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

                                  FORM 10-QSB/A

(MARK ONE)[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

                                       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 Company as Specified in Its Charter)

                      Nevada                              88-0446457
        --------------------------------                  ----------
        (State or Other Jurisdiction of                (I.R.S. Employer
         Incorporation or Organization)               Identification No.)


                    60 Lower Baggot Street, Dublin 2 Ireland
                    ----------------------------------------
                    (Address of Principal Executive Offices)

                                353 1 602 4757
                                --------------
                          (Company's Telephone Number)

                   ------------------------------------------
                    (Former Name, Former Address, and Former
                   Fiscal Year, if Changed Since Last Report)

      Indicate  by check mark  whether  the  Company  (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 Company
was  required  to file  such  reports),  and (2)  been  subject  to such  filing
requirements for the past 90 days: Yes X  No   .
                                      ---   ---

      Indicate by check mark whether the Company is a shell  company (as defined
in Rule 12b-2 of the Exchange Act): Yes   No X .
                                       ---  ---

      As of September  30, 2005,  the Company had  123,163,616  shares of common
stock issued and outstanding.

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

                                       1

<PAGE>


AMENDMENT NO. 1 EXPLANATORY NOTE

     We are filing Amendment No. 1 (this "Amendment") to the Freestar Technology
Corporation Quarterly Report on Form 10-QSB for the three months ended September
30,  2005,  in  response  to  comments  issued by the staff of the  Division  of
Corporation   Finance  of  the   Securities   and   Exchange   Commission   (the
"Commission").  The  Commission  issued their comments to the Company on July 6,
2006 in connection  with its review of the  Company's  Annual Report on SEC Form
10-KSB and Quarterly Reports on SEC Form 10-QSB.

     Based on these  comments and  discussions  with the  Commission,  and after
consultation with the Company's  independent  registered public accounting firm,
the  Company  is  filing  this  Amendment  to  present  the  cost of  amortizing
capitalized  computer  software  as  a  cost  of  revenue  in  our  consolidated
statements of losses. Such costs were previously classified as selling,  general
and administrative  expenses.  In this regard, the Company has also expanded the
comparison  of the three  months  ended  September  30, 2005 to the three months
ended September 30, 2004 in the Management's Discussion and Analysis and Plan of
Operation.

     This change in presentation has no impact on previously  reported net loss,
loss per  share,  revenue,  cash,  total  assets,  cash  flow or  deficiency  in
stockholders' equity. For the convenience of the reader, this Form 10-QSB/A sets
forth the entire Form 2005 10-QSB. There are no other significant changes to the
original Form 10-QSB other than those  outlined  above.  This Form 10-QSB/A does
not reflect events  occurring  after the filing of the original Form 10-QSB,  or
modify or  update  disclosures  therein  in any way other  than as  required  to
reflect the  Amendment  set forth below.  Among other  things,  forward  looking
statements  made in the original Form 10-KSB (other than the  restatement),  and
such forward looking statements should be read in their historical  context.  In
addition,  currently-dated  certifications  from our Chief Executive Officer and
Chief Financial Officer have been included as exhibits to this Amendment.



<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              PAGE

     ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

              CONDENSED CONSOLIDATED BALANCE

              SHEET AS OF SEPTEMBER 30, 2005...................................3

              CONDENSED CONSOLIDATED STATEMENTS OF
              OPERATIONS FOR THE THREE MONTHS ENDED

              SEPTEMBER 30, 2005 AND SEPTEMBER 30, 2004........................5

              CONDENSED CONSOLIDATED STATEMENTS
              OF CASH FLOWS FOR THE THREE MONTHS ENDED

              SEPTEMBER 30, 2005 AND SEPTEMBER 30, 2004........................6

              NOTES TO CONDENSED CONSOLIDATED

              FINANCIAL STATEMENTS.............................................8

     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF

              FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................17

     ITEM 3.  CONTROLS AND PROCEDURES.........................................32

PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS...............................................33

     ITEM 2.  UNREGISTERED SALES OF EQUITY

              SECURITIES AND USE OF PROCEEDS..................................34

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.................................35

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE
              OF SECURITY HOLDERS.............................................35

     ITEM 5.  OTHER INFORMATION...............................................35

     ITEM 6.  EXHIBITS........................................................36

SIGNATURES....................................................................37

                                       2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                         FREESTAR TECHNOLOGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEBMER 30, 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                     ASSETS
<S>                                                                                 <C>
Current assets:
 Cash and cash equivalents                                                        $  1,713,987
 Accounts receivable, net of allowance for doubtful accounts of $35,053                293,083
 Other current assets                                                                  114,931
                                                                                  ------------
      Total current assets                                                           2,122,001

Property, plant and equipment, net of accumulated depreciation
   and amortization of $47,098                                                         112,877

Software license, net of accumulated amortization of $582,216                        1,623,284

Customer relationships and contracts, net of accumulated amortization of $370,503    1,543,772

Software, net of accumulated amortization of $617,683                                1,129,650
                                                                                    ----------
      Total assets                                                                $  6,531,584
                                                                                  ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable and accrued expenses                                               1,207,731
 Note payable - current portion                                                        619,262
 Due to related parties                                                              4,560,640
                                                                                  ------------
      Total current liabilities                                                      6,387,633

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
</TABLE>

                                       3

<PAGE>

                         FREESTAR TECHNOLOGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2005
                                   (UNAUDITED)
                                   (CONTINUED)
<TABLE>
<CAPTION>
<S>                                                                              <C>

Additional paid-in capital - preferred stock                                         2,229,558
Common stock, $0.001 par value, 500,000,000 shares authorized;
  123,163,616 shares issued and outstanding                                            123,164
Additional paid-in capital - common stock                                           42,940,127
Common stock subscribed                                                              1,365,000
Deferred compensation                                                               (1,415,480)
Accumulated deficit                                                                (45,050,971)
Accumulated other comprehensive gain  (loss)                                           (50,947)
                                                                                  ------------
     Total stockholders' equity                                                        143,951
                                                                                  ------------
                                                                                  $  6,531,584
                                                                                  ============
</TABLE>


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

                                       4

<PAGE>

                         FREESTAR TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        THREE MONTHS ENDED SEPTEMBER 30,
                                   (UNAUDITED)


                                                      2005             2004
                                                -------------    -------------
Revenue                                         $     602,748    $     365,952
Cost of revenue                                       498,556          256,693
                                                -------------    -------------
Gross profit                                          104,192          109,259
Selling, general and administrative expenses        1,024,454        1,086,403
                                                -------------    -------------
                                                     (920,262)        (977,144)
Other income (expenses):
    Interest income/(expense)                         (18,771)          (1,052)
    Gain on disposal of assets                          2,004               --
                                                -------------    -------------
Loss before income taxes                             (937,030)        (978,196)

Income taxes                                               --               --
                                                -------------    -------------
Net Loss                                             (937,030)        (978,196)

Other - comprehensive income (loss): gain
   on foreign exchange                                 33,062           13,962
                                                -------------    -------------
Comprehensive loss                              $    (903,068)   $    (964,234)
                                                =============    =============
Loss per share - basic                          $       (0.01)   $       (0.01)
                                                =============    =============
Weighted average shares outstanding - basic (1)   120,464,448       68,134,365
                                                =============    =============
Weighted average shares outstanding - diluted (1) 127,908,153       69,270,102
                                                =============    =============


(1)   Adjusted  for a one for seven  reverse  split of the common stock that was
      effective on November 8, 2004

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

                                       5

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                      2005           2004
                                                                                  -----------    -----------
<S>                                                                               <C>            <C>
Cash flows from operating activities:

 Net loss                                                                         $  (937,030)   $  (978,196)

 Adjustments to reconcile net loss to net cash provided by (used for) operating
   activities:

        Amortization of discount on note                                               12,240             --
        Gain on sales of fixed assets                                                  (2,004)            --
        Depreciation and amortization                                                 146,526        143,729
        Cancellation of common stock previously issued to consultants                (263,349)            --
        Non-cash compensation                                                         586,148        580,665
 Changes in assets and liabilities:
    (Increase) decrease in assets
        Accounts receivable                                                          (126,140)       (13,716)
        Other current assets                                                          (78,945)       (34,158)

    Increase (decrease) in liabilities
        Accounts payable and accrued expenses                                        (137,644)        (3,163)
                                                                                  -----------    -----------
            Total adjustments                                                         136,832        673,357
                                                                                  -----------    -----------
            Net cash used in operating activities                                    (800,198)      (304,839)
                                                                                  -----------    -----------

Cash flows from investing activities:

      Purchase of fixed assets                                                        (30,871)        (3,868)
      Cash from sale of fixed assets                                                    2,004             --
      Purchase of software and capitalized software cost                              (96,627)
                                                                                  -----------    -----------
            Net cash used in investing activities                                     (28,867)      (100,495)
                                                                                  -----------    -----------

Cash flows from financing activities:

      Proceeds from sale of common stock                                            1,000,000             --
      Proceeds from exercise of stock options/warrants                                912,500        375,000
      Proceeds from (repayments to) related parties                                   (27,552)       141,449
                                                                                  -----------    -----------
            Net cash provided by financing activities                               1,884,948        516,449
                                                                                  -----------    -----------
Net increase (decrease) in cash and cash equivalents                                1,055,883        111,115
Foreign currently translation adjustments                                              25,426        (51,174)
</TABLE>

                                       6

<PAGE>

                         FREESTAR TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                     2005            2004
                                                                                  -----------    -----------
<S>                                                                              <C>            <C>

