revenue  and  for  disclosure  related  to revenue recognition
policies  in  financial  statements filed with Security and Exchange Commission.
The  effective  date  of  this pronouncement is the fourth quarter of the fiscal
year  beginning  after December 15, 1999.  The adoption of SAB101 in fiscal 2001
did not have a material impact on the Company's financial position or results of
operations.

INCOME  TAXES

The  Company  accounts  for income taxes under Statement of Financial Accounting
Standards  No. 109 ("SFAS 109"), "Accounting for Income Taxes."  Under SFAS 109,
deferred  tax  assets  and  liabilities  are  recognized  for  the  future  tax
consequences  attributable  to  differences  between  the  financial  statement
carrying  amounts  of  existing  assets and liabilities and their respective tax
bases.  Deferred tax assets and liabilities are measured using enacted tax rates
expected  to  apply  to  taxable  income  in  the years in which those temporary
differences  are  expected  to  recovered  or  settled.  A  valuation  allowance
is  provided for significant deferred tax assets when it is more likely than not
those  assets  will  not  be  recovered.

STOCK-BASED  COMPENSATION

The  Company accounts for stock-based compensation issued to employees using the
intrinsic  value  based  method  as  prescribed  by  Accounting Principles Board
Opinion  No.  25  ("APB 25"), "Accounting for Stock issued to Employees."  Under
the  intrinsic  value  based  method, compensation is the excess, if any, of the
fair  value  of  the  stock at the grant date or other measurement date over the
amount  an  employee  must  pay  to acquire the stock.  Compensation, if any, is
recognized  over  the  applicable  service  period, which is usually the vesting
period.

The  Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting  Standards  No.  123  ("SFAS  123),  "Accounting  for  Stock-Based
Compensation."  This  standard,  if  fully  adopted,  changes  the  method  of
accounting  for  employee stock-based compensation plans to the fair value based
method.  For  stock  options  and  warrants,  fair  value is determined using an
option  pricing model that takes into account the stock price at the grant date,
the  exercise  price,  the expected life of the option or warrant and the annual
rate  of  quarterly dividends.  Compensation expense, if any, is recognized over
the  applicable  service  period,  which  is  usually  the  vesting  period.

The  adoption  of  the  accounting  methodology  of SFAS 123 is optional and the
Company  has  elected to continue accounting for stock-based compensation issued
to  employees  using  APB  25; however, pro forma disclosures, as if the Company
adopted  the  cost  recognition  requirement  under SFAS 123, are required to be
presented  (see  Note  10).

In March 2000, the FASB issued Interpretation No. 44 ("FIN 44"), "Accounting for
Certain Transactions Involving Stock Compensation, an Interpretation of APB 25."
FIN  44  clarifies  the application of APB 25 for (a) the definition of employee
for  purpose of applying APB 25, (b) the criteria for determining whether a plan
qualifies  as a no compensatory plan, (c) the accounting consequence for various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for  an  exchange  of  stock  compensation awards in a business
combination.  The  adoption  of  FIN  44  did  not have a material effect on the
Company's  financial  statements.


                                      F-9
<PAGE>
NOTE  1  -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


LOSS  PER  SHARE

The  Company  has  adopted  Statement  of Financial Accounting Standards No. 128
("SFAS 128"), "Earnings per Share." Under SFAS No. 128, basic earnings per share
is  computed  by  dividing  income  available  to  common  shareholders  by  the
weighted-average  number  of  common shares assumed to be outstanding during the
period  of  computation. Diluted earnings per share is computed similar to basic
earnings  per  share  except  that  the  denominator is increased to include the
number  of  additional  common  shares  that  would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive  (totaling  zero  shares  in  2001  and  2000). Because the Company has
incurred net losses, basic and diluted loss per share are the same as additional
potential  common  shares.

FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS

The  FASB  issued  Statement  of  Financial  Accounting Standards No. 107 ("SFAS
107"),  "Disclosures  About  Fair  Value  of  Financial  Instruments."  SFAS 107
requires  disclosure  of fair value information about financial instruments when
it is practicable to estimate that value.  The carrying amounts of the Company's
cash, accounts receivable, accounts payable, accrued expenses and line of credit
borrowings  approximate  their  fair  values due to the short-term maturities of
those  financial  statements.  The fair value of the convertible note receivable
is  not  determinable  as  the  transaction  was  with  a non-public company and
comparable  instruments  were  not  available  to  analyze.

