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

                                      FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001

                                         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 TECHNOLOGIES
                (Exact Name of Registrant as Specified in its Charter)

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

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

                 Registrant's telephone number:  (809) 732-5911

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

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

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

     As of December 31, 2001, the Registrant had 42,833,552 shares of
common stock issued and outstanding.

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

                                  TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                         PAGE

     ITEM 1.  FINANCIAL STATEMENTS

              BALANCE SHEET AS OF
              DECEMBER 31, 2001                                           3

              STATEMENTS OF OPERATIONS
              FOR THE THREE MONTHS ENDED
              DECEMBER 31, 2001 AND FOR THE PERIOD
              FROM INCEPTION TO DECEMBER 31, 2001                         4

              STATEMENTS OF CASH FLOWS
              FOR THE PERIOD FROM INCEPTION
              TO DECEMBER 31, 2001                                        5

              NOTES TO FINANCIAL STATEMENTS                               6

     ITEM 2.  PLAN OF OPERATION                                          10

PART II - OTHER INFORMATION

     ITEM 1.  LEGAL PROCEEDINGS                                          18

     ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                  19

     ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                            20

     ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS        20

     ITEM 5.  OTHER INFORMATION                                          20

     ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                           20

SIGNATURE                                                                21

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCAL STATEMENTS.

                               FREESTAR TECHNOLOGIES
                                  BALANCE SHEET
                                DECEMBER 31, 2001
                                   (Unaudited)

                                      ASSETS

Current Assets
 Cash and cash equivalents                                     $         297
 Accounts receivable, net of allowance for
  doubtful accounts of $0                                            239,020
 Prepaid expenses                                                    221,600
 Other current assets                                                900,000
   Total current assets                                            1,360,917

Property and Equipment, at cost                                      148,529
 Less accumulated depreciation                                        (5,765)
   Total property and equipment                                      142,764

Other assets                                                         979,889
   Total assets                                                $   2,483,570

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
 Bank overdraft                                                        3,028
 Line of credit                                                       91,786
 Note payable                                                        750,000
 Loan payable to stockholder                                               -
 Accounts payable and accrued expenses                                72,935
   Total current liabilities                                         917,749

Stockholders' equity
 Convertible Preferred stock, Series A, $0.001 par value,
  5,000,000 shares authorized; 1,000,000 shares issued
  and outstanding                                                      1,000
 Additional paid-in capital-Preferred stock                          606,639
 Common stock, $0.001 par value, 80,000,000 shares authorized;
  42,833,552 shares issued and outstanding                            41,844
 Additional paid-in capital-Common stock                           3,386,796
 Retained (Deficit)                                               (2,224,610)
 Accumulated foreign currency translation adjustments                (77,848)
 Less: Treasury stock                                               (168,000)
  Total stockholders' equity                                       1,565,821
  Total liabilities and stockholders' equity                    $  2,483,570

                  See accompanying Notes to Financial Statements

                              FREESTAR TECHNOLOGIES
                             STATEMENTS OF OPERATIONS
                                    (Unaudited)

                                              3 Months         From Inception
                                                Ended         (May 25, 2001)
                                              December 31      To December 31
                                                  2001               2001

Net sales                                     $   224,491       $  228,997

Cost of goods sold                                108,232          108,232

 Gross profit                                     116,259          120,765

Operating expenses:
 Selling, general and administrative expenses     254,113        2,325,481

  Operating (loss)                               (137,854)      (2,204,716)

Non-operating expense, net                         (8,832)          (7,321)

Net (loss) before income taxes                   (129,022)      (2,197,395)

Provision for income taxes                              -                -

   Net (loss)                                 $  (129,022)     $(2,197,395)

Earnings (Loss) per common share,
 basic and diluted                                  (0.00)           (0.08)

Weighted average shares outstanding, basic
 and diluted                                   36,316,432       27,795,121

               See Accompanying Notes to Financial Statements

                             FREESTAR TECHNOLOGIES
                           STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                               From Inception
                                                               (May 25, 2001)
                                                               To December 31
                                                                     2001