Cash and cash equivalents, beginning of period                                        632,678        206,205
                                                                                  -----------    -----------
Cash and cash equivalents, end of period                                          $ 1,713,987    $   266,146
                                                                                  ===========    ===========
Supplemental disclosure of cash flow information:
     Interest paid                                                                $        --    $    23,795
                                                                                  ===========    ===========
     Income tax paid                                                              $        --    $        --
                                                                                  ===========    ===========
     Effect of reverse split of common stock                                      $        --    $   409,906
                                                                                  ===========    ===========
     Shares, warrants, and options  issued for services                           $        --    $   206,000
                                                                                  ===========    ===========
     Adjust deferred compensation for the period                                  $   168,236    $   374,666
                                                                                  ===========    ===========
     Cancellation of shares of common stock                                       $   378,574    $        --
                                                                                  ===========    ===========
     Fair value of options issued to consultants and employees                    $   484,584    $        --
                                                                                  ===========    ===========
</TABLE>

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

                                       7

<PAGE>

                         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, 2005. In the opinion of management,  these condensed consolidated
financial  statements  reflect all  adjustments  that are of a normal  recurring
nature and which are necessary to present  fairly the financial  position of the
Company as of September 30, 2005,  and the results of operations  and cash flows
for the  three  months  ended  September  30,  2005 and  2004.  The  results  of
operations  for the three months ended  September  30, 2005 are not  necessarily
indicative  of the results  that may be  expected  for the entire  fiscal  year.
Certain  amounts in the prior period on the  Statements  of Cash Flows have been
changed to conform to the current period presentation.

NATURE OF BUSINESS OPERATIONS.

The Company (formerly Freestar  Technologies) was formed on November 17, 1999 as
a Nevada  corporation.  The  Company  is a  provider  of  payment  services  and
processing.  Its principal offices are in Santo Domingo, Dominican Republic; the
company  also has offices in Helsinki,  Finland;  Dublin,  Ireland;  and Geneva,
Switzerland.

The  Company  intends  to  derive  revenues  from  its core  payment  processing
products,  which include:  (1) Authorization:  transaction fees it receives from
processing online point of sale terminal transactions;  (2) Point of Sale: sales
of "Point of Sale" terminals;  (3) Transaction Fees:  stemming from its Internet
Payment  Gateway;  (4) Dynamic  Currency  Conversion:  credit  card  services to
merchants  and  acquiring  banks (the Company will provide  transaction  gateway
services and settlement with participating  banking  institutions);  (5) Private
Label Cards:  transaction  management services provided for a private label card
issuer;  and (6)  Consulting  Fees:  consulting  services  provided to financial
institutions  and  merchants.  The Company's  revenue for the three months ended
September 30, 2005 was primarily  generated from the  transaction and consulting
fees through its Finland operations.

GOING CONCERN.

The  accompanying  consolidated  financial  statements  have  been  prepared  in
conformity with accounting principles generally accepted in the United States of
America,  which  contemplate

                                       8

<PAGE>

continuation  of the  Company  as a going  concern.  However,  the  Company  has
reported a net loss of $937,030 for the three months  ended  September  30, 2005
and $22,102,463 for the year ended June 30, 2005, and had an accumulated deficit
of $45,050,971 as of September 30, 2005.

The Company cannot be certain that anticipated  revenues from operations will be
sufficient to satisfy its ongoing capital  requirements.  Management's belief is
based on the Company's  operating  plan,  which in turn is based on  assumptions
that  may  prove to be  incorrect.  If the  Company's  financial  resources  are
insufficient  the Company may require  additional  financing in order to execute
its operating plan and continue as a going  concern.  The Company cannot predict
whether this  additional  financing will be in the form of equity or debt, or be
in another form. The Company may not be able to obtain the necessary  additional
capital on a timely  basis,  on  acceptable  terms,  or at all.  In any of these
events,  the Company may be unable to implement its current plans for expansion,
repay  its  debt  obligations  as they  become  due or  respond  to  competitive
pressures,  any of which  circumstances  would have a material adverse effect on
its business, prospects, financial condition and results of operations.

Management plans to take the following steps that it believes will be sufficient
to  provide  the  Company  with the  ability  to  continue  as a going  concern.
Management  intends to raise financing through the sale of its stock both on the
public  market and in private  placements to  individual  investors.  Management
believes  that  with  this  financing,  the  Company  will be  able to  generate
additional  revenues that will allow the Company to continue as a going concern.
This will be accomplished by hiring additional  personnel and focusing sales and
marketing efforts on the distribution of product through key marketing  channels
currently being developed by the Company. The Company also intends to pursue the
acquisition of certain strategic industry partners where appropriate.

REVENUE RECOGNITION.

The Company  recognizes  revenues from  contracts in which the Company  provides
only consulting services as the services are performed. The contractual terms of
the  agreements  dictate the  recognition  of revenue by the  Company.  Payments
received in advance are deferred until the service is provided.

Contract costs include all direct equipment, material, and labor costs and those
indirect costs related to contract performance, such as indirect labor. Selling,
general and administrative costs are charged to expense as incurred.  Provisions
for estimated  losses on  uncompleted  contracts are made in the period in which
such  losses  are  determined.   Changes  in  contract   performance,   contract
conditions,  and estimated  profitability  that may result in revisions to costs
and income are recognized in the period in which the revisions are determined.

For revenue from product  sales,  the Company  recognizes  revenue in accordance
with Staff Accounting  Bulletin ("SAB") No. 104,  "Revenue  Recognition,"  which
superceded SAB No. 101, "Revenue  Recognition in Financial  Statements." SAB No.
101  requires  that  four  basic  criteria  must be met  before  revenue  can be
recognized:  (1) persuasive  evidence of an arrangement exists; (2) delivery has
occurred;   (3)  the  selling   price  is  fixed  and   determinable;   and  (4)
collectibility is reasonably assured.  Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling

                                       9

<PAGE>

prices  of the  products  delivered  and the  collectibility  of those  amounts.
Provisions  for  discounts  and  rebates to  customers,  estimated  returns  and
allowances,  and other  adjustments  are  provided  for in the same  period  the
related sales are recorded. The Company defers any revenue for which the product
has not been  delivered or is subject to refund until such time that the Company
and the customer  jointly  determine  that the product has been  delivered or no
refund will be required.  SAB No. 104  incorporates  Emerging  Issues Task Force
("EITF") No. 00-21,  "Multiple-Deliverable Revenue Arrangements." EITF No. 00-21
addresses   accounting  for  arrangements  that  may  involve  the  delivery  or
performance  of multiple  products,  services  and/or rights to use assets.  The
effect of implementing  EITF No. 00-21 on the Company's  consolidated  financial
position and results of operations  was not  significant.  This issue  addresses
determination  of whether an  arrangement  involving  more than one  deliverable
contains more than one unit of accounting and how the arrangement  consideration
should be measured and allocated to the separate units of  accounting.  EITF No.
00-21  became  effective  for  revenue  arrangements  entered  into  in  periods
beginning  after June 15, 2003. For revenue  arrangements  occurring on or after
August 1, 2003,  the Company  revised its revenue  recognition  policy to comply
with the provisions of EITF No. 00-21.

For those contracts which contain multiple  deliverables,  management must first
determine whether each service, or deliverable, meets the separation criteria of
EITF No. 00-21. In general, a deliverable (or a group of deliverables) meets the
separation  criteria if the deliverable has standalone value to the customer and
if there is objective  and reliable  evidence of the fair value of the remaining
deliverables  in the  arrangement.  Each  deliverable  that meets the separation
criteria are considered a "separate unit of  accounting."  Management  allocates
the total arrangement consideration to each separate unit of accounting based on
the  relative  fair value of each  separate  unit of  accounting.  The amount of
arrangement  consideration  that is allocated to a unit of  accounting  that has
already been delivered is limited to the amount that is not contingent  upon the
delivery  of  another  separate  unit  of  accounting.   After  the  arrangement
consideration has been allocated to each separate unit of accounting, management
applies the  appropriate  revenue  recognition  method for each separate unit of
accounting as described  previously based on the nature of the arrangement.  All
deliverables  that do not meet the  separation  criteria  of EITF No.  00-21 are
combined into one unit of accounting,  and the appropriate  revenue  recognition
method is applied.

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 customer.

STOCK BASED COMPENSATION.

The Company accounts for stock-based  compensation in accordance with Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees,"  and  complies  with the  disclosure  provisions  of SFAS  No.  123,
"Accounting   for   Stock-Based   Compensation."   Under  APB  Opinion  No.  25,
compensation  cost is recognized over the vesting period based on the excess, if
any,  on the date of grant of the fair value of the  Company's  shares  over the
employee's  exercise  price.  When

                                       10

<PAGE>

the  exercise  price of the  option  is less  than the fair  value  price of the
underlying shares on the grant date,  deferred stock  compensation is recognized
and amortized to expense in accordance with FASB  Interpretation No. 44 over the
vesting period of the individual options.  Accordingly, if the exercise price of
the  Company's  employee  options  equals or  exceeds  the  market  price of the
underlying  shares on the date of grant, no compensation  expense is recognized.
Options  or  shares  awards  issued  to  non-employees   are  valued  using  the
Black-Scholes pricing model and expensed over the period services are provided.

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation  -  Transition  and   Disclosure,"   which  amends  SFAS  No.  123,
"Accounting for Stock-Based  Compensation,"  to provide  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based  employee  compensation.  In addition,  SFAS No. 148 expands the
disclosure requirements of SFAS No. 123 to require more prominent disclosures in
both annual and interim financial  statements about the method of accounting for
stock-based employee  compensation and the effect of the method used on reported
results.  The  transition  provisions  of SFAS No. 148 are  effective for fiscal
years ended after December 15, 2002. The transition  provisions do not currently
have an impact on the Company's  consolidated  financial position and results of
operations as the Company has not elected to adopt the fair  value-based  method
of accounting  for  stock-based  employee  compensation  under SFAS No. 123. The
disclosure provisions of SFAS No. 148 are effective for financial statements for
interim  periods  beginning  after  December 15, 2002.  The Company  adopted the
disclosure requirements in the third quarter of fiscal 2003.