ADVERTISING

The  Company expenses the cost of advertising when incurred as selling expenses.
Advertising  expenses were $35,445 and $63,650 for the years ended June 30, 2001
and  June  30,  2000,  respectively.

COMPREHENSIVE  INCOME

The  Company  has  adopted  Statement  of Financial Accounting Standards No. 130
("SFAS  130"), "Reporting Comprehensive Income."  SFAS 130 establishes standards
for  reporting  and display of comprehensive income and its components in a full
set  of  general-purpose financial statements.  The adoption of SFAS 130 has not
materially  impacted  the Company's financial position or results of operations,
as  the  Company  has  no  items  of  comprehensive  income.

SEGMENTS  OF  AN  ENTERPRISE  AND  RELATED  INFORMATION

The  Company  has  adopted  Statement  of Financial Accounting Standards No. 131
("SFAS  131"),  "Disclosures  About  Segments  of  an  Enterprise  and  Related
Information."  SFAS  131  changes  the  way  public companies report information
about  segments  of  their  business  in  their  annual financial statements and
requires  them to report selected segment information in their quarterly reports
issued  to  shareholders.  It  also  requires  entity-wide disclosures about the
products  and  services  and entity provides, the material countries in which it
holds assets and reports revenues and its major customers.  As substantially all
of  the  Company's  operating  expenses,  loss  from operations and identifiable
assets  are from the transaction sales segment, the Company has not made segment
disclosures  in  the  accompanying  financial  statements.


                                      F-10
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)


DERIVATIVE  INSTRUMENTS  AND  HEDGING  ACTIVITIES

In  June  1998,  the FASB issued Statement of Financial Accounting Standards No.
133  ("SFAS  133"),  "Accounting  For  Derivative  Instruments  and  Hedging
Activities."  SFAS  133  establishes  accounting  and  reporting  standards  for
derivative  instruments,  including  certain  derivative instruments embedded in
other  contracts,  and  for  hedging  activities.  It  requires  that  an entity
recognize  all  derivatives as either assets or liabilities on the balance sheet
at  their  fair  value.  This  statement,  as  amended  by  SFAS 137 and 138, is
effective  for  financial statements for all fiscal quarters of all fiscal years
beginning  after  June  15,  2000.  The adoption of this standard did not have a
material  impact  on  the Company's results of operations, financial position or
cash  flows,  as  it  currently  does  not  engage  in any derivative or hedging
activities.

ACCOUNTING  FOR  WEB  SITE  DEVELOPMENT  COSTS

In  March  2000, the Emerging Issues Task Force reached a consensus on Issue No.
00-2, "Accounting for Web Site Development Costs" ("EITF 00-2") to be applicable
to  all web site development costs incurred for the quarter beginning after June
30,  2000.  The  consensus  states that for specific web site development costs,
the  accounting  for such costs should be accounted for under AICPA Statement of
Position  98-1  ("SOP  98-1").  "Accounting  for  the Costs of Computer Software
Developed or Obtained for Internal Use."  The adoption of EITF 00-2 did not have
a  material  effect  on  the  Company's  financial  statements  as  most  of the
capitalization  was  incurred  in fiscal year ended June 30, 2000 or prior.  Web
site  maintenance  costs  incurred and expensed under general and administrative
expenses in the accompanying statements of operations were $232,491 and $345,685
for  the  years  ended  June  30,  2000  and  2001,  respectively.

RECENT  ACCOUNTING  PRONOUNCEMENT

In  July  2001,  FASB issued Statement of Financial Accounting Standards No. 141
("SFAS  141"),  "Business  Combinations"  which  is  effective  for  business
combinations  initiated  after June 30, 2001. SFAS 141 eliminates the pooling of
interest  method  of  accounting for business combinations and requires that all
business  combinations occurring on or after July 1, 2001 be accounted for under
the purchase method. The Company does not expect SFAS No. 141 to have a material
impact  on  its  financial  statements.