Cash Flows From Operating Activities
 Net loss                                                        $ (2,197,395)
 Adjustments to reconcile net loss to net cash
  (used in) operating activities:
  Depreciation                                                          4,951
  Stock and warrants issued to officers and consultants             2,097,286
 Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                         (229,200)
  (Increase) decrease in inventories                                   15,169
  (Increase) decrease in other assets                                 (74,350)
  Increase (decrease) in accounts payable and accrued expenses         36,727

   Net cash (used in) operating activities                           (346,812)

Cash Flows From Investing Activities
 Purchase of property and equipment                                      (638)

   Net cash provided by (used in) investing activities                   (638)

Cash Flows From Financing Activities
 Bank overdraft and borrowings on line of credit                       94,814
 Contributions from stockholder                                       110,484
  Net cash provided by financing activities                           205,298

Effect of Exchange Rate Changes on Cash                               (77,848)

  Increase (decrease) in cash and cash equivalents                   (220,000)

Cash and Cash Equivalents
 Beginning                                                            220,297

 Ending                                                                   297

Supplemental Disclosures of Cash Flow Information
 Cash payments for interest                                                 -

Supplemental Schedule of Non-Cash Investing and
Financing Activities
 Loan payable to stockholder for a deposit
 transferred to the Company                                           900,000

                    See Accompanying Notes to Financial Statements

                               FREESTAR TECHNOLOGIES
                          NOTES TO FINANCIAL STATEMENTS
                                    (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited interim condensed financial statements of
Freestar Technologies ("Company") have been prepared in accordance
with accounting principles generally accepted in the United States for
interim financial information. Accordingly, they do not include all of
the information and notes required by accounting principles generally
accepted in the United States for complete financial statements. The
accompanying financial statements reflect all adjustments (consisting
of normal recurring accruals), which are, in the opinion of
management, considered necessary for a fair presentation of the
results for the interim periods presented. Interim results are not
necessarily indicative of results to be expected for the year ending
June 30, 2002. The Company has experienced significant quarterly
fluctuations in net revenues and operating results, and expects that
these fluctuations in sales, expenses and net income or losses will continue.

The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and disclosures made in the accompanying notes to the
financial statements. These estimates include assessing the
collectability of accounts receivable, the use and recoverability of
inventory, costs of future product returns and provisions for
contingencies expected to be incurred. Actual results could differ
from those estimates.

NOTE 2 - ACQUISITION OF EPAYLATINA, S.A.

On August 10, 2001, Freestar Technologies ("Freestar") purchased all
of the assets of ePayLatina, S.A., a privately held company, formed in
May 2001, in exchange of 1,000,000 shares of Series A convertible
preferred stock in Freestar.  This merger was approved by the
Companies' shareholders.

Pursuant to the terms of the Agreement and Plan of Merger ("Merger
Agreement"), by and between Freestar and ePayLatina, S.A., certain
Freestar shareholders will receive 6,668,000 shares of Freestar stock
after the merger. For accounting purposes, the acquisition was
accounted for using the purchase method with ePayLatina, S.A. as the
accounting acquirer in a reverse acquisition.  Therefore, the
historical equity of the company has been adjusted to reflect the
conversion of ePayLatina, S.A. common stock to that of Freestar.
Additionally, as a reverse acquisition, the historical operating
results prior to the acquisition are those of ePayLatina, S.A. and
include only the transactions of Freestar after the merger.

Following the acquisition, Freestar adopted ePayLatina, S.A.'s fiscal
year end, June 30.

NOTE 3 - LOSS PER SHARE

Basic and diluted net loss per share is computed using the weighted
average number of common shares outstanding during the period. Basic
and diluted loss per share is equivalent to basic net loss per share
because the effect of converting outstanding stock warrants and
convertible preferred stock would be anti-dilutive.

NOTE 4 - CERTAIN FINANCIAL STATEMENTS INFORMATION

a.  Other current assets consist of a deposit of $900,000 for cost of
    producing 66,000 card readers related to the Company's
    implementation of the PaySafeNow System.  The deposit was a non-
    cash contribution by the Company's chief executive officer in
    September 2001.

b.  Other assets consist of the following:

    Software                   $ 894,916
    Deposits                       8,880
    Other                         76,093

                               $ 979,889

c.  Note payable of $750,000 is related to a down payment paid to the
    Company before the acquisition of ePayLatina, S.A related to sale
    of certain assets.  The Company's new management cannot obtain
    details of this transaction and was unable to prove that the note
    payable is no longer valid.

NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141,
"Business Combinations."  SFAS No. 141 supersedes Accounting
Principles Board ("APB") No. 16 and requires that any business
combinations initiated after June 30, 2001 be accounted for as a
purchase; therefore, eliminating the pooling-of-interest method
defined in APB 16.  The statement is effective for any business
combination initiated after June 30, 2001 and shall apply to all
business combinations accounted for by the purchase method for which
the date of acquisition is July 1, 2001 or later.  The Company does
not expect the adoption to have a material impact to the Company's
financial position or results of operations.

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other
Intangibles."  SFAS No. 142 addresses the initial recognition,
measurement and amortization of intangible assets acquired
individually or with a group of other assets (but not those acquired
in a business combination) and addresses the amortization provisions
for excess cost over fair value of net assets acquired or intangibles
acquired in a business combination.  The statement is effective for
fiscal years beginning after December 15, 2001, and is effective July
1, 2001 for any intangibles acquired in a business combination
initiated after June 30, 2001.  The Company does not expect the
adoption to have a material impact to the Company's financial position
or results of operations.

In October 2001, the FASB recently issued SFAS No. 143, "Accounting
for Asset Retirement Obligations," which requires companies to record
the fair value of a liability for asset retirement obligations in the
period in which they are incurred.  The statement applies to a
company's legal obligations associated with the retirement of a
tangible long-lived asset that results from the acquisition,
construction, and development or through the normal operation of a
long-lived asset.  When a liability is initially recorded, the company
would capitalize the cost, thereby increasing the carrying amount of
the related asset.  The capitalized asset retirement cost is
depreciated over the life of the respective asset while the liability
is accreted to its present value.  Upon settlement of the liability,
the obligation is settled at its recorded amount or the company incurs
a gain or loss. The statement is effective for fiscal years beginning
after June 30, 2002.  The Company does not expect the adoption to have
a material impact to the Company's financial position or results of
operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets".  Statement 144 addresses
the accounting and reporting for the impairment or disposal of long-
lived assets. The statement provides a single accounting model for
long-lived assets to be disposed of.  New criteria must be met to
classify the asset as an asset held-for-sale. This statement also
focuses on reporting the effects of a disposal of a segment of a
business.  This statement is effective for fiscal years beginning
after December 15, 2001.  The Company does not expect the adoption to
have a material impact to the Company's financial position or results
of operations.

NOTE 6 - GOING CONCERN

The accompanying condensed financial statements have been prepared on
a going concern basis which contemplates the realization of assets and
the satisfaction of liabilities in the normal course of business.
Through December 31, 2001, the Company has not been able to generate
significant revenues from its operations to cover its costs and
operating expenses. Although the Company has been able to issue its
common stock for a significant portion of its expenses or has obtained
cash contributions from its major stockholder/chief executive officer,
it is not known whether the Company will be able to continue this
practice, or be able to obtain continuing cash advances and
contributions or if its revenue will increase significantly to be able
to meet its cash operating expenses.

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

NOTE 7 - NON-CASH COMPENSATION AND OTHER EQUITY TRANSACTIONS

In August 2001, the Company issued 8,000,000 shares of restricted
common stock to three executives and officers as sign-on bonus, and
recognized an expense of $784,000 which is included in the selling,
general and administrative expenses of the accompanying financial statement.

In August 2001, the Company issued 3,800,000 shares of its common
stock to two individuals for consulting services related to the assets
purchase of ePayLatina, S.A. on August 10, 2001.  The Company
recognized an expense of $456,000 which is included in the selling,
general and administrative expenses of the accompanying financial
statements.  In November 2001, the Company revoked 1.4 million shares
of common stock from one individual due to his inability of completing
the services.  Related expense of $168,000 was reversed in the quarter
ended December 31, 2001.

In August 2001, the Company issued a warrant covering 250,000 shares
of common stock to an investor relation consultant.  The Company used
the Black-Scholes option-pricing model to value the shares, with the
following assumptions: (1) no expected dividends; (2) a risk-free
interest rate of 5.5%; (3) expected volatility of 406%; and (4) an
expected life of 3 years.  The Company recognized $44,986 as general
and administrative expense in the accompanying financial statements.

