UNITED STATES SECURITIES AND EXCHANGE COMMISSION

   Litigation Release No. 16917 / February 28, 2001

   Civil Action No. 3 01-CV-0397 (BL) (N.D. Texas, Dallas Division)

   The Securities and Exchange Commission filed a civil action on
   February 28, 2001, against Smart-Mart, Inc., Timothy A. McMurray and
   Bradley D. Woy for an alleged fraudulent securities offering. The
   Complaint, filed in the United States District Court for the Northern
   District of Texas, alleges that from March 1998 through February 1999,
   Smart-Mart raised approximately $2.4 million from approximately 720
   investors located nationwide and in Canada through the sale of common
   stock in a purported private placement offering.

   In connection with these sales, Smart-Mart, McMurray and Woy knowingly
   made false and misleading statements to investors regarding an
   impending initial public offering ("IPO"), the business prospects of
   the company, the use of investor funds, and the liquidity and return
   on investment. In addition, McMurray failed to disclose critical
   information regarding his background and experience. Notwithstanding
   these representations, Smart-Mart never took any significant steps to
   conduct an IPO and the company had minimal business operations.
   Moreover, Smart-Mart's financial and other business records reveal
   that McMurray and Woy used a large portion of investor funds for
   unauthorized business and personal expenses.
     * Smart-Mart, Inc., a Texas corporation located in Dallas, Texas,
       was incorporated on September 22, 1997. Smart-Mart operated a
       multi-level marketing Internet retail shopping center, found at
       www.smartmart.com, which provided a 24-hour Internet retail
       directory providing sundry products and services to Smart-Mart
       members.
     * Timothy A. McMurray, age 54 and a resident of Dallas, Texas, was a
       founder of Smart-Mart and was the president, CEO and chairman of
       the board until he resigned in October 1998. McMurray was
       convicted of bank fraud for a check-kiting scheme in January 1993,
       and was sentenced to five years probation.
     * Bradley D. Woy, age 30 and a resident of Irving, Texas, was
       promoted to the president, CEO and chief operating officer of
       Smart-Mart following McMurray's resignation.

   The Complaint charges the defendants with violating the securities
   registration and antifraud provisions of Sections 5(a), 5 (c) and
   17(a) of the Securities Act of 1933, and Section 10(b) of the
   Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The
   Commission seeks permanent injunctive relief against Smart-Mart,
   McMurray and Woy, as well as disgorgement with prejudgment interest,
   an accounting and civil money penalties.