In  July  2001,  FASB issued Statement of Financial Accounting Standards No. 142
("SFAS  142"),  "Goodwill  and  Other Intangible Assets," which is effective for
fiscal years beginning after December 15, 2001.  Early adoption is permitted for
entities with fiscal years beginning after March 15, 2001 provide that the first
interim  financial statements have not been previously issued.  SFAS 142 address
how  intangible  assets  that are acquired individually or with a group of other
assets  should  be  accounted  for  in  the  financial  statements  upon  their
acquisition  and  after  they  have  been  initially recognized in the financial
statements.  SFAS  142  requires  that  goodwill and intangible assets that have
indefinite  useful lives not be amortized but rather be tested at least annually
for impairment, and intangible assets that have finite useful lives be amortized
over  their  useful  lives.  SFAS  142  provides  specific  guidance for testing
goodwill  and  intangible  assets that will not be amortized for impairment.  In
addition, SFAS  142 expands the disclosure requirements about goodwill and other
intangible  assets  in  the  years  subsequent to their acquisition.  Impairment
losses  for goodwill and indefinite-life intangible assets that arise due to the
initial application of SFAS 142 are to be reported as resulting from a change in
accounting  principle.  However,  goodwill  and intangible assets acquired after
June  30,  2001  will  be


                                      F-11
<PAGE>
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES  (CONTINUED)


subject  immediately  to  be provision of SFAS 142.  The Company does not expect
SFAS  142  to  have  a  material  effect  on  its  financial  statements.

In  July  2001,  the FASB issued Statement of Financial Accounting Standards No.
143  ("SFAS  143"),  "Accounting  for  Asset  Retirement  Obligations," SFAS 143
establishes  standards  associated  with  the  retirement of tangible long-lived
assets  and  the associated asset retirement costs.  This statement is effective
for  financial statements issued for fiscal years beginning after June 15, 2002.
The
Company  has  not  yet  assessed  the  impact  of this standard on its financial
statements,  but  does  not  expect  the  impact  to  be  material.

RECLASSIFICATION

Certain reclassifications have been made to conform the fiscal 2000 presentation
with  the  current  year's  presentation.

NOTE  2  -  AGREEMENT  WITH  CIT  AND  BANK  SINOPAC

On  October  19,  2000,  the  Company and CIT Commercial Services entered into a
Factoring  Agreement.  Under the agreement, the Company sells and assigns to CIT
all  accounts receivable arising from transaction sales.  CIT assumes the credit
risk  on  a  non-recourse  basis  on  each  account  approved.  For  each  sales
transaction  processed  to  CIT  for  collection,  CIT  will  charge 1.5% of the
assigned  invoice value as their factoring fee.  As of June 30, 2001 and for the
year  then  ended,  the  amount  of  factoring  has  not been significant to the
Company.

NOTE  3  -  PROPERTY  AND  EQUIPMENT

Property and equipment consist of the following at June 30, 2001:


Software                                                              $ 126,028
Computer equipment                                                      100,389
Furniture and fixtures                                                   29,783
Office equipment                                                         23,420
Leasehold improvements                                                    7,261
                                                                      ----------
                                                                        286,881
Accumulated depreciation and amortization                              (215,634)
                                                                      ----------
                                                                      $  71,247
                                                                      ==========


NOTE  4  -  INVESTMENT  IN  ABNET  (A  RELATED  PARTY)

As  disclosed  in  Note  9,  the  Company  received  proceeds  of  approximately
$1,000,000  in  2000 through the issuance of 111,000 shares of its common stock.
The  shares  were  purchased  by  Abest  Tech.  Company,  Ltd.  d.b.a.  ABNet.tw
("ABNet").  The  Company,  in  turn,  acquired  1,500,000  shares  of  ABNet,
representing  15% of the outstanding common stock of ABNet, for $1,000,000.  The
net  result  of  the transactions is an investment in ABNet of $1,000,000, which
represents  the then fair value of the ABNet's common stock issued.  The Company
accounts  for its investment in ABNet under the cost method as it has only a 15%
interest  and  has  no  ability  to  influence the decisions of management.  For


                                      F-12
<PAGE>
NOTE  4  -  INVESTMENT  IN  ABNET  (A  RELATED  PARTY)  (CONTINUED)


the  year  ended  June  30,  2001,  the Company recognized an impairment loss of
$148,879  based  on management's assessment of the operations and future revenue
of  ABNet  (see  Note  1).

