U.S. SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                 FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2003

                                     OR

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


                          COMMISSION FILE NUMBER: 0-28749


                           FREESTAR TECHNOLOGY CORPORATION
                   (Exact Name of Registrant as Specified in its Charter)

          Nevada                                        88-0446457
 (State of Incorporation)                        (I.R.S. Employer ID No.)


       Calle Fantino Falco, J.A. Baez Building, 2nd Floor, Santo Domingo,
                               Dominican Republic
                    (Address of principal executive offices)

                  Registrant's telephone number:  (809) 503-5911

     Securities registered pursuant to Section 12(b) of the Act: None

     Securities registered pursuant to Section 12(g) of the Act: Common
                         Stock, $0.001 Par Value

     Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) been subject to such filing requirements for the past 90 days.
Yes     X        No            .

     As of December 31, 2003, the Registrant had 450,562,670 shares of
common stock issued and outstanding.

     Transitional Small Business Disclosure Format (check one): Yes  No  X .

                                    TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                         PAGE

     ITEM 1.  FINANCIAL STATEMENTS

              CONDENSED CONSOLIDATED BALANCE
              SHEET AS OF DECEMBER 31, 2003                               3

              CONDENSED CONSOLIDATED STATEMENTS OF
              OPERATIONS FOR THE THREE AND SIX MONTHS ENDED
              DECEMBER 31, 2003 AND DECEMBER 31, 2002                     5

              CONDENSED CONSOLIDATED STATEMENTS OF
              CASH FLOWS FOR SIX MONTHS ENDED
              DECEMBER 31, 2003 AND DECEMBER 31, 2002                     6

              NOTES TO CONDENSED CONSOLIDATED
              FINANCIAL STATEMENTS                                        9

     ITEM 2.  MANAGEMENT'S DISCUSSION AND
              ANALYSIS OF FINANCIAL CONDITION
              AND RESULTS OF OPERATIONS                                  20

     ITEM 3.  CONTROLS AND PROCEDURES                                    36

PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS                                          37

     ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                  40

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                            41

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS        41

     ITEM 5.  OTHER INFORMATION                                          41

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                           44

SIGNATURES                                                               45

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                          FREESTAR TECHNOLOGY CORPORATION
                        CONDENSED CONSOLIDATED BALANCE SHEET
                               DECEMBER 31, 2003
                                  (Unaudited)

                                     ASSETS

Current assets:
Cash and cash equivalents                                     $      590,141
Accounts receivable, net of allowance for
doubtful accounts of $34,676                                         185,693
Prepaid salaries to officers                                          73,947
Other current assets                                                 118,652

Total current assets                                                 968,433

Property, plant and equipment, net of accumulated
  depreciation and amortization                                       53,589

Software, net of accumulated amortization                            685,645
Software license, net of accumulated amortization                  2,012,868
Customer relations and contracts, net of accumulated amortization  1,914,275
Investment in TransAxis, Inc.                                      1,506,028
Other assets                                                           2,917

                                                               $   7,143,755

                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses                          $   1,091,749
Line of credit                                                         4,697

Due to related party for converted pledged collateral                727,459
Due to related party for advances                                    253,960

Total current liabilities                                          2,077,865

Stockholders' Equity:
Convertible preferred stock, series A, $0.001 par value,
  1,000,000 shares  authorized; 1,000,000 shares issued
   and outstanding                                                     1,000
 Convertible preferred stock, series B, $0.001 par value,
  4,000,000 shares  authorized; 2,500,000 shares issued
   and outstanding                                                     2,500
 Additional paid-in capital - preferred stock                      2,229,558
 Common stock, $0.001 par value, 500,000,000
shares authorized;
  450,562,670 issued and outstanding                                 449,572
 Additional paid-in capital - common stock                        26,181,329
 Share cancellation receivable                                    (1,531,206)
 Subscription receivable                                            (888,648)
 Deferred compensation                                            (2,134,372)
 Accumulated deficit                                             (19,351,087)
 Accumulated other comprehensive income                              107,244

Total stockholders' equity                                         5,065,890

                                                                $  7,143,755

The accompanying notes form an integral part of these condensed
consolidated financial statements


                       FREESTAR TECHNOLOGY CORPORATION
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (Unaudited)



<TABLE>
<CAPTION>
                                                Three Months   Three Months   Six Months   Six Months
                                                   Ended          Ended         Ended        Ended
                                              December, 31     December 31,   December 31,  December 31,
                                                   2003           2002          2003           2002
<S>                                          <C>               <C>            <C>           <C>
Revenue                                       $   361,431      $          -   $    661,374  $      8,700

Cost of revenue                                   282,776                 -        435,435           802

Gross profit                                       78,655                 -        225,939         7,898

Non-cash compensation                             611,552         4,416,472      2,552,408     4,618,505
Selling, general and administrative expenses      720,151           292,301      1,315,956       719,766

Loss from operations                           (1,253,048)       (4,708,773)    (3,642,425)   (5,330,373)

Other income (expenses):
Miscellaneous                                           -            (7,966)             -        42,656
Interest expense                                  (15,910)         (254,254)       (32,461)     (377,862)

Net Loss                                       (1,268,958)       (4,970,993)    (3,674,886)   (5,665,579)

Other comprehensive income (loss)                 112,965           164,919        125,896       126,727

Comprehensive loss                             (1,155,993)       (4,806,074)    (3,548,990)   (5,538,852)

Loss per share - basic and diluted                   0.00             (0.07)         (0.01)        (0.09)

Weighted average shares outstanding -
    basic and diluted                         382,509,784        76,011,340    294,558,901    61,059,628
</TABLE>


The accompanying notes form an integral part of these condensed
consolidated financial statements


                           FREESTAR TECHNOLOGY CORPORATION
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                   Six Months     Six Months
                                                     Ended          Ended
                                                   December 31,   December 31,
                                                      2003            2002

Cash flows used for operating activities:

Net loss                                          $(3,674,886)    $ (5,665,579)
Adjustments to reconcile net loss to net cash
  provided by (used for) operating activities:
Depreciation and amortization                         258,222          120,905

Non-cash compensation                               2,552,408        4,618,505

Amortization of financing cost on convertible
notes payable                                               -          224,738

Amortization of discount for beneficial conversion
features on convertible notes payable                       -          106,752

Changes in assets and liabilities:
(Increase) decrease in assets
Accounts receivable                                   (35,629)               -
Prepaid salaries - officers                            56,553                -
Merchandise credits - current                               -           44,000
Deferred revenue                                      (29,917)               -
Other assets                                          (96,898)           1,811
Increase (decrease) in liabilities
Accounts payable and accrued expenses                 393,329           24,139
Due to shareholders                                    16,475            4,853
Accrued salaries - related parties                          -           52,400

Total adjustments                                   3,114,543        5,198,103

Net cash used by operating activities                (560,343)       (467,476)

Cash flows used for investing activities:
Purchase of fixed assets                              (11,911)         (7,278)
Investment in Rahaxi                                        -        (208,000)
Purchase of software and capitalized software cost   (385,406)              -
Investment in TransAxis, Inc.                         (75,000)              -

Net cash used by investing activities                (472,317)       (215,278)

Cash flows provided by financing activities:
Principal proceeds from line of credit agreement            -          (2,470)
Repayment on overdraft                                      -          (8,842)
Proceeds from issuance of notes payable                     -         350,000

Proceeds from sale of common stock                  1,046,152         212,000
Proceeds from exercise of stock
options/warrants                                      307,500               -
Sale of warrants                                            -          90,000
Repayments from a related party, net                  (11,585)         (7,700)

Net cash provided by financing activities           1,342,067         632,988

Net increase (decrease) in cash and
cash equivalents                                      309,407         (49,766)

Foreign currently translation adjustments              16,311         126,458

Cash and cash equivalents, beginning of period        264,423           2,441

Cash and cash equivalents, end of period              590,141          79,133

Supplemental disclosure of cash flow information:
Interest paid                                               -          30,685

Income tax paid                                             -               -

Shares and warrants issued for services             2,552,408       4,618,505

Prepaid financing cost as increase of
convertible notes payable                                   -         135,720

Loan payable to a stockholder related
to a deposit transferred to the Company                     -               -

Issuance of 4 million shares of common
stock to replace shares a shareholder
contributed for a debt conversion                     270,000               -

Issuance of 7 million shares of common
stock for unpaid accrued salaries to
officers and salaries                                 343,00                -

Debt to related party incurred in
relation to convertible notes payable and related
accrued expenses paid off by
shares owned by president of the Company             679,869                -

Discount for beneficial conversion
features on convertible notes payable                      -          106,752

Issuance of 4,000,000 shares of common
stock to replace shares
a shareholder contributed for a debt
conversion                                                 -          270,000

Issuance of 7,000,000 shares of common
stock for unpaid accrued
salaries to officers and salaries for future period        -          343,000

Debt to related party incurred in
relation to convertible notes payable
and related accrued expenses paid off
by shares owned by president of the Company                -          679,867

Issuance of 8,383,418 shares for
investment in TransAxis, Inc.                      1,431,028                -


The accompanying notes form an integral part of these condensed
consolidated financial statements


                           FREESTAR TECHNOLOGY CORPORATON
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

1.  BASIS OF PRESENTATION AND NATURE OF BUSINESS OPERATIONS

Basis of Presentation.

The accompanying unaudited condensed consolidated financial statements
of FreeStar Technology Corporation, a Nevada corporation ("Company"),
have been prepared in accordance with the instructions to Form 10-QSB
and do not include all of the information and footnotes required by
accounting principles generally accepted in the United States of
America for complete consolidated financial statements.  These
condensed consolidated financial statements and related notes should
be read in conjunction with the Company's Form 10-KSB for the fiscal
year ended June 30, 2003.  In the opinion of management, these
condensed consolidated financial statements reflect all adjustments
which are of a normal recurring nature and which are necessary to
present fairly the financial position of the Company as of December
31, 2003, and the results of operations for the three-month and six-
month periods ended December 31, 2003 and 2002, and cash flows for the
six-month periods ended December 31, 2003 and 2002. The results of
operations for the six-month period ended December 31, 2003 are not
necessarily indicative of the results that may be expected for the
entire fiscal year.

Nature of Business Operations.

The Company, formerly known as Freestar Technologies and Freedom Surf,
Inc., was formed on November 17, 1999 as a Nevada corporation, with
its principal offices in Santo Domingo, Dominican Republic. The
Company has developed software- enabling e-commerce transactions over
the Internet, using credit, debit, ATM (with PIN), or smart cards.

The Company intends to have four main revenue sources: (1) sales of
its PaySafe devices "ePayPad"; (2) processing fees related to the
transactions through the use of ePayPad and merchant services (the
Company intends to charge a fee for these transactions ranging from
0.3% to 1.3% of the value of the transaction); (3) revenue from the
Company's transaction fees stemming from its Internet Payment Gateway;
and (4) revenue stemming from Rahaxi Processing Oy., which derives
income from the transaction fees it receives from processing online
point of sale terminal transactions.

ePayPad is one of several card swipe devices that the Company intends
to utilize to deliver its transaction processing solution "Pay Safe
Now". The ePayPad is a small desktop hardware device resembling a
credit card reader found at your local supermarket or bank. This
unobtrusive box is equipped with a credit card reader and a ten key
numeric keypad. The ePayPad allows the consumers to securely shop and
pay bills on-line.

Through the purchase of Rahaxi Processing Oy. in January 2003, a
Northern European online credit card processing company based in
Helsinki, Finland, the Company intends to expand its market to Europe.
For the three months and six months ended December 31, 2003, all
revenue of the Company was derived from this division.

Revenue Recognition.

The Company recognizes revenue when products are shipped or services
provided to its customers.  Provisions for discounts and other
adjustments are provided for in the same period the related revenue is
recorded.

Processing fee revenue is earned based upon the actual number of
transactions processed through its processing system.  Transaction
processing fees are recognized in the period that the service is
performed.  These fees are charged on a per transaction basis,
depending on the arrangement with the customers.

Recent Accounting Pronouncements.

In  January  2003,  the Financial Accounting Standards Board ("FASB")
issued  Interpretation  No.  46, "Consolidation of Variable Interest
Entities" ("FIN 46").  FIN 46 changes the  criteria by which one
company includes another entity in its consolidated  financial
statements.  Previously,  the criteria were based on control through
voting interest.  FIN 46 requires a variable interest entity to be
consolidated by a company if that company is subject to a majority of
the risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's  residual returns or
both.  A company that consolidates a variable interest entity is
called the  "primary beneficiary" of that entity.  The consolidation
requirements of FIN 46 apply immediately to variable interest entities
created after January 31, 2003.  The consolidation  requirements apply
to older entities in the first fiscal year or interim period beginning
after June 15, 2003.  Certain of the disclosure requirements apply in
all financial statements issued after January 31, 2003, regardless of
when the variable interest entity was established.

During October 2003,  the FASB issued Staff Position No. FIN 46,
deferring the effective date for applying the provisions of FIN 46
until the end of the first interim or annual period ending after
December  31, 2003 if the variable interest was created prior to
February 1, 2003 and the public entity has not issued financial
statements reporting that variable interest entity in accordance with FIN 46.

