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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Washington,
      D.C. 20549</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>____________________________</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PURSUANT
      TO SECTION 13 OR 15(d) OF THE</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      EXCHANGE ACT OF 1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Date
      of Report: </strong></font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman"><strong>(Date
      of earliest event reported)</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>July
      7, 2006</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>____________________________</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>CYBER
      MERCHANTS EXCHANGE, INC. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>California</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(State
      or
      other Jurisdiction of Incorporation or Organization)</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="top" width="27%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>001-15643</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(Commission
                File Number)</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>95-4597370</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(IRS
                Employer Identification No.)</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="27%">&#160;</td>
            <td valign="top" width="23%">
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>936A
                Beachland Boulevard, Suite 13 </strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Vero
                Beach, FL 32963 </strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(Address
                of Principal Executive Offices and zip code)</font></div>
            </td>
            <td valign="top" width="23%">&#160;</td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>(772)
      231-7544</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(Registrant's
      telephone</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">number,
      including area code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>N/A</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">(Former
      Name or Former Address, if Changed Since Last Report)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of registrant under any of the following
      provisions:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
      ]
      Written communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
      ]
      Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
      240.14a-12(b)) </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
      ]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
      Act
      (17 CFR 240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
      ]
      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
      Act
      (17 CFR 240.13e-4(c))</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Safe
      Harbor Statement under the Private Securities Litigation Reform Act of
      1995</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Information
      included in this Form 8-K may contain forward-looking statements within the
      meaning of Section 27A of the Securities Act and Section 21E of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act"). This information may
      involve known and unknown risks, uncertainties and other factors which may
      cause
      the actual results, performance or achievements of Cyber Merchants Exchange,
      Inc. (&#8220;Cyber&#8221;) and Prime Fortune Enterprises Limited and its subsidiaries
      (collectively, &#8220;InfoSmart Group&#8221;) to be materially different from future
      results, performance or achievements expressed or implied by any forward-looking
      statements. Forward-looking statements, which involve assumptions and describe
      Cyber&#8217;s and InfoSmart Group&#8217;s future plans, strategies and expectations, are
      generally identifiable by use of the words "may," "should," "expect,"
      "anticipate," "estimate," "believe," "intend" or "project" or the negative
      of
      these words or other variations on these words or comparable terminology.
      Forward-looking statements are based on assumptions that may be incorrect,
      and
      there can be no assurance that any projections or other expectations included
      in
      any forward-looking statements will come to pass. Cyber&#8217;s and InfoSmart Group&#8217;s
      actual results could differ materially from those expressed or implied by the
      forward-looking statements as a result of various factors. Except as required
      by
      applicable laws, Cyber undertakes no obligation to update publicly any
      forward-looking statements for any reason, even if new information becomes
      available or other events occur in the future.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Section
      1 - Registrants&#8217; Business and Operations</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      1.01 Entry into a Material Definitive Agreement.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      July 7, 2006, Cyber Merchants Exchange, Inc., a California corporation
      ("Cyber"), entered into an Exchange Agreement (&#8220;Exchange Agreement&#8221;) with KI
      Equity Partners II, LLC, a Delaware limited liability company (&#8220;KI Equity&#8221;),
      Prime Fortune Enterprises Limited, an international business company
      incorporated in the British Virgin Islands ("Prime"), and each of the equity
      owners of Prime (the &#8220;Prime Shareholders&#8221;). Under the terms of the Exchange
      Agreement, Cyber will, at closing of the exchange transaction (&#8220;Closing&#8221;),
      acquire all of the outstanding capital stock and ownership interests of Prime
      (the &#8220;Interests&#8221;) from the Prime Shareholders, and the Prime Shareholders will
      transfer and contribute all of their Interests to Cyber. In exchange, Cyber
      will
      issue to the Prime Shareholders 1,000,000 shares of Series A Convertible
      Preferred Stock, no par value per share, of Cyber ("Series A Preferred Shares"),
      which shall be convertible into 116,721,360 shares of Cyber&#8217;s common stock
      (&#8220;Conversion Shares&#8221;). A copy of the Exchange Agreement is included as Exhibit
      2.1 to this Current Report and is hereby incorporated by this reference. All
      references to the Exchange Agreement and other exhibits to this Current Report
      are qualified, in their entirety, by the text of such exhibits.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prime
      owns all of the capital stock of Infosmart Group, Limited, a company
      incorporated in the British Virgin Islands (&#8220;InfoSmart&#8221;). InfoSmart beneficially
      owns 100% of the issued and outstanding capital stock of both: (i) Info Smart
      Technology Limited, a company incorporated under the laws of Hong Kong (&#8220;IS
      Technology&#8221;); and (ii) Info Smart International Enterprises Limited, a company
      incorporated under the laws of Hong Kong (&#8220;IS International&#8221;). IS Technology
      owns all of the issued and outstanding capital stock of Infoscience Media
      Limited, a company incorporated under the laws of Hong Kong (&#8220;IS Media&#8221;). IS
      Media owns 99.42% of the issued and outstanding capital stock of Discobras
      Industria E Comercio de Electro Eletronica Limiteda, a company incorporated
      under the laws of Brazil (&#8220;Discobras&#8221;). Prime, Infosmart, IS International, IS
      Technology, IS Media and Discobras shall be referred to herein collectively
      as
      "InfoSmart Group." InfoSmart Group is engaged in the business of development,
      manufacturing, marketing and sales of recordable DVD media. </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the execution of the Exchange Agreement, Cyber, InfoSmart,
      IS
      Technology, IS International and IS Media entered into a Guarantee and
      Assumption Agreement (&#8220;Guarantee Agreement&#8221;), under which InfoSmart, IS
      Technology, IS International and IS Media have agreed to be jointly and
      severally liable with Prime and the Prime Shareholders for each and every
      obligation and liability of Prime and the Prime Shareholders under the Exchange
      Agreement as if it were a party to the Exchange Agreement. A copy of the
      Guarantee Agreement is included as Exhibit 2.2 to this Current Report and is
      hereby incorporated by this reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
      completion of the exchange transaction (the &#8220;Exchange&#8221;), Prime will become a
      wholly-owned subsidiary of Cyber. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      consummation of the Exchange is contingent on a minimum of $7,000,000 (or such
      lesser amount as mutually agreed to by Prime and the placement agent) being
      subscribed for, and funded into escrow, by certain accredited and institutional
      investors (&#8220;Investors&#8221;) for the purchase of shares of Series B Convertible
      Preferred Stock (&#8220;Series B Preferred Shares&#8221;) of Cyber promptly after the
      closing of the Exchange under terms and conditions approved by Cyber&#8217;s board of
      directors immediately following the Exchange (&#8220;Financing&#8221;). The closing of the
      Financing will be contingent on the closing of the Exchange, and the Exchange
      will be contingent on the closing of the Financing. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
      assurances can be given that the Financing or the Exchange will be completed.
