U.S. Securities and Exchange Commission

                              Washington, DC 20549

                                  Form 10-QSB/A

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

              For the quarterly period ended September 30, 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 0-7693
                                                 ------

                      INTERNATIONAL MERCANTILE CORPORATION
       -----------------------------------------------------------------
       (Exact name of small business issuer as specified in its charter)

            Missouri                                     43-0970243
------------------------------------------------------------------------
(State of other jurisdiction of                        (IRS Employer
 incorporation or organization)                      Identification No.)


                        P.O. Box 340, Olney, MD 20830
                  ---------------------------------------------
                    (Address of principal executive offices)

                                 (301) 774-6913
                           ---------------------------
                           (Issuer's telephone number)

                      1625 Knecht Ave, Baltimore, MD 21227
              -----------------------------------------------------
              (Former name, former address, and former fiscal year,
                          if changed since last report)


Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 (d) of the  Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                      Yes [ X ]      No  [__]



<PAGE>


                 APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

As of September 30, 2001, there were outstanding 1,960,028 shares of Class A
Common Stock, $0.10 par value, and 1,142,857 shares of Class B Common Stock,
$0.10 par value.


     Transitional Small Business Disclosure Format (check one);

                      Yes [__]       No  [ X ]



















<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION

                               Form 10-QSB/A Index
                               September 30, 2001

                                                                      Page
                                                                      ----


Part I: Financial Information .....................................     3


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

      Balance Sheets as of June 30, 2000
      and September 30, 2001 (unaudited)...........................    6-7

      Statement of Operations for the quarters ended
      June 30, 2000 and September 30, 2001 ........................     8

      Statement of Changes in Stockholder's Equity
      for the quarters ended June 30, 2000 and September 30, 2001..     9

      Statement of Cash Flows for the quarters ended June 30,
      2001 and September 30, 2001 .................................    10

      Notes to Financial Statements................................   11-13


     Item 2. Management's Discussion and Analysis
             or Plan of Operation .................................    14


Part II:   Other Information ......................................    15


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


     Item 2.    Changes in Securities .............................    15


     Item 3.    Defaults Upon Senior Securities ...................    15


     Item 4.    Submission of Matters to a Vote of
                Security Holders ..................................    15


     Item 5.    Other Information .................................    15


Signatures ........................................................    16



                                        2
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION


                                     PART I

                              FINANCIAL INFORMATION


Item 1.   Financial Statements


                      INTERNATIONAL MERCANTILE CORPORATION

                                TABLE OF CONTENTS
                               SEPTEMBER 30, 2001

                                                                         Page

Accountants' Review Report                                                1

Balance Sheets                                                           2-3

Statements of Operations                                                  4

Statements of Changes in Stockholders' Equity                             5

Statements of Cash Flows                                                  6

Notes to the Financial Statements                                        7-13
















<PAGE>






To the Board of Directors and Stockholders
International Mercantile Corporation, a Missouri corporation

We have  reviewed the  accompanying  balance sheet of  International  Mercantile
Corporation (a Missouri Corporation) as of June 30, 2000 and September 30, 2001,
and the related  statements of operations,  changes in stockholders'  equity and
cash flows for the periods then ended.  Our review was  performed in  accordance
with  Statements on Standards for Accounting and Review  Services  issued by the
American Institute of Certified Public Accountants. All the information included
in  these  financial  statements  is the  representation  of the  management  of
International Mercantile Corporation.

A review consists  principally of inquiries of Company  personnel and analytical
procedures  applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion  regarding the financial  statements taken
as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material  modifications that should
be made to the  accompanying  financial  statements  in order  for them to be in
conformity with generally accepted accounting principles.

The financial  statements  for the year ended December 31, 2000 presented in the
financial  statements  were audited by Caruso and Caruso of Boca Raton,  Florida
and they  expressed  an  unqualified  opinion on them in our report dated April,
2001,  but we have  not  performed  any  auditing  procedures  on  International
Mercantile Corporation.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 12 to the
financial  statements,  the Company has incurred  significant  operating losses.
Although the Company is  negotiating  financing  arrangements  that will provide
additional  working  capital  until  revenues  from full  scale  operations  are
sufficient, the Company cannot predict what the outcome of the negotiations will
be. These  conditions  raise  substantial  doubt about the Company's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments that might result from the outcome of this uncertainty.