On December 24, 2003, the FASB issued FASB Interpretation No. 46
(Revised December  2003), "Consolidation of Variable Interest
Entities" ("FIN-46R"), primarily to clarify the required  accounting
for  interests  in  variable interest entities.  FIN-46R replaces FIN-
46 that was issued in January 2003.  FIN-46R exempts certain entities
from its requirements and provides  for special effective dates for
entities that have fully or  partially  applied  FIN-46 as of
December  24,  2003.  In certain situations, entities have the option
of applying or continuing  to apply FIN-46 for a short period of time
before applying FIN-46R.  While  FIN-46R  modifies  or clarifies
various provisions of FIN-46, it also incorporates many FASB Staff
Positions  previously issued by the FASB.  The Company has deferred
the adoption of FIN 46 with respect to variable interest entities
created prior to February 1, 2003.  Management is currently assessing
the impact, if any, FIN 46 may have on the Company; however,
management does not believe there will be any material impact to the
Company's financial position, results of operations or liquidity
resulting from the adoption of this interpretation.

In December  2003,  the FASB issued  Statement of  Financial
Accounting  Standards ("SFAS") No. 132 (Revised 2003), "Employers'
Disclosures about Pensions and Other Postretirement Benefits."  This
standard replaces  SFAS No. 132 of the same title that was previously
issued in February 1998.  The revised SFAS No. 132 was issued  in
response  to concerns expressed by  financial statement users about
their need for more transparency of pension information.  The  revised
standard increases the existing GAAP disclosures for defined benefit
pension plans and other defined benefit postretirement plans.
However, it does not change the measurement or recognition of those
plans as required under: SFAS No. 87, "Employers' Accounting for
Pensions"; SFAS No. 88, "Employers' Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination
Benefits"; and SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than  Pensions."  Specifically, the revised standard
requires companies to provide additional disclosures about pension
plan assets, benefit  obligations, cash flows, and benefit costs of
defined benefit pension plans and other defined benefit postretirement
plans.  Also, for the first time, companies are required to provide a
breakdown of plan assets by category, such as debt, equity and real
estate, and to provide certain  expected rates of return and target
allocation percentages for these asset categories.  The revised SFAS
No. 132 is effective for financial statements with fiscal years ending
after December 15, 2003 and for interim periods beginning after
December 15, 2003.  The adoption of this Statement  is not expected to
have a material impact on the Company's financial position, results of
operations, or cash flows.

2.  ACQUISITION OF RAHAXI PROCESSING OY.

In September 2002, the Company entered into an acquisition agreement
with Heroya Investments Limited ("Heroya") for the purpose of
acquiring 100% of the common stock of Rahaxi Processing Oy.
("Rahaxi").  The original acquisition agreement was subsequently
amended in December 2002, in February 2003, and again in June 2003.
On January 16, 2003, the Company issued 22,000,000 shares of common
stock in order to obtain a majority interest of Rahaxi.  Since the
remainder of the purchase price was to be made in installments, the
Company considered the transaction to be completed as of that date.
As of December 31, 2003, all the considerations to purchase Rahaxi had
been given Heroya.

During the three months ended December 31, 2003, the Company engaged
an independent firm to perform a valuation of Rahaxi.  Based on the
results of the valuation, the Company adjusted the allocation of the
purchase price primarily pertained to the values assigned to
intangible assets and goodwill.  Total purchase price remained to be
valued at approximately $4,010,013.

The Company will continuously evaluate the fair value of the assets
acquired.  If the fair value is determined to be lower than the
purchase price of Rahaxi in the future, the Company will record an
impairment charge against acquired assets accordingly.

The preliminary and revised purchase price allocation is summarized as
follows:



<TABLE>
<CAPTION>
                                                 Originally
                                                 reported as                               As
                                                 of June 30, 2003       Adjustment      Adjusted
<S>                                             <C>                     <C>             <C>
Accounts receivable                             $    160,208                     -      $    160,208
Other current assets                                  10,973                     -            10,973
       Fixed assets                                   46,154                     -            46,154
Software                                             114,540                     -           114,540
Software license fee                               2,719,500              (458,345)        2,261,155
Customer relations and contracts                           -             1,967,204         1,967,204
Goodwill                                           1,508,859            (1,508,859)                -
Accounts payable and accrued expenses               (518,572)                    -          (518,572)
Deferred revenue                                     (31,649)                    -           (31,649)

  Total purchase price                             4,010,013                     -          4,010,013
</TABLE>


3.  ACQUISITION OF TRANSAXIS, INC.

Acquisition.

On September 24, 2003, the Company entered into a stock purchase
agreement with certain shareholders of TransAxis, Inc. ("TransAxis")
(formerly Digital Courier Technologies, Inc.) for the acquisition of a
majority of the common stock of this publicly held company ("TA
Acquisition Agreement").  The terms of the TA Acquisition Agreement
provide for the Company to purchase a majority of the shares that
consist of the following: (a) 2,916,533 shares that will be
outstanding upon the conversion of certain debt of TransAxis
("Conversion Right"); and (b) 805,000 shares of company common stock
issued and outstanding.  In exchange, the Company is to issue on a pro
rata basis based on the sellers' current percentage beneficial
ownership of TransAxis common stock (including the beneficial
ownership of the TransAxis common stock represented by the Conversion
Right) the aggregate number of shares of Company common stock which is
the greater of (i) 7,000,000 shares of common stock, or (ii) that
number of shares of common stock equal to $1,260,000 divided by the
average closing bid price per share of the common stock on the five
days prior to the closing date.

On October 8, 2003, the parties amended the original purchase
agreement as follows ("Amendment No. 1"):

     (a)  The Registration Rights Agreement (Exhibit B to the
     agreement) was amended so that the Company is to use commercially
     reasonable efforts to cause a Form SB-2 registration statement
     covering re-sales of all of the shares of Company common stock to
     be issued to or on behalf of the Sellers at the closing to be
     filed with the Securities and Exchange Commission within 180 days
     after the closing. Thereafter, the Company is to use commercially
     reasonable efforts to have this registration statement declared
     effective as promptly as possible, and to keep this registration
     statement effective until the earlier of (i) one year following
     the effectiveness date or (ii) that date on which all of the
     common stock covered by the registration statement may be resold
     without further restriction pursuant to Rule 144 under the
     Securities Act of 1933.

     (b)  The parties to the agreement concur that the original amount
     of Company common stock to be issued in connection with the
     Agreement is 31,500,000 shares, but that due to a certain
     liability of TransAxis, the total amount of common stock to be
     issued by the Company is reduced to 25,312,053.  In addition, due
     to a missing stock certificate of that company, the Company will
     be required to deliver a further reduced total of 25,183,418
     shares of common stock at the closing, with the remaining 128,585
     shares issuable only upon delivery to the Company of the missing
     stock certificate.

In compliance with the agreement and the amendment, on October 15,
2003, the Company issued and delivered a total of 25,183,418
restricted shares of common stock for approximately 87% of the shares
of TransAxis, and this transaction was closed.  The closing date of
the transaction, October 15, 2003, was considered the effective date
of the acquisition as all the terms and details were finalized and
executed and the Company has control of the assets of TransAxis.

On February 20, 2004, the parties further amended the original
purchase agreement ("Amendment No. 2").  The Company claimed that it
had identified certain accounting-related deficiencies in the books
and records of TransAxis which predate the closing date, and that such
deficiencies have and will continue to preclude TransAxis from being
able to obtain audited financial statements without undue effort and
expense.  In order to avoid the cost of litigation and further
disputes and negotiation, the Company and TransAxis agreed to reduce
the number of shares issuable under the TA Acquisition Agreement from
25,183,418 to 3,200,000.  The excess of shares issued per the original
purchase agreement over the revised number of shares will be cancelled
and returned to the Company.  The fair value of the 3,200,000 shares
of $752,000 was calculated based on the quoted market price on
February 20, 2004 (measurement date) and is shown as Investment in
TransAxis, Inc. in the accompanying condensed consolidated balance
sheet as of December 31, 2003.

The acquisition of TransAxis has enabled the Company to enhance its
existing processing system and offer a complete end-to-end solution to
its clients.  As an Internet Payment Gateway is an integral part of
the Company's business module, and TransAxis possessed what the
Company believes to be a quality Internet Payment Gateway with a
proven record, the Registrant decided it would be in its best
interests to acquire TransAxis.  This Internet Payment Gateway is a
comprehensive merchant and client payment gateway that offers, amongst
others:

Transaction processing for VISA/MC/AMEX and Diners Club

   Real-time transaction reporting

   Fraudulent protection and transaction monitoring through iGuard
   Administration

   Batch services

   Credit issuing services

Brown Simpson Settlement.

Prior to the execution of the TA Acquisition Agreement, TransAxis had
incurred a liability to Brown Simpson Partners I, Ltd. ("Brown
Simpson") in the amount of approximately $1,400,000.  During the three
months ended December 31, 2003, the Company entered into a settlement
agreement with Brown Simpson ("Brown Simpson Settlement Agreement")
whereby the Company would issue to Brown Simpson 5,183,418 restricted
shares of Company common stock and pay the amount of $10,000 in cash
in return for  Brown Simpson's dismissal of all its claims against the
Company.  These shares were issued on December 30, 2003.   The Company
is currently in negotiations with Brown Simpson to restructure the
terms of the Brown Simpson Settlement Agreement.  The Company believes
these negotiations will result in the issuance of a significantly
reduced number of shares in settlement of the Brown Simpson dispute.
The  5,183,418 shares are valued at $679,028 and, along with the
3,200,000 shares issued pursuant to the TA Acquisition Agreement, are
shown as Investment in TransAxis in the accompanying condensed
consolidated balance sheet as of December 31, 2003.

The fair value of 25,183,418 shares originally issued in October 2003
totaling $1,813,206 was included in common stock and additional paid
in capital.  The excess of 21,983,418 shares with a fair value of
$1,061,206 was classified as share cancellation receivable in the
stockholders' equity section as of December 31, 2003.  The receivable
will be satisfied upon receipt of the shares.

Notes Receivable.

In anticipation of the TransAxis transaction and while in the
negotiation stage, in July 2003, the Company loaned to TransAxis the
amount of $75,000 via two senior secured convertible note agreements
in the amount of $50,000 and $25,000, respectively (the "Bridge
Notes").  The Bridge Notes carry interest at the rate of (i)12.5 % per
year from September 1, 2003, provided that the Company does not hold
less than 70% interest of the outstanding capital stock of TransAxis
at August 31, 2003, and (ii)  15% per annum commencing January 1,
2004, provided that the Company has not completed the acquisition of
TransAxis by this date.  The Bridge Notes are senior obligation of
TransAxis, Inc. and payment is secured by a security agreement between
the two parties.

The Bridge Notes matured on September 29, 2003 without being paid.  If
the Bridge Notes are not paid in full before December 31, 2003, the
Company has the option for a one-year period to convert the Bridge
Notes without payment of any other consideration into common stock of
TransAxis according to the following: at least the number of shares
which will provide 5% ownership of the outstanding shares of
TransAxis, and shall be increased by 1% for each additional $15,000 of
loans or accrued interest thereon that the Registrant maintains with
TransAxis.

The Bridge Notes are shown as Investment in TransAxis, Inc. in the
accompanying condensed consolidated balance sheet as of December 31, 2003.

Consolidation of TransAxis, Inc.

Due to the insufficient accounting records of TransAxis, the Company
was unable to obtain accurate financial statements and information
related to the purchase price allocation, therefore, the purchase
price including the payments to settle certain liabilities of
TransAxis was classified as "Investment in TransAxis, Inc." until such
information becomes available.  Since the date of the acquisition,
TransAxis has been inactive and its operating results are immaterial
to the accompanying condensed consolidated financial statements.

As of March 16, 2004, the Company believed that the fair value of the
technologies and payment gateway acquired through TransAxis exceed the
purchase price and therefore, no impairment existed as of December 31,
2003.  If the fair value is determined to be lower than the purchase
price of TransAxis in the future, the Company will record an
impairment charge against acquired assets accordingly.

4.  COMMON STOCK

Issuance of Common Stock for Services.

During the three months ended September 30, 2003, the Company issued
6,350,000 free trading shares of its common stock (registered under
Form S-8) to various consultants and legal counsel for current and
future services.

During the three months ended September 30, 2003, the Company issued
20,000,000 restricted shares of its common stock to various
consultants for current and future services.

During the three months ended December 31, 2003, the Company issued
6,535,000 free trading shares of its common stock (registered under
Form S-8) to various consultants and legal counsel for current and
future services.

During the three months ended December 31, 2003, the Company issued
1,000,000 restricted shares of its common stock to an employee for
current and future services.

During the three months ended December 31, 2003, the Company issued
3,400,000 restricted shares of  common stock to various consultants
for current and future services.

Sale of Common Stock.

During the three months ended September 30, 2003, the Company sold
15,700,000 restricted shares of its common stock to various investors
at $0.01 per share for an aggregate amount of $157,000.  The Company
received cash proceeds of $99,985 during the quarter ended September
30, 2003 and $35,000 during the quarter ended December 31, 2003, and
expects to receive the remaining $22,015 in the quarter ended March
31, 2004.