      Further, in the event the Financing is completed, there can be no assurance
      that
      that the gross proceeds will be at least $7,000,000. For purposes of this
      Report, it is assumed that the Financing will be completed with gross proceeds
      of $10,000,000, the maximum amount under the Financing. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      issuance of the Series A Preferred Shares to the Prime Shareholders and, upon
      conversion, the shares of Cyber&#8217;s common stock underlying the Series A Preferred
      Shares, is intended to be exempt from registration under the Securities Act
      of
      1933, as amended (the &#8220;Securities Act&#8221;), pursuant to Regulation S promulgated
      thereunder. The issuance of the Series B Preferred Shares to Investors is
      intended to be exempt from registration under the Securities Act pursuant to
      Section 4(2) thereof and such other available exemptions. As such, the Series
      A
      Preferred Shares and the Series B Preferred Shares, and upon conversion thereof,
      Cyber&#8217;s common stock, may not be offered or sold in the United States unless
      they are registered under the Securities Act, or an exemption from the
      registration requirements of the Securities Act is available. No registration
      statement covering these securities has been or is expected to be filed with
      the
      United States Securities and Exchange Commission (&#8220;SEC&#8221; or &#8220;Commission&#8221;) or with
      any state securities commission in respect of the Exchange or the Financing.
      However, as a condition to the Financing, it is expected that Cyber will agree
      to register for public re-sale the shares of Cyber&#8217;s common stock underlying the
      Series B Preferred Shares issued to the Investors in the Financing. In
      addition,&#160;Cyber has agreed to register for public re-sale after the
      Exchange: (i) 2,000,000 shares of Cyber&#8217;s common stock which are currently
      outstanding and have been granted piggyback registration rights, (ii) 7,104,160
      shares of Cyber&#8217;s common stock currently held by KI Equity which do not have
      piggyback registration rights, (iii) the Gateway Shares (as defined below),
      (iv)
      approximately 6,484,519 shares of Cyber&#8217;s common stock underlying Series A
      Preferred Shares to be issued to Hamptons Investment Group Limited (&#8220;HIG&#8221;)
      immediately prior to the closing of the Exchange, and (v) 134,100 shares of
      Cyber&#8217;s common stock issued to Richardson &amp; Patel LLP after Closing for
      legal services rendered to Prime in connection with the Exchange and Financing.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">3</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
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        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber
      is
      presently authorized under its Articles of Incorporation to issue 40,000,000
      shares of common stock, no par value per share, and 10,000,000 shares of
      preferred stock, no par value per share. Of the 10,000,000 shares of preferred
      stock authorized, 1,200,000 shares will be designated as Series A Convertible
      Preferred Stock pursuant to a Certificate of Determination (&#8220;Series A
      Certificate of Determination&#8221;), which is to be approved by Cyber&#8217;s board of
      directors, and filed with and accepted by, the Secretary of State of the State
      of California prior to the closing of the exchange transaction. </font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
      of the
      date of this Report, Cyber has 10,119,040 shares of its common stock issued
      and
      outstanding, and no shares of preferred stock issued and outstanding. However,
      subject to the completion of the Exchange, Cyber will issue 2,850,000 shares
      of
      Cyber&#8217;s common stock to Worldwide Gateway Co., Ltd. (&#8220;Gateway&#8221;) immediately
      prior to the Closing for Gateway&#8217;s services as a consultant to Cyber connection
      with the Exchange (&#8220;Gateway Shares&#8221;). Accordingly, for purposes of this Report,
      all references to Cyber&#8217;s outstanding common stock and Cyber&#8217;s shareholders will
      include the Gateway Shares and Gateway, respectively. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under
      the
      terms of the Exchange Agreement, all of the outstanding Interests of Prime
      will
      be exchanged for 1,000,000 Series A Preferred Shares of Cyber. Each Series
      A
      Preferred Share will be convertible into 116.721360 shares of Cyber&#8217;s common
      stock (the &#8220;Conversion Rate&#8221;). The Series A Preferred Shares will immediately
      and automatically be converted into shares of Cyber&#8217;s common stock (the
&#8220;Mandatory Conversion&#8221;) upon the approval by a majority of Cyber&#8217;s stockholders
      (voting together on an as-converted-to-common-stock basis), following the
      exchange transaction, of an increase in the number of authorized shares of
      Cyber&#8217;s common stock from 40,000,000 shares to 300,000,000 shares and a change
      of Cyber&#8217;s corporate name (collectively, the &#8220;Corporate Actions&#8221;). KI Equity and
      the Prime Shareholders will enter into a voting agreement (&#8220;Voting Agreement&#8221;)
      to vote their Cyber shares in favor of the Corporate Actions. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      holders of Series A and Series B Preferred Shares will be entitled to vote
      together with the holders of the common stock, as a single class, upon all
      matters submitted to holders of common stock for a vote. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      Series A and Series B Preferred Share will carry a number of votes equal to
      the
      number of shares of common stock issuable upon conversion based on the then
      applicable conversion rate. As such, i</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">mmediately
