UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                ------------------------------------------------
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(MARK  ONE)
[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT  OF  1934

       For  the  Fiscal  Year  Ended  December  31,  2001

[ ]    TRANSITION  REPORT  PURSUANT  TO  SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE  ACT  OF  1934

       For  the  transition  period  from  ________  to  _________.

                        Commission File Number: 333-82493

                     CALIFORNIA MOLECULAR ELECTRONICS CORP.
           (EXACT NAME OF SMALL BUSINESS AS SPECIFIED IN ITS CHARTER)

              Arizona                                    86-0888087
     (STATE OR OTHER JURISDICTION          (I.R.S. EMPLOYER IDENTIFICATION NO.)
    INCORPORATION OR ORGANIZATION)

         50 Airport Parkway,
            San Jose, CA                                    95110
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                  (ZIP CODE)

       Registrant's telephone number, including area code: (408) 451-8404

           Securities registered pursuant to Section 12(b) of the Act:

     TITLE OF EACH CLASS           TITLE OF EACH EXCHANGE ON WHICH REGISTERED
     -------------------           ------------------------------------------

                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                           Common Stock, no par value

     Check  whether the issuer (1) has filed all reports required to be filed by
Section  13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
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 disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K (section 229.405 of this chapter) is not contained herein, 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-K
or  any  amendment  to  this  Form  10-KSB.  [X]

     State issuer's revenues for its most recent fiscal year. $3,481.

     State the aggregate market value of the voting and non-voting common equity
held  by  non-affiliates  computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as of
a  specified  date  within  the  past  60  days.  For  purposes of the foregoing
calculation  only, the issuer has included in the shares owned by affiliates the
beneficial  ownership  of  common  equity  of  officers  and  directors  of  the
registrant  and  members  of  their  families,  and  such inclusion shall not be
construed  as  an  admission  that any such person is an affiliate for any other
purposes.  $2,422,320.

     As  of  March  17,  2002, there were 5,200,586 outstanding shares of Common
Stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

     None.

     Transitional Small Business Disclosure Format (check one):  Yes [ ] No [X]
================================================================================


<PAGE>
<TABLE>
<CAPTION>
                     CALIFORNIA MOLECULAR ELECTRONICS CORP.

                                TABLE OF CONTENTS

                                2001 FORM 10-KSB


ITEM NO.                                                                  PAGE
--------                                                                  ----
<S>       <C>                                                             <C>
                                     PART I
Item 1.   Business                                                           3
Item 2.   Properties                                                         7
Item 3.   Legal Proceedings                                                  7
Item 4.   Submission of Matters to a Vote of Security Holders                7


                                    PART II

Item 5..  Market for the Registrant's Common Stock and Related
          Shareholder Matters                                                7
Item 6..  Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                          8
Item 7.   Financial Statements                                              10
Item 8..  Changes In and Disagreements With Accountants on Accounting
          and Financial Disclosure                                          10

                                    PART III

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

     This  Report  contains  forward-looking  statements  within  the meaning of
Section  27A  of  the Securities Act of 1933, as amended (the "Securities Act"),
and  Section  21E  of  the  Securities  Exchange  Act  of  1934, as amended (the
"Exchange  Act"),  regarding  future events and California Molecular Electronics
Corp.'s  ("CALMEC") plans and expectations that involve risks and uncertainties.
When  used  in  this Report, the words "estimate," "project," "intend," "expect"
and  "anticipate"  and  similar  expressions  are  intended  to  identify  such
forward-looking  statements.  Because  these  forward looking statements involve
risk  and  uncertainties,  actual  results  could  differ  materially from those
expressed  or  implied  by  these  forward-looking  statements  for  a number of
reasons,  including  those  discussed  in the section entitled "Risk Factors" of
CALMEC's Form SB-2 filed with the Securities and Exchange Commission January 31,
2000.  In light of the important factors that can materially affect results, the
inclusion  of  forward-looking  information  herein  should not be regarded as a
representation  by  CALMEC  or any other person that the objectives or plans for
CALMEC  will  be  achieved. The reader is therefore cautioned not to place undue
reliance on the forward-looking statements contained herein, which speak only as
of  the date hereof. CALMEC undertakes no obligation to publicly release updates
or  revisions  to  these  statements.


                                      -2-
<PAGE>
                                     PART I

ITEM  1.  BUSINESS
------------------

     California  Molecular  Electronics  Corp.  ("CALMEC"  or the "Company"), an
Arizona corporation, was incorporated on March 17, 1997.  The Company was formed
to take advantage of a new field of technology in which individual molecules are
used  to  produce  effects  that  are  currently  being  produced  by electronic
circuits.  This  field  is  known  as  "molecular  electronics."  Molecular
electronics seeks to use individual molecules as the component parts of computer
devices,  display  devices,  and  data  storage  devices.

     CALMEC  currently  owns  the patent and trade secret rights to Chiropticene
switching,  a  single-molecule switching technology.  The Company believes these
switches,  one  molecule  in  size,  will  become  key  components  of  future
computational,  optical, and data storage devices.  The Chiropticene switch goes
beyond  the  semiconductor  switch  in  size reduction.  This switch is a single
molecule  that exhibits classical switching properties.  Being only one molecule
in  size,  it  offers  the  promise  of  producing structures thousands of times
smaller  than  the  smallest structures possible with semiconductor electronics.

     The  Company's  aim  is to gain control of patents and trade secrets in the
molecular  electronics  field so as to take advantage of these technological and
economic  advances  in  order  to  generate  revenues by licensing to others the
patents and trade secrets controlled by us. Additionally, the Company intends to
develop  products  through  partnership  agreements  using  the Chiropticene(TM)
technology.

     The  Company's  business currently consists of two major areas of activity,
Research  and  Development  and  Sales  and  Corporate  Development.

RESEARCH  AND  DEVELOPMENT  ("R&D")
-----------------------------------

     The  purpose  of the Company's R&D program is to capture as large a portion
of  the  intellectual property in the field of molecular electronics as possible
and  to develop the capability to create products that exploit this intellectual
property.  To  this  end,  the Company's R&D consists of the following segments:

          -    Research
          -    Intellectual Property Development
          -    Product Technology Development

     These  three  segments  work  together.  Research  develops  the  Company's
knowledge  by answering the questions that the other two segments need answered.
Intellectual  Property  Development  fashions  the  Company's  knowledge  into
patent-protectable  or  trade-secret-protectable  units that can be licensed and
otherwise  exploited for business.  Finally, Product Technology Development puts
in place those technical processes and technology arrangements necessary for the
Company  to  produce  or  support the production of salable products.  All three
research  segments are functioning now at a low but valuable level.  The Company
has  spent approximately $299,228 and $273,107 in research and development costs
during  the  years  ended  December  31,  2001  and  2000,  respectively.


                                      -3-
<PAGE>
SALES  AND  CORPORATE  DEVELOPMENT
----------------------------------

     The  purpose of this area of activity is to exploit CALMEC's R&D results in
order  to  generate  revenue.  This  area of activity is responsible for selling
products  and  for developing business arrangements so as to foster these sales,
as  well  as  developing  products  using  the  Company's  technology.

PRODUCTS  AND  SERVICES

     The  Company's  products  are intellectual property and technical services.
Intellectual  properties  -  CALMEC's  patents  and  trade secrets - are salable
products.  The  Company intends to license them and support them in exchange for
the  payment  of  fees  and  royalties.

     The  Company  also  intends  to  sell  technical services: contract R&D and
product  development  support.  Customers  for  these services will again be the
companies  in  CALMEC's customer network.  The Company believes that its special
molecular  electronics  expertise  will  be  of  value  to its customers as they
attempt  to  develop  molecular  electronics  products.