NOTE  5  -  INVESTMENTS  IN  OVERSEAS  JOINT  VENTURES


On December 22, 1999, the Company entered into an agreement with ABNet to form a
joint  venture  in  Taiwan  named  C-Me  Technology Co., Ltd. ("C-Me Taiwan") to
facilitate  the  buying  and selling activities between U.S.-based retailers and
Taiwan-based  exporters  through  the  Company's web-based communication system.
The Company invested $300,000 (which was used to purchase software back from the
Company)  for  a  30% interest in February 2000 and accounts for this investment
under  the  equity  method.   The Company invested an additional $200,000 for an
additional  10%  interest  in  May  2001.  For the years ended June 30, 2001 and
2000,  the  Company recognized an investment loss in the accompanying statements
of  operations  from  this  joint venture of $168,768 and $74,573, respectively,
based  on  the  Company's  equity  ownership  percentage.

On March 11, 2000, the Company entered into an agreement with Vickem Patana Co.,
Ltd.,  a  Thailand  Corporation, to form a joint venture named E-SouthEast Asia,
Inc. ("E-SEA"), a Delaware corporation, which will use the Company's proprietary
web-based communication system to facilitate the front-end merchandise sourcing.
The  Company invested $300,000 during fiscal year ended June 30, 2000 (which was
used to purchase software back from the Company).  During fiscal year ended June
30,  2001,  the  Company  invested  an  additional  $100,000  for a total equity
interest  of  40% and accounts for this investment under the equity method.  For
the  years  ended  June  30, 2001 and 2000, the Company recognized an investment
loss  in  the  accompanying  statements of operations from this joint venture of
$172,221  and  $0,  respectively,  based  on  the  Company's  equity  ownership
percentage.

On  March  25,  2000,  the  Company  entered into an agreement with Good Support
International Limited, a British Virgin Islands Company, to form a joint venture
named Global Purchasing Dotcom, Inc. ("GP.com"), a Washington corporation, which
will  focus  on  implementing  several targeted businesses in China's e-commerce
market.  The  Company  invested  $400,000 during fiscal year ended June 30, 2000
(which was used to purchase software back from the Company).  During fiscal year
ended  June  30,  2001,  the Company invested an additional $600,000 for a total
interest of 50% and accounts for this investment under the equity method.  As of
June  30,  2001  and  2000,  the  Company  recognized  an investment loss in the
accompanying  statements  of  operations from this joint venture of $184,569 and
$0,  respectively,  based  on  the  Company's  equity  ownership  percentage.

During  fiscal year 2000, each of C-Me Taiwan, E-SEA, and GP.com entered into an
agreement  to  purchase  the  Company's  software  for  $300,000,  $300,000  and
$400,000,  respectively.  The  Company  has  reduced  the carrying amount of its
investment  in  each  of  the joint ventures by the amount of the software sale.
These  amounts  will  be  recognized in income as an adjustment to the Company's
investments  in  the  overseas  joint  ventures  on a straight-line basis over a
three-year period, the estimated life of the software sold.  As of June 30, 2001
and 2000, the Company recognized income in the statements of operations from the
amortization  of  these  software  sales  in the amount of $333,332 and $25,000,
respectively.  The respective joint ventures are amortizing the cost of software
over  the  same  three-year period;  As a result, the total amortization expense
recognized  was  $333,332,  which  is  a  portion  of  the total losses on joint
ventures  of  $1,227,496  (see  below).


                                      F-13
<PAGE>
NOTE  5  -  INVESTMENTS  IN  OVERSEAS  JOINT  VENTURES  (CONTINUED)

As  of  June  30,  2001,  and  for  the  years ended June 30, 2001 and 2000, the
investment  in  respective  joint  ventures  are  summarized  as  follows:

<TABLE>
<CAPTION>
                                   C-Me Taiwan     E-SEA        GP.com        Total
---------------------------------------------------------------------------------------
                                    (Audited)    (Audited)   (Unaudited)
<S>                               <C>            <C>         <C>           <C>
Net investment at July 1, 1999    $          -   $       -   $         -   $         -

Investment                             300,000     300,000       400,000     1,000,000
Negative goodwill                     (300,000)   (300,000)     (400,000)   (1,000,000)
Amortization of negative
  goodwill                              25,000           -             -        25,000
Equity in loss of joint ventures       (74,573)          -             -       (74,573)
                                  -------------  ----------  ------------  ------------
Net investment at June 30, 2000        (49,573)          -             -       (49,573)