For purposes of pro forma  disclosures,  the estimated fair value of the options
is  amortized  over  the  options'  vesting  period.  The  Company's  pro  forma
information was as follows:

                                  Three Months Ended
                                     September 30,
                                   2005         2004
                                ---------    ---------
Net loss, as reported           $(937,030)   $(964,234)

Compensation recognized under

under APB No. 25                       --           --

Compensation recognized under

SFAS No. 123                           --           --
                                ---------    ---------
Pro forma net loss              $(937,030)   $(964,234)
                                =========    =========
Pro forma loss per share        $   (0.01)   $   (0.01)
                                =========    =========

                                       11

<PAGE>

CAPITALIZED SOFTWARE DEVELOPMENT COSTS.

In accordance with Statement of Financial  Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer  Software to be Sold,  Leased or Otherwise
Marketed," the Company  capitalizes  certain costs related to the development of
new software  products or the enhancement of existing  software products for use
in our transaction  processing  software.  These costs are capitalized  from the
point in time that technological feasibility has been established,  as evidenced
by a working model or detailed  working program design to the point in time that
the  product  is  available  for  general  release  to  customers.   Capitalized
development  costs are  amortized on a  straight-line  basis over the  estimated
economic  lives of the  products,  beginning  when the  product  is placed  into
service.   Research  and  development   costs  incurred  prior  to  establishing
technological  feasibility  and costs  incurred  subsequent  to general  product
release  to  customers   are  charged  to  expense  as  incurred.   The  Company
periodically  evaluates  whether  events or  circumstances  have  occurred  that
indicate that the remaining useful lives of the capitalized software development
costs should be revised or that the remaining  balance of such assets may not be
recoverable.

As of September  30, 2005,  the Company  capitalized  approximately  $925,000 of
software  development  in  accordance  with SFAS No. 86. During the three months
ended  September 30, 2005, the Company placed into service $8,296 of capitalized
software,  and  capitalized  an  additional  $0. As of September  30, 2005,  the
Company had capitalized a net amount of approximately $917,000 that is yet to be
placed onto service.

Software costs also include the Enhanced Transactions Secured Software ("ETSS"),
which was  originally  contributed  by the founder and president of  ePayLatina,
S.A.,  Paul  Egan,  who is also  president  of the  Company.  This  software  is
essential for the use of the Company's ePayPad.  Software costs also include the
development  costs related to adding  enhancements  to this software  consisting
primarily of labor cost.  Software costs are amortized on a straight-line  basis
over a  period  of three to six  years.  These  costs  have  been  substantially
amortized as of September 30, 2005.

SIGNIFICANT RECENT ACCOUNTING PRONOUNCEMENTS.

In March 2005, the FASB issued FASB  Interpretation  ("FIN") No. 47, "Accounting
for  Conditional  Asset  Retirement  Obligations,   an  interpretation  of  FASB
Statement  No. 143," which  requires an entity to recognize a liability  for the
fair value of a conditional  asset  retirement  obligation  when incurred if the
liability's fair value can be reasonably  estimated.  The Company is required to
adopt the provisions of FIN No. 47 no later than the end of its fiscal 2006. The
Company does not expect the adoption of this  Interpretation  to have a material
impact on its  consolidated  financial  position,  results of operations or cash
flows.

In May  2005  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and  Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS
No.  154  requires   retrospective   application  to  prior  periods'  financial
statements for changes in accounting  principle,  unless it is  impracticable to
determine  either the  period-specific  effects or the cumulative  effect of the
change. SFAS No. 154 also requires that retrospective application of a change in
accounting  principle is limited to the direct  effects of the change.  Indirect
effects   of  a  change   in   accounting   principle,   such  as  a  change

                                       12

<PAGE>

in  non-discretionary  profit-sharing  payments  resulting  from  an  accounting
change,  should be recognized in the period of the accounting  change.  SFAS No.
154 also  requires  that a change in  depreciation,  amortization,  or depletion
method for  long-lived,  non-financial  assets be  accounted  for as a change in
accounting estimate affected by a change in accounting  principle.  SFAS No. 154
is effective for  accounting  changes and  corrections  of errors made in fiscal
years  beginning  after  December 15,  2005.  Early  adoption is  permitted  for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after the date this  Statement  is  issued.  The  Company  does not  expect  the
adoption  of  this  Statement  to have a  material  impact  on its  consolidated
financial position, results of operations or cash flows.

2.    COMMON STOCK

SALES OF SECURITIES.

During the three months ended  September  30, 2005,  the Company sold  8,333,333
restricted shares of common stock to one investor for $1,000,000 cash ($0.12 per
share).  These shares were issued in October and November 2005, and are shown as
Common Stock Subscribed in the accompanying financial statements.

During the three months ended  September 30, 2005, the Company issued a total of
300,000  restricted  shares of common stock to two  consultants for services for
the Company.  These shares were valued at $68,500  (average of $0.228 per share,
which  approximates  the fair value of the shares at the time the services  were
rendered).

During the three months ended  September 30, 2005,  the Company  issued  options
covering a total of 6,083,331  shares of common stock under the Company's  Stock
Incentive Plan registered  under Form S-8. Options covering a total of 3,650,000
shares of its common stock were  exercised  and the stock was issued  during the
quarter for  proceeds of $547,500.  Options  covering  the  remaining  2,433,331
shares of common  stock  were  exercised  during the  quarter  for  proceeds  of
$365,000,  and the shares were issued in October and November 2005. These shares
are shown as Common Stock Subscribed in the accompanying financial statements.

The Company issued 915,000 shares of its common stock  registered under Form S-8
to various  consultants and legal counsel for current and future services valued
at $201,300  (average of $0.22 per share,  which  approximates the fair value of
the shares at the time the services were rendered).

RECOVERY OF SHARES ISSUED TO SERVICE PROVIDERS.

During the three months ended  September  30, 2005,  the Company  recovered  and
cancelled 378,574 shares of common stock valued at $263,349 previously issued to
service providers. The amount of $263,349,  representing the fair value of these
shares originally  charged to operations,  was credited to operations during the
three months ended September 30, 2005.

                                       13

<PAGE>

3.    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 Processing
Oy. Intercompany receivable and payable are subtracted from the total assets and
liabilities  for  the  segments,   that  are  eliminated  in  consolidation  and
therefore, do not themselves impact consolidated results.

The  following  table  summarizes   segment  asset  and  operating  balances  by
reportable segment:

                                                        Three Months Ended
                                                           September 30,
                                                        2005           2004
                                                    -----------    -----------
Net Sales to External Customers:
PaySafe                                             $        --    $        --
Rahaxi                                                  602,748        365,952
                                                    -----------    -----------
  Total Sales to External Customers                 $   602,748    $   365,952
                                                    ===========    ===========
Depreciation and Amortization:
PaySafe                                             $    13,150    $     9,996
Rahaxi                                                  133,376        133,733
                                                    -----------    -----------
  Total Depreciation and Amortization               $   146,526    $   143,729
                                                    ===========    ===========

General and Administrative Expense (not including
  depreciation and amortization):
Corporate                                           $   756,560    $   724,396
PaySafe                                                  52,765        333,794
Rahaxi                                                  153,348        114,991
                                                    -----------    -----------
  Total General and Administrative                  $   962,673    $ 1,173,181
                                                    ===========    ===========
     Expense

Capital Expenditures:
PaySafe                                             $        --    $     3,868
Rahaxi                                                   30,780         96,627
                                                    -----------    -----------
  Total Capital Expenditures                        $    30,780    $   100,495
                                                    ===========    ===========

Net Income (Loss):
Corporate                                           $  (768,990)   $  (724,396)
PaySafe                                                 (66,406)      (225,619)
Rahaxi                                                 (101,634)       (28,181)
                                                    -----------    -----------
  Total Operating Income (Loss)                     $  (937,030)   $  (978,196)
                                                    ===========    ===========

Segment Assets:
Corporate                                           $ 1,542,068    $    40,515
PaySafe                                                  53,628         87,882
Rahaxi                                                4,935,888      4,933,161
                                                    -----------    -----------
  Total Segment Assets                              $ 6,531,584    $ 5,021,558
                                                    ===========    ===========

                                       14

<PAGE>

4.    RELATED PARTY TRANSACTIONS

Amounts due to related parties at September 30, 2005 consist of the following:

ACCRUED SALARIES - OFFICERS.

The  Company's  president,  Paul Egan,  who is also a  shareholder,  has delayed
payment of a portion of his salary in order to conserve the  Company's  cash. At
September  30, 2005,  the Company had recorded the amount of $148,253 in accrued
salary due to Mr.  Egan.  This amount is shown as Due to Related  Parties in the
accompanying Condensed consolidated Balance Sheet as of September 30, 2005.

The Company's chief financial  officer,  Ciaran Egan, who is also a shareholder,
has  delayed  payment  of a  portion  of his  salary  in order to  conserve  the
Company's  cash. At September  30, 2005,  the Company had recorded the amount of
$92,800  in  accrued  salary  due to Mr.  Egan.  This  amount is shown as Due to
Related Parties in the accompanying  Condensed  consolidated Balance Sheet as of
September 30, 2005.

ADVANCES BY RELATED PARTIES.