      The  Company will also, in addition to the above activities, undertake the
funding  and  development  of  certain  products using the Company's technology.

MARKET

     CALMEC believes that families of processors will be the major product areas
flowing from the field of molecular electronics.  The markets for these products
may  be  an  expanded  version  of today's markets for semiconductor chips.  The
common  types  of  chips  currently  being  manufactured  include  computer
microprocessors,  signal  processors,  special-purpose chips, programmable logic
chips,  memory  chips and controllers.  Semiconductor chips are purchased by the
manufacturers  of  chip-dependent  products.  Chip-dependent  products  are
manufactured  products  that would not exist if chips were to vanish.  This is a
very  long  list of products including PCs, laptops, personal digital assistants
(PDAs),  cellular  phones,  hand  held  calculators, digital camcorders, digital
cameras and a great many other consumer and non-consumer products. Semiconductor
chips  also  support  a  large  chip-driven  software  market providing software
applications  based on these chips.  The chip driven software market consists of
all  the  software  products that would not exist if chips were to vanish.  This
includes  all  PC  software application products, internet application products,
all  PC  operating  systems,  and  in  fact  every  software product written for
application  on  any  chip.

     The  Company  expects  molecular-electronic  processors  to  serve the same
markets  as  today's  semiconductor  chips.  However, since CALMEC believes that
successful  molecular  electronics  technology  will  provide  much  greater
performance  at a much smaller size and price, the Company further believes that
molecular  electronics  processors  will  find their way into many new products.


                                      -4-
<PAGE>
COMPETITION

     The  field  of  molecular  electronics is in the very early stages.  To the
best  of  the  Company's  knowledge,  no  one  anywhere is developing or selling
products  based  on molecular electronics technology.  The Company believes that
at  this  stage,  competition  is for intellectual property that will enable the
control  of  future  markets  and  not  for  the  products  for  these  markets.

     Patents  have  been  and  are being granted for innovations in the field or
innovations  that  will  impact the field. It is the Company's opinion, however,
that  overall, the intellectual property of the field is largely underdeveloped.
Moreover,  an  essential  part of the Company's business strategy is to exploit,
under  exploitation  agreements,  existing  and  future  intellectual  property
belonging  to  others  for the mutual benefit of others and CALMEC. By virtue of
these  strategies,  CALMEC  hopes  to  control  and  minimize  the impact of the
competition  that  will  be  seen.

     The  Company  believes  that the competition for this intellectual property
will  come  from  two  sources:  those  who  will  seek  to  imitate  CALMEC's
customer-building  strategy, and those who will develop and exploit intellectual
property  on  their own. Currently, the Company knows of no companies interested
in  imitating its customer-building strategy. And only time will tell whether or
not  there  will  be  many  or few intellectual property developers who have the
time,  resources  and  commitment to undertake exploitation on their own without
CALMEC's  or  others'  involvement.

     The Company believes that its ultimate competitors will be companies within
CALMEC's  own product-development customer network. The Company's customers will
have  the  knowledge, expertise and experience to engage this new market in part
because  of  the  Company's  work  with  them.  While CALMEC intends to work its
customer  agreements  to  its  benefit,  the  Company recognizes that it will be
impossible  and  perhaps  even  unwise  to  prevent its customers from being its
competitors  in  various  niches of the market. These customer-based competitors
will  probably  be the earliest specific competitors that CALMEC will be able to
identify.  Management  expects  to  know them in more intimate detail than other
future  competitors.

PATENTS

     The  Company  has  executed  an  exclusive  license  and  patent assignment
agreement for the worldwide rights to the economic exploitation of United States
Patent  Number  5,237,067 issued August 17, 1993 to Dr. Robert R. Schumaker, and
its  related  technology,  called  as  a  whole  "chiropticene" technology.  Dr.
Schumaker  is  also  the  Company's  Executive  Vice  President for Research and
Development  and  a major shareholder in the Company.  CALMEC has also filed new
patent  applications  on  related molecular electronics innovations flowing from
new  work  internal  to  the  Company  (United  States Patent Number 6,124,963).

     On  March  26,  1999,  the  Company  executed  an  exclusive patent license
agreement  with  the University of South Carolina for the worldwide rights to an
invention  (USC  Disclosure  #98038)  and  its  related technology that exploits
electrostatic  signals  for  molecular  electronic  computation. On May 6, 1999,
CALMEC  executed  an  exclusive  patent license agreement with the University of


                                      -5-
<PAGE>
Minnesota  for  the worldwide rights to United States Patent Number 5,766,952 on
vapochromic  complexes  and  related  United States Patent Numbers 6,137,118 and
6,160,267  together  exploiting  molecular  electronic  vapochromic  devices.

     During  May,  2001,  the  Company  executed  an  exclusive  patent  license
agreement  with  three professors for worldwide rights to the invention entitled
"Molecular  Dipolar  Rotors"  as  covered under United States Patent Application
Serial  Number  09/812,647

     In  addition,  the  Company  is  working  on developing patent exploitation
agreements with numerous other universities and government labs that are leaders
in  the  field  of  molecular  electronics  and  that own important intellectual
property  in  the  field.

     Chiropticene(TM)  and  CALMEC  are trademarks belonging to the Company that
refer  to  the  Company's  molecular  switches  and  to  the  Company.

EMPLOYEES

     As  of  December  31,  2001, CALMEC had four full-time employees, including
three  employees  who  are  directors  of  the  Company.

DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  COMPANY

     DR.  JON  N. LEONARD is a consultant to business and government in science,
technology,  and business development.  He has been the Chairman of CALMEC since
early in 1997.  He was the President and CEO of BPM Technology from 1992 through
1996, a company that raised $10 million in venture capital to develop and market
a  three-dimensional  printer product.  Prior to that, from 1985 to 1992, he was
the  Chief  Scientist  of,  and responsible for new business development in, the
Strategic  Products  Manufacturing  Division  of  Hughes  Aircraft Company.  Dr.
Leonard  has  authored  numerous  technical  papers in the areas of electronics,
computation  and  communication,  as  well as three popular books in the area of
human  health.  Dr.  Leonard received Ph.D. and Bachelors degrees in mathematics
and  physics  from the University of Arizona and a Masters degree in engineering
from  UCLA.

     MR.  JAMES  J.  MAREK,  JR. has over 30 years of business experience in the
management of high technology companies.  Since September of 1997, Mr. Marek has
been  the  President  and CEO of CALMEC.  Prior to this, in 1996, he had his own
consulting  practice  specializing  in  start-up  management,  turnaround
restructuring,  marketing/sales issues, and contract negotiations.  From 1990 to
1996, Mr. Marek was the President and General Manager of ITEC, Inc., a privately
held $25 million manufacturer of systems for telephone administrations worldwide
and  a provider of contract manufacturing services.  He has over 16 years in top
management  positions  (CEO,  President,  General  Manager,  Vice  President  of
Marketing  and  Sales,  and  Director)  with  full  responsibility  for start-up
companies  as  well  as  multimillion  dollar  corporations  manufacturing  and
marketing  sophisticated  electronic  products.  Mr.  Marek  has  a  Bachelor of
Electrical  Engineering  degree  from  Marquette  University  and  has  taken
post-graduate  work  in  communications,  marketing,  finance,  accounting,  and
business  management.