During the three months ended December 31, 2003, the Company sold
163,700,000 restricted shares of its common stock to various investors
at $0.01 per share for an aggregate amount of $1,637,000.  The Company
received cash proceeds of $946,167 of this amount (net of financing
cost of $163,700 paid and to be paid), and expects to receive the
remaining $527,133 in the quarter ending March 31, 2004.

Issuance of Shares for Rahaxi Acquisition.

During the three months ended September 30, 2003, the Company issued
8,137,000 restricted shares of its common stock pursuant to the
acquisition of Rahaxi Processing Oy. ("Rahaxi").  The issuance of
these shares had been included in the calculation of the purchase
price of Rahaxi during the fiscal year ended June 30, 2003.

Issuance of Shares for TransAxis Acquisition.

During the three months ended December 31, 2003, the Company issued
25,183,418 restricted shares of its common stock pursuant to the
acquisition of TransAxis.  On February 20, 2004, the Company
renegotiated this transaction, and has cancelled these shares and
issued 3,200,000 restricted shares of its common stock in satisfaction
of the renegotiated agreement subsequent to December 31, 2003.  The
net amount of 3,200,000 shares is shown as issued and outstanding in
the accompanying the condensed consolidated balance sheet as of
December 31, 2003.  The fair value of 25,183,418 shares originally
issued in October 2003 totaling $1,813,206 was included in common
stock and additional paid in capital.  The excess of 21,983,418 shares
with a fair value of $1,061,206 was classified as share cancellation
receivable in the stockholders' equity section as of December 31, 2003.

Issuance of Shares for Debt Settlement.

During the three months ended December 31, 2003, the Company issued
5,183,418 restricted shares of its common stock pursuant to the terms
of a debt settlement agreement in relation to the acquisition of
TransAxis, Inc.  The Company is in the process of  renegotiating the
terms of this agreement, and expects to cancel these shares and
satisfy this debt with the issuance of a significantly fewer number of
shares.  The entire amount of 5,183,418 is shown as issued and
outstanding and the fair value of these shares was classified as
Investment in TransAxis, Inc. in the accompanying condensed
consolidated balance sheet as of December 31, 2003.

Warrants and Stock Options to Consultants.

During the three months ended September 30, 2003, the Company granted
options covering 9,000,000 shares of its common stock to various
consultants. These options vested immediately on the grant date and
have a strike price of ranging from $0.023 to $0.05 per share. The
Company valued these options by using the Black-Scholes model under
the following assumptions: (i) no expected dividends (ii) a risk-free
interest rate range of 2.65% (iii) expected volatility ranging
between 118% to 156% and (iv) an expected life of 1/2 year. The fair
value of these options was $298,187, which was expensed in the quarter
ended September 30, 2003.

Exercise of Warrants/Options.

During the three months ended September 30, 2003, the granted options
covering 9,000,000 shares of common stock were exercised resulting in
the issuance of 9,000,000 free trading shares of the Company's common
stock for an aggregate exercise price of $342,000.   The Company
received cash proceeds of $307,500 in the quarter ended September 309,
2003 and $34,500 in the quarter ended December 31, 2003.

Cancellation of Common Stock.

The Company included 3,000,000 shares of its common stock in the
shares issued and outstanding that were originally issued to two
consultants with a fair value of $470,000 and subsequently cancelled.
These shares were shown as share cancellation receivable in the
stockholders' equity section as of December 31, 2003.

5.  SEGMENT INFORMATION

The Company currently operates two business segments: (1) the sale of
its secure transaction processing system ePayPad and related service,
and (2) transaction processing fees generated through its wholly owned
subsidiary, Rahaxi.  Intercompany receivable and payable payables are
subtracted from the total assets and liabilities for the segments,
which are eliminated in consolidation and therefore, do not themselves
impact consolidated results.

                                      PaySafe        Rahaxi
                                      System         Payment
                                                     Processing     Total

                              For the Three Months Ended December 31,2003

Revenue                               $      -       $   361,431   $   361,431

Loss from operations                  (1,138,403)       (114,645)   (1,253,048)

                              For the Six Months Ended December 31,2003

Revenue                                        -         661,374       661,374

Loss from operations                  (3,553,442)        (88,983)   (3,642,425)

                                      As of December 31, 2003

Total assets                           2,186,130       4,957,625     7,143,755

Total liabilities                      1,216,330         861,535     2,077,865

6.  RELATED PARTY TRANSACTIONS

The Company's president and a shareholder, Paul Egan, has advanced
funds to the Company for its operations.  These amounts include net
advances of $219,144 and accrued interest of $34,816 at December 31,
2003.  The Company expects to repay this amount as soon as sufficient
cash flow from operations is generated.  Interest on the unpaid
balances is accrued at the rate of 7% per annum.  The Company accrued
interest expense of $4,180 and $4,853, for the three months ended
December 31, 2003 and 2002, respectively, and $8,833 and $11,636, for
the six months ended December 31, 2003 and 2002, respectively.

In December 2002, a lender group exercised their rights against the
14,400,000 shares pledged by the president of the Company in full
satisfaction of the outstanding notes payable of $637,000, interest
payable of $18,569, and accrued penalties of $24,300.  As of December
31, 2003, the Company considered the notes payable and related
expenses totaling $679,869 with this lender group to be satisfied, and
has recorded a payable to the president for this amount plus accrued
interest of $47,590 in the accompanying condensed consolidated balance
sheet at December 31, 2003.  The Company accrued interest of $11,898
and $23,795 related this transaction for the three months and six
months ended December 31, 2003, respectively.  The Company intended to
issue new stock to replace such pledged shares.

The Company litigated with this lender group regarding excessive
financing cost, number of shares to be returned to the Company and
certain terms of the debt agreements.

On March 4, 2004, this lender group entered into settlements with the
Company.  Under the agreements, this lender group agreed to return
14,400,000 shares originally owned by the president of the Company and
agreed to dismiss all claims, cross-claims and counterclaims with
prejudice.  Accordingly, the president will relieve the liabilities
related to the fair value of the pledged collateral totaling $727,459
as gain on forgiveness of debt during the quarter ended March 31, 2004.

7.  GOING CONCERN

The accompanying condensed consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business.

Through December 31, 2003, the Company has not been able to generate
significant revenue from its operations to cover its costs and
operating expenses. Although the Company has been able to issue its
common stock or other financing for a significant portion of its
expenses, it is not known whether the Company will be able to continue
this practice, or if its revenue will increase significantly to be
able to meet its cash operating expenses.

This, in turn, raises substantial doubt about the Company's ability to
continue as a going concern. Management believes that the Company will
be able to raise additional funds through an offering of its common
stock or alternative sources of financing. However, no assurances can
be given as to the success of these plans. The financial statements do
not include any adjustments that might result from the outcome of
these uncertainties.

8.  LEGAL PROCEEDINGS

There are legal proceedings involving the Company.  Please see "Legal
Proceedings" under Item 1 of Part II hereafter for a complete
description of these proceedings.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

     The following discussion and analysis of financial condition and
results of operations of the FreeStar Technology Corporation, a Nevada
corporation ("Registrant"), is based upon, and should be read in
conjunction with, its unaudited condensed consolidated financial
statements and related notes included elsewhere in this Form 10-QSB,
which have been prepared in accordance with accounting principles
generally accepted in the United States.

Overview.

     The e-payments and e-commerce market is composed of debit and
credit card issuers, switch interchanges, transaction acquirers and
transaction generators, including Automated Teller Machine ("ATM")
networks, retail merchant locations and the Internet. The routing,
control and settlement of e-payments is a complex activity due to the
large number of locations and variety of sources from which
transactions can be generated, the large number of issuers in the
market, high transaction volumes, geographically dispersed networks,
differing types of authorization and varied reporting requirements.
These activities are typically performed online and must be conducted
24 hours a day, seven days a week.

     The Registrant's products and services are  primarily
focused on facilitating electronic payments ("e-payments") and
electronic commerce ("e-commerce").  These products and services are
used principally by financial institutions, retailers, and e-payment
processors, both in domestic and international markets.

     The payments industry is rapidly transforming.  The
Registrant, after its acquisition of Rahaxi Processing Oy. and the
assets of ePayLatina S.A., believes it is a part of this
transformation.  While payment media such as credit cards have reached
maturity, it is still the most frequently used method of online
payment. The growth in electronic commerce is forcing financial
institutions and merchants to offer new secure payment forms to their
customers.  Internet payment gateways and the increased prospect of
fraud from electronic payments are some of the issues that are
creating challenges for financial institutions around the world.

     The Registrant's solutions and services focus on these areas and
enable financial institutions and merchants to formulate coherent
strategies based on knowledge, insight and understanding of the
transformations taking place in the industry.  The Registrant's
acquisition of the assets of ePayLatina S.A., and the formation of its
strategic alliances were instigated to help institutions and merchants
position themselves to provide superior value added services, and
differentiate themselves from competitors in a way that preserves the
business line's profitability.

     The Registrant intends to have four  main revenue sources: (1)
sales of its PaySafe devices "ePayPad"; (2) processing fees related to
the transactions through the use of ePayPad and merchant services (the
Registrant intends to charge a fee for these transactions ranging from
0.3% to 1.3% of the value of the transaction); (3) revenue from the
Registrant's transaction fees stemming from its Internet Payment
Gateway (estimated to be about 0.5% to 3.5% of the value of the
transaction); and (4) revenue stemming from Rahaxi Processing Oy.,
which derives income from the transaction fees it receives from
processing online point of sale terminal transactions in Finland.  For
the six months ended December 31, 2003, the Registrant's revenue was
primarily generated from the transaction fees through its Finland
operations.

     For the Registrant to derive revenue outside of its
Finnish operations, the Registrant first had to perform a major
hardware and software upgrade  at Rahaxi, as Rahaxi is the core
operating system of the Registrants products . This upgrade was
completed in December 2003, and evolved the Registrant's business
critical systems to the latest Hewlett-Packard  ("HP") NonStop servers
and BASE24? e-payment processing software.  HP NonStop servers run
approximately 95% of the world's secure transactions, making the
NonStop platform the backbone for the world's most demanding and
critical environments and offering the Registrant  a secure,
continuously available processing platform. A vastly scalable
platform, HP NonStop provides the Registrant  with the ability to
achieve an adaptive enterprise by enabling it to respond quickly and
easily to  changing business needs, such as managing the expected
growing number of transactions and the need for increased capacity.

     BASE24r software from ACI Worldwide provides the
Registrant with a fast, powerful authorization system. BASE24 software
offers high data integrity for mission-critical environments.  ACI and
HP have a strong and long-standing relationship in e-payment
implementations worldwide.

     The new system will enable the Registrant to meet the
latest Visa and MasterCard standards and to pave the way for EMV
Europay/MasterCard/Visa ("EMV") compliance.  The Registrant  will also be
capable of supporting the latest Visa 3D Secure payment technology.  EMV is an
agreed-upon protocol for the introduction of smart cards. Chip-based
bank and payment cards provide a substantial  increase in the security
of consumer payment transactions, and the Registrant expects it will
be the standard throughout Europe by 2005. EMV is also gaining
momentum in Asia and America, and promises complete global
interoperability of bankcards for consumers.  All payment processors
will have to be able to accept payments mediated by smart cards in
order to remain competitive, and meeting EMV compliance has major
implications for all aspects of the payment handling processes.

     Visa 3D Secure payment introduces greatly increased
security for Internet-based card payments. Consumer payments over the
Internet are already a substantial and growing market, but suffer from
unacceptably high fraud levels. The 3D-Secure protocol will re-
establish public confidence in card payments over the Internet, and
enable the continued expansion of electronic commerce.

     The Registrant believes that its investment in the  upgraded
NonStop systems running the newest ACI software, that it can  meet its
projected  increasing capacity needs and ensure future volume growth.

     The acquisition of TransAxis, Inc. has enabled the Registrant to
enhance its existing processing system and offer a complete end-to-end
solution to its clients.  As an Internet Payment Gateway is an
integral part of the Registrant's business module, and TransAxis, Inc.
possessed what the Registrant believes to be a quality Internet
Payment Gateway with a proven record, the Registrant decided it would
be in its best interests to acquire TransAxis, Inc.  This Internet
Payment Gateway is a comprehensive merchant and client payment gateway
that offers, amongst others, the following:

     Transaction processing for VISA/MC/AMEX and Diners Club

     Real-time transaction reporting

     Fraudulent protection and transaction monitoring through iGuard
     Administration

     Batch services

     Credit issuing services

     After extensive research, the Registrant concluded that the cost
involved to develop its own Internet Payment Gateway with the same
advanced functionalities would be substantially in excess of the
purchase price of TransAxis, Inc.  The Registrant intends to derive
revenue by charging its clients a fee per transaction for processing
transactions through the Internet Payment Gateway.  The Registrant
believes that its Internet Payment Gateway, in addition to its
existing processing system, will enable it to offer a more
comprehensive processing solution to its clients.