Paul Egan has advanced  funds to the Company for its  operations.  These amounts
include net  advances of $141,689  and accrued  interest of $19,987 at September
30, 2005.

Ciaran Egan has advanced funds to the Company for its operations.  These amounts
include net advances of $16,867 and accrued  interest of $1,044 at September 30,
2005.

The Company  expects to repay these amounts as soon as sufficient cash flow from
operations is generated.  Interest on the unpaid balances is accrued at the rate
of 7% per annum.

ACCRUED LIABILITY FOR PREFERRED STOCK ISSUANCE

As part of his  long-term  incentive  and  compensation  plan,  the  Company has
granted  to Paul Egan  1,000,000  shares of its Series B  Convertible  Preferred
Stock,  convertible  at the rate of 12 to 1 into shares of the Company's  common
stock.  These shares were issued in October 2005 (see Note 5). At September  30,
2005, the Company has recorded the amount of $2,760,000 as an accrued liability,
representing the fair value of these shares.

As part of his  long-term  incentive  and  compensation  plan,  the  Company has
granted to Ciaran  Egan  500,000  shares of its Series B  Convertible  Preferred
Stock,  convertible  at the rate of 12 to 1 into shares of the Company's  common
stock.  These shares were issued in October 2005 (see Note 5). At September  30,
2005, the Company has recorded the amount of $1,380,000 as an accrued liability,
representing the fair value of these shares.

5.    SUBSEQUENT EVENTS

On October 17, 2005, the Company issued the following unregistered  (restricted)
securities  of the company to Paul Egan,  Ciaran  Egan,  and Fionn  Stakelum for
services rendered to the company, as follows:

         Paul Egan:                2,000,000 shares of Series B preferred stock.
                                   1,000,000 shares of Series A preferred stock

         Ciaran Egan:              1,500,000 shares of Series B preferred stock.

         Fionn Stakelum:           500,000 shares of Series B preferred stock.

The Company discovered that the Certificates of Designation for the Series A and
Series B preferred  stock of the Company had  inadvertently  not been filed with
the state of Nevada before the respective  shares were issued.  Thereafter,  the
Certificates  of  Designation  were filed with the Nevada  Secretary of State on


                                       15
<PAGE>

June 22, 2005 (see  Exhibits 4.1 and 4.2).  Since Nevada law requires  that such
Certificates  be filed before this stock issued,  the Company  received back and
cancelled all of the preferred stock that had been issued by the Company and new
preferred stock certificates were then issued (as set forth above).

The Series A preferred  stock was  originally  issued with the intention that it
would be convertible into 12 shares of common stock,  provided certain financial
goals were met by the Company (which have not been met).  However,  with the one
for seven reverse split of the Company's common stock,  effective on November 8,
2004, this reduced the convertibility of this stock down to 1.71 to one.

The  Series  B  preferred  stock  that was  issued  prior to  November  8,  2004
(1,000,000  shares for Paul Egan,  1,000,000 shares for Ciaran Egan, and 500,000
shares for Fionn  Stakelum) was  originally  issued with the  intention  that it
would be  convertible  into 12  shares of common  stock,  with no  restrictions.
However,  with the one for seven reverse  split of the  Company's  common stock,
effective  on  November  8,  2004,  this  reduced  the  convertibility  of these
2,500,000  shares down to 1.71 to one.  The other  1,500,000  shares of Series B
preferred  stock  issued on February  21, 2005 were not  affected by the reverse
split.

                                       16

<PAGE>

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

         The  following  discussion  and  analysis  of the  Company's  financial
condition  and  results  of  operations  is based  upon,  and  should be read in
conjunction with, its audited condensed  consolidated  financial  statements and
related notes included  elsewhere in this Form 10-KSB,  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 per day,  seven days
per week.

         The  Company'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 Company intends to derive revenues from its core payment processing
products,  which include:  (1) Authorization:  transaction fees it receives from
processing online point of sale terminal transactions;  (2) Point of Sale: sales
of "Point of Sale" terminals;  (3) Transaction Fees:  stemming from its Internet
Payment  Gateway;  (4) Dynamic  Currency  Conversion:  credit  card  services to
merchants  and  acquiring  banks (the Company will provide  transaction  gateway
services and settlement with participating  banking  institutions);  (5) Private
Label Cards:  transaction  management services provided for a private label card
issuer;  and (6)  Consulting  Fees:  consulting  services  provided to financial
institutions  and  merchants.  The Company's  revenue for the three months ended
September 30, 2005 was primarily  generated from the  transaction and consulting
fees through its Finland operations.

         For the Company to derive  revenue  outside of its Finnish  operations,
the  Company  first had to  perform a major  hardware  and  software  upgrade at
Rahaxi, as Rahaxi is the core operating system of the Company's  products.  This
upgrade was  completed  in December  2003,  and evolved the  Company's  business
critical systems to the latest Hewlett-Packard ("HP") NonStop servers and BASE24
e-payment  processing  software.   HP  NonStop  servers  are  estimated  to  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 Company a secure, continuously available processing platform. A
vastly scalable  platform,  HP NonStop  provides the Company with the ability to
achieve an adaptive  enterprise by enabling it to respond  quickly and easily to
changing  business  needs,

                                       17

<PAGE>

such as managing the expected  growing number of  transactions  and the need for
increased capacity.

         BASE24  software from ACI  Worldwide  provides the Company 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  Company to meet the latest  Visa and
MasterCard standards and to pave the way for EMV Europay/MasterCard/Visa ("EMV")
compliance.  The Company 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.  EMV is also gaining momentum
in Asia and America,  and may help bring about 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.  Management  believes that with the company's  investment in
the upgraded  NonStop systems  running the newest ACI software,  it can meet its
projected increasing capacity needs and ensure future volume growth.

         Management  believes that the Company's near term growth  opportunities
will be derived form the European market place and a significant  portion of its
resources  both  financial and personnel,  will be directed  towards  developing
those  opportunities.  The  Company  also  believes  that  from a  technological
infrastructure  point of view it will  centralize the hosting and development of
its processing system in Europe from its operations in Helsinki, Finland.

         The Company's  principal  offices are in Dublin,  Ireland.  The Company
also has  offices  in Santo  Domingo,  Dominican  Republic;  Helsinki,  Finland;
Stockholm,  Sweden;  and Geneva,  Switzerland.  While the  Company's  offices in
Finland,  Sweden,  and Switzerland  will primarily focus on the European market,
the  company's  office  in  the  Dominican  Republic  will  continue  to  pursue
opportunities in the Caribbean and Latin America. Management believes that these
emerging  markets could offer  favorable  opportunities  in the longer term. The
Company has initiated  discussions  with regard to establishing a market for its
products in Asia, specifically China.

         Effective  November 8, 2004,  the Company  implemented  a one for seven
reverse  split  of  its  common  stock.  The  company's  condensed  consolidated
financial  statements for the three months ended December 31, 2004 reflected the
effects of this reverse  stock-split.  The new trading  symbol for the Company's
common stock as of that date was "FSRT."

                                       18

<PAGE>

RESULTS OF OPERATIONS.

(a)      REVENUE.

         The  Company  had  revenue  of  $602,748  for the  three  months  ended
September 30, 2005 compared to $365,952 for the three months ended September 30,
2004, an increase of $236,796 or  approximately  64%. The increase was due to an
increase  in  processing  fees  and  also  fees  derived  from  development  and
consulting services,  generated by the Company's  subsidiary,  Rahaxi Processing
Oy. The Company  expects  this trend to continue  throughout  the  remainder  of
fiscal  2006 with the  addition  of new  clients  and a  continued  increase  in
consumers' preference to use credit and debit cards as against cash, will result
in increased transactional volume

            For the three months ended September 30, 2005, the Company processed
4,388,538  transactions,  an increase of 627,908 or approximately  17%, over the
3,760,630  transactions  that were processed in the  corresponding  period ended
September 30, 2004.

          During the three months ended  September 30, 2005 the Company  derived
revenues  of $173,632  from  development  and  consulting  services  supplied to
clients.  The  Company did not receive  such fees during the  comparable  period
ended  September 30, 2004. The Company  expects to receive  further revenue from
consulting and development fees throughout the remainder of fiscal 2006.

            The Company expects  revenue levels to increase  throughout the next
twelve  months as it continues to introduce its service  offerings,  such as EMV
transaction  processing  and its Internet  Payment  Gateway.  In  addition,  the
Company  believes that it will derive further  revenue from the sale of Point Of
Sale terminals through its relationships with Hypercom and Global Refunds. There
can be no  guarantee  that  the  Company's  products  will  be  accepted  in the
marketplace  or that its sales efforts will be  successful.  Please see "Factors
That May Affect Operating Results."

            A  significant  percentage  of the  Company's  revenue for the three
months ended  September  30, 2005 has been derived from a limited  number of its
customers,  primarily Finnish customers for its transaction processing products.
Approximately  50% of the Company's total revenues were  attributable to its ten
largest  customers.  The Company derived additional revenue from clients outside
of Finland  during the three  months  ended  September  30,  2005;  this revenue
accounted for approximately 29% of total revenue for the period. The Company did
not obtain revenue  outside of Finland  during the three months ended  September
30, 2004. The future loss of any major  customer  could have a material  adverse
effect on the Company's business, financial condition and results of operations.
The Company  believes  that this  customer  concentration  will continue for the
remainder of fiscal 2006. The Company believes that this customer  concentration
will be diluted  in the second  half of fiscal  2006 as it  continues  to pursue
operations outside of Finland.