      following the exchange transaction, the Prime Shareholders together with the
      Investors (assuming gross proceeds from the Financing of $10,000,000) will
      own
      92.3% of the total combined voting power of all classes of Cyber&#8217;s outstanding
      stock entitled to vote.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">4</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Accordingly,
      upon completion of the Exchange and the Financing (assuming gross proceeds
      from
      the Financing of $10,000,000), the Prime Shareholders (including HIG) will
      own
      1,000,000 Series A Preferred Shares (equivalent to 116,721,360 shares of Cyber&#8217;s
      common stock on an as-converted basis), the Investors will receive Series B
      Preferred Shares convertible into approximately 38,314,177 shares of Cyber&#8217;s
      common stock, and the current Cyber stockholders (including Gateway) will own
      12,969,040 shares of Cyber&#8217;s common stock. Upon the mandatory conversion of the
      Series A Preferred Shares, the Prime Shareholders together with the Investors
      (assuming the Investors elect to convert all of their Series B Preferred Shares)
      will own approximately 92.3% of the total outstanding shares of Cyber&#8217;s common
      stock, and the current Cyber stockholders will own approximately 7.7% of the
      total outstanding shares of Cyber&#8217;s common stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Effective
      as of the closing of the exchange transaction, and subject to applicable
      regulatory requirements, including the preparation, filing and distribution
      to
      the Cyber stockholders of a Schedule 14(f)-1 Notice to Stockholders at least
      ten
      (10) days prior to the Closing, the existing officers and directors of Cyber
      will resign, and the newly-appointed directors of Cyber will consist of three
      members of InfoSmart&#8217;s current management, Kwok Chung (InfoSmart&#8217;s current Chief
      Executive Officer), Pauline Sze (InfoSmart&#8217;s current Chief Financial Officer)
      and Andrew Chang (InfoSmart&#8217;s current Director) (collectively, the &#8220;Management
      Directors&#8221;), and one independent director to be designated by KI Equity to serve
      as a director for the one year period following Closing (&#8220;KI Equity Director&#8221;).
      The Management Directors will also have the right to appoint three person as
      independent directors, however, these board positions are expected to be filled
      following the Closing. The Voting Agreement will require KI Equity and the
      Prime
      Shareholders to vote their Cyber shares for the above director designees.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Prime
      has
      also agreed that, within 90 days following the Closing, Cyber&#8217;s board of
      directors will satisfy the independence, audit and compensation committee and
      other corporate governance requirements under the Sarbanes-Oxley Act of 2002
      (the "SOX Act"), the rules and regulations promulgated by the SEC, and the
      requirements of either NASDAQ or American Stock Exchange (&#8220;AMEX&#8221;) as selected by
      Cyber, whether or not Cyber&#8217;s common stock is listed or quoted, or qualifies for
      listing or quotation, on such national exchanges. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additional
      information concerning the Management Directors and KI Equity Director who
      will
      serve as Cyber&#8217;s directors following the Closing will be included in the
      Schedule 14(f)-1 Notice to Stockholders which will be filed with the SEC and
      mailed to stockholders at least ten (10) days prior to the closing of the
      exchange transaction.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      or
      prior to the Closing, pursuant to the terms of the Exchange Agreement, Cyber
      will also enter into a certain financial advisory agreement with Keating
      Securities, LLC (&#8220;Keating Securities&#8221;), a registered broker-dealer, under which
      Keating Securities will be compensated by Cyber for its advisory services
      rendered to Cyber in connection with the exchange transaction. The transaction
      advisory fee will be $450,000. This fee shall be paid in full at the closing
      of
      the exchange transaction. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber&#8217;s
      completion of the transactions contemplated under the Exchange Agreement are
      subject to the satisfaction of certain contingencies including, without
      limitation, the delivery of U.S. GAAP audited annual, interim reviewed and
      pro
      forma financial information of InfoSmart Group (on a consolidated basis)
      acceptable to Cyber, compliance with regulatory requirements, the completion
      of
      the Financing, and the filing of certificates of determination for the Series
      A
      and Series B Preferred Shares with and acceptance by the Secretary of State
      of
      the State of California. Consummation of the exchange transaction is also
      conditioned upon, among other things: (i) execution by KI Equity and the Prime
      Stockholders of the Voting Agreement; (ii) continued quotation of Cyber&#8217;s common
      stock on the NASD Over-the-Counter Electronic Bulletin Board (&#8220;OTC BB&#8221;); (iii)
      receipt of all required licenses, permits, certificates and approvals by the
      government authorities; (iv) delivery of legal opinions from InfoSmart&#8217;s British
      Virgin Islands and Hong Kong legal counsels satisfactory to Cyber, and (v)
      execution of an aftermarket support agreement between Cyber and Keating
      Aftermarket Support, LLC (&#8220;KAMS&#8221;), with such terms and conditions as mutually
      acceptable to Prime, Cyber and KAMS.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">5</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      directors of Cyber have approved the Exchange Agreement, the Guarantee
      Agreement, and the transactions contemplated under the Exchange Agreement.