     The Registrant is a small company  in a very competitive market.
It has a limited number of staff and is currently headquartered in the
Dominican Republic; its main operating subsidiary is in Finland, which
is a primary target market.  In addition, many of the company's
support services are in the United States.  The Registrant believes
that its operating plan is aggressive, and its success will depend
largely upon its ability to continue to implement high quality
technical solutions for complex and sensitive transaction processing
issues, and to rollout these solutions in a timely, well-coordinated
fashion.  In order to enhance the company's ability to coordinate its
operations, it intends to relocate its corporate offices in the near
future to Miami, Florida; it recently opened a European headquarters
in Geneva, Switzerland.

     The Registrant, under the current management, began generating
more revenue since its acquisition of Rahaxi Processing Oy. in January
2003.  Its business is rapidly changing, and it expects the coming
twelve months to be quite different from the previous twelve months as
the company makes ready and further rolls-out its products and
services.  This process will require the company to react quickly to
problems and opportunities as they arise, and may involve costs that
it does not currently anticipate.  The Registrant also expects that
further acquisitions may help it to quickly move forward in achieving
its goals. It is important to remember that within this context, it is
often difficult to extrapolate future trends from the company's past
operating history.

     In order to conserve cash, the company compensates many of its
outside consultants via stock and stock options in lieu of cash
payments.  These consultants include attorneys, financial and
marketing consultants, and accountants.  Fees for these types of
services are charged to sales, general, and administrative expenses
when they are satisfied via cash, and to non-cash compensation when
they are satisfied via stock or stock options.

     Results of Operations - Three Months Ended December 31, 2003 Compared
to Three Months Ended December 31, 2002.

(a)Revenue.

     The Registrant had revenue of $361,431 for the three
months ended December 31, 2003. The Registrant did not yet have
revenue in the comparable period during fiscal 2003. The increased
revenue is mainly due to the revenue derived as a result of the
acquisition of Rahaxi Processing Oy.  The Registrant did not own
Rahaxi during the three months ended December 31, 2002.

(b)  Cost of Revenue.

     Cost of revenue was $282,776 for the three months ended
December 31, 2003 compared to $0 for the three months ended December
31, 2002 as the Registrant did not yet have revenue or cost of revenue
in the prior period.  The Registrant began to produce revenue and
record the related costs of this revenue with the acquisition of
Rahaxi Processing Oy. that occurred beginning in January 2003.

(c)  Non-cash Compensation.

     During the three months ended December 31, 2003, the Registrant
recorded $611,552 in non-cash compensation, which was a decrease of
$3,804,920, or approximately 86%, compared to $4,416,472 in non-cash
compensation recorded during the three months ended December 31, 2002.
The decrease was attributable primarily to fewer shares issued to
consultants.  In addition, the Registrant issued shares to directors
and officers in the prior year and no such grants were made to
directors and officers during the quarter ended December 31, 2003.

(d)  Selling, General and Administrative Expenses.

     Selling, general, and administrative ("SG&A") expenses were
$720,151 for the three months ended December 31, 2003, an increase of
$427,850, or approximately 146%, compared to such expenses of $292,301
for the three months ended December 31, 2002.  Legal and accounting
fees increased due to ongoing litigation (see "Part II - Item 1: Legal
Proceedings") and as a result of increased legal and accounting work
involved with regard to our acquisitions of Rahaxi Processing Oy. and
TransAxis, Inc.  Legal and accounting expenses made up approximately
$168,000 of total SG&A expenses for the quarter ended December 31,
2003.  In addition, the Registrant continued to add to its product
capabilities, with higher values for capitalized software and software
licenses generating higher amortization expense.  Depreciation expense
also increased for similar reasons.  Depreciation and amortization
accounted for approximately $105,000 of the total SG&A expenses for
the quarter ended December 31, 2003.  The company has continued to
build out its infrastructure, and payroll costs have risen to
approximately $95,000 during that quarter.  Travel costs rose to
approximately $44,000 for the quarter ended December 31, 2003 as the
company increased its focus on the Finnish market and coordination of
its product rollout with Rahaxi Processing Oy.

(e)  Interest Expense.

     The Registrant recognized net interest expense of $15,910 during
the three months ended December 31, 2003, a decrease of $238,344, or
approximately 94%, compared to interest expense of $254,254 for the
three months ended December 31, 2002.  The reason for this change is
lower borrowings during the quarter ended December 31, 2003.  The
Registrant had outstanding convertible debentures of approximately
$600,000 during the quarter ended December 31, 2002 that were settled
in December 2002 with common stock personally owned by the President
of the Registrant.  The Registrant has recorded a liability to its
president in the amount of $679,869 and accrues interest on this
amount at the rate of 7% per annum.  During the comparable three-month
period of 2002, interest expense included substantially higher
interest charges for the convertible debentures, including
amortization of an amount attributable to the beneficial conversion
feature of these notes.

(f)  Miscellaneous.

     The Registrant recorded no miscellaneous income or expense during
the three months ended December 31, 2003 compared to miscellaneous
expense of $7,966 during the three months ended December 31, 2002.

(g)  Net Loss.

     For the reasons stated above, the Registrant recorded a net loss
of $1,268,958 for the three months ended December 31, 2003, an
improvement of $3,702,035, or approximately 75%, compared to the net
loss of $4,970,993 realized during the three months ended December 31, 2002.

     Results of Operations - Six Months Ended December 31, 2003 Compared to
Six Months Ended December 31, 2002.

(a)  Revenue.

     The Registrant had revenue of $661,374 for the six months
ended December 31, 2003 compared to revenue of $8,700 during the six
months ended December 31, 2002, an increase of $652,674, or
approximately 7,500%.  The increased revenue is mainly due to the
revenue derived as a result of the acquisition of Rahaxi Processing
Oy.  The Registrant did not own Rahaxi Processing Oy. during the six
months ended December 31, 2002.

     The Registrant expects revenue levels to increase throughout the
next twelve months as the company continues to roll out its service
offering; however, there can be no guarantee that our product will be
accepted in the marketplace or that our sales effort will be
successful.  Please see "Factors That May Affect Operating Results", below.

(b)  Cost of Revenue.

     Cost of revenue was $435,435 for the six months ended
December 31, 2003 compared to $802 for the six months ended December
31, 2002. The Registrant's revenue was minimal during the six months
ended December 31, 2002 and related cost of revenue was insignificant.
The Registrant began to produce revenue and record the related cost of
revenue with the acquisition of Rahaxi Processing Oy. that occurred
during the quarter ended March 31, 2003.

     Cost of revenue can be expected to increase in the coming twelve
months if the company continues it current trend of increasing sales.
The Registrant also intends to expand its service offering and its
business mix will necessarily change, so that gross margin as  a
percent of sales may not remain constant.

(c)  Non-cash Compensation.

     During the six months ended December 31, 2003, the Registrant
recorded $2,552,408 in non-cash compensation, which was an decrease of
$2,066,097, or approximately 45%, compared to $4,618,505 in non-cash
compensation recorded during the six months ended December 31, 2002.
The primary components of the decrease were fewer shares issued as
compensation to consultants, as well as a decrease in the number of
shares issued as compensation to officers and directors.

     The Registrant expects non-cash compensation to increase during
the coming twelve months.  The Registrant's expected continued
expansion in its various geographic markets will create a growing need
for local consultants and advisors that will be satisfied in large
part via non-cash compensation.  Management intends to continue to
utilize non-cash compensation in order to conserve  cash.

(d)  Selling, General and Administrative Expenses.

     SG&A expenses were $1,315,956 for the six months ended December
31, 2003, an increase of $596,190, or approximately 83%, compared to
$719,766 for the six months ended December 31, 2002.  The same
dynamics which drove up SG&A expenses during the three months ended
December 31, 2003 were in play for the six months ended December 31,
2003:  Legal and accounting fees were approximately $223,000 due to
acquisitions, and the complexity of the company's business;
depreciation and amortization rose to approximately $214,000, and
payroll rose to approximately $187,000 as the company grew.  Travel
costs were approximately $82,000 for the six months ended December 31,
2003 due to the focus on its Finland subsidiary and the Finnish market.

     The rate of future SG&A expenses will largely depend on the pace
of the Registrant's growth in the market for payment processing
products and upon the cost of outside services and professional fees,
including legal fees relating to litigation.  The company fully
expects these costs to increase as it continues its expected rollout
of product offerings.  Selling expenses will continue to increase due
to increased focus on obtaining new customers.  The company intends to
focus additional resources in the areas of sales personnel salaries,
trade show participation, and other promotional expenses.  In
addition, the Registrant may pursue further acquisitions in order to
facilitate its rapid growth and exploit market opportunities, which
would further drive up legal and accounting fees, payroll, and travel costs.

(e)  Interest Expense.

     The Registrant recognized net interest expense of $32,461 during
the six months ended December 31,2003, a decrease of $345,401, or
approximately 91%, compared to interest expense of $377,862 for the
six months ended December 31, 2002. The reason is due to lower
borrowings during the quarter ended December 31, 2003.  The Registrant
had outstanding convertible debentures of approximately $600,000
during the quarter ended December 31, 2002 that were settled in
December 2002 with common stock personally owned by the president of
the company.  The Registrant has recorded a liability to its president
in the amount of $679,869 and accrues interest on this amount at the
rate of 7% per annum.  During the comparable six-month period of 2002,
interest expense included substantially higher interest charges for
the convertible debentures, including amortization of an amount
attributable to the beneficial conversion feature of these notes.

     Currently, the Registrant is utilizing equity financing partly in
order to avoid the interest charges associated with debt financing.
Accordingly, the Registrant does not expect interest expense to
materially increase in the coming twelve months.  There can be no
guarantee that this will be the case; however, as the market for the
Registrant's stock could change, forcing the company to pursue
alternative methods of financing the company's cash needs; in
addition, the Registrant could receive an offer of attractive debt
financing or could undertake additional financing with regard to an
acquisition, in which cases interest expense would significantly increase.

(f)  Miscellaneous.

     The Registrant recorded no miscellaneous income and expense
during the six months ended December 31, 2003 compared to
miscellaneous income of $42,656 during the comparable period of 2002.
The Registrant received a non-refundable deposit of $50,000 during the
six months ended December 31, 2002, and had no such transaction during
the comparable period of 2003.

     The Registrant does not anticipate material increases in
miscellaneous income or expense in the coming twelve months.

(g)  Net Loss.

     For the reasons stated above, the Registrant recorded a net loss
of $3,674,886 for the six months ended December 31, 2003, an
improvement of $1,990,693, or approximately 35%, compared to the net
loss of $5,665,579 realized during the six months ended December 31, 2002.

     A significant percentage of the Registrant's revenue for the
second quarter of fiscal 2004 and for the first six months of fiscal
2004 has been derived from a limited number of the Registrant's
customers, primarily Finnish customers for the Registrant's
transaction processing  products.  Approximately 40% of the
Registrant's total revenue was attributable to the Registrant's ten
largest customers.  The future loss of any major customer could have
a material adverse effect on the Registrant's business, financial
condition and results of operations. The Registrant believes that this
customer concentration will continue for the remainder of fiscal 2004.
The Registrant believes that this customer concentration will be
diluted in the first half of Fiscal 2005 as it pursues operations
outside of Finland.

     The majority of  Registrant's revenues for the second
quarter of fiscal 2004 and for the first six months of fiscal 2004 has
been generated by its operations outside of the United States, and the
Registrant's future growth rates and success are in part dependent on
continued growth and success in international markets.  The Registrant
expects this trend to continue through the fiscal year 2004.

     The Registrant may continue to incur losses on both a
quarterly and annual basis. In addition, the Registrant expects to
continue to incur significant costs of services and substantial
operating expenses.  Therefore, the Registrant will need to
significantly increase revenues to achieve profitability and a
positive cash flow.  The Registrant may not be able to generate
sufficient revenues to achieve profitability.  The Registrant expects
losses to continue for at least the next twelve months.

     The Registrant will attempt to continue to fund its
operations through debt and equity financing until it achieves
profitability, of which there is no guarantee.  The Registrant expects
these concerns regarding its  perceived viability to continue
throughout the fiscal year 2004.

Factors That May Affect Operating Results.

     The operating results of the Registrant can vary significantly
depending upon a number of factors, many of which are outside the
company's control.  General factors that may affect the Registrant's
operating results include:

     - market acceptance of and changes in demand for products and
       services;

     - a small number of customers account for, and may in future
       periods account for, substantial portions of the Registrant's
       revenue, and revenue could decline because of delays of customer
       orders or the failure to retain customers;

     - gain or loss of clients or strategic relationships;

     - announcement or introduction of new services and products by the
       Registrant or by its competitors;

     - price competition;

     - the ability to upgrade and develop systems and infrastructure to
       accommodate growth;

     - the ability to introduce and market products and services in
       accordance with market demand;

     - changes in governmental regulation; and

     - reduction in or delay of capital spending by clients due to the
       effects of terrorism, war and political instability.