In November 2001, the Company issued 14,400,000 shares of restricted
common stock in the value of $1,612,800 to a major stockholder.
$900,000 was in satisfaction of a loan made to the Company by the
stockholder.  The remaining $712,800 was compensation expense  related
to services performed in the quarter ended September 30, 2001.

In the quarter ended December 31, 2001, the Company issued 2,115,000
shares of common stock to various consultants and legal counsels for
current and future services.  The Company recognized an expense of
$249,400 in the current quarter.  The remaining $221,600 was included
as prepaid expense and would be expensed as services rendered in the
future quarters.  In addition, subsequent to the year-end, the Company
issued 110,000 shares of common stock to consultants for services
performed in the quarter ended December 31, 2001.  The value of these
shares totaling $18,100 was recorded in the current quarter.

In November 2001, the Company issued 6,668,000 shares of restricted
common stock due to certain shareholders of Freestar pursuant to the
asset purchase agreement between the Company and ePayLatina, S.A.

ITEM 2.  PLAN OF OPERATION.

Twelve Month Plan of Operation.

     The payments industry is rapidly transforming. The Registrant
after its acquisition of the assets ePayLatina S.A. is part of this
transformation.  It is believed that the Registrant is the first
company to provide solutions and services that enable secure, real-
time movement of financial transactions incorporating hardware and
software to enable credit, debit and ATM with Pin transactions.  While
payment media such as credit cards have reached maturity, it is still
the most frequently used method of online payment. The breathtaking
growth in electronic commerce is forcing financial institutions and
merchants to offer new secure payment forms to their customers.
Internet payment gateways and the increased prospect of fraud from
electronic payments are some of the issues that are creating
challenges for financial institutions around the world.

     The Registrant's solution and services focuses on these areas and
enables financial institutions and merchants to formulate coherent
strategies based on knowledge, insight and understanding of the
transformations taking place in the payments industry.  Charting a
path through this arena requires a deep understanding of the market
and the ability to forecast and predict future trends. The
Registrant's acquisition of the assets of  ePayLatina S.A., and the
formation of its strategic alliances were instigated to help
institutions and merchants position themselves to provide superior
value added services, and differentiate themselves from competitors in
a way that preserves the business line's profitability.

     The Registrant's Enhanced Transactional Secure Software ("ETSS"),
a proprietary software package that enables consumers to consummate
secure e-commerce transactions over the Internet using credit, debit,
ATM (with PIN) or smart cards. The ETSS system integrates a consumer-
side card-swipe terminal with a back-end host-processing center. It
encrypts sensitive financial data at the consumer's personal computer,
using powerful DES encryption and algorithms. It sends an
authorization number to the e- commerce merchant, rather than the
consumer's credit card information, to provide a maximum level of security.

     The Registrant's sales forecast numbers have been derived from
existing contracts currently in place and also after extensive
research and consultations with one of our strategic partners Banco
Nacional de Credito, in fact these assumptions were the main factor in
the bank placing an order for the first 30,000 units.  The Registrant
is currently in Phase 1 of deployment of 30,000 units of its ePayPad
pursuant to its contract with Banco Nacional de Credito, the first
2000 units are currently been deployed.  Banco Nacional de Credito
purchased the first 30,000 units at a price of $60 per unit, which
will it is anticipated will generate approximately $1.8 million
dollars in revenue once all of the units are deployed.  The time frame
for this deployment is expected to be in approximately twelve months.

     The Registrant has a contract with La Nacional de Envious, who
will sell and distribute the Registrant's PaySafeNow solution to its
existing and new client base throughout North and Latin America. The
solution will enable clients to securely transfer money, locally or
internationally via the Internet from the comfort of their own home,
anytime during the day or night using their ATM, debit, credit or
smart card. The initial stage of the agreement requires La Nacional to
purchase 1,500 ePayPads  from the Registrant to distribute and deploy
to its branches and agencies throughout the U.S.  The Registrant
anticipates that it will not only receive revenue from the product
sale but will also receive a transactional revenue fee from each
transaction that takes place. The first units are to be deployed in
New York in early 2002 .