Craig W. Conners, C.P.A.

San Diego, CA
November 14, 2001









                                        1
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                                 BALANCE SHEETS


                                     ASSETS
                                                       Unaudited      Unaudited
                                         December 31    June 30,    September 30
                                            2000          2000           2001
                                         -----------  ------------  ------------

Current Assets
--------------
   Cash and Cash Equivalents          $    63,157    $   (61,840)  $       577
   Marketable Securities - Trading            -              -             -
   Accounts Receivable Net of
     Allowance for Doubtful Accounts    1,036,458      1,306,594           -
   Inventory                              276,391        565,151           -
   Prepaids & Other Assets                 64,585         21,418           -
   Due From Related Party                  51,404            -             -
                                        ------------  ------------  ------------

      Total Current Assets              1,491,995      1,955,003           577

Investments
-----------
   Investment in Equity
      Securities-Available-For-Sale        80,000      3,000,000        18,000

Fixed Assets
------------
   Fixed Assets, net of
      Accumulated Depreciation            225,967        221,574           -

Other Assets
------------
   Organization Costs,
      Net of Amortization                 169,625        191,415           -
   Deposits                                32,604         36,042           -
   Capitalized Loan Costs,
      Net  of Amortization                130,468            -             -
                                        ------------  ------------  ------------
      Total Other Assets                  332,697        227,457        18,000
                                        ------------  ------------  ------------

         Total Assets                 $ 2,130,659    $ 5,404,034   $    18, 577
                                        ============  ============  ============


  See Accountants' Review Report and Accompanying Notes to Financial Statements


                                        2
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                                 BALANCE SHEETS

                       LIABILITIES & STOCKHOLDERS' EQUITY
                                                       Unaudited      Unaudited
                                         December 31    June 30,    September30,
                                            2000          2000           2001
                                         -----------  ------------  ------------

Current Liabilities
-------------------
   Accounts Payable and
      Accrued Expenses                $ 1,097,194      $1,011,136  $   29,000
   Cash Overdraft                             -              -           -
   Accrued Interest Payable               130,182          47,214        -
   Due to Related Party                       -            39,573        -
   Warranty Reserve - Current Portion      12,442           2,442        -
   Convertible Debentures -
      Current Portion                         -              -           -
   Note Payable - Related Parties,
      Current Portion                     455,209         596,609        -
   Line  of Credit                        588,908         698,946        -
   Loans Payable                          247,500         247,500        -
   Capitalized Lease Payable -
      Current Portion                      13,915          10,221        -
                                        ------------  ------------  ------------
      Total Current Liabilities         2,545,350       2,653,641      29,000

Long Term Liabilities
---------------------
   Committments and Contingencies
   Warranty Reserve, Net
      of Current Portion                    5,171          11,884        -
   Capitalized Lease Payable Net
      of Current Portion                   12,126          17,987        -
   Note Payable - Related Party
      Net of Current Portion               75,000          75,000       9,000
   Convertible Debentures                 500,000            -             -
                                       ------------   ------------  ------------
      Total Long Term Liabilities         592,297         104,871      38,000
                                        ------------  ------------  ------------

         Total Liabilities              3,137,647       2,758,512      38,000
                                        ------------  ------------  ------------

Stockholders' Equity
--------------------
   Common stock-Class A -
      31,000,000 authorized
      @ $.10 Par 9,333,536,
      @ .01 Par 16,534,847
      and @ $.10 Par 11,960,028
      shares respectively                 933,354        271,902    1,196,003
   Common stock-Class B - $.01 Par,
      2,000,000 shares authorized,
      1,000,000 and 2,000,000
      shares outstanding                   20,000         20,000        20,000
   Preferred stock - Series 1 -
      $1.00 Par, 2,000,000
      authorized, -0- and -0- shares
      outstanding                             -              -             -
   Preferred stock - Series 2 -
      $1.00 Par, 2,000,000 authorized,
      -0- and 285,714 shares
      outstanding                         285,714         200,000     285,714
   Preferred stock - Series 3 - $1.00
      Par, 5,000,000 authorized, -0-
      shares outstanding                      -              -             -
   Additional Paid in Capital           3,364,530      3,252,577     3,094,732
   Accumulated Deficit                 (5,610,586)    (1,373,315)   (4,615,902)
                                      --------------  ------------  ------------