     The Registrant believes that its planned growth and profitability
will depend in large part on the ability to promote its services, gain
clients and expand its relationship with current clients.
Accordingly, the Registrant intends to invest in marketing, strategic
partnerships, and development of its client base.  If the Registrant
is not successful in promoting its services and expanding its client
base, this may have a material adverse effect on its financial
condition and the ability to continue to operate the business.

     The Registrant is also subject to the following specific factors
that may affect the company's operating results:

(a)  Competition.

     The market for electronic payment systems and electronic
POS systems is intensely competitive and we expect competition to
continue to increase. The Registrant's competitors for POS systems
include VeriFone, Ingenico and Hypercom amongst others, and companies
such as NetGiro, TradeSafe & ProPay, and SafeDebit for the
Registrant's electronic payment software.  In addition, the companies
with whom we have strategic relationships could develop products or
services, which compete with the Registrant's products or services.
In addition some competitors in the Registrant's market have longer
operating histories, significantly greater financial, technical,
marketing and other resources, and greater brand recognition than the
company does.  The Registrant also expects to face additional
competition as other established and emerging companies enter the
market for electronic payment solutions. To be competitive, the
Registrant believes that it must, among other things, invest
significant resources in developing new products, improve its current
products and maintain customer satisfaction. Such investment will
increase the Registrant's expenses and affect its profitability. In
addition, if it fails to make this investment, the Registrant may not
be able to compete successfully with its competitors, which could have
a material adverse effect on its revenue and future profitability

(b)  Technological and Market Changes.

     The markets in which the Registrant competes are characterized by
rapid technological change, frequent new product introductions,
evolving industry standards and changing needs of customers.  There
can be no assurance that the Registrant's existing products will
continue to be properly positioned in the market or that the company
will be able to introduce new or enhanced products into the market on
a timely basis, or at all.  Currently, the Registrant is focusing on
upgrading and introducing new products.  There can be no assurance
that enhancements to existing products or new products will receive
customer acceptance.  As competition in the electronic payments
industry increases, it may become increasingly difficult for us to be
competitive .

     Risks associated with the development and introduction of new
products include delays in development and changes in payment
processing, and operating system technologies that could require the
Registrant to modify existing products.  There is also the risk to the
Registrant that there may be delays in initial shipments of new
products. Further risks inherent in new product introductions include
the uncertainty of price-performance relative to products of
competitors, competitors' responses to the introductions and the
desire by customers to evaluate new products for longer periods of
time.

(c)  New Versions of Registrant's Products May Contain Errors or
Defects.

     The Registrant's electronic payment software products and point
of sale devices are complex and, accordingly, may contain undetected
errors or failures when first introduced or as new versions are
released.  This may result in the loss of, or delay in, market
acceptance of the Registrant's products.  The Registrant has in the
past discovered software errors in its new releases and new products
after their introduction.  The Registrant has experienced delays in
release, lost revenues and customer frustration during the period
required to correct these errors. The Registrant may in the future
discover errors and additional scalability limitations in new releases
or new products after the commencement of commercial shipments or be
required to compensate customers for such limitations or errors, as a
result of which the Registrant's business, cash flow, financial
condition and results of operations could be materially adversely affected.

(d)  Protection of Proprietary Rights.

     The Registrant's success and ability to compete will be dependent
in part on the protection of its potential patents, trademarks, trade
names, service marks and other proprietary rights.  The Registrant
intends to rely on trade secret and copyright laws to protect the
intellectual property that it plans to develop, but there can be no
assurance that such laws will provide sufficient protection to the
Registrant, that others will not develop a service that are similar or
superior to the Registrant's, or that third parties will not copy or
otherwise obtain and use the Registrant's proprietary information
without authorization.  In addition, certain of the Registrant's know-
how and proprietary technology may not be patentable.

     The Registrant may rely on certain intellectual property licensed
from third parties, and may be required to license additional products
or services in the future, for use in the general operations of its
business plan.  The Registrant currently has no licenses for the use
of any specific products.  There can be no assurance that these third
party licenses will be available or will continue to be available to
the Registrant on acceptable terms or at all.  The inability to enter
into and maintain any of these licenses could have a material adverse
effect on the Registrant's business, financial condition or operating results.

     There is a risk that some of the Registrant's products may
infringe the proprietary rights of third parties.  In addition,
whether or not the Registrant's products infringe on proprietary
rights of third parties, infringement or invalidity claims may be
asserted or prosecuted against it and it could incur significant
expense in defending them.  If any claims or actions are asserted
against the Registrant, it may be required to modify its products or
seek licenses for these intellectual property rights.  The Registrant
may not be able to modify its products or obtain licenses on
commercially reasonable terms, in a timely manner or at all.  The
Registrant's failure to do so could have a negative affect on its
business and revenues.

(e)  Economic Slowdown.

     The world economy in general, and the United States economy in
particular have experienced a prolonged downturn for electronic
payment products which the Registrant believes has adversely affected
demand for its products and has made it increasingly difficult to
accurately forecast future revenues. While it is seeing indications
that the economic outlook is no longer deteriorating, the Registrant
cannot predict the extent, timing or duration of any improvement in
the economies where it sells its products. Further, the Registrant
expects that its revenue during fiscal 2004 will be significantly
affected by the timing and success of the introduction of new products
and services during the fiscal year.

(f)  Key Personnel.

     The Registrant's success is largely dependent on the
personal efforts and abilities of its senior management.  The loss of
certain members of the Registrant's senior management, including the
company's chief executive officer, chief financial officer and chief
technical officer, could have a material adverse effect on the
company's business and prospects.

     The Registrant intends to recruit in fiscal year 2004 employees
who are skilled in e-commerce, payment, funds management, payment
reconciliation, Internet and other technologies. The failure to
recruit these key personnel could have a material adverse effect on
the Registrant's business. As a result, the Registrant may experience
increased compensation costs that may not be offset through either
improved productivity or higher revenue.  There can be no assurances
that we will be successful in retaining existing personnel or in
attracting and recruiting experienced qualified personnel.

(g)  Litigation.

     As stated under Legal Proceedings, the Registrant is subject to a
variety of claims and lawsuits. It is possible that one or more of
these matters could be resolved in a manner that ultimately would have
a material adverse impact on the Registrant's business, and could
negatively impact its revenues, operating margins, and net income.

Liquidity and Capital Resources.

     The Registrant had a working capital deficit of $1,109,432 as of
December  31, 2003, which is an increase of $206,228, or approximately
23%, from a working capital deficit of $903,204 as of December 31,
2002, and a decrease of $130,960, or approximately 11%, compared to a
working capital deficit of $1,240,392 at June 30, 2003.  The
Registrant has needed to continually raise capital through private
offerings to fund its operations.

     The Registrant recognizes the need for the infusion of cash
during fiscal 2004.  The Registrant is pursuing various financing
options.  However, there can be no assurance that we will be able to
raise additional funds on favorable terms or at all.  The Company
relies heavily upon the market liquidity of its stock as traded on the
Over the Counter Bulletin Board for its ability to raise funds, for
its ability to consummate acquisitions, and for the use of non-cash
compensation for many of the company's consultants.  Should the
Company experience a weakening in the market for its common stock,
both its short-term liquidity and its ability to achieve its long-term
strategy could be adversely affected.

     The Registrant's continued operations, as well as the
implementation of its business plan, will depend upon its ability to
raise additional funds through bank borrowings, equity or debt
financing.  The Registrant estimates that it will need to raise
approximately $5,000,000 over the next twelve months for such
purposes.  However, adequate funds may not be available when needed or
may not be available on favorable terms to the Registrant.  The
ability of the Registrant to continue as a going concern is dependent
on additional sources of capital and the success of the company's
business plan.  Regardless of whether the Registrant's cash assets
prove to be inadequate to meet its operational needs, the company
might seek to compensate providers of services by issuance of stock in
lieu of cash.  The notes to the condensed consolidated financial
statements contained in this Form 10-QSB, as well as the audited
consolidated financial statements contained in the Registrant's Form
10-KSB for the year ended June 30, 2003, include substantial doubt
paragraphs regarding the company's ability to continue as a going
concern.  The Registrant believes it currently has adequate cash to
fund anticipated cash needs for at least the next three months.

     If funding is insufficient at any time in the future, the
Registrant may not be able to take advantage of business opportunities
or respond to competitive pressures, any of which could have a
negative impact on the business, operating results and financial
condition.  In addition, insufficient funding may have a material
adverse effect on our financial condition, which could require the
Registrant to:

     - curtail operations significantly;

     - sell significant assets;

     - seek arrangements with strategic partners or other parties that
       may require the Registrant to relinquish significant rights to
       products, technologies or markets; or

     - explore other strategic alternatives including a merger or sale
       of the Registrant.

In addition, if additional shares were issued to obtain financing, or
compensate service providers, existing stockholders may suffer a
dilutive effect on their percentage of stock ownership.

Financing Activities.

     During the three months ended December 31, 2003, the Registrant
sold a total of 163,700,000 shares of common stock in a Regulation S
offering to individuals  for a total consideration of $1,637,000
($0.01 per share).  The Registrant received cash proceeds of $946,167
(net of financing costs of $163,700 paid and to be paid) and expects
to receive the remaining $527,133 in the quarter ending March 31, 2004.

     The Registrant  requires substantial capital to fund its
business, particularly to finance  capital expenditures. As a result,
the registrant could be required to raise substantial additional
capital at any time. To the extent that the registrant  raises
additional capital through the sale of equity or convertible debt
securities, the issuance of such securities could result in dilution
to existing stockholders. If additional funds are raised through the
issuance of debt securities, these securities may have rights,
preferences and privileges senior to holders of common stock and the
terms of such debt could impose restrictions on the Registrants
operations. If it is  unable to obtain such additional capital, the
Registrant  may be required to reduce the scope of its planned product
development and marketing efforts, which would materially adversely
affect its business, financial condition and operating results.

Certain Indebtedness.

     (a)  The Registrant's president and a shareholder, Paul Egan, has
advanced funds to the company for its operations.  These amounts
include advances of $219,144 and accrued interest of $34,816 at
December 31,2003.  The Registrant expects to repay this amount as soon
as sufficient cash flow from operations is generated.  Interest on the
unpaid balances is accrued at the rate of 7% per annum.


     (b)  The Registrant has an unsecured note payable with Banc
Nacional de Credito, a Dominican Republic bank, of $4,697 at December
31,2003.  The note carries an interest rate of 48% and is payable on demand.

     (c)  On March 25, 2002, the Registrant entered into
financing agreements with Boat Basin Investors LLC and Papell
Holdings, Ltd. Under the terms of the agreements, the Registrant
issued 8% convertible notes payable to these two parties, in the
amounts of $70,000 and $200,000.  These convertible notes matured on
March 1, 2003 and were collateralized by 4,000,000 restricted shares
of common stock pledged by the majority stockholder.  The notes were
convertible after 61 days into common stock at the lower of 80% of the
average closing bid price at the conversion date.  If the Registrant,
at any time while these notes are outstanding, does any of the
following, (a) pay stock dividend or any form of distributions on
common shares, (b) subdivide outstanding shares of the common stock
into a larger number of shares, (c) combine outstanding shares of the
common stock into smaller number of shares, or (d) issue by
reclassification of shares of common stock any shares of capital stock
of the Registrant, the conversion price shall be revised per a pre-
defined formula.  During the period ended June 30, 2002, none of the
principal amount was converted to common stock.  The interest is
payable on the earlier of the conversion date of the notes or the
maturity date with any unpaid interest at an accelerated rate of 18%.
Furthermore, the Registrant was required to file a registration
statement by May 25, 2002 for 200% of the number of shares the notes
plus accrued interest can be converted into.

     In addition, since this debt is convertible into equity
at the option of the note holder at beneficial conversion rates, an
embedded beneficial conversion feature will be recorded as a debt
discount and amortized using the effective rate over the life of the
debt in accordance with Emerging Issues Task Force ("EITF") No. 00-27.
The Registrant recorded a discount of $83,077 and amortized $20,769 as
interest expense for the period ended June 30, 2002.  Any unamortized
debt discount related to the beneficial conversion feature will be
charged to interest expense upon conversion.

     The Registrant defaulted on the registration requirement and
consequently was required to pay the investors a 9% penalty on the
amount borrowed.  As of June 30, 2002, the Registrant recorded $24,300
related to the penalties.  In June 2002, this lender group exercised
their rights against the 4,000,000 shares pledged by the president of
the Registrant in full satisfaction of the $270,000 note payable. The
note originally was set to mature in June 2003. The parties dispute
the effect and effective date of such exercise.  Such dispute had not
been resolved as of September 30, 2003 and the litigation is ongoing.

     (d)  On June 27, 2002, the Registrant entered into a financing
agreement with the following lenders for a total of $400,000 in
convertible notes:

     Papell Holdings, Ltd., Boat Basin Investors LLC, vFinance,
Inc., David Stefansky, Marc Siegal and Richard Rosenblum. These notes
were secured by 14,400,000 shares of common stock pledged by the
Registrant's president. The Registrant received $60,000 of the
proceeds in June 2002 and $150,000 in the quarter ended September 30,
2002. The Registrant expensed $2,262 during the year ended June 30,
2002.  The remaining $190,000 represents financing cost. The
Registrant prorated the financing cost of $54,280 as of June 30, 2002
based on the cash receipts in June 2002. The remaining $135,720 was
recorded as prepaid financing cost in the quarter ended September 30,
2002.  The prepaid financing cost is amortized over the term of the
loan (approximately one year). The Registrant recorded $47,500 for the
amortization of such cost for the quarter ended September 30, 2002,
and fully amortized the remaining prepaid financing cost of $140,238
during the quarter ended December 31, 2002.