Investment                             200,000     100,000       600,000       900,000
Amortization of negative
  goodwill                             100,000     100,000       133,332       333,332
Equity in loss of joint ventures      (168,768)   (172,221)     (184,569)     (525,558)
                                  -------------  ----------  ------------  ------------
Net investment at June 30, 2001   $     81,659   $  27,779   $   548,763   $   658,201
                                  =============  ==========  ============  ============
</TABLE>

The  following  is  the condensed financial information of each of the Company's
overseas  joint  ventures  as  of  and  for  the  year-ended  June  30,  2001:

<TABLE>
<CAPTION>
                                   C-Me Taiwan     E-SEA        GP.com        Total
---------------------------------------------------------------------------------------
                                    (Audited)    (Audited)   (Unaudited)
<S>                               <C>            <C>         <C>           <C>
Current assets                    $    104,632   $ 310,723   $ 1,243,825   $ 1,659,180
                                  -------------  ----------  ------------  ------------
Total assets                      $    370,947   $ 619,939   $ 1,630,862   $ 2,621,748
                                  =============  ==========  ============  ============

Current liabilities               $    134,947   $     492   $         -   $   135,439
                                  -------------  ----------  ------------  ------------
Total liabilities                 $    134,947   $     492             -   $   135,439
                                  =============  ==========  ============  ============

Total stockholders' equity        $    236,000   $ 619,447   $ 1,630,862   $ 2,486,309


Sales                             $     13,940   $  10,766   $     6,075   $    30,781
                                  -------------  ----------  ------------  ------------
Cost of sales                           65,953         370             -   $    66,323
                                  =============  ==========  ============  ============

Net loss                          $   (478,497)  $(379,861)  $  (369,138)  $(1,227,496)
                                  =============  ==========  ============  ============
</TABLE>


                                      F-14
<PAGE>
NOTE  6  -  CONVERTIBLE  NOTE  RECEIVABLE


In  June  2001, the Company advanced $600,000 to an unrelated non-public company
for a convertible note receivable ("Note").  The Note, which accrues interest at
6%,  is  payable  in  monthly  interest  installments, with the entire principal
balance  plus  any  unpaid  and accrued interest due June 12, 2003.  The Note is
convertible  into common stock at the discretion of the Company at $3 per share,
which  is estimated by both the Company and the note maker to be the fair market
value  of  the  common  stock.  Total  interest accrued related to this note was
$1,800  and  is  recorded  under accrued interest receivable in the accompanying
balance  sheet  at  June  30,  2001.

NOTE  7  -  LINE  OF  CREDIT

The  Company  has  a  non-revolving line-of-credit (the "Line") with a financial
institution,  which  expired  on June 22, 2001 and provided for borrowings up to
maximum  of  $900,000.  The Line, which accrued interest at the prime rate (7.5%
at June 30, 2001), was collaterized by certain certificates of deposits totaling
approximately  $1,000,000  and was guaranteed by an officer of the Company.  The
Line  contained  financial and non-financial covenants, which the Company was in
compliance  with  at  June  30, 2001.  The Company paid the line in full in July
2001.

NOTE  8  -  INCOME  TAXES

Income  tax expense for the years ended June 30, 2001 and 2000 differed from the
amounts  computed  by applying the U.S. Federal income tax rate of 34 percent to
the  loss  before  income  taxes  as  a  result  of  the  following:

<TABLE>
<CAPTION>
                                                               2001         2000
                                                          ------------  ------------
<S>                                                       <C>           <C>
Computed "expected" tax (benefit) expense                 $(1,225,000)  $(1,117,000)

Reduction in income taxes resulting from:
    Change in valuation allowance                           1,329,000     1,214,000
    State and local income taxes, net of federal benefit     (103,200)      (95,285)
                                                          ------------  ------------

                                                                 $800        $1,715
                                                          ============  ============
</TABLE>

The  tax effects of temporary differences that give rise to significant portions
of  the  deferred  tax  assets  at  June  30,  2001  are  presented  below:

Deferred tax assets:
    Stock option expense and other                                  $1,200,000
    Net operating loss carryforwards                                 2,200,000
                                                                    -----------

       Total gross deferred tax assets                               3,400,000

       Less valuation allowance                                     (3,400,000)
                                                                    -----------

       Net deferred tax assets                                      $        -
                                                                    ===========


The  net  change  in  the total valuation allowance for the years ended June 30,
2001  and  2000  was  an  increase  of  $1,329,000  and 1,214,000, respectively.