      Total Stockholders' Equity       (1,006,988)     2,645,522    (   19,423)
                                      --------------  ------------  ------------

         Total Liabilities &
            Stockholders' Equity      $ 2,130,659    $ 5,404,034   $    18,577
                                      ==============  ============  ============

  See Accountants' Review Report and Accompanying Notes to Financial Statements


                                        3
<PAGE>


<TABLE>
<CAPTION>
                      INTERNATIONAL MERCANTILE CORPORATION
                            STATEMENTS OF OPERATIONS



                                 For the Year       For the Six        For the Nine
                                    Ended           Months Ended       Months Ended
                                 December 31,         June 30,         September 30,
                                    2000               2000                2001
                                                     Unaudited           Unaudited
                              ----------------    ----------------    --------------
<S>                              <C>                <C>                 <C>
Revenues

   Sales                         $ 7,064,025        $ 4,045,914         $       -
   Cost of Merchandise
      Sold                         6,463,249          3,697,212                 -
                               ----------------    ----------------    --------------

      Gross Profit                   600,776            202,898                 -
Operating Expenses
   Amortization                      109,796             20,384                 -
   Auto and Truck                      -                 15,993                 -
   Bad Debts                         410,870             34,625                 -
   Bank Charges                         -                18,470
   Donations                            -                 1,817
   Depreciation                       50,713             22,494                 -
   Interest Expense                  249,932             88,454                 -
   Marketing, Advertising
      Expense & Sales Expense        432,765              8,622
   Other General &
      Administrative Expense       2,057,519          1,204,713               9,016
   Warranty Reserve                   10,037              7,000                 -
                               ----------------    ----------------    --------------

      Total Operating
         Expenses                  3,321,632          1,422,573               9,016
                               ----------------    ----------------    --------------

      Net (Loss)
         From Operations          (2,720,856)        (1,073,871)             (9,016)

Other Revenues and (Expenses)
      Loss on Securities          (2,645,642)              -                   -
      Finance Charge Income           55,356               -                   -
                               ----------------    ----------------    --------------

      Net (Loss) From
         Operations and
         Other Revenues         $ (5,311,142)       $  (374,374)        $    (9,016)
                               ================    ================    ==============

      Earnings (Loss)
         per share of
         common Stock
         - Basic                $    (1.4461)       $   (0.0368)        $   (0.0000)
                               ================    ================    ==============

      Weighted Average
         Shares - Basic            3,672,698          9,190,183          10,470,467
                               ================    ================    ==============

      Earnings (Loss)
         per share of Common
         Stock - Diluted        $    (0.9392)       $   (0.0368)        $   (0.0000)
                               ================    ================    ==============

      Weighted Average
         Shares - Diluted          5,655,036           9,190,183         20,454,753
                               ================    ================    ==============

</TABLE>


  See Accountants' Review Report and Accompanying Notes to Financial Statements

                                        4
<PAGE>


<TABLE>
<CAPTION>
                      INTERNATIONAL MERCANTILE CORPORATION
                  STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
             FOR THE YEAR JANUARY 1, 2000 THROUGH DECEMBER 31, 2000
                   AND THE SIX MONTHS ENDED SEPTEMBER 30, 2001


                                                           COMMON STOCK                PREFERRED STOCK
                                                        SHARES       AMOUNT         SHARES          AMOUNT
                                                        -------      ------         ------          ------


<S>                                                 <C>           <C>            <C>           <C>
Balance, Janaury 1, 2000, as adjusted for
August 8, 2000 1:7 reverse stock split              $  1,728,920  $    82,892    $ 2,945,874   $ (299,444)
Issuance of Common Stock of International
Mercantile Corporation a Missouri corp to
owners of Micromatix.com, Inc., a Delaware
corporation, as adjusted for August 8,
    2000 1:7 reverse stock split
    Class A Common Stock                                 214,286       21,429           -            -
    Class B Common Stock                               1,000,000       10,000           -            -
Issuance of Common Stock of International
Mercantile Corporation a Missouri
corporation, as adjusted for August 8,
2000 1:7 reverse stock split
    Class A Common Stock                               8,390,330      839,033        418,656         -
    Class B Common Stock
    Series 2 Preferred Stock                                -            -           285,714