     The Registrant now has  the first fifty merchants on the
Enelpunto.net Payment Gateway  live with the  Registrant's PaySafeNow
system .  EnelPunto.net has established the Registrant's ETSS as the
standard, approved e-commerce payment technology for EnelPunto's
online merchants."  Now the first fifty merchants are fully
operational, it will provide the platform for the Registrant to move
forward with the integration of new merchants . The Registrant expects
to integrate more than one thousand merchants by the middle of 2002 .

     The Registrant has entered into a revenue-sharing contract with
Credulus Systems International to market credit analysis systems and
services to the financial services industry in Latin America. The
credit analysis and automation tools of Credulus Systems complement
our proprietary payment systems and will enhance the Registrants
product line. They offer synchronous capture and delivery of payment
data patterns into the credit profiles used by financial institutions
and merchants. Local credit bureaus cannot meet the sophisticated
demands of today's online and private financial networks. CRM systems
improve customer service but not the financial product offering of the
banks. CredAbilityc by Credulus Systems addresses the risk management
demands of the market and maximizes profit for credit providers The
CredAbilityc Credit Analysis Solution is tailored to the specific
requirements of financial services in the emerging economies of the
Latin American & Caribbean region. Leverage and analysis of customer
data empowers financial institutions through accurate and immediate
risk measurement. The consequent mitigation of risk reduces costs to
consumers and increases margins for credit providers, which in turn
stimulates market activity

     The Registrant has entered into a strategic alliance with Fortech
which will enhance brand awareness for the Registrant's products.  The
alliance will enable the  Registrant to integrate its PaySafeNow
system with Fortechs business software package so as to develop a
total business solution for clients.  Fortech will also market and
distribute and act as a reseller of the  Registrant s products.  This
strategic alliance will open up new markets for the  Registrant thus
accelerating revenue growth.

     The Registrant has entered into a strategic alliance with
Caribbean Postal Services (CPS) which will implement and develop an
aggressive sales and marketing program for The Registrant's products.
CPS will market and distribute the Registrant's product to their
existing and future clients through their own portal and extensive
marketing campaigns.  CPS will give added value to the Registrant's
clients by way of their distribution networks not only in the
Dominican Republic but also in the United States.  CPS will deliver
goods purchased by clients using the ePayPad from the United States
directly to the Dominican Republic.  The Registrant believes that the
CPS distribution network will greatly enhance and accelerate sales
growth for the Registrant.

     The Registrant has entered into a technical agreement with GS
Telekom ("GTKOM"), which will further develop and enhance the
Registrant's products.  This agreement will enable the Registrant to
enter into the rapidly expanding and highly profitable Wireless
Application Protocol market.  GTKOM and the Company will jointly
develop and customize solutions for specific clients. This agreement
is significant for the Registrant as it will gain the company entry
into a potentially lucrative market.  The agreement will also provide
the Registrant with resources to develop the next generation of its products.

     The Registrant has made important strides in obtaining a strong
market presence in the United States with its strategic partner SSP
Solutions.  This strategic partnership will bring to the Registrant a
strong and broad client portfolio with global scope., which will
provide us with a secure platform for future growth.  The Registrant
will continue to build on new growth horizons The results of which
will come to fruition in the early part of 2002.  The Registrant has
consistently sought high caliber partners to create a best of breed
technology approach for its customers.  The Registrant believes that
harnessing the strengths of complementary industry partners is a vital
part of its growth strategy.

     After extensive research and long term negotiations with numerous
manufacturers it was decided to outsource manufacture of the units.
The decision to outsource will have many obvious long term benefits
for the Registrant, for example, no production payroll, not carrying
excess amounts of inventory thus improving our cash flow, immunity
from industrial disputes which will ensure an uninterrupted supply of
units to our clients, the cost of the units will be put out to tender
regularly thus ensuring our product remains at a competitive price in
the market place. It is important for the Registrant to have cash on
hand to maintain a sufficient supply of inventory to meet consumer
demand.  The risk of maintaining inadequate stocks of certain key
components must be minimized by larger than normal forward purchasing.