                                      -6-
<PAGE>
     DR.  ROBERT  R. SCHUMAKER is a renowned chemist and inventor, credited with
the development of new superconducting materials while at IBM, and the holder of
more  than  a  dozen  patents.  Since  May  of  1997  Dr. Schumaker has been the
director of R&D at CALMEC.  Prior to coming to CALMEC, from 1992 until 1997, Dr.
Schumaker  ran  International  Molecular  Processors,  a private company that he
founded,  that  conducted  research  in  the  area  of molecular switch devices.
Before  this,  Dr.  Schumaker  spent 25 years as a research scientist at IBM and
another  10  years  in  research  and  teaching  at  the  University of Bordeaux
(France),  the  University  of  Alabama, and Universidad Autonoma de Guadalajara
(Mexico).  Dr.  Schumaker  received  his  Bachelors degree in Chemistry from the
University  of  California in Santa Cruz, and his Ph.D. degree in Chemistry from
the  University  of  Oregon.


ITEM  2.  PROPERTIES

     The Company leases lab space at San Jose State University, and office space
in  Tucson,  Arizona  and  Huntsville,  Alabama.

ITEM  3.  LEGAL  PROCEEDINGS

     None.

ITEM  4.   SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     On  March  25,  2001, the Company held a Special Meeting of Shareholders to
vote  on  a proposed amendment to the Articles of Incorporation that would allow
the  Company to issue preferred shares of stock.  Present at the Special Meeting
were  4,395,257  of  the  5,131,675  outstanding  shares  of  common stock.  All
4,395,257  shares  present  voted  in  favor  of  the  proposed  amendment.


                                     PART II

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

   Market  Information
   -------------------

     There  is  no  public  market  for the Company's common stock, and a public
market  may  not  be  available  in  the  foreseeable  future.

   Shareholders
   ------------

     The  number  of  common  shareholders of record as of December 31, 2001 was
338.

   Dividend  Policy
   ----------------

     No  cash  dividends  have been declared on the Company's common stock since
the  Company's  inception.  It is not anticipated that dividends will be paid in
the  foreseeable  future.


                                      -7-
<PAGE>
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

Overview
--------

     CALMEC  was  formed  to  engage  primarily in the business of producing and
selling  products  and  services  related  to  the  new  technological  field of
molecular  electronics.  Molecular electronics is the technology of using single
molecules  to  form  components  of  electronic  devices.

     The  Company  continues  to  be  in the initial phase of its existence, and
through  December  31, 1999, CALMEC's three officers had elected to forego their
salaries.  Commencing  February 2000, the Executive Vice President and Secretary
began  receiving  remuneration  for  his  services  and  commencing May 2000 the
President  and Chief Executive Officer began to receive a portion of his salary.
The  Company  will  transition  from the start-up phase to the operational phase
when  the  Board  of  Directors  has  determined  sufficient  capital  has  been
accumulated  to  do so.  At that time, all employees and executive officers will
receive  salaries,  additional  space  will be leased, capital equipment will be
purchased,  and  other operating expenses will be incurred.  Prior to that time,
activities  will be restricted to low cost activities that will keep the Company
within  its  cash  resources.

     In  the  second quarter of 1999, the Company started paying salaries to two
chemists  to perform research.  Also in the second quarter of 1999, CALMEC began
leasing  lab  space  from  San  Jose State University for the purpose of housing
these  chemists  and developing Chiropticene demonstration chemistry.  The lease
ran through March 31, 2000, and the Company has renegotiated with San Jose State
University  to extend the lease until March 31, 2003.

     On January 31, 2000, CALMEC filed a Form SB-2, Registration Statement under
the Securities Act of 1933, with the Securities and Exchange Commission ("SEC").
On  February  7,  2000,  the  Registration Statement became effective and CALMEC
commenced its sale of up to 1,000,000 shares of common stock at $6.00 per share.
CALMEC  planned  to  raise  $6  million  with  this  offering, before payment of
estimated offering expenses of $50,000.  Subsequent to the effective date of the
Registration  Statement through February 28, 2001, CALMEC sold 120,239 shares of
its  common  stock,  for  a  total  aggregate  price  of  $721,434.  The Company
terminated  the  sale  of  its  common stock under the Registration Statement on
February  28,  2001.

Operations
----------

     The  Company  was in the development stage during 1999, and had no revenues
from operations.  During the first quarter of 2000, the Company received a grant
from  The  National Science Foundation in the amount of $100,000, which was paid
in  three  equal  installments  during  2000.  The  grant  supported research to
demonstrate  the  feasibility  of the unique Chiropticene  molecular switch. The
Company  recognized  the  $100,000  as  grant income during 2000, as the related
expenditures  were  incurred  by  the  Company  in  2000.


                                      -8-
<PAGE>
     R&D  costs of $299,228 for the year ended December 31, 2001 compared to R&D
costs  of  $273,107  in  2000,  an increase of $26,121 or 9.6%. The increase was
primarily  related  to a purchase of technology with stock, offset by a decrease
in  R&D  related  salary  and  wage  expense.

     Officers'  compensation donated to the Company of $40,000 in 2001 decreased
from  $67,900 recorded in 2000, entirely related to the fact that certain of the
officers  began  receiving  payment  for all or a portion of their salary during
2000.

     In  1999,  the Company was still considered to be in the development stage,
and  costs other than R&D and Officers' compensation donated to the Company were
considered  preoperating  expenses.  In  the  year  2000,  as the Company earned
revenue,  it  is  no longer considered to be in the development stage, and costs
other than R&D and Officers' compensation donated to the Company are recorded as
selling,  general and administrative costs.  Selling, general and administrative
costs  consist  primarily of rent, travel and other administrative expenses, and
increased  from  $390,374 in 2000 to $424,691 in 2001, an increase of $34,317 or
8.8%,  primarily  related  to an officer receiving a portion of his salary for a
full  year  offset  by  a  decrease  in  travel  expenses.

Liquidity  and  Capital  Resources
----------------------------------

     The full extent of CALMEC's future capital requirements and the adequacy of
its  available  funds  will  depend  on  many  factors,  not all of which can be
accurately  predicted.  Although no assurance can be given, the Company believes
it  can  continue  to operate in its present status for at least the next twelve
months.  After  terminating its sale of common stock effective February 28, 2001
under  its  public  offering  relating  to  its  February  7,  2000 Registration
Statement  filed  with  the  SEC,  the Company has undertaken additional and new
activities  to  develop  certain  products  using the Company's technology.  The
Company  is  aggressively pursuing industrial and venture capital funds in order
to  develop  this  technology.

     CALMEC  is  seeking  to  raise additional capital through public or private
equity  or  debt  financings.  Future capital funding transactions may result in
dilution  to  existing  stockholders.

     There  can  be  no  assurance  that additional capital will be available on
favorable  terms, if at all.  CALMEC's inability to obtain additional capital on
acceptable  terms  could  limit  its  ability  to  meet  its  plan of operation.

Hiring  of  employees
---------------------

     CALMEC  will  transition  from  its start-up phase to its operational phase
when  its accumulated cash balances permit it to do so according to the business
judgment  of  management.  At that time, employees currently working without pay
or  for  partial pay will begin receiving full compensation.  Regardless of when


                                      -9-
<PAGE>
that  time  occurs, the Company has already hired and is supporting the lab work
of a chemist, and is paying one of the executive officers full compensation, and
another  executive  officer  a  portion  of  his  compensation.


ITEM  7.  FINANCIAL  STATEMENTS

     (1)  Financial Statements
          See Index to Financial Statements on Page F-1

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

     None.

                                    PART III

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

     Reference  is made to the information regarding Directors under the heading
"Directors  and  Executive  Officers  of  the  Company"  in  Part  I  hereof.