                                      F-15
<PAGE>
NOTE  8  -  INCOME  TAXES  (CONTINUED)


As  of  June  30,  2001,  the  Company  had  net operating loss carryforwards of
approximately  $5,700,000  and  $2,850,000  available  to  offset future taxable
Federal  and  state  income,  respectively.  The  carryforward amounts expire in
varying  amounts  between  2011  and  2021.

Due  to  the change in ownership provisions of the Internal Revenue Code Section
382, net operating loss carryforwards for Federal and State income tax reporting
purposes  are  subject  to  annual  limitations.  Should an additional change in
ownership occur, net operating loss carryforwards may be limited as to their use
in  future  years.

NOTE  9  -  STOCKHOLDERS'  EQUITY

During  fiscal  2000, the Company received $664,024 in cash for 83,003 shares of
common  stock  subscribed  at  June  30,  1999.

On  February  9,  2000,  the  Board  of  Directors of the Company authorized the
issuance  of 111,000 shares of its restricted common stock at $9.01 per share to
raise  $1,000,000 for the purpose of its investment in ABNet.  The cash proceeds
of  this  issuance  were  $999,980,  net  of  wire  expenses  of  $20.

In May 2000, the Company conducted a private placement to issue 1,255,900 shares
of  its  common  stock at $4.878 per share.  The private placement was closed on
June  30,  2000  with  net  proceeds  of  $5,186,959, net of issuing expenses of
$939,377.  Among  the  net proceeds, $1,475,240 was received during fiscal 2001.

During the fiscal year ended June 30, 2000, a total of 105,000 options under the
Company's  1996  Stock  Option  Plan  had  been exercised.  The Company received
proceeds of $12,020, of which $6,000 was received during fiscal 2001, and issued
105,000  shares  of  its  common  stock  accordingly.

The  Company  adopted  a cashless policy that allows the stock option holders to
exercise  their options without paying any cash.  During the year ended June 30,
2000,  the  Company  issued  a  total  of 31,596 shares of its common stock, and
recognized  an  additional  stock  compensation expense of $265,102.  During the
year  ended  June  30,  2001,  the  Company  determined  that  5,996 shares were
incorrectly  issued  and that these shares were cancelled, accordingly resulting
in  a  $43,852  reduction  in  stock  compensation  expense.

NOTE  10  -  STOCK  OPTIONS  AND  WARRANTS

OPTIONS

The  Company's 1996 Stock Option Plan (the "1996 Plan") provides for granting of
stock options to employees and non-employee directors.  The Company has reserved
250,000  shares of common stock for issuance under the 1996 Plan.  The terms and
conditions  of grants of stock options are determined by the Board of Directors.
Generally,  one-half of the granted options are exercisable after the employee's
first  year  of employment.  The remaining options are exercisable after the end
of  the  employee's  third  year of employment.  The options granted will expire
within  three  months  after  termination  of  employment.


                                      F-16
<PAGE>
NOTE  10  -  STOCK  OPTIONS  AND  WARRANTS  (CONTINUED)


During  the  year  ended June 30, 2000, the Company granted 70,000 options under
the  1996 Plan to all directors for their service during the year ended June 30,
1999  and  35,000 options to four employees as an incentive at an exercise price
of  $0.40 per share.  The Company recognized total stock compensation expense of
$275,800  in  the  statement  of  operations  for  the year ended June 30, 2000.
During  the  year  ended  June  30, 2001, 2,500 of these options were cancelled.