      The
      directors of Prime have approved the Exchange Agreement and the transactions
      contemplated thereunder. The directors of Infosmart, IS International, IS
      Technology and IS Media have approved the Guarantee Agreement. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      parties expect the closing of the transactions under the Exchange Agreement
      and
      the Financing to occur on or about August 31, 2006. However, there can be no
      assurances that the exchange transaction or the Financing will be completed.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Exchange Agreement may be terminated as follows: (i) by mutual written consent,
      (ii) by either party if the exchange transaction is not consummated by August
      31, 2006 , (iii) by either party if the exchange transaction is prohibited
      by
      issuance of an order, decree or ruling, and (iv) by either party if the other
      is
      in material breach of any representation, warranty, covenant or agreement.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kevin
      R.
      Keating is the father of Timothy J. Keating, the principal member of Keating
      Investments, LLC. Keating Investments, LLC is the managing member of KI Equity,
      which is the majority stockholder of Cyber, Keating Securities, LLC, the
      registered broker-dealer affiliate of Keating Investments, LLC, and KAMS. Kevin
      R. Keating is not affiliated with and has no equity interest in Keating
      Investments, LLC, KI Equity, KAMS or Keating Securities, LLC and disclaims
      any
      beneficial interest in the shares of Cyber&#8217;s common stock owned by KI Equity.
      Similarly, Keating Investments, LLC, KI Equity, KAMS and Keating Securities,
      LLC
      disclaim any beneficial interest in the shares of Cyber&#8217;s common stock currently
      owned by Kevin R. Keating.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Business
      of Cyber</u></font></div>
    <div>&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Cyber
      is
      currently a shell company with nominal assets whose sole business has been
      to
      identify, evaluate and investigate various companies with the intent that,
      if
      such investigation warrants, a reverse merger transaction could be negotiated
      and completed pursuant to which Cyber would acquire a target company with an
      operating business with the intent of continuing the acquired company&#8217;s business
      as a publicly held entity. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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        </div>
      </div>
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        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Business
      of InfoSmart Group</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">InfoSmart
      Group started in the recordable digital versatile disks (&#8220;DVDRs&#8221;) manufacturing
      business with the establishment of IS Technology. Founded in Hong Kong in August
      of 2002, IS Technology was the first company in Hong Kong to manufacture DVDRs.
      With the growth in DVDR demand, the initial shareholders of IS Technology took
      in other shareholders to form two other companies, IS International and IS
      Media, to produce DVDRs. These three companies form InfoSmart Group&#8217;s main
      operational business. InfoSmart Group currently manufactures 8x and 16x discs,
      and is preparing to launch production of new optical storage media, namely,
      writable high density DVDR discs. InfoSmart Group currently has customers in
      Western Europe and Australia. In an effort to enter the South American market,
      InfoSmart Group is establishing a sales and distribution network and a
      production facility in Brazil through its Discobras subsidiary.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      business of InfoSmart Group involves a number of risks and uncertainties that
      could cause the actual results of either company to differ materially from
      those
      estimated by management from time to time. Potential risks and uncertainties,
      include, but are not limited to, such factors as fluctuations in demand for
      InfoSmart&#8217;s products, InfoSmart Group&#8217;s cost of manufacturing and raw materials,
      conditions and trends in the retail market, additions or departures of key
      personnel, Info Smart Group&#8217;s ability to attract and maintain customers and
      strategic business relationships, InfoSmart Group&#8217;s ability to develop and/or
      license existing and new technologies for the manufacture of its products,
      the
      impact of competitive products and pricing, growth in target markets, the
      adequacy of InfoSmart Group&#8217;s liquidity and financial strength to support its
      growth, and other information that may be detailed from time to time in Cyber&#8217;s
      filings with the United States Securities and Exchange Commission should the
      exchange transaction contemplated by the Exchange Agreement be completed.
</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      3.02 &#160;Unregistered Sales of Equity Securities.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      Item
      1.01, which is incorporated herein by reference.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
      9.01 Financial Statements and Exhibits.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Exhibits</u></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 72pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.1
                </font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exchange
                Agreement by and among Cyber, KI Equity, Prime and the Prime Shareholders
                dated July 7, 2006 *. </font></div>
            </td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 72pt;">&#160;</td>
            <td>&#160;</td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 72pt;"><font size="2">2.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font>&#160;</td>
            <td><font size="2">Guarantee and Assumption Agreement by and among
              Cyber,
              Infosmart, IS International, IS Technology and IS Media dated July
              7,
              2006.</font>&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">*
      The
      schedules to this document are not being filed herewith. &#160;Cyber agrees to
      furnish supplementally a copy of any such schedule to the Securities and
      Exchange Commission upon request.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">7</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, Cyber Merchants
      Exchange, Inc. has duly caused this report to be signed on its behalf by the
      undersigned hereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: "><strong>Cyber
              Merchants Exchange, Inc.</strong></font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;July
              12, 2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Kevin
              R.