<TABLE>
<CAPTION>
ITEM  10.  EXECUTIVE  COMPENSATION

                           SUMMARY COMPENSATION TABLE

                                                        Long-term
                            Annual Compensation    Compensation Awards
                            -------------------  ----------------------

(a)                            (b)      (c)               (g)
                                                 Securities Underlying
Name and Principal Position   Year   Salary ($)    options/ SARS (#)
----------------------------  -----  ----------  ----------------------
<S>                           <C>    <C>         <C>
President/CEO                  2001      54,600                  13,000
                               2000      33,600                   9,750

EVP/Secretary                  2001     120,000                       -
                               2000     110,000                       -
</TABLE>

Note:  Reference  is  made  to  the  information  in  "Note  8  -  Related Party
Transactions"  of  the  notes  to the financial statements under Part II, Item 7
hereof.


                                      -10-
<PAGE>
<TABLE>
<CAPTION>
                      OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR

(a)                       (b)              (c)              (d)             (e)

                       Number of    Percent of Total
                      Securities      Options/ SARs
                      Underlying       Granted to       Exercise or
Name and             Options/SARs     Employees in      Base Price
Principal Position    Granted (#)      Fiscal Year        ($/Sh)      Expiration Date
-------------------  -------------  -----------------  -------------  ----------------
<S>                  <C>            <C>                <C>            <C>
President/CEO               13,000              69.8%  $        6.00  April 30, 2010
</TABLE>

<TABLE>
<CAPTION>
ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

     (1)                      (2)                   (3)          (4)

                                                Amount and
                                                 Nature of
                      Name and Address of       Beneficial   Percent of
Title of Class         Beneficial Owner            Owner        Class
---------------  -----------------------------  -----------  -----------
<S>              <C>                            <C>          <C>
Common           Jon N. Leonard                  3,978,666         76.8%
                 1512 W. Canada Hills Dr.
                 Tucson, AZ  85737

Common           James J. Marek, Jr.               390,200          7.5%
                 1080 Grande View Blvd., #828
                 Huntsville, AL  35824

Common           Robert R. Schumaker               370,000          7.1%
                 520 Pilgrim Dr.
                 Capitola, CA  95010
</TABLE>


ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     None.


                                      -11-
<PAGE>
ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)  Exhibits

               See the exhibits filed under Item 13(c), which are filed herewith
               or  incorporated  by  reference  herein.

     (b)  Reports on Form 8-K

               None.

     (c)  Exhibits

<TABLE>
<CAPTION>
The exhibits listed below are filed or incorporated by reference herein.


EXHIBIT
NUMBER                      DESCRIPTION OF DOCUMENT
-------                     -----------------------
<S>      <C>
3.1      Articles of Incorporation of California Molecular Electronics Corp., filed as
         exhibit 3.1 to our Registration Statement on Form SB-2 filed with the
         Commission on January 31, 2000 and incorporated herein by this
         reference.
-------  -----------------------------------------------------------------------------
3.2      Bylaws of California Molecular Electronics Corp., filed as exhibit 3.2 to our
         Registration Statement on Form SB-2 filed with the Commission on
         January 31, 2000 and incorporated herein by this reference.
-------  -----------------------------------------------------------------------------
10.1     Long term employment agreements between R. Schumaker and California
         Molecular Electronics Corp. and J. Marek and California Molecular
         Electronics Corp., filed as exhibit 4 to our Registration Statement on Form
         SB-2 filed with the Commission on January 31, 2000 and incorporated
         herein by this reference.*
-------  -----------------------------------------------------------------------------
10.2     Exclusive patent license and assignment agreement between R. Schumaker
         and California Molecular Electronics Corp., filed as exhibit 5 to our
         Registration Statement on Form SB-2 filed with the Commission on
         January 31, 2000 and incorporated herein by this reference.
-------  -----------------------------------------------------------------------------
10.3     Stock Option Agreement between James J. Marek, Jr. and California
         Molecular Electronics Corp. dated May 1, 2000 and incorporated herein
         by this reference.*
-------  -----------------------------------------------------------------------------
10.4     Rights Agreement between James J. Marek, Jr. and California Molecular
         Electronics Corp. dated June 1, 2000 and incorporated herein by this
         reference.*
-------  -----------------------------------------------------------------------------
10.5     Long term employment agreements between James J. Marek, Jr. and
         California Molecular Electronics Corp., dated September 1, 2001.*
-------  -----------------------------------------------------------------------------
</TABLE>

*  Management  contract  or  compensation  plan  arrangement.


                                      -12-
<PAGE>
SIGNATURES
----------

CALIFORNIA  MOLECULAR  ELECTRONICS  CORP.

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

California Molecular Electronics Corp.
--------------------------------------
(Registrant)


/s/  James J. Marek, Jr.
------------------------
James  J.  Marek,  Jr.
President and Chief Executive Officer


Date:  March 30, 2002
---------------------


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.

Date               Name:  Position                         Signature
----               ---------------                         ---------

March 30, 2002     Dr. Jon N. Leonard: Director,        Jon.  N. Leonard
--------------     -----------------------------        ----------------
                   Chairman  of  the  Board             /s/  Jon N. Leonard
                   ------------------------             -------------------

March 30, 2002     James J. Marek, Jr: Director,        James J. Marek, Jr.
--------------     ------------------------------       -------------------
                   President,  Chief  Executive         /s/  James J. Marek, Jr.
                   ----------------------------         ------------------------
                   Officer
                   -------




                                      -13-
<PAGE>
<TABLE>
<CAPTION>
                     CALIFORNIA MOLECULAR ELECTRONICS CORP.
                              FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2001 AND 2000



                                                                                  Page
                                                                                  ----
<S>                                                                               <C>
Report of Independent Certified Public Accountants                                F-2
Balance Sheet at December 31, 2001 and 2000                                       F-3
Statement of Operations for the Years Ended December 31, 2001 and 2000            F-4
Statement of Stockholders' Equity for the Years Ended December 31, 2001 and 2000  F-5
Statement of Cash Flows for the Years Ended December 31, 2001 and 2000            F-6
Notes to Financial Statements                                                     F-7
</TABLE>



                                       F-1
<PAGE>
March  17,  2002

To the Board of Directors

  and Stockholders of

    California Molecular Electronics Corp.


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------

     In  our  opinion, the accompanying balance sheet and the related statements
of  operations, stockholders' equity (deficit) and cash flows present fairly, in
all  material  respects,  the  financial  position  of  California  Molecular
Electronics  Corp.  ("CALMEC") at December 31, 2001 and 2000, and the results of
its  operations  and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.  These
financial  statements  are  the  responsibility of the Company's management; our
responsibility  is  to express an opinion on these financial statements based on
our  audits.  We  conducted  our  audits  of these statements in accordance with
auditing  standards  generally  accepted  in  the United States of America which
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, assessing the accounting principles
used  and  significant  estimates made by management, and evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  the  opinion  expressed  above.