     The Registrant's growth in sales poses substantial financing
needs for receivables as well as inventory.  In 2003 and 2004
accumulated earnings can support virtually all of this need.  The
Registrant will need a line of credit to provide cash in the first
year until accounts receivables begin to turn over into cash.  Over
the next twelve months, the Registrant will require a total of $1
million of new equity investment.  As the receivables are projected to
exceed $400,000 in the first year, and stem from prime quality
customers, commercial banking lines of credit (or A/R factoring)
should be easily obtainable supported by this current asset without a
need for reliance on inventory.  The period of 60-days for receivables
is not unusual, but the inventory turn-over is projected to be slow
due to a need to keep higher levels than was necessary previously so
as to meet the expected consumer demand for the companies products.
Should it be necessary to arrange for factoring of the receivables,
interest expense would increase.

     This financing will not only be used for the purchase of
inventory supplies but also for the added expense of additional
employees, consultants and for the purchase of capital equipment that
will be necessary for the opening of new offices.  The costs are
projected to increase as sales increase and more capital equipment is
purchased to enhance and facilitate growth projections.

     As research and development is an integral part of our growth
strategy, the Registrant  projects this important expense to increase
to ensure the quality of its products and satisfy consumer
expectations.  The Registrant is confident that the projected
financing figure is sufficient to allow it to continually improve its
product in relation to consumer demand.  The Registrant is presently
in the process of developing a wireless application for the PaySafeNow
system; this development process is set to continue through the next
twelve months.  Salary and compensation increases are projected to be
in line with growth in sales and profits, the personnel plan calls for
expanding the workforce in accordance with growth projections.

Risk Factors Connected with Plan of Operation.

(a)  Limited Prior Operations, History of Operating Losses, and
Accumulated Deficit May Affect Ability of Registrant to Survive.

     The Registrant has had limited prior operations to date.  Since
the Registrant's principal activities to date have been limited to
organizational activities, research and development, and prospect
development, it has no record of any revenue-producing operations.
Consequently, there is only a limited operating history upon which to
base an assumption that the Registrant will be able to achieve its
business plans.  In addition, the Registrant has only limited assets.
As a result, there can be no assurance that the Registrant will
generate significant revenues in the future; and there can be no
assurance that the Registrant will operate at a profitable level.  If
the Registrant is unable to obtain customers and generate sufficient
revenues so that it can profitably operate, the Registrant's business
will not succeed.  Accordingly, the Registrant's prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered in connection with the establishment of a new business in
a highly competitive industry, characterized by new product introductions.

     The Registrant incurred a net loss of $2,197,395 for the six
months ended December 31, 2001 and $129,022 for the three months ended
December 31, 2001.  At December 31, 2001, the Registrant had an
accumulated deficit of $2,224,610.  This raises substantial doubt
about the Registrant's ability to continue as a going concern.

(b)  Need for Additional Financing May Affect Operations and Plan of Business.

     Current funds available to the Registrant will not be adequate
for it to be competitive in the areas in which it intends to operate.
The Registrant's continued operations, as well as the implementation
of its business plan, therefore will depend upon its ability to raise
additional funds through bank borrowings, equity or debt financing.
The Registrant estimates that it will need to raise approximately
$1,000,000 over the twelve months from December 31, 2001 for such
purposes.  However, adequate funds may not be available when needed or
may not be available on favorable terms to the Registrant.  The
ability of the Registrant to continue as a going concern is dependent
on additional sources of capital and the success of the Registrant's
business plan.  Regardless of whether the Registrant's cash assets
prove to be inadequate to meet the Registrant's operational needs, the
Registrant might seek to compensate providers of services by issuance
of stock in lieu of cash.

     If funding is  insufficient at any time in the future,  the
Registrant may not be able to take advantage of business opportunities
or respond to competitive pressures, any of which could have a
negative impact on the business, operating results and financial
condition.  In addition, if additional shares were issued to obtain
financing, current shareholders may suffer a dilutive effect on their
percentage of stock ownership in the Registrant.

(c)  No Assurance of Protection of Proprietary Rights May Affect
Ability to Manufacture Products.

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

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

(d)  Dependence on Outsourced Manufacturing May Affect Ability to
Bring Products to Market.