         The majority of Company's revenues for the three months ended September
30, 2005 have been generated by its operations outside of the United States, and
its  future  growth  rate  is,  in  part,

                                       19

<PAGE>

dependent on continued growth in international markets. The Company expects this
trend to continue through the remainder of fiscal year 2006.

(b)      COST OF REVENUE.


         Cost of revenue was $498,556 for the three months ended  September  30,
2005,  compared to $256,693 for the three months ended  September  30, 2004,  an
increase of $241,863 or  approximately  94%.  The increase in cost of revenue is
due in part to continued  investment in the Company's  technical  infrastructure
and hiring of additional staff.  Approximately $84,745 of the cost of revenue is
attributed  to the  amortization  of  capitalized  software;  this cost will not
increase  directly  with an  increase  in sales,  but will only  increase as the
Company adds to or improves its operating software.

         Cost of revenue can be expected to increase in the coming twelve months
if the Company continues its current trend of increasing sales. The Company 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.  The
fixed portion of cost of revenue  attributable  to the  amortization of software
costs  will  become  smaller  as a  percentage  of sales if  sales  continue  to
increase, thus increasing the Company's operating margin.

(c)      SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

         Selling,  general and  administrative  expenses were $1,024,454 for the
three months  ended  September  30, 2005  compared to  $1,086,403  for the three
months ended  September  30, 2004,  a decrease of $61,949 or  approximately  6%.
During the three months ended  September  30, 2005,  the primary  components  of
selling, general, and administrative expenses were: consulting fees of $648,875,
of which  $586,148 were non-cash  costs;  payroll and related costs of $258,310;
depreciation  and  amortization of $61,781;  travel and  entertainment  costs of
$114,768;  facility fees, such as rent,  telephone,  and utilities,  of $89,201;
legal and accounting fees of approximately $63,682; and professional services of
$33,779.  The Company  also  credited to selling,  general,  and  administration
expenses  the amount of $263,349  representing  the  original  issuance  cost of
shares issued to consultants  in prior periods,  which have been returned to the
Company and cancelled.



         The level of future selling,  general and administrative  expenses will
largely  depend on the pace of the  Company'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.  In
addition,  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 Company may pursue further acquisitions
in order to facilitate its growth and exploit market opportunities,  which would
further drive up legal and accounting fees, payroll, and travel costs.

(d)      INTEREST EXPENSE.

         The Company had net interest expense of $18,771 during the three months
ended  September  30, 2005  compared to net  interest  expense of $1,052 for the
three months ended  September 30, 2004,

                                       20

<PAGE>

an increase of $17,719 or approximately  1,684%. Higher interest expense was due
primarily  to  amortization  of the  discount on notes  payable in the amount of
$12,240.

         Currently, the Company is utilizing equity financing partly in order to
avoid the interest  charges  associated  with debt financing.  Accordingly,  the
Company 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  price for the  Company's  common stock could  change,  forcing it to
pursue  alternative  methods of financing the Company's cash needs. In addition,
the  Company  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.

(e)      NET LOSS.

         For the  reasons  stated  above,  the  Company  recorded  a net loss of
$937,030 for the three months ended  September 30, 2005 compared to $978,196 for
the  three  months  ended   September   30,  2004,  a  decrease  of  $41,166  or
approximately 4%. The decrease is primarily due to the increase in revenue .

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

         The Company  will  attempt to continue to fund its  operations  through
debt and equity financing until it achieves profitability,  of which there is no
guarantee.  The Company expects these concerns regarding its perceived viability
to continue throughout the fiscal year 2006.

FACTORS THAT MAY AFFECT OPERATING RESULTS.

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

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

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

o        gain or loss of clients or strategic relationships;

o        announcement  or  introduction  of new  services  and  products  by the
         Company or by its competitors;

                                       21

<PAGE>

o        price competition;

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

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

o        changes in governmental regulation; and

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

         The Company  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 Company intends
to invest in marketing,  strategic  partnerships,  and development of its client
base. If the  Company's  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 Company's 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
Company's  competitors  for POS systems include  VeriFone and Ingenico,  amongst
others, and companies such as Global Payments, First Data and Euroconnex for the
Company's electronic payment software.  In Finland the company faces competition
from  companies  such as Point,  which is the  largest  terminal  vendors in the
Finnish  market,  as well as companies such as Screenway and Altdata,  which are
Point of Sale software  vendors.  In addition,  the companies  with whom we have
strategic  relationships could develop products or services,  which compete with
the  Company's  products  or  services.  In  addition  some  competitors  in the
Company's  market  have  longer  operating  histories,   significantly   greater
financial,   technical,   marketing  and  other  resources,  and  greater  brand
recognition  than the Company does. The Company also expects to face  additional
competition as other  established  and emerging  companies  enter the market for
electronic  payment solutions.  To be competitive,  the Company 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 Company's expenses and affect its profitability. In
addition,  if it fails to make this  investment,  the Company may not be able to
compete  successfully with its competitors,  which could have a material adverse
effect on its revenue and future profitability

                                       22

<PAGE>

(b)      TECHNOLOGICAL AND MARKET CHANGES.

         The markets in which the Company  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
Company'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 Company 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 the Company 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 Company to modify existing products.
There is also the risk to the  Company  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 COMPANY'S PRODUCTS MAY CONTAIN ERRORS OR DEFECTS.

         The Company'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 Company's  products.  The Company
has in the past discovered  software errors in its new releases and new products
after their  introduction.  The Company has experienced delays in release,  lost
revenues and customer  frustration  during the period  required to correct these
errors. The Company 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 Company's business,  cash flow, financial condition and
results of operations could be materially adversely affected.

(d)      NO ASSURANCE OF SUCCESSFUL AND TIMELY PRODUCT DEVELOPMENT.

         The Company's products and proposed  enhancements are at various stages
of development and additional  development and testing will be required in order
to determine the technical feasibility and commercial viability of the products.

         There  can be no  assurance  that  the  Company's  product  development
efforts will be  successfully  completed.  The  Company's  proposed  development
schedule  may be  affected  by a variety of  factors,  many of which will not be
within the control of the Company, including technological difficulties,  access
to   proprietary   technology  of  others,   delays  in  regulatory   approvals,
international  operating licenses, and the availability of necessary funding. In
light of the foregoing factors,  there can be no assurance that the Company will
be able to complete or successfully commercialize its products. The inability of
the Company to successfully complete the development of new products or to do so
in a timely manner,  could force the Company to scale back operations,  or cease
operations entirely.

                                       23

<PAGE>

(e)      MARKET ACCEPTANCE.

         The  Company's  success is  dependent on the market  acceptance  of its
products.  Despite the  increasing  demand for security  devices,  the Company's
products represent  an advanced approach to the industry,  and market acceptance
of the  Company's  products  will be  dependent,  among other  things,  upon its
quality, ease of use, speed,  reliability,  and cost effectiveness.  Even if the
advantages of the Company's  products are established,  the Company is unable to
predict  how  quickly,  if  at  all,  the  products  will  be  accepted  by  the
marketplace.

(f)      PROTECTION OF PROPRIETARY RIGHTS.

         The Company'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 Company 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  Company,  that others  will not  develop services   that are
similar or superior to the  Company's,  or that third  parties  will not copy or
otherwise  obtain  and  use  the  Company's   proprietary   information  without
authorization.  In addition,  certain of the Company's  know-how and proprietary
technology may not be patentable.

         The Company 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. There can be
no assurance  that these third party licenses will be available or will continue
to be available to the  Companion  acceptable  terms or at all. The inability to
enter into and  maintain  any of these  licenses  could have a material  adverse
effect on the Company's business, financial condition or operating results.

         There is a risk that some of the  Company's  products  may infringe the
proprietary rights of third parties.  In addition,  whether or not the Company'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 Company,  it may be required to modify its products or seek licenses
for these  intellectual  property rights.  The Company may not be able to modify
its products or obtain  licenses on commercially  reasonable  terms, in a timely
manner or at all. The Company's failure to do so could have a negative affect on
its business and revenues.

(g)      DEPENDENCE ON SUPPLIERS.

         The Company  depends upon a number of suppliers  for  components of its
products.  There is an inherent  risk that certain  components  of the Company's
products  will  be   unavailable   for  prompt   delivery  or,  in  some  cases,
discontinued.   The  Company only  has  limited  control  over  any  third-party
manufacturer as to quality  controls,  timeliness of production,  deliveries and
various  other  factors.  Should  the  availability  of  certain  components  be
compromised,  it could force the Company to develop

                                       24

<PAGE>

alternative designs using other components, which could add to the cost of goods
sold and  compromise  delivery  commitments.  If the Company is unable to obtain
components in a timely manner, at an acceptable cost, or at all, the Company may
need to select new suppliers,  redesign or  reconstruct  processes used to build
its security  devices.  In such an  instance,  the  Company would not be able to
manufacture any security  devices for a period of time,  which could  materially
adversely affect its business, results from operations, and financial condition.

(h)      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 Company  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 Company cannot predict the extent,  timing or duration of any improvement in
the economies where it sells its products. Further, the Company expects that its
revenue  during  fiscal  2006 will be  significantly  affected by the timing and
success of the introduction of new products and services during the fiscal year.

(i)      KEY PERSONNEL.

         The Company's  success is largely dependent on the personal efforts and
abilities of its senior management. The loss of certain members of the Company'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 Company  intends to recruit in fiscal year 2006  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 Company's business. As a result, the
Company  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.

(j)      LIMITATIONS ON LIABILITY AND INDEMNIFICATION.

