U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 2000.
[ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from . . . . . . to . . . . . .
Commission file number 333-60487
CYBER MERCHANTS EXCHANGE, INC. D.B.A. C-ME.COM
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(Name of small business issuer in its charter)
CALIFORNIA 95-4597370
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
600 S. LAKE AVE., SUITE 405, PASADENA, CA 91106
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (626)793-5000
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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
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Number of shares outstanding of the issuer's classes of common equity, as of
September 30, 2000: 7,589,669 shares of Common Stock, no par value (one class)
Transitional Small Business Disclosure Format: Yes No X
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 3
Item 1. Financial Statements . . . . . . . . . . . . . . . . . . . . . 3
Balance Sheet (unaudited) as at September 30 and June 30, 2000. . . 3
Statement of Operations (unaudited) for three months ended
September 30, 2000 and September 30, 1999 . . . . . . . . . . . . . 4
Statement of Cash Flows (unaudited) for three months ended
September 30, 2000 and September 30, 1999 . . . . . . . . . . . . . 5
Notes to Financial Statements (unaudited) . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . . . . . . . . . 8
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 10
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2
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<TABLE>
<CAPTION>
CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEET
June 30, September 30,
2000 2000
------------ ---------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,274,395 $ 67,995
Certificates of deposit 3,900,000 4,832,284
Stock subscription receivable 1,481,240 -
Accounts receivable, net of allowance for doubtful accounts of
$5,990 and $4,640 as of December 31, 1999 and 2000,
respectively 54,693 74,276
Accounts receivable - related parties 700,000 34,237
Prepaid expenses 5,367 4,895
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Total current assets 7,415,695 5,013,687
Furniture, fixtures and equipment, net 63,937 63,920
Investments in overseas joint ventures and ABNet, net 815,427 2,154,748
Other assets 3,619 7,222
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Total assets $ 8,298,678 $ 7,239,577
============ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 691,114 $ 96,429
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Total current liabilities 691,114 96,429
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Commitments and contingency
Shareholders' equity:
Common stock, no par value; 40,000,000 shares authorized;
7,589,669 shares issued and outstanding at June 30, 1999 and
2000, respectively 8,550,777 10,032,017
Additional paid-in capital 3,332,827 3,572,442
Common stock subscribed 1,481,240 -
Unearned stock compensation (1,180,196) (1,160,787)
Accumulated deficit (4,577,084) (5,300,524)
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Total shareholders' equity 7,607,564 7,143,148
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Total liabilities and shareholders' equity $ 8,298,678 $ 7,239,577
============ ===============
</TABLE>
See accompanying notes to financial statements.
3
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<TABLE>
<CAPTION>
CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
STATEMENT OF OPERATIONS
Three Months Ended
September 30,
--------------------------
1999 2000
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(Unaudited) (Unaudited)
<S> <C> <C>
Revenues:
Subscribers' fees $ 10,150 $ 12,900
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Operating costs and expenses:
Cost of revenue 23,452 69,532
General and administrative expenses 121,622 421,619
Stock-based compensation - 259,024
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Operating gain (loss) (134,924) (737,275)
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Other income (expenses):
Interest income, net 18,133 76,382
Other expenses - (1,453)
Loss on investment in C-ME.com Taiwan - (39,300)
Loss on investment in GP.com - (20,447)
Loss on investment in E-SEA - (932)
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Loss before income taxes (116,791) (723,026)
Income taxes - (414)
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Net loss $ (116,791) $ (723,440)
============ ============
Basic and diluted net loss per share $ (0.019) $ (0.095)
============ ============
Weighted-average number of common shares outstanding 6,086,173 7,589,669
============ ============
</TABLE>
See accompanying notes to financial statements.