     The risks of association with outsourced manufacturers are
related to aspects of these firms' operations, finances and suppliers.
The Registrant may suffer losses if the outside manufacturer fails to
perform its obligations to manufacture and ship the product
manufactured.  These manufacturers' financial affairs may also affect
the Registrant's ability to obtain product from these firms in a
timely fashion should they fail to continue to obtain sufficient
financing during a period of incremental growth.  The Registrant
intends to maintains a strong relationship with these manufacturers to
ensure that any issues they may face are dealt with in a timely manner.

(e)  No Assurance of Market Acceptance May Affect Ability to Sell Products.

     There can be no assurance that any products successfully
developed by the Registrant or its corporate collaborators, if
approved for marketing, will ever achieve market acceptance.  The
Registrant's products, if successfully developed, may compete with a
number of traditional products manufactured and marketed by major e-
commerce and technology companies, as well as new products currently
under development by such companies and others.  The degree of market
acceptance of any products developed by the Registrant or its
corporate collaborators will depend on a number of factors, including
the establishment and demonstration of the efficacy of the product
candidates, their potential advantage over alternative methods and
reimbursement policies of government and third party payors.  There
can be no assurance that the marketplace in general will accept and
utilize any products that may be developed by the Registrant or its
corporate collaborators.

(f)  Substantial Competition May Affect Ability to Sell Products.

     The Registrant may experience substantial competition in its
efforts to locate and attract customers for its products.  Some
competitors in its industry have greater experience, resources, and
managerial capabilities than the Registrant and may be in a better
position than the Registrant to obtain access to attract customers.
There are a number of larger companies which will directly compete
with the Registrant.  Such competition could have a material adverse
effect on the Registrant's profitability or viability.

(g)  Other External Factors May Affect Viability of Registrant.

     The industry of the Registrant in general is a speculative venture
necessarily involving some substantial risk.  There is no certainty
that the expenditures to be made by the Registrant will result in
commercially profitable business.  The marketability of its products
will be affected by numerous factors beyond the control of the
Registrant.  These factors include market fluctuations, and the general
state of the economy (including the rate of inflation, and local
economic conditions), which can affect peoples' spending.  Factors
which leave less money in the hands of potential customers of the
Registrant will likely have an adverse effect on the Registrant.  The
exact effect of these factors cannot be accurately predicted, but  the
combination of these factors may result in the Registrant not receiving
an adequate return on invested capital.

(h)  Control by Officers and Directors Over Affairs of the Registrant
May Override Wishes of Other Stockholders.

     The Registrant's officers and directors beneficially own
approximately 52% of the outstanding shares of the Registrant's common
stock.  As a result, such persons, acting together, have the ability
to exercise significant influence over all matters requiring
stockholder approval.  Accordingly, it could be difficult for the
investors hereunder to effectuate control over the affairs of the
Registrant.  Therefore, it should be assumed that the officers,
directors, and principal common shareholders who control these voting
rights will be able, by virtue of their stock holdings, to control the
affairs and policies of the Registrant.

(i)  Loss of Any of Current Management Could Have Adverse Impact on
Business and Prospects for Registrant.

     The Registrant's success is dependent upon the hiring and
retention of key personnel.  The Registrant's officers and directors
currently have employment and non-competition agreements with the
Registrant for a period of three years; however, no other employees
have such an agreement.  Therefore, there can be no assurance that
these other personnel will remain employed by the Registrant.  Should
any of these individuals cease to be affiliated with the Registrant for
any reason before qualified replacements could be found, there could be
material adverse effects on the Registrant's business and prospects.

     In addition, all decisions with respect to the management of the
Registrant will be made exclusively by the officers and directors of
the Registrant.  Investors will only have rights associated with
stockholders to make decisions which effect the Registrant.  The
success of the Registrant, to a large extent, will depend on the
quality of the directors and officers of the Registrant.  Accordingly,
no person should invest in the shares unless he is willing to entrust
all aspects of the management of the Registrant to the officers and directors.

(j)  Potential Conflicts of Interest May Affect Ability of Officers
and Directors to Make Decisions in the Best Interests of Registrant.

     The officers and directors have other interests to which they
devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or serve
on boards of directors, and each will continue to do so
notwithstanding the fact that management time may be necessary to the
business of the Registrant. As a result, certain conflicts of interest
may exist between the Registrant and its officers and/or directors
which may not be susceptible to resolution.