     These notes payable were convertible into equity at the option of
the note holders at beneficial conversion rates, an embedded
beneficial conversion feature will be recorded as a debt discount and
amortized using the effective rate over the life of the debt in
accordance with EITF No. 00-27.  The Registrant has an unamortized
discount of $62,308 related to convertible notes payable of $270,000
as of June 30, 2002 and recorded a discount of $44,444 related to the
$400,000 convertible debts. The Registrant recorded amortization of
discounts of $31,880 on these convertible notes during the quarter
ended September 30, 2002, and fully amortized the remaining discount
of $74,872 during the quarter ended December 31, 2002.

     In December 2002, the Registrant received an additional $237,000
less $37,000 financing fees from these same lenders.

     In December 2002, this lender group exercised their rights
against the 14,400,000 shares pledged by the president of the
Registrant in full satisfaction of the outstanding notes payable of
$637,000, interest payable of $18,569, and accrued penalties of
$24,300. As of December 31, 2002, the Registrant considered the notes
payable and related expenses totaling $679,869 with this lender group
being paid off and has recorded a payable to the president for this
amount plus accrued interest of $47,590 in the accompanying condensed
consolidated balance sheet at December 31, 2003.  The Registrant
intended to issue new stock to replace such pledged shares.

     Prepaid financing cost and debt discounts related to this
convertible debt were expensed during the quarter ended December 31, 2002.

     The Registrant litigated with this lender group regarding
excessive financing cost, number of shares to be returned to the
Registrant and certain terms of the debt agreements.  As of December
31, 2003, the case was still pending and the outcome could not be
determined.  On March 4, 2004, this lender group entered into
settlement agreements with the company.  Under the agreements, this
lender group agreed to return 14,400,000 shares originally owned by
the president of the company and agreed to dismiss all claims, cross-
claims and counterclaims with prejudice.  Accordingly, the president
will relieve the liabilities related to the fair value of the pledged
collateral totaling $727,459 as gain on forgiveness of debt during the
quarter ending March 31, 2004.

Exchange Rates.

     The Registrant's operations are principally in Dominican Republic
under the name ePayLatina S.A., which are operated in its local
currency, the Dominican Republic Peso; and in Helsinki Finland under
the Rahaxi subsidiary, operated in its local currency, the Euro.  All
assets and liabilities are translated at exchange rates in effect at
the end of the period.  Income statement accounts are translated at
average rates for the period.  Gains and losses from translation of
foreign currency financial statements into U.S. dollars are included
in comprehensive income (loss).  The accumulated foreign currency
translation adjustment was $107,244 at December 31, 2003.

     A significant portion of the Registrant's revenues and expenses
is denominated in currencies other than U.S. dollars; Rahaxi
Processing Oy. generates its revenue in EUROS.  Any significant change
in exchange rates may have a favorable or negative effect on both the
revenues and operational costs of the Registrant  In particular, the
value of the U.S. dollar to the Euro impacts the Registrant's
operating results.  The Registrant's expenses are not necessarily
incurred in the currency in which revenue is generated, and, as a
result, we are required from time to time to convert currencies to
meet the Registrant's obligations.  In addition, a significant portion
of  the Registrant's financial statements are prepared in Euro and
translated to U.S. dollars for consolidation .

Other.

     The Registrant does not provide post-retirement or post-
employment benefits requiring charges under Statements of Financial
Accounting Standards No. 106 and No. 112.

Critical Accounting Policies.

     The Securities and Exchange Commission ("SEC") has issued
Financial Reporting Release No. 60, "Cautionary Advice Regarding
Disclosure About Critical Accounting Policies" ("FRR 60"), suggesting
companies provide additional disclosure and commentary on their most
critical accounting policies.  In FRR 60, the Commission has defined
the most critical accounting policies as the ones that are most
important to the portrayal of a company's financial condition and
operating results, and require management to make its most difficult
and subjective judgments, often as a result of the need to make
estimates of matters that are inherently uncertain.  Based on this
definition, the Registrant's most critical accounting policies
include: (a) use of estimates in the preparation of financial
statements; and (b) non-cash compensation valuation. The methods,
estimates and judgments the Registrant uses in applying these most
critical accounting policies have a significant impact on the results
the company reports in its financial statements.

(a)  Use of Estimates in the Preparation of Financial Statements.

     The preparation of these financial statements requires the
Registrant to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related
disclosure of contingent assets and liabilities.  On an on-going
basis, the Registrant evaluates these estimates, including those
related to revenue recognition and concentration of credit risk.  The
Registrant bases its estimates on historical experience and on various
other assumptions that is believed to be reasonable under the
circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources.  Actual results may differ
from these estimates under different assumptions or conditions.

(b)  Stock-Based Compensation Arrangements.

     The Registrant intends to issue shares of common stock to various
individuals and entities for management, legal, consulting and
marketing services.  These issuances will be valued at the fair market
value of the service provided and the number of shares issued is
determined, based upon the open market closing price of common stock
as of the date of each respective transaction.  These transactions
will be reflected as a component of selling, general and
administrative expenses in the accompanying statement of operations.

Forward Looking Statements.

     The foregoing management's discussion and analysis of financial
condition and results of operations contains "forward looking
statements" within the meaning of Rule 175 of the Securities Act of
1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as
amended.  The words "believe," "expect," "anticipate," "intends,"
"forecast," "project," and similar expressions identify forward-
looking statements.  These are statements that relate to future
periods and include, but are not limited to, statements as to the
Registrant's estimates as to the adequacy of its capital resources,
its need and ability to obtain additional financing, the features and
benefits of its products, its growth strategy, the need for additional
sales and support staff, its operating losses and negative cash flow,
its critical accounting policies, its profitability and factors
contributing to its future growth and profitability.  Forward-looking
statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from those projected. These
risks and uncertainties include, but are not limited to, those
discussed above, as well as risks related to the Registrant's ability
to develop new technology and introduce new products, its ability to
protect its intellectual property, its ability to find additional
financing.  These forward-looking statements speak only as of the date
hereof.  The Registrant expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change in
its expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.

ITEM 3.  CONTROLS AND PROCEDURES.

Controls and Procedures.

(a)  Evaluation of Disclosure Controls and Procedures.

     Within the 90 days prior to the end of the period covered by this
report, the Registrant carried out an evaluation of the effectiveness
of the design and operation of its disclosure controls and procedures
as of the end of the period covered by the report pursuant to Rule
13a-14 under the Securities Exchange Act of 1934 ("Exchange Act").
This evaluation was done under the supervision and with the
participation of the Registrant's President.  Based upon that
evaluation, they concluded that the Registrant's disclosure controls
and procedures are effective in gathering, analyzing and disclosing
information needed to satisfy the Registrant's disclosure obligations
under the Exchange Act.

(b)  Changes in Internal Controls.

     There were no significant changes in the Registrant's internal
controls or in its factors that could significantly affect those
controls since the most recent evaluation of such controls.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

     Other than as set forth below, the Registrant is not a party to
any material pending legal proceedings and, to the best of its
knowledge, no such action by or against the Registrant has been
threatened.

FreeStar et al. v. Dennis H. Johnston et al.

     On September 10, 2002, Dennis Johnston dismissed a previous
federal court action in its entirety against Registrant, Paul Egan,
Ciaran Egan, First American Stock Transfer and Phillip Young.  On or
about September 13, 2002, the Registrant and ePayLatina, S.A. brought
an action in the Superior Court for the State of California against
Mr. Johnston for malpractice, breach of fiduciary duty; deceit and
declaratory relief.  Mr. Johnston demurred to the complaint. On
January 30, 2003, Judge Judith Chirlin rejected Mr. Johnston's
demurrer and ordered him to answer the complaint as it stands.

     On or about February 19, 2003, Mr. Johnston filed an answer to
the complaint and an unverified cross-complaint alleging breach of
contract, fraud among other causes of action.  The cross-complaint was
brought against the same defendants in the District Court action and
added new defendants, including Corrigan & Morris LLP and its
partners.  In March 2003, Registrant and other defendants demurred to
Mr. Johnston's cross-complaint. In the face of Registrant's demurrer,
Johnston chose not to oppose, but instead abandoned his complaint.

     In May 2003, Mr. Johnston filed an unverified first amended
cross-complaint alleging breach of contract and fraud in connection
with legal fees allegedly owed to Mr. Johnston.  All causes of action
against Corrigan & Morris LLP and its partners were dismissed with
prejudice and costs were awarded to Corrigan & Morris LLP.  The
Registrant has filed an answer to that cross-complaint.

     In June 2003, Judge Judith Chirlin ruled that the action against
Corrigan & Morris LLP was dismissed with prejudice.  On January 15,
2004, Judge Chirlin ordered Mr. Johnston to pay Corrigan & Morris LLP
$15,500 in attorneys' fees.  On January 15, 2004, Judge Chirlin
granted the Anti-SLAPP motions brought by the Registrant's other
attorneys, the affect of which is to dismiss them from this action,
and instructed them to submit their requests for the award of attorney fees.

     Management believes the Registrant has meritorious claims and
defenses to Mr. Johnston's claims and ultimately will prevail on the
merits.  However, this matter remains in the early stages of
litigation and there can be no assurance as to the outcome of the
lawsuit. Litigation is subject to inherent uncertainties, and
unfavorable rulings could occur. Were unfavorable rulings to occur,
there exists the possibility of a material adverse impact of money
damages on the Registrant's financial condition, results of
operations, or liquidity of the period in which the ruling occurs, or
future periods.

vFinance et al. v. FreeStar et al. (Bankruptcy Action).

     On January 9, 2003, vFinance Investments, Richard Rosenblum,
David Stefansky, Marc Siegel, Boat Basin Investors LLC and Papell
Holdings, Ltd. ("Petitioners") filed an involuntary bankruptcy
petition against the Registrant. The Petitioners sought liquidation
and the appointment of a receiver.

     On March 4, 2003, United States Bankruptcy Judge Gropper
dismissed the Petitioners' bankruptcy petition against the Registrant.
On March 21, 2003, the Registrant filed its motion for an order and
judgment awarding costs and attorneys' fees in favor of the Registrant
against the Petitioners pursuant to 11 U.S.C.   303(i).  On or about
April 21, 2003, the parties reached a settlement to resolve the 11
U.S.C.  303(i) (1) issues in that motion.  The Petitioners owed and
paid the Registrant $40,000 in satisfaction of the settlement.

vFinance et al. v. FreeStar et al. (Civil Action).

     On or about January 22, 2003, vFinance Investments, Richard
Rosenblum, David Stefansky, Marc Siegel, Boat Basin Investors LLC, and
Papell Holdings, Ltd. (collectively, "Plaintiffs") filed a complaint
against Paul Egan, First American Stock Transfer and Phil Young,
president of First American Stock Transfer, in the United States
District Court for the Southern District of New York alleging, among
other claims, fraud, conversion and violations of the Securities
Exchange Act of 1934.  In addition to unspecified money damages, the
Plaintiffs sought an affirmative preliminary injunction against Mr.
Egan and First American Stock Transfer seeking the removal of
restrictive legends placed on 14,400,000 unregistered shares of
Registrant stock purportedly owned by the Plaintiffs.  The Registrant
was not named in the suit.  The Registrant opposed the affirmative
injunctive action on the grounds that removal of the legends would
constitute a violation of the registration provisions of the federal
securities laws and that the Registrant was an indispensable party.

     On January 29, 2003, U.S. District Judge Robert Sweet held a
hearing on the Plaintiffs' request for preliminary injunction and
expressed serious concern that there seemed to be significant factual
disputes and refused to order the injunction.

     On February 7, 2003, Judge Sweet issued an order denying the
Plaintiffs' motion for preliminary injunction and staying the action
pursuant to U.S. Bankruptcy Code 11 U.S.C. 362(a), on the ground that
the Registrant, which was not named in the action, was an
indispensable party.  That stay continued until after the bankruptcy
case (discussed above) was dismissed and the Registrant was added as a
defendant.

     On March 24, 2003, the Plaintiffs filed an amended complaint
against the Registrant, Paul Egan, Ciaran Egan, and Registrant's stock
transfer agent alleging, among other things, that Registrant and Paul
Egan failed to repay money borrowed.  Plaintiffs' 13 causes of action
include breach of contract, conversion fraud and violations of the
Securities and Exchange Act of 1934. The amended complaint seeks the
issuance of 14,400,000 shares of free trading Registrant stock and
damages in an unspecified amount.