4
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<TABLE>
<CAPTION>
CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENT
Three Months Ended
September 30,
--------------------------
1999 2000
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (116,792) $ (723,440)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 7,410 10,861
Stock compensation expense - 259,024
Loss on investments - 60,679
Changes in current assets and liabilities:
Accounts receivable (2,225) 360,417
Accounts payable and accrued expenses (165,433) (594,685)
Prepaid expenses - 472
Other assets - (3,603)
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Net cash used in operating activities (277,040) (630,275)
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Cash flows from investing activities:
Purchase of office equipment (26,980) (10,844)
Increase in deposits and others (865,248) (932,284)
Investment in certificates of deposit 500,000 -
Investment in GP.com - (1,000,000)
Advance to GP.com - (34,237)
Investment in E-SEA - (400,000)
Return of investment due to sales of software - 320,000
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Net cash provided by (used in) investing activities (392,228) (2,057,365)
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Cash flows from financing activities:
Proceeds from stock subscribed 96,984 1,481,240
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Net cash provided by financing activities 96,984 1,481,240
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Net increase in cash and cash equivalents (572,284) (1,206,400)
Cash and cash equivalents, beginning of period 595,265 1,274,395
------------ ------------
Cash and cash equivalents, end of period $ 22,981 $ 67,995
============ ============
</TABLE>
See accompanying notes to financial statements.
5
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION AND BUSINESS
Cyber Merchants Exchange, Inc. d.b.a. C-ME.com (the "Company" or "C-ME.com") is
a business-to-business e-commerce company serving the worldwide retail industry.
C-ME.com, a California corporation, was formed in July, 1996.
The Company provides its customers with an Internet-based communications system
that enables retailers and vendors to conduct negotiations and to electronically
facilitate the sourcing, and the purchase and sale of merchandise on a global
basis. Using C-ME.com's proprietary software, the Company maintains a secure
yet open electronic network that enables retailers to conduct on-line
communications and transactions with their vendors. The front-end
communications and trading process is generally referred to in the retail
industry as "sourcing." High volumes of product and transaction data are
exchanged between retailers and their vendors in order for buy-sell transactions
to be initiated, negotiated and consummated. This critical sourcing process
typically requires a substantial amount of time and attention from both the
retail merchandise buyer and the salesperson of a vendor. The Company's related
software products and services are designed to make this sourcing function
substantially more effective and efficient.
C-ME.com believes that by providing retailers with direct access to foreign
manufacturers, it can better support its existing retail partnerships and
attract new retail partners by aggregating vendors to create efficiencies for
both foreign manufacturers and U.S. retailers. To do this C-ME.com is
partnering with companies in other countries that have the connections, capital
and ability to form joint ventures. These joint ventures are opening regional
merchandise sourcing offices and marketing Internet Sourcing Networks (ISN's) to
international manufacturers that would like to sell directly to large U.S.
retailers. By establishing localized merchandise sourcing offices, C-ME.com is
fulfilling its mission of being the retailers' global sourcing solution by
making international commerce convenient and feasible for many manufacturers who
know how to make quality products but do not have technological knowledge or
Internet access. Beginning in the Pacific Rim, the Company has formed joint
ventures in Taiwan, Thailand, The Philippines, and China during 2000, and plans
to form six more joint ventures in various Asian countries during 2001, as well
as to expand its operations to Central and South America and Europe in 2002.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for fair presentation have
been included. Operating results for the three months period ended September
30, 2000 are not necessarily indicative of the results that may be expected for
the year ending June 30, 2001. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year ended June 30, 2000.
6
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - RELATED PARTY TRANSACTIONS
During the quarter ended September 30, 2000, the Company received proceeds of
$700,000 from GP.com and E-SEA for the sales of software to these joint
ventures. In addition, during September 2000, the Company advanced
approximately $34,000 to GP.com. Subsequent to September 30, 2000, the Company
received payment in full for all advances from GP.com.
NOTE 4 - TRANSACTION IN SHAREHOLDER' EQUITY
In May 2000, the Company conducted a private placement to issue 1,255,900 shares
of its common stock at $4.878 per share. The fund raising was closed on June
30, 2000, with net proceeds of $5,186,959, netting issuance expenses of
$939,377. Among the net proceeds of $5,186,959, $1,475,240 was received on July
30, 2000. During the three-month period ended September 30, 2000, the Company
received proceeds of $6,000 from options exercised.
During the three-month period ended September 30, 2000, the Company granted a
total of 335,596 options under the 1999 Option Plan to employees, officers and
non-employees. The exercise prices of options granted vary and range from
$4.878 to $6.080. The Company applies APB Opinion No. 25 "Accounting for Stock
Issued to Employees" and related interpretations in accounting for its stock
option plans. As a result, the Company recognized a total compensation expense
of $239,615 which all related to employees. Based on their respective vesting
terms, this amount will be amortized over two years with $119,540 being
amortized the first year and $120,076 being amortized the second year.