Balance,  December 31, 2000                           11,619,250      953,354        285,714    3,364,530

Issuance of Common Stock of International
Mercantile Corporation a Missouri
Corporation, as adjusted for August 8,
    2000 1:7 reverse stock split
    Class A Common Stock                               2,626,492      262,649           -        (269,798)
    Class B Common Stock
    Series 2 Preferred Stock
                                                      ----------------------------------------------------

Balance, September 30, 2001                         $ 14,245,742  $ 1,216,003    $   285,714

</TABLE>








  See Accountants' Review Report and Accompanying Notes to Financial Statements


                                        5
<PAGE>


<TABLE>
<CAPTION>

                      INTERNATIONAL MERCANTILE CORPORATION
                            STATEMENTS OF CASH FLOWS


                                                                      Year Ended       For 9 Months
                                                                       12/31/01          9/30/01
                                                                      -----------     -------------

<S>                                                                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
Net (Loss)                                                          $ (5,311,142)       $  (8,363)
Adjustments to Reconcile Net Income to Net Cash
     Provided by Operating Activities
                 Bad Debts                                               410,870
                 Depreciation & Amortization                             160,509
               (Increase)Decrease in
                    Marketable Securities - Trading                      715,075
                    Accounts Receivable                                 (712,457)
                    Inventory                                            199,235
                    Prepaids & Other Assets                              (50,287)
                    Deposits                                             (14,274)
                    Organization Costs & Loan Costs                      (70,199)
                    Due From Related Party                               (51,404)
                 Increase(Decrease)
                    Accounts Payable & Accrued Expenses                  473,106
                    Cash Overdraft
                    Due to Related Party                                (261,322)
                    Accrued Interest                                     121,130
                    Warranty Reserve                                      10,287
                                                                     ------------       -----------
     NET CASH PROV. BY OPERATING ACTIVITIES                           (4,380,873)          (8,363)

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
Acquisition of Fixed Assets                                              (87,127)
Permanent Impairment of Equity Securities
   Available-for-Sale                                                  2,645,642
                                                                     ------------       -----------

     NET CASH (USED) IN INVESTING ACTIVITIES                           2,558,515

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
Proceeds from Loans, Notes Payable, Capital
    Leases and Line of Credit                                          1,695,000            9,000
Payments on Loans, Notes and Line of Credit                           (1,413,591)
Payments on Capital Lease                                                 (8,422)
Issuance of Capital Stock & Capital Contributions Thereon              1,574,829
Reverse Merger of Macromatix per Unwind Provision                                         (31,788)
                                                                     ------------       -----------

     NET CASH (USED) IN FINANCING ACTIVITIES+B15                       1,847,816          (31,788)
                                                                     ------------       -----------

NET INCREASE (DECREASE) IN CASH                                           25,458           31,151

CASH - BEGINNING                                                          37,699           32,371
                                                                     ------------       -----------

CASH - ENDING                                                           $ 63,157            1,220
                                                                     ============       ===========
</TABLE>