              Keating</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="FONT-FAMILY: " size="1">&#160;</font></td>
            <td align="left">
              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">Kevin
              R. Keating, President </font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td>&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">8</font></div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="3">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 243pt; TEXT-INDENT: -243pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>EXHIBIT
      INDEX</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 90pt;"><u><font size="2">Exhibit Number</font></u></td>
            <td><u><font size="2">Description of Exhibit</font></u></td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 90pt;">&#160;</td>
            <td>&#160;</td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 90pt;">
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.1
                </font></div>
            </td>
            <td>
              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exchange
                Agreement by and among Cyber, KI Equity, Prime and the Prime Shareholders
                dated July 7, 2006. </font></div>
            </td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 90pt;">&#160;</td>
            <td>&#160;</td>
          </tr>

      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td style="width: 72pt;">&#160;</td>
            <td style="width: 90pt;"><font size="2">2.2</font></td>
            <td><font size="2">Guarantee and Assumption Agreement by and among
              Cyber,
              Infosmart, IS International, IS Technology and IS Media dated July
              7,
              2006.</font>&#160;</td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt"></font>&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: ">9</font></div>
      <div style="WIDTH: 100%; TEXT-ALIGN: center">
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      </div>
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{"company-data": {"conformed-name": "CYBER MERCHANTS EXCHANGE INC", "cik": "0001066961", "assigned-sic": "7389", "irs-number": "954597370", "state-of-incorporation": "CA", "fiscal-year-end": "0531"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-15643", "film-number": "06958499"}, "business-address": {"street1": "600 S LAKE AVE", "street2": "STE 405", "city": "PASADENA", "state": "CA", "zip": "91106", "phone": "6267935000"}, "former-company": {"former-conformed-name": "WORLD WIDE MAGIC NET INC", "date-changed": "19980727"}}
Unassociated Document
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
____________________________
FORM
      8-K
CURRENT
      REPORT
PURSUANT
      TO SECTION 13 OR 15(d) OF THE
SECURITIES
      EXCHANGE ACT OF 1934
Date
      of Report:
(Date
      of earliest event reported)
July
      7, 2006
____________________________
CYBER
      MERCHANTS EXCHANGE, INC.
(Exact
      name of registrant as specified in charter)
California
(State
      or
      other Jurisdiction of Incorporation or Organization)
001-15643
(Commission
                File Number)
95-4597370
(IRS
                Employer Identification No.)
936A
                Beachland Boulevard, Suite 13
Vero
                Beach, FL 32963
(Address
                of Principal Executive Offices and zip code)
(772)
      231-7544
(Registrant's
      telephone
number,
      including area code)
N/A
(Former
      Name or Former Address, if Changed Since Last Report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of registrant under any of the following
      provisions:
[
      ]
      Written communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
[
      ]
      Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
      240.14a-12(b))
[
      ]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
      Act
      (17 CFR 240.14d-2(b))
[
      ]
      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
      Act
      (17 CFR 240.13e-4(c))
Safe
      Harbor Statement under the Private Securities Litigation Reform Act of
      1995
Information
      included in this Form 8-K may contain forward-looking statements within the
      meaning of Section 27A of the Securities Act and Section 21E of the Securities
      Exchange Act of 1934, as amended (the "Exchange Act"). This information may
      involve known and unknown risks, uncertainties and other factors which may
      cause
      the actual results, performance or achievements of Cyber Merchants Exchange,
      Inc. ("Cyber") and Prime Fortune Enterprises Limited and its subsidiaries
      (collectively, "InfoSmart Group") to be materially different from future
      results, performance or achievements expressed or implied by any forward-looking
      statements. Forward-looking statements, which involve assumptions and describe
      Cyber's and InfoSmart Group's future plans, strategies and expectations, are
      generally identifiable by use of the words "may," "should," "expect,"
      "anticipate," "estimate," "believe," "intend" or "project" or the negative
      of
      these words or other variations on these words or comparable terminology.
      Forward-looking statements are based on assumptions that may be incorrect,
      and
      there can be no assurance that any projections or other expectations included
      in
      any forward-looking statements will come to pass. Cyber's and InfoSmart Group's
      actual results could differ materially from those expressed or implied by the
      forward-looking statements as a result of various factors. Except as required
      by
      applicable laws, Cyber undertakes no obligation to update publicly any
      forward-looking statements for any reason, even if new information becomes
      available or other events occur in the future.
Section
      1 - Registrants' Business and Operations
Item
      1.01 Entry into a Material Definitive Agreement.
Effective
      July 7, 2006, Cyber Merchants Exchange, Inc., a California corporation
      ("Cyber"), entered into an Exchange Agreement ("Exchange Agreement") with KI
      Equity Partners II, LLC, a Delaware limited liability company ("KI Equity"),
      Prime Fortune Enterprises Limited, an international business company
      incorporated in the British Virgin Islands ("Prime"), and each of the equity
      owners of Prime (the "Prime Shareholders"). Under the terms of the Exchange
      Agreement, Cyber will, at closing of the exchange transaction ("Closing"),
      acquire all of the outstanding capital stock and ownership interests of Prime
      (the "Interests") from the Prime Shareholders, and the Prime Shareholders will
      transfer and contribute all of their Interests to Cyber. In exchange, Cyber
      will
      issue to the Prime Shareholders 1,000,000 shares of Series A Convertible
      Preferred Stock, no par value per share, of Cyber ("Series A Preferred Shares"),
      which shall be convertible into 116,721,360 shares of Cyber's common stock
      ("Conversion Shares"). A copy of the Exchange Agreement is included as Exhibit
      2.1 to this Current Report and is hereby incorporated by this reference. All
      references to the Exchange Agreement and other exhibits to this Current Report
      are qualified, in their entirety, by the text of such exhibits.