         The Company's  articles of incorporation and bylaws include  provisions
to the effect that we may indemnify any director,  officer, or employee, as well
as limit the  liability of such persons.  In addition,  provisions of Nevada law
provide for such  indemnification,  as well as for a limitation  of liability of
our directors and officers for monetary  damages  arising from a breach of their
fiduciary duties. Any limitation on the liability of any director or officer, or
indemnification  of  any  director,   officer,  or  employee,  could  result  in
substantial  expenditures being made by the Company in covering any liability of
such persons or in indemnifying them.

                                       25

<PAGE>

(k)      LITIGATION.

         As stated under Legal  Proceedings,  the Company's subject to a lawsuit
and a regulatory investigation. 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  Company's  business,  and could  negatively  impact its revenues,
operating margins, and net income.

OPERATING ACTIVITIES.

         The net cash used in  operating  activities  was $800,198 for the three
months ended  September 30, 2005 compared to $304,837 for the three months ended
September 30, 2004, an increase of $495,361 or approximately  163%. Cash used in
operating  activities  during  the three  months  ended  September  30,  2005 is
attributable primarily to the net loss of $937,030, partially offset by non-cash
charges of $323,069 (net) of non-cash compensation ($586,148 of compensation for
services  initiated  during the period less  $263,349 for stock  returned to the
Company and cancelled, issued in prior periods) and $146,526 of depreciation and
amortization.  Cash from operating activities was also decreased by $126,140 due
to an increase in accounts  receivable and by $78,945 due to a decrease in other
current assts.

INVESTING ACTIVITIES.

         Net  cash  used  in  investing  activities  decreased  by  $71,628,  or
approximately  71%, to $28,867 during the three months ended  September 30, 2005
as compared to $100,495  for the three  months ended  September  30, 2004.  This
change was primarily  due to decreased  investing by the Company in software and
capitalized software costs.

LIQUIDITY AND CAPITAL RESOURCES.

         As of  September  30,  2005,  the Company had total  current  assets of
$2,122,001 and total current  liabilities of $6,387,633,  resulting in a working
capital  deficit of  $4,265,632.  The Company had cash and cash  equivalents  of
$1,713,987 at September  30, 2005. As of September 30, 2005,  the Company had an
accumulated deficit of $45,050,971.  These factors raise substantial doubt as to
the Company's ability to continue as a going concern.  The independent  auditors
report on our June 30,  2005  financial  statements  included in the Form 10-KSB
states  that our  difficulty  in  generating  sufficient  cash  flow to meet its
obligations  and  sustain  operations  raise  substantial  doubts  about the our
ability to continue as a going concern.

         The accompanying  financial statements have been prepared assuming that
the Company  continues as a going concern that  contemplates  the realization of
assets and the  satisfaction  of  liabilities  in the normal  course of business
assuming the Company will continue as a going concern.  However,  the ability of
the  Company  to  continue  as a going  concern on a  longer-term  basis will be
dependent upon its ability to generate  sufficient  cash flow from operations to
meet its  obligations on a timely basis,  to obtain  additional  financing,  and
ultimately attain profitability.

                                       26

<PAGE>

         Management  plans to  continue  raising  additional  capital  through a
variety of fund raising  methods  during fiscal 2006 and to pursue all available
financing alternatives in this regard. Management may also consider a variety of
potential  partnership  or  strategic  alliances  to  strengthen  its  financial
position.  Whereas  the  Company  has been  successful  in the  past in  raising
capital, no assurance can be given that these sources of financing will continue
to be available to us and/or that demand for our equity/debt instruments will be
sufficient to meet our capital  needs,  or that  financing  will be available on
terms  favorable to the Company.  The  financial  statements  do not include any
adjustments  relating to the  recoverability  and  classification of liabilities
that might be  necessary  should the  Company be unable to  continue  as a going
concern.

         If funding is insufficient  at any time in the future,  the Company may
not  be  able  to  take  advantage  of  business  opportunities  or  respond  to
competitive  pressures,  or may be  required  to reduce the scope of its planned
product  development and marketing  efforts,  any of which could have a negative
impact on its business and operating results. In addition,  insufficient funding
may have a material adverse effect on the Company's financial  condition,  which
could require the Company to:

o        curtail operations significantly;

o        sell significant assets;

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

o        explore other strategic  alternatives including a merger or sale of the
         Company.

         To the extent that the Company raises  additional  capital  through the
sale of equity or convertible debt  securities,  the issuance of such securities
may 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 Company's  operations.  Regardless of
whether the  Company's  cash assets prove to be inadequate to meet the Company's
operational  needs, the Company may seek to compensate  providers of services by
issuance of stock in lieu of cash, which may also result in dilution to existing
shareholders.

         The Company has been  successful in obtaining  cash  resources  through
private placements and the exercise of options.  Financing  activities  provided
cash of $1,884,948  during the three months ended September 30, 2005 compared to
$516,449  for the  three  months  ended  September  30,  2004,  an  increase  of
$1,368,499 or  approximately  265%.  During the three months ended September 30,
2005, the Company received $1,000,000 in cash from the sale of common stock, and
$912,500 from the exercise of stock options.

                                       27

<PAGE>

CERTAIN INDEBTEDNESS.

         The Company's  president,  Paul Egan,  who is also a  shareholder,  has
advanced  funds to the Company for its  operations.  These  amounts  include net
advances of $150,410 and accrued interest of $19,987 at September 30, 2005.

         The  Company's  chief  financial  officer,  Ciaran Egan,  who is also a
shareholder, has advanced funds to the Company for its operations. These amounts
include net advances of $8,145 and accrued  interest of $1,044 at September  30,
2005.

         The Company  expects to repay these amounts as soon as sufficient  cash
flow from operations is generated. Interest on the unpaid balances is accrued at
the rate of 7% per annum.

ACCRUED SALARIES.

         Paul Egan has  delayed  payment  of a portion of his salary in order to
conserve the Company's cash. At September 30, 2005, the Company has recorded the
amount of $148,253 in accrued  salary due to Mr.  Egan.  This amount is shown as
Due to Related Parties in the accompanying  condensed consolidated balance sheet
as of September 30, 2005.

         Ciaran Egan has delayed  payment of a portion of his salary in order to
conserve the Company's cash. At September 30, 2005, the Company has recorded the
amount of $92,800 in accrued salary due to Mr. Egan. This amount is shown as Due
to Related Parties in the accompanying  condensed  consolidated balance sheet as
of September 30, 2005.

EXCHANGE RATES

         The Company'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  name of  Rahaxi
Processing  Oy.,  operated  in its local  currency,  the Euro.  All  assets  and
liabilities  are  translated at exchange rates in effect at the end of the year.
Accounts for  consolidated  statements of operations  are translated at weighted
average  rates for the year.  Gains  and  losses  from  translation  of  foreign
currency  financial  statements  into  U.S.  dollars  are  included  in  Other -
comprehensive  income  (loss).  The  accumulated  foreign  currency  translation
adjustment was $50,947 at September 30, 2005.

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

                                       28

<PAGE>

INFLATION.

         The impact of inflation on the costs of the Company, and the ability to
pass on cost  increases  to its  customers  over time is  dependent  upon market
conditions. The Company is not aware of any inflationary pressures that have had
any significant  impact on the Company's  operations over the past quarter,  and
the  Company  does  not  anticipate  that  inflationary   factors  will  have  a
significant impact on future operations.

OFF-BALANCE SHEET ARRANGEMENTS.

         The Company does not maintain  off-balance sheet  arrangements nor does
it participate in non-exchange  traded contracts requiring fair value accounting
treatment.

OTHER.

         The  Company  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 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  Company's  most  critical  accounting  policies
include:  (a) use of estimates in the preparation of financial  statements;  (b)
stock-based  compensation  arrangements;   (c)  revenue  recognition;   and  (d)
long-lived  assets.  The methods,  estimates  and  judgments the Company 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 Company 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 Company  evaluates these estimates,
including those related to revenue recognition and concentration of credit risk.
The Company 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.

                                       29

<PAGE>

(b)      STOCK-BASED COMPENSATION ARRANGEMENTS.

         The  Company  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.

(c)      REVENUE RECOGNITION.

         The Company  recognizes  revenues  from  contracts in which the Company
provides only consulting services as the services are performed. The contractual
terms of the  agreements  dictate  the  recognition  of revenue by the  Company.
Payments received in advance are deferred until the service is provided.

         Contract costs include all direct equipment,  material, and labor costs
and those  indirect  costs  related to  contract  performance,  such as indirect
labor.  Selling,  general  and  administrative  costs are  charged to expense as
incurred.  Provisions for estimated losses on uncompleted  contracts are made in
the period in which such losses are determined. Changes in contract performance,
contract conditions, and estimated profitability that may result in revisions to
costs and  income  are  recognized  in the  period in which  the  revisions  are
determined.

For revenue from product  sales,  the Company  recognizes  revenue in accordance
with Staff Accounting  Bulletin ("SAB") No. 104,  "Revenue  Recognition,"  which
superceded SAB No. 101, "Revenue  Recognition in Financial  Statements." SAB No.
101  requires  that  four  basic  criteria  must be met  before  revenue  can be
recognized:  (1) persuasive  evidence of an arrangement exists; (2) delivery has
occurred;   (3)  the  selling   price  is  fixed  and   determinable;   and  (4)
collectibility is reasonably assured.  Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products  delivered and the  collectibility of those amounts.  Provisions
for discounts and rebates to customers,  estimated  returns and allowances,  and
other  adjustments  are  provided  for in the same period the related  sales are
recorded.  The  Company  defers any  revenue  for which the product has not been
delivered  or is subject  to refund  until  such time that the  Company  and the
customer jointly determine that the product has been delivered or no refund will
be required.  SAB No. 104  incorporates  Emerging Issues Task Force ("EITF") No.
00-21,  "Multiple-Deliverable  Revenue  Arrangements."  EITF No. 00-21 addresses
accounting  for  arrangements  that may involve the delivery or  performance  of
multiple  products,  services  and/or  rights  to  use  assets.  The  effect  of
implementing EITF No. 00-21 on the Company's consolidated financial position and
results of operations was not significant. This issue addresses determination of
whether an arrangement  involving more than one  deliverable  contains more than
one unit of accounting and how the arrangement  consideration should be measured
and  allocated  to the  separate  units of  accounting.  EITF No.  00-21  became
effective for revenue  arrangements entered into in periods beginning after June
15, 2003.  For revenue  arrangements

                                       30

<PAGE>

occurring  on  or  after  August  1,  2003,  the  Company  revised  its  revenue
recognition policy to comply with the provisions of EITF No. 00-21.