  See Accountants' Review Report and Accompanying Notes to Financial Statements


                                        6
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

1.   Organization and Summary of Significant Accounting Policies


ORGANIZATION

International  Mercantile  Corporation  (The  Company)  is a profit  corporation
organized  under  the  laws of the  State  of  Missouri  on  March  10,  1971 as
International  Mercantile  Corporation  (IMTL).  On July 31,  1999,  the Company
liquidated  its'  majority  interest  holdings  in its'  subsidiary,  University
Mortgage,  Inc.,  which  represented  the  Company's  operations,  through a new
issuance of University Mortgage, Inc. stock to a related third party investor in
consideration  of their  capital  investment in  University  Mortgage,  Inc. The
result of this action left an OTC Bulletin Board publicly traded company with no
substantial assets or liabilities. On September 6, 1999, the Company merged with
Micromatix.com,   Inc.  (the  predecessor  company),  a  newly  formed  Delaware
corporation which maintained an Internet based personal  computer  manufacturing
business  that sells  build-to-order  unbranded or "white box" PC systems and PC
related hardware throughout the United States to value added retailers and other
marketers of micro computer  systems.  Shareholders of the  predecessor  company
received 2,500 shares of the Company's  stock for each share of the  predecessor
company;  a total  of  2,500,000  shares  issued,  in  exchange  for 100% of the
outstanding stock of the predecessor  company. The merger was accounted for as a
capital  transaction with no recognition of goodwill or other intangible assets.
The Company,  however,  has not completed  the requisite  articles of merger and
related  documents,  which are  required to be filed with the  applicable  state
authorities.  Immediately  subsequent  to the  transaction,  the  owners  of the
predecessor  company  assumed the  management of the Company  doing  business as
Micromatix.net  and owned  approximately  26.92% of the outstanding stock of the
Company representing 48.32% of the voting rights. Since this transaction was, in
substance, a recapitalization of Micromatix.com,  Inc. (the predecessor company)
and  not a  business  combination,  pro  forma  information  is  not  presented.
Accordingly,  the historical data contained in the financial  statements is that
of the predecessor  company.  An unwind provision  existed as part of the merger
agreement,  whereby the merger agreement could be rendered void. On September 2,
2000 this  provision  was extended  until March 30, 2001.  On March 31, 2001 the
Board of Directors  elected exercise their put option and unwind the merger with
Micromatix.com.  The net effect of this was to return each  corporation to their
status pro ante prior to their  merger.  The  unwinding  returned all assets and
liabilities to Micromatix so they could continue to operate independently.  Each
has agreed to hold each other harmless.

The Company has then changed its  direction and sought to acquire a new business
in either the form of a merger,  acquisition  or some type of pooling of shares.
As of  September  30,  2001 the company  made  preliminary  agreement  which was
formalized  on or about  October 17, 2001 to acquire a wholly  owned  subsidiary
called  Solutions  Technology Inc. The agreement calls for exchange of the total
shares  outstanding of Solutions  Technology,  A Nevada  Corporation.  The total
number of shares outstanding for Solutions Technology, Inc. is 20,511,365 common
stock and the exchange  will be on a 1 for 1 basis of the company Class A Common
Stock. In order to facilitate this the board has issued an additional 20,511,365
shares thus the  original  capital  structure  will  remain the same.  The stock
certificates  were issued on October 19, 2001 by approval of the board.  Further
aspects  of the  exchange  include  the  purchase  of the  Class B shares by two
entities,  David A. Facciani and  Integrated  Capital Corp at 50 percent each in
return for $1.00.

REVENUE RECOGNITION

Revenues will be recognized when earned based on the accrual method.


INVENTORY

There  currently is no inventory nor is there any plans to have inventory at any
time in the near future.

                                        7
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


ADVERTISING EXPENSE

The Company  recognizes  advertising  expenses in accordance  with  Statement of
Position  ("SOP") 93-7  "Reporting on  Advertising  Costs." As such, the Company
expenses the costs of producing  advertisements  at the time production  occurs,
and expenses the cost of  communicating  advertising  in the period in which the
advertising space or airtime is used.


PROPERTY AND EQUIPMENT

Property and  equipment is stated at cost.  Depreciation  is computed  using the
straight-line  method based on the estimated  useful lives of the assets,  which
range from three to five years.  Costs for routine  repairs and  maintenance are
expensed  as  incurred  and  gains  and  losses on the  disposal  of assets  are
recognized in the period such disposals occur.


SOFTWARE DEVELOPMENT COSTS

Internal  and  external  costs  incurred to develop  internal-use  software  are
capitalized  during the  application  development  stage and are being amortized
over three years.


INTANGIBLE ASSETS

Costs  incurred to organize  the Company  are  capitalized  and  reported on the
balance sheet as other assets.  The costs are being amortized over a period of 5
years using the straight-line  method.  Costs associated with the procurement of
loans and lines of credit are  capitalized  and reported on the balance sheet as
other  assets.  The  costs  are  amortized  over  the term of the  related  debt
instrument.