ODENBERG, ULLAKKO, MURANISHI & CO. LLP
San  Francisco,  California



                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                           CALIFORNIA MOLECULAR ELECTRONICS CORP.
                           --------------------------------------

                                       BALANCE SHEET
                                       -------------


                                                                       December 31
                                                               ----------------------------
                                                                   2001           2000
                                                               -------------  -------------
                                     ASSETS
                                     ------
<S>                                                            <C>            <C>

Current assets:
  Cash                                                         $     94,375   $    120,606
  Receivable from stockholders                                       19,655         10,000
  Prepaid expenses                                                        -          8,247
                                                               -------------  -------------
     Total current assets                                           114,030        138,853

Equipment, net                                                        4,670          5,167
Other                                                                 1,388          1,406
                                                               -------------  -------------
                                                               $    120,088   $    145,426
                                                               =============  =============

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
                 ----------------------------------------------

Current liabilities:
  Accounts payable and accrued liabilities                     $     23,634   $     23,175
  Accrued officer's compensation                                    136,500         58,500
  Other payable                                                       5,000          5,000
                                                               -------------  -------------
     Total current liabilities                                      165,134         86,675
                                                               -------------  -------------

Stockholders' equity (deficit):
  Preferred stock, no par value:
     Authorized 10 million shares; 33,314 and
     none issued and outstanding at December 31, 2001
     and 2000, respectively                                         196,381              -
  Common stock, no par value:
     Authorized 20 million shares; 5,186,886 and
     5,090,123 issued and outstanding (including
     4,800 treasury shares) at December 31, 2001
     and 2000, respectively                                       2,341,088      1,878,913
  Less: Treasury stock at cost; 4,800 shares at December 31,
     2001 and 2000, respectively                                    (28,800)       (28,800)
  Accumulated deficit                                            (2,553,715)    (1,791,362)
                                                               -------------  -------------
                                                                    (45,046)        58,751
                                                               -------------  -------------
  Commitments (Notes 5 and 9)
                                                               -------------  -------------
                                                               $    120,088   $    145,426
                                                               =============  =============
</TABLE>


                See accompanying notes to financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                      CALIFORNIA MOLECULAR ELECTRONICS CORP.
                      --------------------------------------

                              STATEMENT OF OPERATIONS
                              -----------------------

                                                           Year ended December 31
                                                          ------------------------
                                                             2001         2000
                                                          -----------  -----------
<S>                                                       <C>          <C>
Revenue:
  Grant income                                                         $  100,000
  Interest income                                         $    3,481       10,099
                                                          -----------  -----------
                                                               3,481      110,099
                                                          -----------  -----------

Expenses:
  Research and development expenses                          299,228      273,107

  Officers' compensation donated to the Company (Note 7)      40,000       67,900

  Selling, general and administrative expenses               424,691      390,374
                                                          -----------  -----------

          Total expenses                                     763,919      731,381
                                                          -----------  -----------

Loss before state income taxes                              (760,438)    (621,282)

Provision for state income taxes                               1,915          850
                                                          -----------  -----------

Net loss                                                  $ (762,353)  $ (622,132)
                                                          ===========  ===========



Basic and diluted loss per common share                   $    (0.15)  $    (0.12)
                                                          ===========  ===========

Weighted average number of common shares outstanding       5,136,044    5,071,256
                                                          ===========  ===========
</TABLE>


                See accompanying notes to financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                             CALIFORNIA MOLECULAR ELECTRONICS CORP.
                                             --------------------------------------

                                           STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                           -------------------------------------------



                                                    Common stock         Preferred Stock
                                                ----------------------  -----------------
                                                                                            Treasury    Accumulated
                                                 Shares      Amount     Shares   Amount      Stock        Deficit       Total
                                                ---------  -----------  ------  ---------  ----------  -------------  ----------
<S>                                             <C>        <C>          <C>     <C>        <C>         <C>            <C>
Balance at December 31, 1999                    4,989,265  $1,280,242        -  $      -   $ (28,800)  $ (1,169,230)  $  82,212

Stock issued in public offering                    89,007     534,042        -         -           -              -     534,042

Stock issued in exchange for services (Note 3)      7,051      42,306        -         -           -              -      42,306

Stock issuance costs                                    -     (45,577)       -         -           -              -     (45,577)

Officers' compensation donated to the
  Company (Note 7)                                      -      67,900        -         -           -              -      67,900

Net loss                                                -           -        -         -           -       (622,132)   (622,132)
                                                ---------  -----------  ------  ---------  ----------  -------------  ----------

Balance at December 31, 2000                    5,085,323   1,878,913        -         -     (28,800)    (1,791,362)     58,751

Stock issued in public offering                    31,232     187,392        -         -           -              -     187,392

Series A Preferred stock issued in                      -           -   33,314   199,884           -              -     199,884
  private placement offering

Exercise of warrants                               51,370     155,295        -         -           -              -     155,295

Stock issued for license fee (Note 3)              10,500      63,000        -         -           -              -      63,000

Stock issued to an employee as compensation         1,000       6,000        -         -           -              -       6,000

Stock issued in exchange for services               2,661      15,966        -         -           -              -      15,966

Grant of option in exchange for services                -         570        -         -           -              -         570

Stock issuance costs                                    -      (6,048)       -    (3,503)          -              -      (9,551)

Officers' compensation donated to the                   -      40,000        -         -           -              -      40,000
  Company (Note 7)

Net loss                                                -           -        -         -           -       (762,353)   (762,353)
                                                ---------  -----------  ------  ---------  ----------  -------------  ----------

Balance at December 31, 2001                    5,182,086  $2,341,088   33,314  $196,381   $ (28,800)  $ (2,553,715)  $ (45,046)
                                                =========  ===========  ======  =========  ==========  =============  ==========
</TABLE>


                See accompanying notes to financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                       CALIFORNIA MOLECULAR ELECTRONICS CORP.
                       --------------------------------------

                              STATEMENT OF CASH FLOWS
                              -----------------------

                                                             Year ended December 31
                                                             ----------------------
                                                                2001        2000
                                                             ----------  ----------
<S>                                                          <C>         <C>
Operations:
  Net loss                                                   $(762,353)  $(622,132)
  Items not requiring current use of cash:
    Officers' compensation, donated to the Company (Note 7)     40,000      67,900
    Depreciation and amortization                                2,457       1,838
    License fees in exchange for stock                          63,000           -
    Stock issued as compensation                                 6,000           -
    Legal fees in exchange for stock                            15,966      42,306
    Other fees in exchange for option                              570           -
    Changes in other operating items:
         Prepaid expenses                                        8,247      (1,754)
         Other                                                      18      (1,000)
         Accounts payable and accrued liabilities                  459       9,375
         Accrued officer's compensation                         78,000      58,500
                                                             ----------  ----------
         Cash used for operating activities                   (547,636)   (444,967)
                                                             ----------  ----------

Investments:
  Equipment                                                     (1,960)     (4,885)
                                                             ----------  ----------
         Cash used for investing activities                     (1,960)     (4,885)
                                                             ----------  ----------

Financing:
  Issuance of common and preferred stock, net of stock
    issuance expense                                           377,725     488,465
  Exercise of common stock warrants                            155,295           -
  Advance to stockholders                                       (9,655)    (10,000)
                                                             ----------  ----------
         Cash provided by financing activities                 523,365     478,465
                                                             ----------  ----------

Increase (decrease) in cash                                    (26,231)     28,613

Cash at beginning of period                                    120,606      91,993
                                                             ----------  ----------
Cash at end of period                                        $  94,375   $ 120,606
                                                             ==========  ==========

Supplemental cash flow disclosures:
  Taxes paid                                                 $   1,915   $     850
                                                             ==========  ==========
  Interest paid                                              $     747   $     193
                                                             ==========  ==========
</TABLE>


                See accompanying notes to financial statements.