The  Company's 1999 stock option plan (the "1999 Plan") provides for granting of
stock  options  to  employees,  officers, directors, and other entities who have
made  contributions to the Company. The Company has reserved 2,000,000 shares of
common stock for issuance under the 1999 Plan. The Board of Directors determines
the  terms  and  conditions  of  granting  stock options. Generally, the vesting
period  is two years, allocated as follows: the first 25% of options granted are
exercisable after the first six months of employment, then 4.16% are vested each
month  thereafter.  The  1999  Plan  provides for the useful life of the options
granted  to  be  10  years  starting from the date of grant. The options granted
expire  within three months after the termination of employment. During the year
ended  June  30,  2000,  the  Company  granted  a  total of 1,655,315 options to
employees,  directors,  officers,  consultants,  attorneys, finders, and outside
sales  representatives.  The  exercise  prices of options granted vary and range
from  $3.25  to  $13.12. The Company applied APB Opinion No. 25: "Accounting for
Stock  Issued  to  Employees"  and related interpretations in accounting for its
stock option granted to employees. The Company applies SFAS 123: "Accounting for
Stock-Based  Compensation"  to  stock  options  granted  to  non-employees. As a
result,  the  Company will recognize a total non-cash stock compensation expense
of  $2,077,187  over  the  vesting  period  of  two  years of which $896,991 and
$795,348 was recognized in the statements of operations for the years ended June
30,  2000  and  2001,  respectively.

During  the  year  ended  June  30,  2001 the Company granted a total of 353,016
options  to  employees,  directors,  officers,  consultants,  and  outside sales
representatives.  The  exercise  prices  of  options granted vary and range from
$4.878  to  $6.08.  The Company applies APB Opinion No. 25 "Accounting for Stock
Issued  to  Employees"  and  related interpretations in accounting for its stock
option  plans.  As  a  result,  the  Company  recognized  total  non-cash  stock
compensation  expense  of  $619,237  in the statement of operations for the year
ended  June  30,  2001.


                                      F-17
<PAGE>
NOTE  10  -  STOCK  OPTIONS  AND  WARRANTS  (CONTINUED)


A summary of changes in stock options during each year is presented below:

                                                      Weighted Average
                                      Stock Options    Exercise Price
                                      --------------  -----------------

Balance, July 1, 1999                       120,000   $            0.15

Options granted                           1,760,315                4.10
Options cancelled                           (50,912)               2.63
Options exercised                          (136,596)               0.60
                                      --------------  -----------------
Balance, June 30, 2000                    1,692,807                4.33

Options granted                             353,016                5.06
Options adjustment                            5,996                0.40
Options cancelled                          (314,280)               6.96
                                      --------------  -----------------

Balance, June 30, 2001                    1,737,539   $            4.02
                                      ==============  =================

Options exercisable at June 30, 2001      1,525,466   $            4.00
                                      ==============  =================

The  following  table summarizes information about the stock options outstanding
at  June  30,  2001:


                        Options Outstanding          Options Exercisable
                  --------------------------------  ---------------------
                             Weighted
                              Average    Weighted              Weighted
                             Remaining    Average               Average
                            Contractual  Exercise              Exercise
Exercise Price    Number       Life        Price     Number      Price
---------------  ---------  ----------  ----------  ---------  ---------

0.40               92,500   7.35 years  $    0.40      92,500  $    0.40
3.00 to $3.50   1,061,500   8.30 years  $    3.25     923,020  $    3.26
4.00 to $13.12    583,539   8.91 years  $    5.98     509,946  $    5.99
                ----------  ----------  ----------  ---------  ---------
Total           1,737,539   8.19 years  $    4.02   1,525,466  $    4.00
==============  ==========  ==========  ==========  =========  =========


                                      F-18
<PAGE>
NOTE  10  -  STOCK  OPTIONS  AND  WARRANTS  (CONTINUED)


The fair value of the stock options granted during the years ended June 30, 2000
and  2001  was $3,426,343 and $902,088, respectively, on the date of grant using
the  Black  Scholes  option-pricing model.  The pricing assumptions used were as
follows:

<TABLE>
<CAPTION>
                                   Year Ended      Year Ended
                                 June 30, 2000   June 30, 2001
                                 --------------  --------------
<S>                              <C>             <C>
Discount rate - bond yield rate    5.66 to 6.89           4.75%

Volatility                       16.94 to 17.29         107.36%

Expected life                               2-5             10

Expected dividend yield                       -              -
                                 ==============  ==============
</TABLE>


The  Company applies APB Opinion No. 25 in accounting for its options granted to
employees.  Had  the  Company determined the 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 amounts indicated below:

<TABLE>
<CAPTION>
                                                        June 30,           June 30,
                                                          2000              2001
                                                       ------------    --------------
<S>                                                    <C>             <C>
 Net loss attributable to Common Stock - as reported   $(3,287,659)    $  (3,604,185)
                                                       ============    ==============

 Net loss attributable to Common Stock - pro forma     $(3,822,648)    $  (5,088,599)
                                                       ============    ==============