INTERIM FINANCIAL STATEMENTS

The accompanying  unaudited  interim  financial  statements at June 30, 2000 and
September  30,  2001  and  for  the  quarters  then  ended  do not  include  all
disclosures provided in the annual financial statements. These interim financial
statements  are  the   representation  of  management  and  should  be  read  in
conjunction  with the Company's  annual  audited  financial  statements  and the
footnotes  thereto.  However,  the  accompanying  interim  financial  statements
reflect all adjustments which are, in the opinion of management, of a normal and
recurring nature necessary for a fair presentation of the financial position and
results of operations of the Company.  Unless otherwise stated,  all information
other  than  that  related  to  December  31,  2000 and the year  then  ended is
unaudited, and no other form of assurance is provided.

                                        8
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


MARKETABLE SECURITIES AND INVESTMENT IN EQUITIES          AVAILABLE-FOR-SALE

The Company's marketable  securities are comprised of equity and debt securities
and are  classified as trading  securities.  Trading  securities are recorded at
fair  value,  with the change in fair value  during the period  included  in net
earnings.  In the first  quarter  of the year 2000 the  Company  liquidated  its
entire marketable  trading  securities  portfolio.  The Company's  Investment in
Equities  Available-For-Sale  is comprised of securities that management has not
demonstrated  are being held for  trading.  The  investment  is recorded at fair
market value on the balance sheet with any permanent decline in value recognized
in the statement of operations in accordance with SFAS 115. Currently,  the only
securities  being held by the company are 200,000 of GLTK and  4,000,000 of PCLO
currently traded on the OTCBB.


WARRANTY RESERVE

The Company  maintains  a depot  warranty on  components  sold and  manufactured
systems for three years; the equivalent  period of time that  substantially  all
components  from supplier  manufacturers  are warranted.  As the Company has not
established a history of warranty service,  a warranty reserve of one quarter of
1% of sales has been recorded at March 31, 2000, December 31, 2000, and at March
31,  2001.  This  potential  warranty  should not affect the company as it would
become the responsibility of Micromatix.


INCOME TAXES

The  Company  files its tax  return  with the  Internal  Revenue  Service as a C
Corporation.  Applying statutory tax rates to future year's differences  between
the tax  bases  and  financial  reporting  amounts  of  assets  and  liabilities
recognizes deferred income taxes. No deferred tax asset/valuation  allowance has
been recognized for the losses incurred to date, as it is not determinable  that
the Company will realize any tax benefit from such losses.  Loss  carryforwards,
if any,  expire  fifteen  years  following the tax year-end in which they occur.
Micromatix  will be responsible  for the filing of the operations  through March
30, 2001.  To the extent of the  operations  for the company's  activities  from
March 31, 2001 through the end of their fiscal  period is what will be reflected
on their tax return.


USE OF ESTIMATES AND ASSUMPTIONS

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  requires that  management 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 respective  reporting
period. Actual results could vary from these estimates and assumptions.

                                       9
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


CONCENTRATIONS OF RISK

Financial  instruments that potentially subject the Company to concentrations of
credit  risk  consist   primarily  of  cash,  cash  equivalents  and  marketable
securities.  The Company maintains its cash and cash equivalents in bank deposit
accounts,  the balances of which, at times, may exceed federally insured limits.
Additionally,  the Company  assumes that computer  chip and memory  availability
will remain constant.  This assumption subjects the Company to concentrations of
risk should the availability of these items become uncertain in the future


RECENT ACCOUNTING PRONOUNCEMENTS

The Financial  Accounting  Standards  Board issued SFAS No. 133,  Accounting for
Derivative  Instruments and Hedging Activities effective for all fiscal quarters
of fiscal years  beginning  after June 15, 1999. The Company does not anticipate
the impact of this pronouncement will be material. Further, the Company does not
believe that any recently  issued,  but not yet effective  accounting  standards
will have a material  effect on the  Company's  financial  position,  results of
operations or cash flows.

In December 1999, the  Securities and Exchange  Commission  staff released Staff
Accounting  Bulletin No. 101, Revenue  Recognition in Financial  Statements (SAB
No.  101),  which  provides  guidance  on  the  recognition,   presentation  and
disclosure of revenue in financial  statements.  SAB No. 101 does not impact the
Company's revenue recognition.