                                      F-6
<PAGE>
                     CALIFORNIA MOLECULAR ELECTRONICS CORP.
                     --------------------------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

NOTE  1  -  Operations  and  summary  of  significant  accounting  policies:

     California  Molecular  Electronics  Corp.  ("CALMEC"  or the "Company"), an
Arizona  corporation,  was incorporated on March 17, 1997.  CALMEC was formed to
engage  primarily in the business of producing and selling products and services
related  to  the  new  technological  field of molecular electronics, as well as
research  and  development  related to this field.  Molecular electronics is the
technology  of  using  single  molecules  to  form  the components of electronic
devices.

     Basis  of  presentation
     -----------------------

     These financial statements are presented on the basis that the Company will
continue  as  a  going  concern.  This going concern assumption contemplates the
realization  of  assets and the satisfaction of liabilities in the normal course
of  business  over  a  reasonable  period  of time. As shown in the accompanying
financial  statements,  the Company incurred net losses of $762,353 and $622,132
for  the  years ended December 31, 2001 and 2000, respectively. The Company will
need  to  obtain  additional  funds  to  continue  its  research and development
activities and fund operating expenses. As of December 31, 2001, the Company had
cash  of  $94,375.  In  addition,  the Company has raised $56,000 related to the
exercise  of  warrants  during  January  through March 17, 2002, and is actively
pursuing  industrial  and  venture  capital.  Management  also  plans  to  raise
additional  cash  by encouraging warrant holders to exercise their warrants (See
Note  3).  However, there can be no assurance that management's efforts to raise
additional capital will be successful. Those factors create an uncertainty about
the  Company's  ability  to  continue  as  a  going  concern.

     If  the Company is unable to obtain the necessary capital, management plans
to  restructure  the  Company  operations  to allow it to continue to operate by
reducing  or  eliminating  cash compensation paid to the Company's President and
Chief Executive Officer and Executive Vice President and Secretary (See Note 7),
and  scaling down the Company's research and development and other expenditures.
Management believes that this would allow the Company to continue to operate and
to  pursue  its  business  plan  through  at  least  2002.

     A summary of significant accounting policies follows:

     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.  Actual results could differ from those
estimates.


                                      F-7
<PAGE>
     Fair  value  of  financial  instruments
     ---------------------------------------

     The  carrying  values  of  financial  instruments,  such as receivable from
stockholders  and  accounts  payable,  approximate  their  fair  market  values.

     Cash  and  cash  equivalents
     ----------------------------

     The  Company  considers  all  highly  liquid investments with a maturity of
three  months  or  less  at  the  date  of  acquisition  to be cash equivalents.

     Concentration  of  credit  risk
     -------------------------------

     The Company maintains its cash in bank deposit accounts at well-established
financial  institutions.  At times the balances per the records of the financial
institutions  may  exceed  federally  insured  limits.

     Furniture  and  fixtures
     ------------------------

     Furniture  and  fixtures  are stated at cost.  Expenditures for maintenance
and  repairs are charged to expense.  Depreciation is computed using accelerated
methods  over  the  estimated  useful  lives  of  the  assets  of  five  years.

     Grant  income
     -------------

     Grant  income  is  recognized  as income in the period in which the related
expenditures  are  incurred  by  the  Company.

     Research  and  development
     --------------------------

     Research and development costs are expensed as incurred.

     Income  taxes
     -------------

     The  Company uses the asset and liability method in accounting for deferred
income  taxes.  Under this method, deferred income taxes are recorded to reflect
the  tax consequences in future years of differences between the carrying amount
of  assets  and  liabilities for financial reporting and tax purposes (primarily
relating  to  start-up  costs)  at  each  fiscal  year  end.

     Loss  per  share
     ----------------

     Basic  and  diluted loss per common share is calculated by dividing the net
loss for the period by the weighted average number of common shares outstanding.
In  2001  and  2000,  diluted  loss per share excludes the effect of convertible
preferred  stock,  options  and  warrants,  because  the  effect would have been
antidilutive.


                                      F-8
<PAGE>
     Reclassification  of  financial  statement  presentation
     --------------------------------------------------------

     Certain  reclassifications  have been made to the 2000 financial statements
to  conform to the 2001 financial statement presentation. Such reclassifications
have  had  no  effect  on  net  loss  as  previously  reported.

NOTE  2  -  Equipment:

     Equipment is summarized as follows:

                                           December 31
                                        ------------------
                                          2001      2000
                                        --------  --------
     Computer equipment                 $  9,469  $  7,509
     Less - accumulated depreciation       4,799     2,342
                                        --------  --------
                                        $  4,670  $  5,167
                                        ========  ========

NOTE  3 - Stock  offerings:

     Common  stock
     -------------

     In  April 1998, CALMEC commenced a private placement offering of its common
stock.  The  offering  agreement allowed for the sale of up to 400,000 shares of
CALMEC's  common  stock  at $2.50 per share (restated for stock dividend), for a
maximum  value  of  $1 million.  There was no minimum number of securities which
were  required  to  be  sold  in  the  offering.  In  February 1999, the Company
increased  the  price  of  the shares to $5.00 per share (restated for the stock
dividend).   On March 1, 1999, the Company began providing stock purchasers with
a  warrant for each share purchased.  The warrant entitled the purchasers to buy
an  additional  share  for  $5.00  through February 2002.  CALMEC terminated the
offering  in  June  1999.

     On January 31, 2000, CALMEC filed a Form SB-2, Registration Statement Under
The Securities Act of 1933, with the Securities and Exchange Commission ("SEC"),
which  became effective on February 7, 2000, and CALMEC commenced its sale of up
to  1,000,000  shares  of  common  stock  at  $6.00 per share. Subsequent to the
effective  date  of the Registration Statement through February 28, 2001, CALMEC
has sold 120,239 shares of its common stock, for an aggregate price of $721,434.
Additionally,  the  Company  issued 7,051 shares of its common stock in exchange
for  services  in the amount of $42,306 in 2000. The Company terminated the sale
of  its  common  stock  under  the  Registration Statement on February 28, 2001.

     During  2001, the Company issued 2,661 shares of common stock and an option
to  purchase  634  shares  of  common stock to vendors in exchange for services.
Such  issuances have been reflected as selling, general and administrative costs
of $16,536.  Also in 2001, the Company issued 1,000 shares of common stock to an
employee  and  10,500 shares of common stock related to a license agreement (see
Note  6), both of which are recorded as research and development costs of $6,000
and  $63,000,  respectively.


                                      F-9
<PAGE>
     On  January 26, 2001, as an inducement to warrant holders to exercise their
warrants,  the  Company  reduced the exercise price of warrants exercised before
March  1,  2001  to $3.50 per share from $5.00 per share.  Those warrant holders
who  exercised their warrants after March 1, 2001 and before April 30, 2001 were
able  to  exercise  at $4.00 per share.  For those warrant holders who exercised
their  warrants after April 30, 2001, the warrant exercise price was the initial
$5.00  per  share.

     For  those  warrant holders who exercised all of their warrants rather than
just  a  portion of them prior to April 30, 2001, the Company issued the warrant
holders  the  same  number  of warrants at an exercise price of $3.25 per share,
such  warrants  expiring  on  November  30,  2001.

     For  those  warrant  holders  who  obtain the aforementioned warrants which
expired  on  November 30, 2001, and exercised all of them before expiration, the
Company  issued the warrant holders another warrant in the same number of shares
as  the original warrant, with an exercise price of $3.00 per share and expiring
on  May  31,  2002.

     During  the  year  ended December 31, 2001, warrant holders exercised 1,000
warrants  at $3.00 per share, 1,000 warrants at $3.25 per share, 15,120 warrants
at $3.50 per share, and 7,000 warrants at $4.00 per share for a total of $87,170
related  to  the  aforementioned  warrants.