     On May 5, 2003, the Registrant filed a counterclaim against the
Plaintiffs and vFinance Investments, Inc.  On that same date, the
Registrant answered Plaintiffs' complaint, denying the allegations.
The Registrant's counterclaim contends that the Plaintiffs and
vFinance breached their fiduciary duties to the Registrant by
recommending and assisting the Registrant in negotiating and drafting
convertible debt financing through floorless convertible notes with
lenders controlled by vFinance.  The Registrant further alleges that
the Plaintiffs and vFinance charged the Registrant exorbitant fees and
otherwise ensured profits of multiples of their original investment by
setting out to destroy the Registrant through short selling its stock.
The Registrant and Paul Egan further allege that vFinance and the
Plaintiffs caused them to suffer damages as a result of their "death
spiral" or toxic convertible financing strategy, violations of the
federal securities laws, breach of contracts, including over-
conversion of certain pledged securities, market manipulation, breach
of fiduciary duty and fraud.

     As part of the counter-claim, the Registrant alleges that the
Plaintiffs may have caused the Registrant unwittingly to participate
in violations of the registration provisions of the federal securities
laws in connection with certain previously disclosed financing
transactions involving convertible notes.

     As of March 4, 2004, this case has been settled.  Under the terms
of the settlement agreement: (i) Plaintiffs, David Stefansky, Richard
Rosenblum, Marc Siegel, Boat Basin Investors LCC, and Papell Holdings
Ltd. agreed to return 14,400,000 shares of the Registrant's stock
issued to them; and (ii) Plaintiffs and vFinance agreed to refrain
from trading in the Registrant's securities for a period of two years.
The Parties each exchanged mutual releases and agreed to dismiss the
action including all claims, cross-claims and counterclaims with
prejudice.  As a result of the settlement, the Registrant will
extinguish approximately $750,000 of debt in its third quarter.  There
appears to be no remaining contingent liabilities of the Registrant
related to that lawsuit.

Securities and Exchange Commission Investigation.

     The staff of the Denver office of the SEC, pursuant to a formal
non-public inquiry, has sought and received production of documents
and testimony relating to certain financing transactions entered into
by the Registrant that were the subject of separate litigation
referenced above (vFinance et al. v. FreeStar et al.), issuance of the
Registrant's stock, facts stated in press releases, and reports filed
with the SEC concerning, among other things, the Registrant's assets,
operations, financial condition, anticipated revenue and strategic
initiatives.  The Registrant has been and expects to continue to
cooperate with that SEC inquiry.

     The Registrant has not received any communications from the SEC
in this matter since about August 2003.  There remains, however, a
risk that an enforcement proceeding will be recommended by the staff
of the SEC as result of this formal investigation.  However, it cannot
be predicted with any certainty what the nature of such enforcement
proceeding would be, the type of sanctions that might be sought, or
what the likelihood would be of reaching a settlement.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     The Registrant sold the following securities without registration
(restricted) during the three months ended December 31, 2003:

     (a)  During the quarter ended December 31, 2003, the Registrant
issued 1,000,000 shares of its common stock to an employee for current
and future services, with a fair value of $72,000 ($0.072 per share).

     (b)  During the quarter ended December 31, 2003, the Registrant
issued 3,400,000 restricted shares of  common stock to various
consultants for current and future services, with a fair value of
$535,600 ($0.1575 per share).

     (c)  During the quarter ended December 31, 2003, the Registrant
sold 163,700,000 restricted shares of its common stock to various
investors at $0.01 per share for an aggregate amount of $1,637,000.
The Registrant received cash proceeds of $946,167 of this amount (net
of sale commissions of $163,700 paid and to be paid), and expects to
receive the remaining $527,133 in the quarter ending March 31, 2004.

     (d)  During the quarter ended December 31, 2003, the Registrant
issued 25,183,418 restricted shares of common stock pursuant to the
acquisition of TransAxis.  On February 20, 2004, the Registrant
renegotiated this transaction, and has cancelled these shares and
issued 3,200,000 restricted shares of common stock  in satisfaction of
the renegotiated agreement.  The net amount of 3,200,000 shares is
shown as issued and outstanding in the accompanying condensed
consolidated balance sheet as of December 31, 2003.

     (e)  During the quarter ended December 31, 2003, the Registrant
issued 5,183,418 restricted shares of common stock pursuant to the
terms of a debt settlement agreement; these shares were valued at
$679,028.  The Registrant is in the process of  renegotiating the
terms of this agreement, and expects to cancel these shares and
satisfy this debt with the issuance of a significantly fewer number of
shares.  The entire amount of 5,183,418 is shown as issued on the
accompanying condensed consolidated balance sheet as of December 31, 2003.

     Other than as set forth above, no commissions were paid in
connection with any of these sales.  All these sales were undertaken
under either Rule 506 of Regulation D or Regulation S under the
Securities Act of 1933, as amended.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     Not applicable.

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

     None

ITEM 5.  OTHER INFORMATION.

Disagreement with Former Auditor for ePayLatina, S.A.

     On August 10, 2001, the Registrant purchased all of the assets of
ePayLatina, S.A.  Prior to this acquisition, an audit was conducted on
the books and record of ePayLatina, S.A. by the Dominican Republic
office of Ernst & Young.  This audit, dated August 2, 2001, is
contained in a Form 8-K/A filed with the SEC on November 1, 2001.  For
accounting purposes, this acquisition was accounted for using the
purchase method, with ePayLatina, S.A. as the accounting acquirer in a
reverse acquisition.  Therefore, the historical equity of the
Registrant has been adjusted to reflect the conversion of ePayLatina,
S.A. common stock to that of the Registrant.  Additionally, as a
reverse acquisition, the historical operating results prior to the
acquisition are those of ePayLatina, S.A. and include only the
transactions of the Registrant after the acquisition.

     On October 25, 2002, the current independent auditors for the
Registrant, Stonefield Josephson, Inc. ("Stonefield"), completed an
audit of the books and records of the Registrant for the period from
May 25, 2001 (inception of ePayLatina, S.A.) to June 30, 2002.
Stonefield concluded, as a result of this audit, that: (a) because
ePayLatina, S.A. lacked sufficient documentation to demonstrate to
Stonefield that this company owned free and clear of any liens certain
assets, including equipment and software, previously recorded on
ePayLatina, S.A.'s balance sheet as having a value of approximately
$900,000, this company could no longer properly recognize such items
as assets of this company; and (b) the revenue figures for the
Registrant, based on the ePayLatina, S.A. audit, for the period from
May 25, 2001 to March 31, 2002 (including the intervening quarters),
were recorded improperly and overstated by approximately $150,500.
Both the balance sheet and the income statement in question had
previously been audited by Ernst & Young.

     Prior to the issuance of the audit for the fiscal year ended June
30, 2002, Stonefield attempted on numerous occasions to contact Ernst
& Young to discuss this inconsistency.  In September 2003, Ernst &
Young's Domincan Republic office orally advised Paul Egan that Ernst &
Young continues to stand behind its audit of ePayLatina, and in
particular confirms its opinion that the assets and revenue were both
properly recorded by ePayLatina, S.A. as reflected in the audited
financial statements which they prepared.  Neither the Registrant nor
Stonefield has received any written correspondence from Ernst & Young
supporting their position or evidence of the Registrant's ownership of
such assets.  However, it is the Registrant's understanding that this
matter is still under review by Ernst & Young.

     As a result of the above disagreement, the Registrant has not
amended the Form 8-K noted above.  Once this matter has been resolved,
then a determination will be made by the Registrant as to whether the
Form 8-K is required to be further amended.  However, the Registrant
intends to file amended Form 10-QSB's for the affected periods as a
result of Stonefield's audit.

Acquisition of TransAxis, Inc.

(a)  Stock Purchase Agreement.

     On September 24, 2003, the Registrant entered into a stock
purchase agreement with certain shareholders of TransAxis, Inc.
("TransAxis") (formerly Digital Courier Technologies, Inc.) for the
acquisition of a majority of the common stock of this publicly held
company (see Exhibit 2.12 to this Form 10-QSB).  The terms of the
acquisition provide for the Registrant to purchase a majority of the
shares that consist of the following: (a) the 2,916,533 shares that
will be outstanding upon the conversion of certain debt of TransAxis
("Conversion Right"); and (b) the 805,000 shares of Registrant common
stock issued and outstanding.  In exchange the Registrant is to issue
on a pro rata basis based on the sellers' current percentage
beneficial ownership of TransAxis common stock (including the
beneficial ownership of the TransAxis common stock represented by the
Conversion Right) the aggregate number of shares of Registrant common
stock which is the greater of (i) 7,000,000 shares of common stock, or
(ii) that number of shares of common stock equal to $1,260,000 divided
by the average closing bid price per share of the common stock on the
five days prior to the closing date.

     On October 8, 2003, the parties amended the original purchase
agreement (see Exhibit 2.13 to this Form 10-QSB).  The following was
amended under this document:

     (a)  The Registration Rights Agreement (Exhibit B to the
agreement) was amended so that the Registrant is to use
commercially reasonable efforts to cause a Form SB-2 registration
statement covering re-sales of all of the shares of Registrant
common stock to be issued to or on behalf of the Sellers at the
closing to be filed with the SEC within 180 days after the
closing. Thereafter, the Registrant is to use commercially
reasonable efforts to have this registration statement declared
effective as promptly as possible, and to keep this registration
statement effective until the earlier of (i) one year following
the effectiveness date or (ii) that date on which all of the
common stock covered by the registration statement may be resold
without further restriction pursuant to Rule 144 under the
Securities Act of 1933.

     (b)  The parties to the agreement concur that the original amount
of Registrant common stock to be issued in connection with the
Agreement is 31,500,000 shares, but that due to a certain
liability of TransAxis, the total amount of common stock to be
issued by the Registrant is reduced to 25,312,053.  In addition,
due to a missing stock certificate of that Registrant, the
Registrant will be required to deliver a further reduced total of
25,183,418 shares of common stock at the closing, with the
remaining 128,585 shares only upon delivery to the Registrant the
missing stock certificate.

     In compliance with the agreement and the amendment, on October
15, 2003, the Registrant issued and delivered a total of 25,183,418
restricted shares of common stock for approximately 87% of the shares
of TransAxis, and this transaction was closed.  The closing date of
the transaction, October 15, 2003, was considered the effective date
of the acquisition as all the terms and details were finalized and executed.

     On February 20, 2004, the parties further amended the original
purchase agreement ("Amendment No. 2").  Freestar claimed that it had
identified certain accounting-related deficiencies in the books of
TransAxis which predate the closing date, and that such deficiencies
have and will continue to preclude TransAxis from being able to obtain
audited financial statements without undue effort and expense.  In
order to avoid the cost of litigation and further disputes and
negotiation, Freestar and TransAxis agreed to reduce the number of
shares issuable under the TA Acquisition Agreement from 25,183,418 to
3,200,000.  The value of these shares of $752,000 along with the value
of the shares issued pursuant to the Brown Simpson Settlement (see
below) are shown as Investment in TransAxis in the accompanying
condensed consolidated balance sheet for the period ended December 31, 2003.

(b)  Loan to TransAxis.

     In anticipation of this transaction and while in the negotiation
stage, in July 2003, the Registrant loaned to TransAxis the amount of
$75,000 via two senior secured convertible note agreements in the
amount of $50,000 and $25,000, respectively ("Bridge Notes") (see
Exhibits 4.15 and 4.16 to this Form 10-QSB).  The Bridge Notes carry
interest at the rate of (i)12.5 % per year from September 1, 2003,
provided that the Registrant does not hold less than 70% interest of
the outstanding capital stock of TransAxis at August 31, 2003, and
(ii)  15% per annum commencing January 1, 2004, provided that the
Registrant has not completed the acquisition of TransAxis by this
date.  The Bridge Notes are senior obligation of TransAxis, Inc. and
payment is secured by a security agreement between the two parties.

     The Bridge Notes matured on September 29, 2003 without being
paid.  If the Bridge Notes are not paid in full before December 31,
2003, the Registrant has the option for a one-year period to convert
the Bridge Notes without payment of any other consideration into
common stock of TransAxis according to the following: at least the
number of shares which will prove 5% ownership of the outstanding
shares of TransAxis, and shall be increased by 1% for each additional
$15,000 of loans or accrued interest thereon that the Registrant
maintains with TransAxis.

     Since the Registrant purchased majority interest of TransAxis
effective October 15, 2003, these notes receivable are included in the
Investment in TransAxis, Inc. in the quarter ended December 31, 2003.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

Exhibits.

     Exhibits included or incorporated by reference herein are set
forth in the attached Exhibit Index.

Reports on Form 8-K.

     The Registrant filed the following reports on Form 8-K during the
second quarter of the fiscal year covered by this Form 10-QSB:

     (a)  A Form 8-K/A filed on October 15, 2003 to disclose a third
amendment, dated June 27, 2003, to the acquisition agreement
between the Registrant Heroya Investments Limited for Rahaxi
Processing Oy.

     (b)  A Form 8-K filed on October 24, 2003 to disclose a Stock
Purchase Agreement between the Registrant and the stockholders of
TransAxis, Inc., dated September 24, 2003, and an Amendment to
Stock Purchase Agreement between the Registrant and the
stockholders of TransAxis, Inc., dated October 8, 2003.