 Net loss per share - as reported                      $     (0.53)    $       (0.48)
                                                       ============    ==============
 Net loss per share as pro forma                       $     (0.61)    $       (0.67)
                                                       ============    ==============
</TABLE>

WARRANTS

On  October 15, 1997, the Company entered into an agreement with Burlington Coat
Factory Warehouse Corporation ("BCF").  Under the agreement, the Company and BCF
plan  to  jointly  develop  a network whereby participants of the network can do
business  through  the  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 of 828,118 shares as of June 30, 2001) 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,
2001,  the  exercise  price  ranged from $4.00 to $9.00 per share.  The warrants
agreement  will  expire  on  October  15,  2002.

On  February  10, 1999, the Company issued 20,000 common stock warrants, subject
to  certain  conditions and restrictions as defined in the warrant agreement, at
$8.00  per  share  to  an  unrelated  bank


                                      F-19
<PAGE>
NOTE  10  -  STOCK  OPTIONS  AND  WARRANTS  (CONTINUED)


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.  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 $13.20 per share, which is 165% of the Company's
IPO  price.  As  of  June 30, 1999, there were 10,815 warrants outstanding under
these  agreements.  The  warrants  will  expire  on  May  13,  2004.

On  May  25,  2000,  the  Company entered into a joint marketing and cooperation
agreement  with  Factory  2-U.  As  a part of the agreement, the Company granted
Factory  2-U  a  warrant  that  allows  Factory 2-U to purchase up to 10% of the
issued  and  outstanding  shares of the Company's common stock immediately after
its  June 2000 private placement at the same price at which the shares were sold
in  the  private placement.  As of June 30, 2000, the maximum shares Factory 2-U
could purchase were 838,119 shares at $4.878 per share.  In accordance with SFAS
No.  123,  the  Company recognized an expense of $684,738 in the fiscal 2000 for
the  granting  of  this  warrants.  The  warrant  will  expire  on May 25, 2005.

Information  with respect to common stock purchase warrants issued is summarized
as  follows:

                                                  Weighted Average
                                       Warrants    Exercise Price
                                       ---------  -----------------
Balance, June 30, 1999                   707,056  $            4.11
Warrants issued                          989,996  $            4.98
                                       ---------  -----------------
Balance, June 30, 2000 and 2001        1,697,052  $            4.59
                                       =========  =================

Warrants exercisable at June 30, 2001  1,697,052  $            4.59
                                       =========  =================

Additional  information  about  outstanding  warrants  to purchase the Company's
common  stock  at  June  30,  2001  is  as  follows:


                Warrants Outstanding and Exercisable
                ------------------------------------
                             Weighted
                              Average    Weighted
                             Remaining    Average
                            Contractual  Exercise
Exercise Price    Number       Life        Price
---------------  ---------  -----------  ---------
4.00              676,241   1.29 years   $    4.00
4.01 to $4.878    977,663   3.90 years   $    4.74
4.879 and over     43,148   1.63 years   $    9.83
                 ---------  -----------  ---------
Total           1,697,052   2.27 years   $    4.54
==============  ==========  ===========  =========


                                      F-20
<PAGE>
NOTE  12  -  COMMITMENTS  AND  CONTINGENCIES


OPERATING  LEASE

The Company leases office space under a non-cancelable operating lease agreement
that  will  expire  on  October  31,  2002.  Future minimum lease payments under
non-cancelable  operating  leases  as  of  June  30,  2000  are  as  follows:


YEARS ENDING JUNE 30,         AMOUNT
----------------------------  -------
   2002                       $43,000
                              -------
   2003                        15,000

Total minimum lease payments  $58,000
                              =======


Rent  expense  for  the  years  ended  June  30, 2000 and 2001 was approximately
$28,000  and  $74,000,  respectively.

PENDING  LITIGATION

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  13  -  SUBSEQUENT  EVENT

On  July  11,  2001,  the Company announced the establishment of C-Me Hong Kong.
The  joint venture corporation was formed to further expand the Company's global
merchandise  sourcing  and  retail  sales  network.

On  August  7, 2001, the Company announced the establishment of C-ME Korea.  The
joint  venture  corporation  was  formed  to further expand the Company's global
merchandise  sourcing  and  retail  sales  network.


                                      F-21
<PAGE>