     Preferred  stock
     ----------------

     On  March  25,  2001, the Company commenced a private placement offering to
sell  200,000  units  at  $6.00  per  unit.  A unit is comprised of one share of
Series  A  Preferred  Stock,  one  warrant  for the purchase of one common share
exercisable  through  October  31,  2001  at $2.50 per share, and one warrant to
purchase  an additional common share at $3.50 per share, through April 30, 2002.
During  the  year  ended  December  31,  2001, the Company sold 33,314 units for
$199,884  and  warrant  holders exercised 27,250 warrants related to these units
for  $68,125.  The  private  placement  was  closed  on  October  1,  2001.

     The  Series A Preferred Stock has a conversion price of $6.00 per share and
is  convertible at the option of the holder into one share of common stock.  The
conversion  price  of the Series A Preferred Stock is subject to adjustment upon
certain  events.  The Series A Preferred Stock outstanding will automatically be
converted  into  common  stock  at  the  then  effective  conversion  price  (a)
immediately  upon  the closing of an underwritten public offering pursuant to an
effective  registration  statement under the Securities Act of 1933, as amended,
covering  the  offer  and  sale  of  capital  stock  of the Company in which the
proceeds received by the Company, net of underwriting discounts and commissions,
equal  or  exceed $15 million, or (b) immediately upon the vote of a majority of
the shares of the Series A Preferred Stock outstanding on the date of such vote.
In the event of any voluntary or involuntary liquidation, dissolution or winding
up  of the Company, holders of the Series A Preferred Stock then outstanding are
entitled to be paid, out of the assets of the Company available for distribution
to  its  stockholders,  before  any  payments  are  to be made to holders of the
Company's  common  stock.


                                      F-10
<PAGE>
NOTE  4  -  Grant:

     During  the  first  quarter  of 2000, the Company received a grant from The
National Science Foundation in the amount of $100,000, to be paid in three equal
installments.  The  grant  was  made  in  support of research to demonstrate the
feasibility  of the unique Chiropticene molecular switch.  The first installment
of  $33,333  was  received  in  January 2000, and was recognized as grant income
during  the quarter ended March 31, 2000.  The second installment of $33,333 was
received  in  April  2000, and was recognized as grant income during the quarter
ended June 30, 2000.  The third and final installment of $33,334 was received in
the  fourth  quarter  of  2000.  The grant has been recognized as revenue in the
period  in  which  the  related  expenditures  were  incurred  by  the  Company.

NOTE  5  -  Leases:

     The  Company  had  entered  into a cost reimbursable contract with San Jose
State  University  Foundation  ("Foundation")  for the period from April 1, 2000
through  March  31,  2001,  which has been extended through March 31, 2003.  The
contract may be cancelled by either party, with thirty days written notice.  The
contract  includes  advisory  services  to  be  provided  by  the San Jose State
University Department of Chemistry, facilities, supplies and equipment use.  The
Foundation  shall  be  reimbursed  for  costs  incurred  in  providing  the
aforementioned  items  not to exceed a maximum amount of $90,659 over the period
of the contract.  The Company also leases office space in Arizona and Alabama on
a  month  to  month  basis. Rent expense was $100,904 and $100,955 for the years
ended  December  31,  2001  and  2000,  respectively.

NOTE  6  -  Licenses:

     CALMEC  has  entered  into  an  exclusive  license  and  patent  assignment
agreement  with  an officer/director of the Company.  The agreement provides the
Company  with  the  exclusive  rights to use ChiropticeneTM switches, a class of
molecular  electronic switches.  The agreement also called for the assignment to
CALMEC of all of the officer/director's rights to Chiropticene(TM) technology on
May 1, 1999.  CALMEC paid the officer/director a license fee of $25,000 ($10,500
of  the  license  fee  was paid in 1998, and the balance was paid in 1999.)  The
cost  of  the  license  fee  has  been  expensed  in  the prior years' financial
statements  as  research  and  development  costs.

     During  1999,  CALMEC  entered  into  license  agreements  with  certain
universities  which  provide  the Company with exclusive licenses to use or sell
products  using  technology  owned  by  the  universities.  The Company paid the
universities  $25,000,  and issued 15,005 shares of common stock to a university
and  certain  inventors  for  license  fees.  CALMEC  reimbursed  one  of  the
universities  $15,237  for  prior  expenses incurred.  The Company reflected the
payments  and  common  stock  issuance in the amount of $115,262 as research and
development  costs  in  1999.

     During 2001, CALMEC entered into a license agreement with certain inventors
which  provide the Company with exclusive licenses to use or sell products using
technology  owned  by the inventors.  The Company issued 10,500 shares of common
stock  for license fees.  CALMEC has reflected the issuance of such common stock
in  the  amount  of  $63,000  as  research  and  development  costs  in  2001.


                                      F-11
<PAGE>
NOTE  7  -  Related  party  transactions:

     CALMEC's  three officers have devoted 100% of their time to the business of
the Company since their hire in 1997.  Planned annual remuneration for the three
officers  is as follows:  $40,000 - Chairman and Treasurer; $110,000 - President
and  Chief  Executive  Officer;  and  $120,000  -  Executive  Vice President and
Secretary.  The  officers  elected to forego their salaries through December 31,
1999,  and  certain  officers have continued to forego all or a portion of their
salaries  in 2000 and 2001.  As required by the Securities and Exchange
Commission  accounting  rules,  in  the  accompanying  financial  statements the
officers'  unpaid  salaries  totaling  $40,000  and  $67,900 for the years ended
December  31, 2001 and 2000, respectively, are reflected as compensation expense
and  a  credit  to  common  stock,  as the Company does not intend to repay such
forfeited  salaries  in the future.  Effective February 2000, the Executive Vice
President  and  Secretary began to receive a salary for his services.  Effective
May  2000,  the President and Chief Executive Officer ("CEO") began to receive a
portion  of  his salary in cash ($1,050 per week) and 250 stock options per week
with an exercise price of $6.00 per share ("Rolling Option").  When the Board of
Directors determines at some point in the future that the Company is able to pay
full  cash  compensation  to  the  CEO, the CEO will no longer receive 250 stock
options per week. At such time, the officer can require the Company to issue him
shares  of common stock or pay him $6.00 per share, or a combination of the two,
based  on  the  number  of  unexercised  shares  under  the  Rolling Option. The
Company's  obligation  under  this  agreement  has been recorded as compensation
expense  in  the  amount of $78,000 and $58,500 for the years ended December 31,
2001  and  2000,  respectively.

     On  September 1, 2001, CALMEC entered into a long-term employment agreement
("Agreement")  with  its  CEO.  Under the Agreement, once the Company enters the
operational  phase,  the Company will pay the CEO a salary of $132,000 per year.
The  Company  will  enter into the operational phase once the Board of Directors
has  determined  sufficient capital has been accumulated to do so. The Agreement
has  a  term  of  five  years  ending  on August 31, 2006.  Prior to the Company
entering  the operational phase, the CEO will continue to perform his duties for
compensation  as  described  in  the  preceding  paragraph.  As  additional
compensation,  upon the first anniversary of the Agreement, the CEO will receive
a  seven  year stock option to purchase 400,000 shares of CALMEC common stock at
an  exercise  price  of  $6.00  per  share,  vesting  at 100,000 shares per year
thereafter  of  completed  employment.