         For those contracts  which contain  multiple  deliverables,  management
must first determine whether each service, or deliverable,  meets the separation
criteria  of  EITF  No.  00-21.  In  general,  a  deliverable  (or  a  group  of
deliverables)  meets the separation  criteria if the  deliverable has standalone
value to the  customer and if there is  objective  and reliable  evidence of the
fair value of the remaining  deliverables in the  arrangement.  Each deliverable
that  meets  the   separation   criteria  is  considered  a  "separate  unit  of
accounting."  Management  allocates the total arrangement  consideration to each
separate  unit of  accounting  based on the relative fair value of each separate
unit of accounting. The amount of arrangement consideration that is allocated to
a unit of  accounting  that has already been  delivered is limited to the amount
that is not contingent upon the delivery of another separate unit of accounting.
After the arrangement  consideration has been allocated to each separate unit of
accounting,  management applies the appropriate  revenue  recognition method for
each separate unit of accounting as described  previously based on the nature of
the arrangement.  All deliverables  that do not meet the separation  criteria of
EITF No. 00-21 are combined  into one unit of  accounting,  and the  appropriate
revenue recognition method is applied.

         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
customer.

(d)      LONG-LIVED ASSETS.

         Long-lived  assets  to be held  and used are  analyzed  for  impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be  recoverable.  The Company  evaluates at each balance  sheet
date whether  events and  circumstances  have occurred  that  indicate  possible
impairment.  If there are  indications  of  impairment,  the Company uses future
undiscounted  cash  flows  of the  related  asset  or  asset  grouping  over the
remaining  life in measuring  whether the assets are  recoverable.  In the event
such cash flows are not expected to be sufficient to recover the recorded  asset
values,  the assets are written down to their  estimated fair value.  Long-lived
assets to be  disposed of are  reported at the lower of carrying  amount or fair
value of asset less the cost to sell.

FORWARD LOOKING STATEMENTS.


         This Form 10-QSB/A  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.  When used in this Form  10-QSB/A,  the
words  "expects,"   "anticipates,"   "believes,"  "plans,"  "will"  and  similar
expressions  are  intended to  identify  forward-looking  statements.  These are
statements  that relate to future  periods and include,  but are not limited to,
statements  regarding  our  adequacy of capital  resources,  need and ability to
obtain  additional  financing,  the features and benefits of our  services,  our
operating losses and negative cash flow, and our critical accounting policies.



                                       31

<PAGE>

         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 the risks set forth under "Factors That May Affect
Operating Results." These  forward-looking  statements speak only as of the date
hereof. The Company 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.

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

         The Company maintains disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Securities  Exchange Act of 1934, as
amended) that are designed to ensure that  information  required to be disclosed
in our periodic  reports  filed under the  Exchange Act is recorded,  processed,
summarized and reported within the time periods specified in the SEC's rules and
forms,  and  that  such  information  is  accumulated  and  communicated  to our
management,  including our principal  executive officer and principal  financial
officer, to allow timely decisions regarding required disclosure.

         As of the end of the period  covered  by this  report,  our  management
carried out an evaluation,  under the supervision and with the  participation of
our  principal  executive  officer  and  principal  financial  officer,  of  our
disclosure  controls  and  procedures  (as  defined in Rule  13a-15(e)  and Rule
15d-15(e)  of the  Exchange  Act).  Based  upon the  evaluation,  our  principal
executive officer and principal  financial officer concluded that our disclosure
controls and procedures were effective at a reasonable assurance level to ensure
that  information  required to be disclosed by us in the reports that we file or
submit under the Exchange Act is recorded,  processed,  summarized and reported,
within the time periods specified in the SEC's rules and forms. In addition, our
principal  executive officer and principal  financial officer concluded that the
Company's  disclosure  controls and  procedures  were  effective at a reasonable
assurance  level to ensure  that  information  required to be  disclosed  in the
reports that the Company files or submits under the Exchange Act is  accumulated
and communicated to the Company's management,  including our principal executive
officer and principal  financial  officer,  to allow timely decisions  regarding
required disclosure.



                                       32

<PAGE>


CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES.

         There  were  no  changes  in  the  Company's  disclosure  controls  and
procedures,  or in factors that could  significantly  affect those  controls and
procedures, since their most recent evaluation.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

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

DIAMOND CLUB OF AMERICA, INC. V. FREESTAR TECHNOLOGY CORPORATION.

         On April 6, 2004,  Diamond  Club of  America,  Inc.  filed a  complaint
against the Company in the Suffolk County New York Supreme Court.  The complaint
alleges,  among other  things,  that the Company owes  Diamond  Club  $35,410.45
pursuant  to  an  agreement  between  Diamond  Club  and  TransAxis,  Inc.  or a
predecessor company of TransAxis, Inc.

         The  Company  has  filed  an  answer  to  the  complaint  in  which  it
affirmatively  defends this action on the grounds that as a minority stockholder
in  TransAxis  the  Company it is not  responsible  for the debts of  TransAxis.
Management  is  confident  that the Company  will  prevail on the merits and the
Company intends to defend itself vigorously.  This action is still pending,  but
the plaintiff has made no efforts to move this care forward, and the Company has
had no contact with plaintiff during the past 12 months.

CYBERNET VENTURES V. DIGITAL COURIER TECHNOLOGIES, INC. ET AL.

         On  April  18,  2002,  Cybernet  Ventures,  Inc.  ("Cybernet")  filed a
complaint in Los Angeles County  Superior Court alleging that between April 1999
and  December  2001  Digital  Courier  Technologies,  Inc.  ("DCTI")  engaged in
wrongful  conduct  with  respect  to its  performance  of  certain  credit  card
processing  agreements with DCTI.  Cybernet's  complaint asserts legal causes of
action  against  DCTI  for  fraud,  intentional   misrepresentation,   negligent
misrepresentation, conversion, unjust enrichment, and interference with economic
relations.

         Unbeknownst  to the Company,  on June 11, 2003 Cybernet filed its first
amended  complaint  adding the  Company  as a "Doe"  defendant  with  adding any
specific  claims for relief.  In March 2005,  again  unbeknownst to the Company,
Cybernet secured a $1,200,000 default judgment against the Company.

                                       33

<PAGE>

         On July  25,  2005,  after  consideration  of the  papers  filed by the
parties, and the arguments of counsel, the Court reversed its early judgment and
vacated  the  $1,200,000  default  judgment  that had been  entered  against the
Company.  On July 26,  2005,  the Company  moved the Court to dismiss the entire
amended complaint against the Company.  On September 12, 2005,  Cybernet filed a
new  amended  complaint  against  the  Company  seeking  $1,200,000  in damages,
alleging  that the  Company  had  engaged in a  "defacto"  merger  with DCTI and
therefore should be subject to DCTI's financial obligations.

         Management is confident that the Company will prevail on the merits and
the Company intends to defend itself vigorously. 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  Company's
financial condition,  results of operations, or liquidity of the period in which
the ruling occurs, or future periods.

SECURITIES AND EXCHANGE COMMISSION INVESTIGATION.

         In January  2003,  the  Company  was advised by the staff of the Denver
office of the SEC that it had initiated an informal,  non-public inquiry.  Since
that  time,  the staff has sought  and  received  production  of  documents  and
testimony  relating  to  certain  financing  transactions  entered  into  by the
Company,  issuance of its stock in compliance with the registration  provisions,
facts stated in press releases and reports filed with the Commission concerning,
among other  things,  the Company's  assets,  operations,  financial  condition,
anticipated revenue and strategic initiatives.

         In July  2003,  the  Company  learned  that the SEC had issued a formal
order of investigation.  There is a risk that an enforcement  proceeding will be
recommended  by  the  staff  of  the  Commission  as a  result  of  this  formal
investigation. Enforcement proceedings could include allegations by the SEC that
the  Company  violated  the  anti-fraud,  registration  and  books  and  records
provisions of federal  securities laws, and the rules  thereunder.  However,  it
cannot  be  predicted  with  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.  The Company has been and expects
to continue to cooperate with the ongoing SEC investigation.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

         The  Company  made the  following  sales of  unregistered  (restricted)
securities  during the  quarter  ended on  September  30,  2005 (not  previously
reported in a Form 8-K):

         (a) On July 13, 2005,  the Company  issued 250,000 shares of its common
stock to a

                                       34

<PAGE>

consultant for investor  relations  services for the Company.  These shares were
valued at $57,500, or $0.23 per share.

         (b) On  September  8, 2005,  the Company  issued  50,000  shares of its
common stock to a consultant for services provided for the Company. These shares
were valued at $11,000, or $0.22 per share.

         (c) During the three  months  ended  September  30,  2005,  the Company
issued  options  covering a total of 6,083,331  shares of common stock under the
Company's Stock  Incentive  Plan, the underlying  shares of which are registered
under Form S-8. These options were subsequently exercised.