     (c)  a Form 8-K filed on November 5, 2003 to disclose a Consent
of Independent Certified Public Accountants in connection with
the filing of the Form 10-KSB for the fiscal year ended June 30, 2003.

                                SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                       FreeStar Technology Corporation


Dated: March 16, 2004                  By: /s/ Paul Egan
                                       Paul Egan, President/Chief
                                       Executive Officer


Dated: March 16, 2004                  By: /s/ Ciaran Egan
                                       Ciaran Egan,
                                       Secretary/Treasurer/Chief
                                       Financial Officer

                                     EXHIBIT INDEX

Number                    Description

1      Agency Agreement between the Registrant and vFinance
       Investments, Inc., dated March 24, 2002 (including the
       following exhibits: Exhibit B: Form of Warrant) (the
       following exhibits have been omitted: Exhibit A: Term Sheet)
       (incorporated by reference to Exhibit 1 of the Form 10-KSB
       filed on November 13, 2002).

2.1    Asset Purchase Agreement between the Registrant and Southern
       California Logo, Inc., dated April 26, 2000 (incorporated by
       reference to Exhibit 1 of the Form 8-K filed on May 15, 2000).

2.2    Asset Purchase Agreement between the Registrant and
       Ronbridge Investments, Ltd., dated October 17, 2000
       (incorporated by reference to Exhibit 10 of the Form 8-K
       filed on October 23, 2000).

2.3    Binding Letter of Intent between the Registrant and
       ePayLatina, S.A., dated July 23, 2001 (incorporated by
       reference to Exhibit 10.2 of the Form 8-K filed on July 25, 2001).

2.4    Asset Purchase Agreement between the Registrant and
       ePayLatina, S.A., dated August 9, 2001 (incorporated by
       reference to Exhibit 10.1 of the Form 8-K filed on August
       14, 2001).

2.5    Acquisition Agreement between the Registrant and Heroya
       Investments Limited, dated September 10, 2002 (the following
       schedules have been omitted: Schedule 1, books and records
       of Rahaxi; Schedule 2, draft employment agreements with Hans
       Turitz and Tony Horrell; and Schedule 3, list of clients
       introduced to Rahaxi by HEROYA) (incorporated by reference
       to Exhibit 2 of the Form 8-K filed on September 25, 2002).

2.6    Amendment 1 to Acquisition Agreement between the Registrant
       and Heroya Investments Limited, dated December 16, 2002
       (incorporated by reference to Exhibit 2.2 of the Form 8-K/A
       filed on December 24, 2002).

2.7    Amendment 2 to Acquisition Agreement between the Registrant
       and Heroya Investments Limited, dated February 25, 2003
       (incorporated by reference to Exhibit 2.3 of the Form 8-K/A
       filed on February 26, 2003).

2.8    Letter Agreement, dated April 24, 2003, from FreeStar
       Acquisition Corporation to the Registrant, and consented to
       by Paul Egan, Ciaran Egan and Fionn Stakelum (including the
       Performance Guarantee) (incorporated by reference to Exhibit
       2 of the Form 8-K filed on April 24, 2003).

2.9    Letter of Intent between the Registrant and Digital Courier
       Technologies, Inc., dated April 29, 2003 and accepted on
       April 30, 2003 (incorporated by reference to Exhibit 2 of
       the Form 8-K filed on May 1, 2003).

2.10   Revised Letter of Intent between the Registrant and
       TransAxis, Inc. (formerly known as Digital Courier
       Technologies, Inc.), dated and accepted on June 20, 2003
       (the following exhibits to this document have been omitted:
       Exhibit A: form of a Senior Secured Convertible Note ;
       Exhibit B: Security Agreement; and Exhibit C: Use of
       Proceeds) (incorporated by reference to Exhibit 2.2 of the
       Form 8-K/A filed on June 26, 2003).

2.11   Amendment 3 to Acquisition Agreement between the Registrant
       and Heroya Investments Limited, dated June 27, 2003
       (incorporated by reference to Exhibit 2.4 of the Form 8-K/A
       filed on October 15, 2003).

2.12   Stock Purchase Agreement between the Registrant and the
       stockholders of TransAxis, Inc., dated September 24, 2003
       (incorporated by reference to Exhibit 2.1 of the Form 8-K
       filed on October 24, 2003).

2.13   Amendment to Stock Purchase Agreement between the Registrant
       and the stockholders of TransAxis, Inc., dated October 8,
       2003 (incorporated by reference to Exhibit 2.2 of the Form
       8-K filed on October 24, 2003).

3.1    Articles of Incorporation, dated November 17, 1999
       (incorporated by reference to Exhibit 3.3 of the Form 10-SB
       filed on January 3, 2000).

3.2    Certificate of Amendment of Articles of Incorporation, dated
       September 8, 2000 (incorporated by reference to Exhibit 3.4
       of the Form S-8 filed on August 17, 2001).

3.3    Certificate of Amendment to Articles of Incorporation, dated
       February 15, 2001 (incorporated by reference to Exhibit 3.1
       of the Form 8-K filed on February 20, 2001).

3.4    Certificate of Amendment to Articles of Incorporation, dated
       December 15, 2002 (incorporated by reference to Exhibit 3.4
       of the Form 10-QSB filed on March 12, 2003).

3.5    Certificate of Amendment to Articles of Incorporation, dated
       February 24, 2003 (incorporated by reference to Exhibit 3.5
       of the Form 10-QSB filed on March 12, 2003).

3.6    Bylaws, dated November 17, 1999 (incorporated by reference
       to Exhibit 3.2 of the Form 10-SB filed on January 3, 2000)

4.1    Consulting Services Agreement between the Registrant and
       Public Securities Service, dated November 30, 1999
       (incorporated by reference to Exhibit 10.1 of the Form S-8
       filed on September 29, 2000).

4.2    Consulting Agreement between the Registrant and Dennis H.
       Johnston, dated August 1, 2001 (incorporated by reference to
       Exhibit 10.1 of the Form S-8 filed on August 17, 2001).

4.3    Certificate of Powers, Designations, Preferences and Rights
       of Series A Preferred Stock of the Registrant, dated August
       10, 2001 (incorporated by reference to Exhibit 4 of the Form
       8-K filed on August 14, 2001).

4.4    Non-Employee Directors and Consultants Retainer Stock Plan,
       dated October 25, 2001 (incorporated by reference to Exhibit
       4.1 of the Form S-8 filed on November 9, 2001).

4.5    Employee Stock Incentive Plan, dated October 25, 2001
       (incorporated by reference to Exhibit 4.2 of the Form S-8
       filed on November 9, 2001).

4.6    Form of Financing Agreement between the Registrant, and
       Papell Holdings, Ltd. and Boat Basin Investors LLC, dated
       March 25, 2002 (including the following exhibits: Exhibit A:
       Form of Convertible Note; Exhibit B: Form of Warrant;
       Exhibit C: Registration Rights Agreement; Exhibit D: Stock
       Pledge Agreement;  Exhibit E: Form of Opinion of Counsel;
       and Exhibit F: Unconditional Guarantee (the following
       exhibits have been omitted: Schedule 4(c): Compliance with
       Laws; Schedule 4(d): Litigation; Schedule 4(h):
       Capitalization; and Schedule 7(j): Consolidations)
       (incorporated by reference to Exhibit 4.6 of the Form 10-KSB
       filed on November 13, 2002).

4.7    Loan Agreement between the Registrant, and David Stefansky,
       Marc Siegal and Richard Rosenblum, dated June 12, 2002
       (including the following exhibits: Exhibit A: Form of
       Promissory Note; and Exhibit C: Unconditional Guarantee) (the
       following exhibits have been omitted: Exhibit B: Term Sheet;
       and Exhibit D: Corporate Resolution) (incorporated by
       reference to Exhibit 4.7 of the Form 10-KSB filed on
       November 13, 2002).

4.8    Form of Financing Agreement between the Registrant, and
       Papell Holdings, Ltd., Boat Basin Investors LLC, vFinance,
       Inc., David Stefansky, Marc Siegal and Richard Rosenblum
       dated June 27, 2002 (except for Papell Holdings, which is
       dated September 9, 2002) (including the following exhibits:
       Exhibit A: Form of Convertible Note; Exhibit B: Registration
       Rights Agreement; Exhibit C: Unconditional Guarantee;
       Exhibit D: Form of Stock Pledge Agreement; and Exhibit E:
       Form of Opinion of Counsel) (the following exhibits have
       been omitted: Schedule 4(c): Compliance with Laws; Schedule
       4(d): Litigation; Schedule 4(h): Capitalization; and
       Schedule 7(j): Consolidations) (incorporated by reference to
       Exhibit 4.8 of the Form 10-KSB filed on November 13, 2002).

4.9    Supplementary Agreement between the Registrant and vFinance
       Investments, Inc., Boat Basin Investors LLC. Marc Siegel,
       David Stefansky, and Richard Rosenblum, dated June 27, 2002
       (incorporated by reference to Exhibit 4.9 of the Form 10-KSB
       filed on November 13, 2002).

4.10   Amended and Restated Non-Employee Directors and Consultants
       Retainer Stock Plan, dated November 15, 2002 (incorporated
       by reference to Exhibit 4.1 of the Form S-8 POS filed on
       December 11, 2002).

4.11   Amended and Restated Stock Incentive Plan, dated November
       15, 2002 (incorporated by reference to Exhibit 4.2 of the
       Form S-8 POS filed on December  11, 2002).

4.12   Option to Purchase 10,000,000 Shares of Common Stock, dated
       April 24, 2003, issued by the Registrant to Phaeton
       Investments Limited (incorporated by reference to Exhibit 10
       of the Form 8-K filed on April 24, 2003).

4.13   Amended and Restated Non-Employee Directors and Consultants
       Retainer Stock Plan (Amendment No, 2), dated May 25, 2003
       (incorporated by reference to Exhibit 4.1 of the Form S-8
       POS filed on June 2, 2003).

4.14   Amended and Restated Stock Incentive Plan (Amendment No, 2),
       dated May 25, 2003 (incorporated by reference to Exhibit 4.2
       of the Form S-8 POS filed on June 2, 2003).

4.15   Senior Secured Convertible Note issued by TransAxis, Inc. in
       favor of the Registrant, dated July 14, 2003 (incorporated
       by reference to Exhibit 4.15 of the Form 10-QSB filed on
       December 1, 2003).

4.16   Senior Secured Convertible Note issued by TransAxis, Inc. in
       favor of the Registrant, dated July 17, 2003 (incorporated
       by reference to Exhibit 4.16 of the Form 10-QSB filed on
       December 1, 2003).

16.1   Letter on change in certifying accountant, dated March 9,
       2001 (incorporated by reference to Exhibit 16.2 of the Form
       8-K/A filed on March 13, 2001).

16.2   Letter on change in certifying accountant, dated October 17,
       2002 (incorporated by reference to Exhibit 16 of the Form 8-
       K/A filed on October 22, 2002).

21     Subsidiaries of the Registrant (incorporated by reference to
       Exhibit 21 of the Form 10-QSB filed on May 20, 2003).

23     Consent of Independent Certified Public Accountants
       (incorporated by reference to Exhibit 23 of the Form 8-K
       filed on November 4, 2003).

31.1   Rule 13a-14(a)/15d-14(a) Certification of Paul Egan (see below).

31.2   Rule 13a-14(a)/15d-14(a) Certification of Ciaran Egan (see below).

32     Section 1350 Certification of Paul Egan and Ciaran Egan (see below).

99.1   Certificate of Register issued to ePayLatina, S.A., dated
       June 4, 2001 (in Spanish and translated into English)
       (incorporated by reference to Exhibit 99 of the Form 8-K
       filed on April 9, 2003).

99.2   Press release issued by the Registrant, dated April 24, 2003
       (incorporated by reference to Exhibit 2 of the Form 8-K
       filed on April 24, 2003).

99.3   Press release issued by the Registrant, April 24, 2003 (7:37
       p.m.) (incorporated by reference to Exhibit 99.3 of the Form
       8-K/A filed on April 25, 2003).

99.4   Text of conference call held by the Registrant, dated May 7,
       2003 (incorporated by reference to Exhibit 99 of the Form 8-
       K filed on May 9, 2003).

99.5   Text of conference call held by the Registrant, dated May
       21, 2003 (incorporated by reference to Exhibit 99.1 of the
       Form 8-K filed on May 30, 2003).

99.6   Press release issued by the Registrant, dated May 29, 2003
       (incorporated by reference to Exhibit 99.2 of the Form 8-K
       filed on May 30, 2003).

99.7   Press release issued by the Registrant, dated July 29, 2003
       (incorporated by reference to Exhibit 99.3 of the Form 8-K/A
       filed on August 6, 2003).

99.8   Text of conference call held by the Registrant, dated July
       29, 2003 (incorporated by reference to Exhibit 99.4 of the
       Form 8-K/A filed on August 6, 2003).

99.9   Press release issued by the Registrant, dated October 16,
       2003 (incorporated by reference to Exhibit 99 of the Form 8-
       K filed on October 24, 2003).