NOTE 5 - SUBSEQUENT EVENTS
In July 2000, Mr. Yoichiro Honda, an independent party, formed C-ME Japan Co.,
Ltd. On August 26, 2000, the Company executed a sale agreement to sell its
software to C-ME Japan for approximately $366,000. On October 10, 2000, the
Company signed an investment agreement with C-ME Japan Co., Ltd. to invest 19.5
million of Japanese Yen (approximately $190,000) in C-ME Japan Co., Ltd. On
October 15, 2000, the Company invested 19.5 million of Japanese Yen to C-ME
Japan. In accordance with the investment agreement, the Company will inject an
additional 20 million of Japanese Yen in December 2000. The equity interest
the Company will own in C-ME Japan will approximate 49.375%.
On October 19, 2000, the Company executed a Factoring Agreement with CIT
Financial Services. Under this agreement, CIT will establish pre-approved credit
lines for buyers so they can easily and efficiently purchase products on the
C-ME.com web-site and, at the same time, provide credit protection to sellers.
CIT will assume the buyer's financial ability to pay its debts on all approved
orders on the C-ME.com site.
7
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the financial statements and the
related notes thereto included elsewhere in this quarterly report for the three
months ended September 30, 2000. This quarterly report contains certain
forward-looking statements and the Company's future operating results could
differ materially from those discussed herein. Certain statements contained in
this Report, including, without limitation, statements containing the words
"believes," "anticipates," "expects" and the like, constitute "forward-
looking statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. These factors are discussed in more detail below in
the section entitled "Risk Factors." Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking statements. The
Company disclaims any obligation to update any such factors or to announce
publicly the results of any revisions of the forward-looking statements
contained or incorporated by reference herein to reflect future events or
developments.
STATUS OF OPERATIONS
The Company's current business model focuses on the retailer and forming
strategic retail relationships. In addition, the Company is aggressively
pursuing the establishment of international sourcing offices. This
international expansion will help complement the strategic retailer
relationships that the Company anticipates attracting through the execution of
its business model. The Company plans to utilize the marketing power of its
retail partners to attract vendors worldwide.
The Company believes that by providing retailers with direct access to foreign
manufacturers, it can support its existing retail partnerships and attract new
retail partners. The Company's goal is to aggregate manufacturers to create
efficiencies for both foreign manufacturers and U.S. retailers. The Company's
strategy is to partner with companies in other countries that have the
connections, capital and ability to form joint ventures. These joint venture
corporations will open multiple merchandise sourcing offices in many countries,
beginning in the Pacific Rim's major manufacturing centers. The local
merchandise sourcing offices will be used to market the Company's ISNs to
manufacturers that want to sell directly to U.S. retailers.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Three Months Ended September 30, 2000 Compared to September 30, 1999
OPERATING REVENUE
Total operating revenues for the three months ended September 30, 2000 were
$12,900 as compared to $10,150 for the same period last year, or a 27% increase.
Revenues consisted of subscribers' fees. The increase in operating revenues was
due to the increased number of subscribers to the Company's software.
8
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
The Company anticipates generating revenues from fees paid by domestic and
global vendors who subscribe to the ISN, one-time sales of operating software to
joint ventures, and a commission to be paid by the retailers on overseas
purchases through the Company's operating system.
OPERATING COSTS AND EXPENSES
The cost of revenue was $69,532 for the three months ended September 30, 2000 as
compared to $23,452 for the same period last year, or a 197% increase. The
increase in the cost of revenue is attributable to an increase in the cost of
additional technical personnel to service customers, as well as the increased
costs of developing and servicing the Company's proprietary software.
General and administrative expenses were $421,620 for the three months ended
September 30, 2000, as compared to $121,622 for the same period last year, or a
247% increase. The increase in general and administrative expenses is primarily
due to increases in professional consulting expenses, payroll expenses, and
marketing expenses.
The Company recognized stock compensation expenses of $259,024 for the
three-months ended September 30, 2000. Of the $259,024, $29,885 came from
options granted in the first quarter of fiscal year 2001. The remaining
$229,139 was due to amortization of unearned stock compensation recognized in
the fiscal year ended June 30, 2000.