         No commissions  were paid in connection with any of these sales.  These
sales were undertaken under Rule 506 of Regulation D under the Securities Act of
1933. Each of the transactions did not involve a public offering and each of the
investors represented that he/she was a "sophisticated" or "accredited" investor
as defined in Rule 502 of Regulation D.

         There  have been no  purchases  of common  stock of the  Company by the
Company or its affiliates during the three months ended September 30, 2005.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         Not applicable.

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

         None.

ITEM 5.  OTHER INFORMATION.

SUBSEQUENT EVENT.

On October 17, 2005, the Company issued the following unregistered  (restricted)
securities  of the company to Paul Egan,  Ciaran  Egan,  and Fionn  Stakelum for
services rendered to the company, as follows:

         Paul Egan:                2,000,000 shares of Series B preferred stock.
                                   1,000,000 shares of Series A preferred stock

         Ciaran Egan:              1,500,000 shares of Series B preferred stock.

         Fionn Stakelum:           500,000 shares of Series B preferred stock.

The Company discovered that the Certificates of Designation for the Series A and
Series B preferred stock of the Company had  inadvertently not been filed before
this stock was issued.  Thereafter,  the  Certificates of Designation were filed
with the Nevada  Secretary of State on June 22, 2005 (see Exhibits 4.1 and 4.2).
Since  Nevada law  requires  that such  Certificates  be filed before this stock

                                       35

<PAGE>

issued,  the Company received back and cancelled all of the preferred stock that
had been issued by the Company and new preferred  stock  certificates  were then
issued (as set forth above).

The Series A preferred  stock was  originally  issued with the intention that it
would be convertible into 12 shares of common stock,  provided certain financial
goals were met by the Company (which have not been met).  However,  with the one
for seven reverse split of the Company's common stock,  effective on November 8,
2004, this reduced the convertibility of this stock down to 1.71 to one.

The  Series  B  preferred  stock  that was  issued  prior to  November  8,  2004
(1,000,000  shares for Paul Egan,  1,000,000 shares for Ciaran Egan, and 500,000
shares for Fionn  Stakelum) was  originally  issued with the  intention  that it
would be  convertible  into 12  shares of common  stock,  with no  restrictions.
However,  with the one for seven reverse  split of the  Company's  common stock,
effective  on  November  8,  2004,  this  reduced  the  convertibility  of these
2,500,000  shares down to 1.71 to one.  The other  1,500,000  shares of Series B
preferred  stock  issued on February  21, 2005 were not  affected by the reverse
split.

CORRECTION.

         In the  Company's  Form 10-KSB filed on November 9, 2005, it was stated
that, among other things, that:

         (a)  "There  has been no  public  market  for the  common  stock of the
         Company. The Company intends to have a market maker file an application
         on behalf of the Company  with the Over the Counter  Bulletin  Board in
         order to make a market in the Company's  common  stock." This statement
         should have read:  "There has been only a limited public market for the
         common  stock of the Company.  Our common stock is currently  traded on
         the Over the Counter Bulletin Board.

         (b) "If the Company  attains  listing on the Over the Counter  Bulletin
         Board..." This statement should have deleted.

ITEM 6.  EXHIBITS.

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

                                       36

<PAGE>

                                   SIGNATURES

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

                                     FREESTAR TECHNOLOGY CORPORATION

Dated: July 21, 2006                 By: /s/ Paul Egan
                                         ---------------------------------------
                                             Paul Egan
                                             Chief Executive Officer

Dated: July 21, 2006                 By: /s/ Ciaran Egan
                                         ---------------------------------------
                                             Ciaran Egan Secretary/Treasurer/
                                             Chief Financial Officer

                                       37

<PAGE>

                                  EXHIBIT INDEX

Number                                      Description
------            --------------------------------------------------------------
1                 Agency Agreement between the Company 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  Company 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 Company 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 Company 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 Company 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   Company  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 Company 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 Company 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 Company,  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).

                                       38
<PAGE>

Number                                      Description
------            --------------------------------------------------------------
2.9               Letter of Intent  between  the  Company  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 Company 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 Company 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  Company  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 Company 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).

2.14              Amendment  No.  2 to  Stock  Purchase  Agreement  between  the
                  Company  and  the  stockholders  of  TransAxis,   Inc.,  dated
                  February 20, 2004 (incorporated by reference to Exhibit 2.3 of
                  the Form 8-K/A filed on March 2, 2004).

2.15              Asset Purchase Agreement between the Company, and Unipay, Inc.
                  and  its  stockholder,   Unicomp,  Inc.,  dated  May  4,  2004
                  (incorporated  by  reference  to  Exhibit  2.1 of the Form 8-K
                  filed on May 20, 2004).

2.16              Registration Rights Agreement between the Company, and Unipay,
                  Inc. and its  stockholder,  Unicomp,  Inc.,  dated May 4, 2004
                  (incorporated  by  reference  to  Exhibit  2.2 of the Form 8-K
                  filed on May 20, 2004).

2.17              Non-Competition  and  Non-Disclosure   Agreement  between  the
                  Company and Unicomp,  Inc., dated May 4, 2004 (incorporated by
                  reference  to  Exhibit  2.3 of the Form  8-K  filed on May 20,
                  2004).

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).

                                       39

<PAGE>

Number                                      Description
------            --------------------------------------------------------------
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 Company 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  Company  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 Company, 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 Company,  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).

                                       40

<PAGE>

Number                                      Description
------            --------------------------------------------------------------
4.7               Loan Agreement between the Company, 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 Company,  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  Company  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 Company 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).

                                       41

<PAGE>

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

4.17              Amended and Restated  Non-Employee  Directors and  Consultants
                  Retainer  Stock Plan  (Amendment  No. 3),  dated April 7, 2004
                  (incorporated  by  reference  to Exhibit 4 of the Form S-8 PSO
                  filed on April 19, 2004).

4.18              Amended and Restated  Non-Employee  Directors and  Consultants
                  Retainer Stock Plan (Amendment No. 4), dated December 20, 2004
                  (incorporated  by reference to Exhibit 4.1 of the Form S-8 POS
                  filed on January 26, 2005).

4.19              Amended and Restated Stock  Incentive Plan  (Amendment No. 3),
                  dated December 20, 2004  (incorporated by reference to Exhibit
                  4.2 of the Form S-8 POS filed on January 26, 2005).

4.20              Form of Option to  Purchase  Shares  of  Common  Stock,  dated
                  February 21, 2005 (incorporated by reference to Exhibit 4.1 of
                  the Form 8-K filed on May 12, 2005).

4.21              Certificate  of  Designation  (Series  A),  dated June 9, 2005
                  (incorporated  by  reference  to  Exhibit  4.1 of the Form 8-K
                  filed on October 20, 2005).

4.22              Certificate  of  Designation  (Series  B),  dated June 9, 2005
                  (incorporated  by  reference  to  Exhibit  4.2 of the Form 8-K
                  filed on October 20, 2005).

10.1              Employment  Agreement  between the  Company  and Ciaran  Egan,
                  dated  August 9, 2001  (incorporated  by  reference to Exhibit
                  10.2 of the Form 8-K filed on August 14, 2001).

10.2              Employment  Agreement between the Company and Paul Egan, dated
                  August 9, 2001  (incorporated  by reference to Exhibit 10.3 of
                  the Form 8-K filed on August 14, 2001).

10.3              Consulting   Agreement   between   the   Company  and  Margaux
                  Investment  Management  Group  S.A.,  dated  August  23,  2003
                  (incorporated  by  reference  to  Exhibit  10.3  of  the  Form
                  10-KSB/A filed on October 28, 2004).

10.4              Addendum to Employment  Contract  between the Company and Paul
                  Egan,  dated  August 9, 2004  (incorporated  by  reference  to
                  Exhibit 10.4 of the Form 10-KSB/A filed on October 28, 2004).

                                       42

<PAGE>

Number                                      Description
------            --------------------------------------------------------------
10.5              Addendum to Employment Contract between the Company and Ciaran
                  Egan,  dated  August 9, 2004  (incorporated  by  reference  to
                  Exhibit 10.5 of the Form 10-KSB/A filed on October 28, 2004).

10.6              Rescission Agreement between the Company and TransAxis,  Inc.,
                  dated   August  24,  2004   (effective   on  June  17,   2004)
                  (incorporated  by  reference  to  Exhibit 10 of the Form 8-K/A
                  filed on August 26, 2004).

10.7              Employment  Agreement  between the Company and Angel  Pacheco,
                  dated April 1, 2005  (incorporated  by reference to Exhibit 10
                  of the Form 8-K filed on May 10, 2005).

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).

16.3              Letter on change in certifying accountant, dated June 28, 2004
                  (incorporated  by  reference  to  Exhibit 16 of the Form 8-K/A
                  filed on July 16, 2004).

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

23                Consent  of  Independent  Registered  Public  Accounting  Firm
                  (incorporated  by  reference  to Exhibit 23 of the Form 10-KSB
                  filed on November 9, 2005).

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

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

32                Section 1350 Certification of Paul Egan and Ciaran Egan (filed
                  herewith).

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  Company,  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  Company,  dated  April 24, 2003
                  (incorporated  by  reference to Exhibit 99.3 of the Form 8-K/A
                  filed on April 25, 2003).

                                       43

<PAGE>

Number                                      Description
------            --------------------------------------------------------------
99.4              Text of conference call held on 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 on 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  Company,  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  Company,  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 on 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 Company,  dated October 16, 2003
                  (incorporated by reference to Exhibit 99 of the Form 8-K filed
                  on October 24, 2003).

                                       44