Prime
      owns all of the capital stock of Infosmart Group, Limited, a company
      incorporated in the British Virgin Islands ("InfoSmart"). InfoSmart beneficially
      owns 100% of the issued and outstanding capital stock of both: (i) Info Smart
      Technology Limited, a company incorporated under the laws of Hong Kong ("IS
      Technology"); and (ii) Info Smart International Enterprises Limited, a company
      incorporated under the laws of Hong Kong ("IS International"). IS Technology
      owns all of the issued and outstanding capital stock of Infoscience Media
      Limited, a company incorporated under the laws of Hong Kong ("IS Media"). IS
      Media owns 99.42% of the issued and outstanding capital stock of Discobras
      Industria E Comercio de Electro Eletronica Limiteda, a company incorporated
      under the laws of Brazil ("Discobras"). Prime, Infosmart, IS International, IS
      Technology, IS Media and Discobras shall be referred to herein collectively
      as
      "InfoSmart Group." InfoSmart Group is engaged in the business of development,
      manufacturing, marketing and sales of recordable DVD media.
2
In
      connection with the execution of the Exchange Agreement, Cyber, InfoSmart,
      IS
      Technology, IS International and IS Media entered into a Guarantee and
      Assumption Agreement ("Guarantee Agreement"), under which InfoSmart, IS
      Technology, IS International and IS Media have agreed to be jointly and
      severally liable with Prime and the Prime Shareholders for each and every
      obligation and liability of Prime and the Prime Shareholders under the Exchange
      Agreement as if it were a party to the Exchange Agreement. A copy of the
      Guarantee Agreement is included as Exhibit 2.2 to this Current Report and is
      hereby incorporated by this reference.
Following
      completion of the exchange transaction (the "Exchange"), Prime will become a
      wholly-owned subsidiary of Cyber.
The
      consummation of the Exchange is contingent on a minimum of $7,000,000 (or such
      lesser amount as mutually agreed to by Prime and the placement agent) being
      subscribed for, and funded into escrow, by certain accredited and institutional
      investors ("Investors") for the purchase of shares of Series B Convertible
      Preferred Stock ("Series B Preferred Shares") of Cyber promptly after the
      closing of the Exchange under terms and conditions approved by Cyber's board of
      directors immediately following the Exchange ("Financing"). The closing of the
      Financing will be contingent on the closing of the Exchange, and the Exchange
      will be contingent on the closing of the Financing.
No
      assurances can be given that the Financing or the Exchange will be completed.
      Further, in the event the Financing is completed, there can be no assurance
      that
      that the gross proceeds will be at least $7,000,000. For purposes of this
      Report, it is assumed that the Financing will be completed with gross proceeds
      of $10,000,000, the maximum amount under the Financing.
The
      issuance of the Series A Preferred Shares to the Prime Shareholders and, upon
      conversion, the shares of Cyber's common stock underlying the Series A Preferred
      Shares, is intended to be exempt from registration under the Securities Act
      of
      1933, as amended (the "Securities Act"), pursuant to Regulation S promulgated
      thereunder. The issuance of the Series B Preferred Shares to Investors is
      intended to be exempt from registration under the Securities Act pursuant to
      Section 4(2) thereof and such other available exemptions. As such, the Series
      A
      Preferred Shares and the Series B Preferred Shares, and upon conversion thereof,
      Cyber's common stock, may not be offered or sold in the United States unless
      they are registered under the Securities Act, or an exemption from the
      registration requirements of the Securities Act is available. No registration
      statement covering these securities has been or is expected to be filed with
      the
      United States Securities and Exchange Commission ("SEC" or "Commission") or with
      any state securities commission in respect of the Exchange or the Financing.
      However, as a condition to the Financing, it is expected that Cyber will agree
      to register for public re-sale the shares of Cyber's common stock underlying the
      Series B Preferred Shares issued to the Investors in the Financing. In
      addition, Cyber has agreed to register for public re-sale after the
      Exchange: (i) 2,000,000 shares of Cyber's common stock which are currently
      outstanding and have been granted piggyback registration rights, (ii) 7,104,160
      shares of Cyber's common stock currently held by KI Equity which do not have
      piggyback registration rights, (iii) the Gateway Shares (as defined below),
      (iv)
      approximately 6,484,519 shares of Cyber's common stock underlying Series A
      Preferred Shares to be issued to Hamptons Investment Group Limited ("HIG")
      immediately prior to the closing of the Exchange, and (v) 134,100 shares of
      Cyber's common stock issued to Richardson & Patel LLP after Closing for
      legal services rendered to Prime in connection with the Exchange and Financing.
3
Cyber
      is
      presently authorized under its Articles of Incorporation to issue 40,000,000
      shares of common stock, no par value per share, and 10,000,000 shares of
      preferred stock, no par value per share. Of the 10,000,000 shares of preferred
      stock authorized, 1,200,000 shares will be designated as Series A Convertible
      Preferred Stock pursuant to a Certificate of Determination ("Series A
      Certificate of Determination"), which is to be approved by Cyber's board of
      directors, and filed with and accepted by, the Secretary of State of the State
      of California prior to the closing of the exchange transaction.
As
      of the
      date of this Report, Cyber has 10,119,040 shares of its common stock issued
      and
      outstanding, and no shares of preferred stock issued and outstanding. However,
      subject to the completion of the Exchange, Cyber will issue 2,850,000 shares
      of
      Cyber's common stock to Worldwide Gateway Co., Ltd. ("Gateway") immediately
      prior to the Closing for Gateway's services as a consultant to Cyber connection
      with the Exchange ("Gateway Shares"). Accordingly, for purposes of this Report,
      all references to Cyber's outstanding common stock and Cyber's shareholders will
      include the Gateway Shares and Gateway, respectively.