NET LOSS
The Company recorded a net loss of $723,440 for the three months ended September
30, 2000. This represents a $606,649 increase in net losses, as compared to a
net loss of $116,791 for the same period last year. The increase in net loss is
attributable to a $2,750 increase in revenue, compared to a $609,399 increase in
operating costs and other expenses. Loss per share as of September 30, 2000,
was $0.095 as compared to $0.019 as of September 30, 1999, due to an increase in
net losses and an increase in the number of outstanding shares of common stock.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balances and certificates of deposit decreased by $274,116
from $5,174,395 as of the 12 months ended June 30, 2000, to $4,900,279 as of
September 30, 2000. This decrease in cash balances and certificates of deposit
is primarily due to the Company's expansion and losses from operations.
Management estimates the monthly cash "burn rate" to be approximately $150,000
per month. The Company believes it has sufficient cash resources to operate its
business over the next twelve months. Depending on market acceptance of the
Company's current business model, the Company may raise additional funds, either
debt or equity, to augment future growth of the business.
On January 12, 2000, the Company entered into an agreement with a bank to
establish a $600,000 revolving line of credit agreement. Borrowings are secured
by a $700,000 time certificate of deposit at the bank. The line of credit will
expire on January 2, 2001. The Company has this revolving credit line facility
available for general working capital purposes. As of September 30, 2000, the
Company had no borrowing under this facility.
9
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
Management believes that current cash balances, certificates of deposit and cash
flows from operations, if any, will be sufficient to meet present growth
strategies and related working capital and capital expenditure requirements.
The current business plan proposes significant increases in spending when
compared to historical expenditures. Management may decide to raise additional
capital through the issuance of additional debt or equity securities, prior to
achieving positive cash flows from operations.
In July 2000, the Company injected $1,000,000 into Global Purchasing Dotcom,
Inc. (GP.com) for a 50% equity interest and $400,000 into E-SouthEast Asia, Inc.
(E-SEA) for a 40% equity interest. The Company has a future investment
commitment of approximately $190,000 to C-ME Japan in December 2000.
The Company plans to utilize a combination of internally generated funds from
operations, potential debt and / or equity financings to fund its longer-term
growth over a period of two to five years. The availability of future
financings will depend on market conditions.
The forecast of the period of time through which the Company's financial
resources will be adequate to support operations is a forward-looking statement
that involves risks and uncertainties. The actual funding requirements may
differ materially from this as a result of a number of factors including plans
to fully support the ISN and the Company's investments in systems infrastructure
and staffing.
EFFECT OF FLUCTUATIONS IN FOREIGN EXCHANGE RATES
The Company's current joint ventures are located in countries outside the United
States. The functional currency for this foreign operation is the local
currency. The carrying value of the Company's investments in Taiwan is subject
to the risk of foreign currency fluctuations. Any dividends received from the
Company's international joint ventures will also be subject to foreign exchange
risk.
RISK FACTORS
THE COMPANY HAS NOT PRODUCED A PROFIT AND CANNOT BE CERTAIN THAT IT WILL
PRODUCE A PROFIT.
The Company is not profitable and continues to produce a net loss. If the
Company does achieve profitability, it cannot be certain that it will remain
profitable nor that profits will increase in the future. The Company has
incurred significant losses since its inception and may never generate or
sustain a profit. For the three months ended September 30, 2000, the Company
reported a net loss of $706,319. The Company devotes significant resources to
developing, enhancing, selling and marketing its products and services. As a
result, the Company will need to generate significant revenues to maintain
profitability. The Company may not continue its historical growth or generate
sufficient revenues to sustain or increase profitability on a quarterly or
annual basis in the future.
THE INTERNET SOURCING NETWORK HAS NOT GENERATED ANY REVENUE.
The Company expects to depend primarily on revenue from the complete
implementation of its domestic and international Internet Sourcing Networks.
The Internet Sourcing Network has not generated any revenue and there is no
guarantee that it will generate revenue in the future.
10
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
THE COMPANY MAY REQUIRE ADDITIONAL EQUITY FINANCING, WHICH MAY NOT BE
AVAILABLE AND MAY DILUTE THE OWNERSHIP INTERESTS OF INVESTORS.