NOTE  8  -  Stock  option  plan:

     On  May  1,  1997,  the Board of Directors of CALMEC adopted the 1997 Stock
Option  Plan  (the  "1997  Plan").  The  aggregate  number  of  shares  that are
available  for  issuance  pursuant  to the exercise of options granted under the
1997  Plan  may not exceed 1,600,000 shares of common stock.  Options granted in
2001  and  2000  have  vesting  periods  ranging  from  immediate to five years.
Incentive  stock options are priced at the fair market value of the stock at the
date  of  grant.  Nonqualified  stock  options are priced at eighty-five percent
(85%)  of  the fair market value at the date of grant.  Options generally have a
life  of  seven  to  ten  years.


                                      F-12
<PAGE>
     During  1997, CALMEC adopted Financial Accounting Standards Board Statement
No.  123,  "Accounting  for  Stock-Based  Compensation"  ("SFAS  No.  123") and,
pursuant  to the provisions of SFAS No. 123, applies Accounting Principles Board
Opinion  No.  25,  "Accounting  for Stock Issued to Employees" ("APB 25") to the
1997  Plan.  Accordingly,  no compensation cost has been recognized for the Plan
in  2001  and  2000.

     Had  CALMEC  elected  to adopt the fair value approach of SFAS No. 123, the
net  loss  of  $762,353  as  reported for the year ended December 31, 2001 would
compare  to  a  pro  forma  net  loss  of $779,694.  The net loss of $622,132 as
reported  for  the year ended December 31, 2000 would compare to a pro forma net
loss  of $645,588.  Basic and diluted loss per share of $0.15 for the year ended
December  31, 2001 would compare to a net loss per share of $0.15 on a pro forma
basis.  Basic and diluted loss per share of $0.12 as reported for the year ended
December  31,  2000  would  compare  to a pro forma net loss per share of $0.13.

     The  effects of applying SFAS No. 123 in the preceding pro forma disclosure
are  not  indicative  of  the  effect  on  reported  net  loss for future years.

     The fair value of each option grant is estimated on the date of grant using
the  minimum value method with the following assumptions used for grants in 2001
and 2000, respectively:  risk-free interest rates of 4.0% and 6.4%, and expected
lives  of  4.2 and 5.8 years.  No dividend yield was used as CALMEC has not paid
dividends  in  the  past and does not anticipate paying dividends in the future.

<TABLE>
<CAPTION>
                                                         Year ended December 31,
                                                ------------------------------------------
                                                       2001                 2000
                                                -------------------  ---------------------
                                                          Weighted               Weighted
                                                           Average               Average
                                                          Exercise               Exercise
                                                 Shares     Price     Shares      Price
                                                --------  ---------  ---------  ----------
<S>                                             <C>       <C>        <C>        <C>

Outstanding at beginning of year                 927,850  $  0.5039   918,020   $  0.4341
Granted                                           18,634     5.9694    29,830      6.0000
Canceled/Expired                                       -          -   (20,000)    (5.5000)
                                                --------  ---------  ---------  ----------
Outstanding at end of year                       946,484  $  0.6284   927,850   $  0.5039
                                                ========  =========  =========  ==========

Options exercisable at year-end                  772,484              587,850

Weighted average grant-date fair value of
options granted during the year whose
exercise price equaled market price on date of
grant                                                     $    0.93             $    1.77
</TABLE>

     No  options  to  employees  were granted during 2001 or 2000 whose exercise
price  was  greater  or  less  than  the  market  price  on  the  date of grant.

     In 2001, the Company issued nonqualified stock options with a fair value of
$570  to  a  vendor,  and in 2000, the Company issued nonqualified stock options
with  an  immaterial  fair  value  to  an  outside  consultant.


                                      F-13
<PAGE>
     The  following table summarizes information about stock options outstanding
at  December  31,  2001:

<TABLE>
<CAPTION>
                Options Outstanding                    Options Exercisable
---------------------------------------------------  -----------------------
                              Weighted
                               Average    Weighted                Weighted
Range of                      Remaining    Average                 Average
Exercise          Number     Contractual  Exercise     Number     Exercise
Prices          Outstanding     Life        Price    Exercisable    Price
--------------  -----------  -----------  ---------  -----------  ---------
<S>             <C>          <C>          <C>        <C>          <C>
$ .0025             400,000    2.3 years  $   .0025      320,000  $   .0025
$ .0050             400,000    2.7 years  $   .0050      320,000  $   .0050
$2.5000              71,420    5.8 years  $  2.5000       71,420  $  2.5000
$5.00 - $6.00        75,064    7.2 years  $  5.5048       61,064  $  5.4895
--------------  -----------  -----------  ---------  -----------  ---------
$.0025 - $6.00      946,484    3.1 years  $   .6284      772,484  $   .6682
==============  ===========  ===========  =========  ===========  =========
</TABLE>

NOTE  9  -  Commitments:

     In  accordance  with the Company's license agreement with a university (see
Note  6), beginning January 1, 2002 and on January 1 of every year thereafter as
long  as  the  license  is  in  effect,  the  Company shall pay the university a
maintenance  fee.  The fee shall be equal to either, at the university's option,
2,000  shares  of  the  Company's  common  stock  or a cash payment equal to the
greater  of  $10,000  or  the  fair  value  of the 2,000 shares on the due date.

     CALMEC had the following warrants outstanding at December 31, 2001:


                    Number
                  Outstanding     Exercise Price     Maturity Dates
                  -----------     --------------     --------------
                    25,586            $3.00               2002
                    25,500            $5.00               2002
                    34,400            $3.50               2002


NOTE  10  -  Income  taxes:

     The  Company's  operating  loss  for  financial reporting purposes had been
reported  as  deferred  start-up costs for federal and state income tax purposes
through  December 31, 2000.  Deferred tax assets are comprised of the following:

<TABLE>
<CAPTION>
                                               Year ended December 31,
                                               -----------------------
                                                   2001        2000
                                                ----------  ----------
<S>                                             <C>         <C>
Deferred start-up costs/net operating losses    $ 607,467   $ 332,962

Valuation allowance for deferred tax assets      (607,467)   (332,962)
                                                ----------  ----------

Net deferred tax asset                          $       -   $       -
                                                ==========  ==========
</TABLE>

     A  valuation  allowance  is  provided  for  deferred  tax  assets as future
deductibility  is uncertain.  At December 31, 2001 and 2000, all of the deferred
tax  assets  were  noncurrent.  The  change  in  valuation allowance of $274,505
results  from  the  net  operating  loss  for  2001.


                                      F-14
<PAGE>
     A  reconciliation  of income tax computed at the federal statutory tax rate
to  the  provision  for  income  taxes  is  as  follows:

<TABLE>
<CAPTION>
                                                             Year ended December 31,
                                                     --------------------------------------
                                                            2001                2000
                                                     ------------------  ------------------
                                                       Amount      %       Amount      %
                                                     ----------  ------  ----------  ------
<S>                                                  <C>         <C>     <C>         <C>
Income taxes at federal statutory rate               $(258,549)  (34.0)  $(207,885)  (34.0)
Increase (decrease) in income taxes resulting from:
  State and local income taxes, net of federal tax
    benefit                                            (45,169)   (6.0)    (30,571)   (5.0)
  Permanent differences                                 13,600     4.0      42,976     7.0
  State minimum taxes                                    1,915     0.0         850     0.0
  Net operating loss                                   290,118    36.0     195,480    32.0
                                                     ----------  ------  ----------  ------
                                                     $   1,915     0.0   $     850     0.0
                                                     ==========  ======  ==========  ======
</TABLE>

NOTE  11  -  Subsequent  events:

     For  the  period  January  1 through March 15, 2002, the Company has issued
18,500  shares  of  common  stock  related to the exercise of warrants for total
proceeds  of  $56,000.


                                      F-15
<PAGE>