Under
      the
      terms of the Exchange Agreement, all of the outstanding Interests of Prime
      will
      be exchanged for 1,000,000 Series A Preferred Shares of Cyber. Each Series
      A
      Preferred Share will be convertible into 116.721360 shares of Cyber's common
      stock (the "Conversion Rate"). The Series A Preferred Shares will immediately
      and automatically be converted into shares of Cyber's common stock (the
"Mandatory Conversion") upon the approval by a majority of Cyber's stockholders
      (voting together on an as-converted-to-common-stock basis), following the
      exchange transaction, of an increase in the number of authorized shares of
      Cyber's common stock from 40,000,000 shares to 300,000,000 shares and a change
      of Cyber's corporate name (collectively, the "Corporate Actions"). KI Equity and
      the Prime Shareholders will enter into a voting agreement ("Voting Agreement")
      to vote their Cyber shares in favor of the Corporate Actions.
The
      holders of Series A and Series B Preferred Shares will be entitled to vote
      together with the holders of the common stock, as a single class, upon all
      matters submitted to holders of common stock for a vote.
Each
      Series A and Series B Preferred Share will carry a number of votes equal to
      the
      number of shares of common stock issuable upon conversion based on the then
      applicable conversion rate. As such, i
mmediately
      following the exchange transaction, the Prime Shareholders together with the
      Investors (assuming gross proceeds from the Financing of $10,000,000) will
      own
      92.3% of the total combined voting power of all classes of Cyber's outstanding
      stock entitled to vote.
4
Accordingly,
      upon completion of the Exchange and the Financing (assuming gross proceeds
      from
      the Financing of $10,000,000), the Prime Shareholders (including HIG) will
      own
      1,000,000 Series A Preferred Shares (equivalent to 116,721,360 shares of Cyber's
      common stock on an as-converted basis), the Investors will receive Series B
      Preferred Shares convertible into approximately 38,314,177 shares of Cyber's
      common stock, and the current Cyber stockholders (including Gateway) will own
      12,969,040 shares of Cyber's common stock. Upon the mandatory conversion of the
      Series A Preferred Shares, the Prime Shareholders together with the Investors
      (assuming the Investors elect to convert all of their Series B Preferred Shares)
      will own approximately 92.3% of the total outstanding shares of Cyber's common
      stock, and the current Cyber stockholders will own approximately 7.7% of the
      total outstanding shares of Cyber's common stock.
Effective
      as of the closing of the exchange transaction, and subject to applicable
      regulatory requirements, including the preparation, filing and distribution
      to
      the Cyber stockholders of a Schedule 14(f)-1 Notice to Stockholders at least
      ten
      (10) days prior to the Closing, the existing officers and directors of Cyber
      will resign, and the newly-appointed directors of Cyber will consist of three
      members of InfoSmart's current management, Kwok Chung (InfoSmart's current Chief
      Executive Officer), Pauline Sze (InfoSmart's current Chief Financial Officer)
      and Andrew Chang (InfoSmart's current Director) (collectively, the "Management
      Directors"), and one independent director to be designated by KI Equity to serve
      as a director for the one year period following Closing ("KI Equity Director").
      The Management Directors will also have the right to appoint three person as
      independent directors, however, these board positions are expected to be filled
      following the Closing. The Voting Agreement will require KI Equity and the
      Prime
      Shareholders to vote their Cyber shares for the above director designees.
Prime
      has
      also agreed that, within 90 days following the Closing, Cyber's board of
      directors will satisfy the independence, audit and compensation committee and
      other corporate governance requirements under the Sarbanes-Oxley Act of 2002
      (the "SOX Act"), the rules and regulations promulgated by the SEC, and the
      requirements of either NASDAQ or American Stock Exchange ("AMEX") as selected by
      Cyber, whether or not Cyber's common stock is listed or quoted, or qualifies for
      listing or quotation, on such national exchanges.
Additional
      information concerning the Management Directors and KI Equity Director who
      will
      serve as Cyber's directors following the Closing will be included in the
      Schedule 14(f)-1 Notice to Stockholders which will be filed with the SEC and
      mailed to stockholders at least ten (10) days prior to the closing of the
      exchange transaction.
At
      or
      prior to the Closing, pursuant to the terms of the Exchange Agreement, Cyber
      will also enter into a certain financial advisory agreement with Keating
      Securities, LLC ("Keating Securities"), a registered broker-dealer, under which
      Keating Securities will be compensated by Cyber for its advisory services
      rendered to Cyber in connection with the exchange transaction. The transaction
      advisory fee will be $450,000. This fee shall be paid in full at the closing
      of
      the exchange transaction.
Cyber's
      completion of the transactions contemplated under the Exchange Agreement are
      subject to the satisfaction of certain contingencies including, without
      limitation, the delivery of U.S. GAAP audited annual, interim reviewed and
      pro
      forma financial information of InfoSmart Group (on a consolidated basis)
      acceptable to Cyber, compliance with regulatory requirements, the completion
      of
      the Financing, and the filing of certificates of determination for the Series
      A
      and Series B Preferred Shares with and acceptance by the Secretary of State
      of
      the State of California. Consummation of the exchange transaction is also
      conditioned upon, among other things: (i) execution by KI Equity and the Prime
      Stockholders of the Voting Agreement; (ii) continued quotation of Cyber's common
      stock on the NASD Over-the-Counter Electronic Bulletin Board ("OTC BB"); (iii)
      receipt of all required licenses, permits, certificates and approvals by the
      government authorities; (iv) delivery of legal opinions from InfoSmart's British
      Virgin Islands and Hong Kong legal counsels satisfactory to Cyber, and (v)
      execution of an aftermarket support agreement between Cyber and Keating
      Aftermarket Support, LLC ("KAMS"), with such terms and conditions as mutually
      acceptable to Prime, Cyber and KAMS.