EARNINGS PER SHARE

As per Financial  Accounting  Standards Board Statement of Financial  Accounting
Standards  No. 128 (SFAS 128),  Earnings Per Share,  standards for computing and
presenting  earnings  per share (EPS)  applies to publicly  held common stock or
potential  common stock. It requires dual  presentation of basic and diluted EPS
on the face of the  income  statement  for all  entities  with  complex  capital
structures.  Basic EPS  excludes  dilution  and is computed  by dividing  income
available to common stockholders by the weighted average number of common shares
outstanding  for the period.  Diluted EPS reflects the  potential  dilution that
could  occur  if  securities  or other  contracts  to issue  common  stock  were
exercised or  converted  into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity.  In computing  EPS for the
year ended  December 31, 2000 and the quarters ended June 30, 2000 and September
30, 2001 the number of shares  considered to be  outstanding  is computed as the
average actual number of shares of the Company outstanding during the period.

                                       10
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


EARNINGS PER SHARE CONT'D

Other appropriate  adjustments have been made to deal with changes in numbers of
shares issued during the period.  Diluted EPS for the period ended June 30, 2000
were computed as a result of the Company's complex capital  structure  including
1,000,000  shares  of  Class B Common  stock  (see  reverse  split)  which  were
authorized  and  unissued as of June 30, 2000.  These  shares were  subsequently
issued by April 12,  2000.  Diluted  EPS for the year  2000 were  computed  as a
result of the Company's complex capital  structure;  including 285,714 shares of
Series 2 Preferred  stock,  20,000 shares of Class B Common stock, and 1,250,000
equivalent converted shares represented by the $500,000  Convertible  Debenture.
Diluted EPS for the quarter  ended  September 30, 2001 were computed as a result
of the Company's complex capital structure; including 285,714 shares of Series 2
Preferred stock, 20,000 shares of Class B Common stock, and 5,714,286 equivalent
converted shares represented by the $500,000 Convertible  Debenture.  The actual
conversion  may be reduced given the reverse  merger and  relinquishment  of the
debentures.


DEVELOPMENT STAGE




















                                       11
<PAGE>


                      INTERNATIONAL MERCANTILE CORPORATION
                          NOTES TO FINANCIAL STATEMENTS


Officers' Compensation

Prior to the reverse acquisition, the Company's day-to-day activities were
managed by certain officer/shareholders, who contributed their time on the
Company's behalf without compensation in either cash or stock. No value for
these services has been determined or recorded on the accompanying financial
statements. Subsequent to the merger one of these officer/shareholders is
compensated as a consultant through a wholly owned corporation of the officer/
shareholder and another officer is being compensated through the Company's
payroll. Given there are no current operations other than the acquisition of a
new company and the financing thereof there are currently no officer salaries.


Notes Payable consisted of the following at December 31, 2000:

         Note Payable - related party dated September 6, 1999      $  9,000


In July 1999 Bowne & Co, Inc., a financial  corporate printer filed suit against
the Company in New York seeking  approximately $18,000 for claims of outstanding
printed invoices. As of March 31, 2001 the suit is still pending and the outcome
is not  yet  determinable.  This  is a  liability  of the  Company  as  well  as
Micromatix as a judgment has been procured.

In August 2000  Interim  Atlantic  Enterprises,  LLC filed suit against IMTL for
$11,038  This suit  concerns a claim that an  employee  did not work the minimum
number of days required  under the terms of a contract  between IMTL and Interim
Atlantic  Enterprises,  LLC. As of September 30, 2001 the is a default  judgment
against the company as well as Micromatix.  This liability is still shown on the
Company's  balance  sheet.  On March 28,  2000,  Microsoft  Corporation  filed a
complaint  against  the  Company  and an  employee  for  alleged  copyright  and
trademark  infringement  and related  causes of action.  On November 7, 2000 the
Company filed an answer  denying all of  Microsoft's  claims.  As of the date of
these financial  statements the suit is still pending and the outcome is not yet
determinable however it would be a liability of Micromatix.


Going Concern

The  Company's  financing  has been  provided by related  party  loans,  capital
contributions  from shareholders and third party loans. The Company  anticipates
that  through the rest of the year ended  December  31, 2001 the Company will be
able to locate,  finance  and  acquire a new  viable  business.  Currently,  the
Company is merely a shell for a new viable  business  opportunity.  There are no
operations and  accordingly  the losses are  considerably  less. The company has
much less capital requirements as the operations have changed from manufacturing
of computers to the acquisition of a new business.