The Company's ultimate success will depend on its ability to raise additional
capital. No commitments to provide additional funds have been made by
management or other shareholders. The Company has not investigated the
availability, source or terms that might govern the acquisition of additional
financing. When additional capital is needed, there is no assurance that funds
will be available from any source or, if available, that they can be obtained on
terms acceptable to the Company. If not available, the Company's operations
would be severely limited, and it would be unable to implement its business
plan. If equity financing is used to raise additional working capital, the
ownership interests of existing shareholders may be diluted.
THE COMPANY'S OPERATING RESULTS ARE LIKELY TO FLUCTUATE SIGNIFICANTLY.
As a result of the Company's limited operating history and the rapidly changing
nature of the markets in which it competes, the Company's quarterly and annual
revenues and operating results are likely to fluctuate from period to period.
For this reason, you should not rely on period-to-period comparisons of the
Company's financial results as indications of future results. The Company's
future operating results could fall below the expectations of public market
analysts or investors and significantly reduce the market price of its common
stock. Fluctuations in the Company's operating results will likely increase the
volatility of its stock price.
THE COMPANY'S DEPENDENCE ON ALLIANCES WITH BUSINESSES AND GOVERNMENTS
OUTSIDE OF THE UNITED STATES INVOLVES RISKS.
The Company depends on its ability to establish and maintain successful
alliances with businesses and governments located outside of the United States.
If the Company is unable to establish and maintain such alliances, it will not
be able to implement the business plan in its current configuration, which will
affect both its revenue stream and profit potential. In addition, the Company
faces political sovereign risks of conducting international business, including
risks of changing economic conditions in the Pacific Rim, which may have a
material adverse effect on its ability to provide global merchandise sourcing to
its retail partners.
THE COMPANY DOES NOT ANTICIPATE PAYING DIVIDENDS TO COMMON SHAREHOLDERS
IN THE FORESEEABLE FUTURE, WHICH MAKES INVESTMENT IN THE COMPANY
SPECULATIVE OR RISKY
The Company has not paid dividends on its common stock and does not anticipate
paying dividends on its common stock in the foreseeable future. The Board of
Directors has sole authority to declare dividends payable to the Company's
shareholders. The fact that the Company has not and does not plan to pay
dividends indicates that the Company must use all of its funds generated by
operations for reinvestment in its operating activities and also emphasizes that
the Company may not continue as a going concern. Investors also must evaluate
an investment in the Company solely on the basis of anticipated capital gains.
11
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As disclosed in the Company's Form 10-KSB, dated June 30, 2000, and filed on
September 29, 2000, the Company was named as a co-defendant, along with BCF, in
a lawsuit brought by Stanley Rosner, an individual in an action in the Supreme
Court of the State of New York, Nassau County. To date, the Company has not
received notice of the proposed transfer of venue and has not filed its
responsive papers or otherwise moved against the complaint.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
10.1 Factoring Agreement Between CIT, Commercial Services, Inc. and Cyber
Merchants Exchange dated October 19, 2000.
27.1 Financial Data Schedule
(b) REPORT ON FORM 8-K
On July 18, 2000, the Company filed a Form 8-K to report under Item 5 that on
June 30, 2000, the Company closed a private placement offering that secured
equity funding of approximately $6.1 million. In addition, on May 25, 2000, the
Company granted Factory 2-U Stores a warrant on the Company's outstanding common
shares. Based on a joint marketing and cooperation agreement, Factory 2-U
received a warrant entitling it to purchase 838,119 shares of common stock of
the Company.
12
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
SIGNATURES
In accordance with the requirement of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CYBER MERCHANTS EXCHANGE, INC., d.b.a. C-ME.com
-----------------------------------------------
(Registrant)
11/10/00 /s/ Frank S. Yuan
------------- ------------------------------------------------
Frank S. Yuan, Chairman, Chief Executive Officer
11/10/00 /s/ John F. Busey
------------- -----------------------------------------------
John F. Busey, President and Acting
Chief Financial Officer
13
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CYBER MERCHANTS EXCHANGE, INC.
D.B.A. C-ME.COM
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
10.1 Factoring Agreement Between CIT, Commercial Services, Inc. and Cyber
Merchants Exchange dated October 19, 2000.
27.1 Financial Data Schedule
14
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