5
The
      directors of Cyber have approved the Exchange Agreement, the Guarantee
      Agreement, and the transactions contemplated under the Exchange Agreement.
      The
      directors of Prime have approved the Exchange Agreement and the transactions
      contemplated thereunder. The directors of Infosmart, IS International, IS
      Technology and IS Media have approved the Guarantee Agreement.
The
      parties expect the closing of the transactions under the Exchange Agreement
      and
      the Financing to occur on or about August 31, 2006. However, there can be no
      assurances that the exchange transaction or the Financing will be completed.
The
      Exchange Agreement may be terminated as follows: (i) by mutual written consent,
      (ii) by either party if the exchange transaction is not consummated by August
      31, 2006 , (iii) by either party if the exchange transaction is prohibited
      by
      issuance of an order, decree or ruling, and (iv) by either party if the other
      is
      in material breach of any representation, warranty, covenant or agreement.
Kevin
      R.
      Keating is the father of Timothy J. Keating, the principal member of Keating
      Investments, LLC. Keating Investments, LLC is the managing member of KI Equity,
      which is the majority stockholder of Cyber, Keating Securities, LLC, the
      registered broker-dealer affiliate of Keating Investments, LLC, and KAMS. Kevin
      R. Keating is not affiliated with and has no equity interest in Keating
      Investments, LLC, KI Equity, KAMS or Keating Securities, LLC and disclaims
      any
      beneficial interest in the shares of Cyber's common stock owned by KI Equity.
      Similarly, Keating Investments, LLC, KI Equity, KAMS and Keating Securities,
      LLC
      disclaim any beneficial interest in the shares of Cyber's common stock currently
      owned by Kevin R. Keating.
Business
      of Cyber
Cyber
      is
      currently a shell company with nominal assets whose sole business has been
      to
      identify, evaluate and investigate various companies with the intent that,
      if
      such investigation warrants, a reverse merger transaction could be negotiated
      and completed pursuant to which Cyber would acquire a target company with an
      operating business with the intent of continuing the acquired company's business
      as a publicly held entity.
6
Business
      of InfoSmart Group
InfoSmart
      Group started in the recordable digital versatile disks ("DVDRs") manufacturing
      business with the establishment of IS Technology. Founded in Hong Kong in August
      of 2002, IS Technology was the first company in Hong Kong to manufacture DVDRs.
      With the growth in DVDR demand, the initial shareholders of IS Technology took
      in other shareholders to form two other companies, IS International and IS
      Media, to produce DVDRs. These three companies form InfoSmart Group's main
      operational business. InfoSmart Group currently manufactures 8x and 16x discs,
      and is preparing to launch production of new optical storage media, namely,
      writable high density DVDR discs. InfoSmart Group currently has customers in
      Western Europe and Australia. In an effort to enter the South American market,
      InfoSmart Group is establishing a sales and distribution network and a
      production facility in Brazil through its Discobras subsidiary.
The
      business of InfoSmart Group involves a number of risks and uncertainties that
      could cause the actual results of either company to differ materially from
      those
      estimated by management from time to time. Potential risks and uncertainties,
      include, but are not limited to, such factors as fluctuations in demand for
      InfoSmart's products, InfoSmart Group's cost of manufacturing and raw materials,
      conditions and trends in the retail market, additions or departures of key
      personnel, Info Smart Group's ability to attract and maintain customers and
      strategic business relationships, InfoSmart Group's ability to develop and/or
      license existing and new technologies for the manufacture of its products,
      the
      impact of competitive products and pricing, growth in target markets, the
      adequacy of InfoSmart Group's liquidity and financial strength to support its
      growth, and other information that may be detailed from time to time in Cyber's
      filings with the United States Securities and Exchange Commission should the
      exchange transaction contemplated by the Exchange Agreement be completed.
Item
      3.02  Unregistered Sales of Equity Securities.
See
      Item
      1.01, which is incorporated herein by reference.
Item
      9.01 Financial Statements and Exhibits.
(d)
Exhibits
.
2.1
Exchange
                Agreement by and among Cyber, KI Equity, Prime and the Prime Shareholders
                dated July 7, 2006 *.
2.2
Guarantee and Assumption Agreement by and among
              Cyber,
              Infosmart, IS International, IS Technology and IS Media dated July
              7,
              2006.
*
      The
      schedules to this document are not being filed herewith.  Cyber agrees to
      furnish supplementally a copy of any such schedule to the Securities and
      Exchange Commission upon request.
7
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, Cyber Merchants
      Exchange, Inc. has duly caused this report to be signed on its behalf by the
      undersigned hereunto duly authorized.
Cyber
              Merchants Exchange, Inc.
Date: July
              12, 2006
By:
/s/ Kevin
              R.
              Keating
Kevin
              R. Keating, President
8
EXHIBIT
      INDEX
Exhibit Number
Description of Exhibit
2.1
Exchange
                Agreement by and among Cyber, KI Equity, Prime and the Prime Shareholders
                dated July 7, 2006.
2.2
Guarantee and Assumption Agreement by and among
              Cyber,
              Infosmart, IS International, IS Technology and IS Media dated July
              7,
              2006.
9