                                       12
<PAGE>


Reverse Stock Split

On August 8, 2000 the Company, through a Board action,  authorized a 1:7 reverse
split of the Company's  outstanding Class A Common Stock, and outstanding Series
1, Series 2 and Series 3 Preferred  Stock. The Board approved the rounding up of
every  fractional  shareholder to a full share,  with all  shareholders  equally
affected. Coinciding with the reverse split, the Company increased the par value
of its Class A Common Stock from $.01 to $.10 per share,  and  increased the par
value of its  Preferred  Stock from $.10 to $1.00 per share.  The purpose of the
reverse split was to facilitate  raising  additional capital for the Company and
allow management to find possible merger and acquisition candidates.  Because of
the Linuxone deal and the need to find another  acquisition  candidate the Board
approved  another  reverse  stock  split of 11 to 1. The  Board  and  Management
believe this is one of several  necessary steps that must be taken to insure the
viability of the Company.


Subsequent Events





















                                       13
<PAGE>



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


CAUTIONARY  STATEMENT FOR PURPOSE OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

The following discussion regarding International  Mercantile Corp ("the Company"
or "IMTE") and its business and operations contains "forward-looking" statements
within the meaning of Private  Securities  Litigation  Reform Act of 1995. These
statements  consist of any statement  other than a recitation of historical fact
and can be identified by the use of  forward-looking  terminology such as "may,"
"except,"  "anticipate,"  "estimate,"  or  "continue"  or the  negative or other
variations thereof or comparable  terminology.  The reader is cautioned that all
forward-looking  statements are necessarily  speculative and there are risks and
uncertainties  that could cause  actual  events or results to differ  materially
from those referred to in such forward-looking statements,  including no history
of  profitable   operations,   competition,   risks  related  to   acquisitions,
difficulties in managing  growth,  dependence on key personnel and other factors
discussed under the section titled "Management's Discussion and Analysis or plan
of Operations-Factors That May Affect Future Results" in the Company's quarterly
report on the form 10-Q for the quarter ended  September  30, 2001.  The Company
does not have a policy of updating or revising  forward-looking  statements  and
thus it should not be assumed  that silence of  management  over time means that
actual events are occurring as estimated in such forward-looking statements.

The following  discussion and analysis  should be read in  conjunction  with the
financial  statements  appearing  as Item {1} to this  Report.  These  financial
statements  reflect  the  operations  of the  Company  for  the  quarters  ended
September 30, 2001 and June 30, 2000.


 Plan of Operation

The Company now intends to search for a acquisition candidate to merge into it's
existing  shell.  The  financing  of the new  candidate  will  likely be through
private  placement  memorandum  or  existing  companies  willing  to pay for the
corporate shell because it is a fully reporting company. There are no guarantees
this will occur and the Company is current in all it's filing's with the SEC.










                                       14
<PAGE>


                                     PART II
                                OTHER INFORMATION


Item 1.   Legal Proceedings

     There are two default judgments against the Company for a total of $29,000.


Item 2.   Change in Securities

            Xxxxxx insert later


Item 3.   Defaults Upon Senior Securities

     Not Applicable


Item 4.   Submission of Matters to a Vote of Security Holders

     Not Applicable


Item 5.   Other Information

     Not Applicable


Item 6.   Exhibits and Reports

      Not Applicable
















                                       15
<PAGE>


                                   SIGNATURES

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


INTERNATIONAL MERCANTILE CORPORATION




By: /s/ C. Fredric Richardson
    --------------------------
        C. Frederic Richardson
           Chief Exec. Officer
           President, Director


Date: November 14, 2001




By: /s/ C. Fredric Richardson
    --------------------------
        C. Timothy Jewell,
           Chief Exec. Officer
           President, Director




By: /s/ Edward Hutya
    --------------------------
        Edward Hutya,
           Director




By: /s/ Max W. Apple
    --------------------------
        Max W. Apple,
           Chairman

Date: November 14, 2001



         ---------------------------------------------------------------

                                       16
<PAGE>