     In addition, conflicts of interest may arise in the area of
corporate opportunities which cannot be resolved through arm's length
negotiations.  All of the potential conflicts of interest will be
resolved only through exercise by the directors of such judgment as is
consistent with their fiduciary duties to the Registrant.  It is the
intention of management, so as to minimize any potential conflicts of
interest, to present first to the Board of Directors to the
Registrant, any proposed investments for its evaluation.

(k)  Limitations on Liability, and Indemnification, of Directors and
Officers May Result in Expenditures by Registrant.

     The Registrant's articles of incorporation include provisions to
eliminate, to the fullest extent permitted by the Nevada Revised
Statutes as in effect from time to time, the personal liability of
directors of the Registrant for monetary damages arising from a breach
of their fiduciary duties as directors.  The By-Laws of the Registrant
also include provisions to the effect that the Registrant may
indemnify any director, officer, or employee.  Any limitation on the
liability of any director, or indemnification of directors, officer,
or employees, could result in substantial expenditures being made by
the Registrant in covering any liability of such persons or in
indemnifying them.

(l)  Absence of Cash Dividends May Affect Investment Value of
Registrant's Stock.

     The Board of Directors does not anticipate paying cash dividends
on the common stock for the foreseeable future and intends to retain
any future earnings to finance the growth of the Registrant's
business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements and the general operating
and financial conditions of the Registrant as well as legal
limitations on the payment of dividends out of paid-in capital.

(m)  No Cumulative Voting May Affect Ability of Some Shareholders to
Influence Mangement of Registrant.

     Holders of the shares of common stock of the Registrant are not
entitled to accumulate their votes for the election of directors or
otherwise. Accordingly, the holders of a majority of the shares
present at a meeting of shareholders will be able to elect all of the
directors of the Registrant, and the minority shareholders will not be
able to elect a representative to the Registrant's board of directors.

(n)  No Assurance of Continued Public Trading Market and Risk of Low
Priced Securities May Affect Market Value of Registrant's Stock.

     There has been only a limited public market for the common stock
of the Registrant.  The common stock of the Registrant is currently
quoted on the Over the Counter Bulletin Board.  As a result, an
investor may find it difficult to dispose of, or to obtain accurate
quotations as to the market value of the Registrant's securities.  In
addition, the common stock is subject to the low-priced security or so
called "penny stock" rules that impose additional sales practice
requirements on broker-dealers who sell such securities.  The
Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure in connection with any trades involving a stock
defined as a penny stock (generally, according to recent regulations
adopted by the U.S. Securities and Exchange Commission, any equity
security that has a market price of less than $5.00 per share, subject
to certain exceptions), including the delivery, prior to any penny
stock transaction, of a disclosure schedule explaining the penny stock
market and the risks associated therewith.   The regulations governing
low-priced or penny stocks sometimes limit the ability of broker-
dealers to sell the Registrant's common stock and thus, ultimately,
the ability of the investors to sell their securities in the secondary
market.

(o)  Failure to Maintain Market Makers May Affect Value of
Registrant's Stock.

     If the Registrant is unable to maintain a National Association of
Securities Dealers, Inc. member broker/dealers as market makers, the
liquidity of the common stock could be impaired, not only in the
number of shares of common stock which could be bought and sold, but
also through possible delays in the timing of transactions, and lower
prices for the common stock than might otherwise prevail.
Furthermore, the lack of  market makers could result in persons being
unable to buy or sell shares of the common stock on any secondary
market.  There can be no assurance the Registrant will be able to
maintain such market makers.

(p)  Sale of Shares Eligible For Future Sale Could Adversely Affect
the Market Price.

     All of the 22,400,000 shares of common stock which are currently
held, directly or indirectly, by management have been issued in
reliance on the private placement exemption under the Securities Act
of 1933.  Such shares will not be available for sale in the open
market without separate registration except in reliance upon Rule 144
under the Securities Act of 1933.  In general, under Rule 144 a
person, or persons whose shares are aggregated, who has beneficially
owned shares acquired in a non-public transaction for at least one
year, including persons who may be deemed affiliates of One Touch, as
defined, would be entitled to sell within any three-month period a
number of shares that does not exceed the greater of 1% of the then
outstanding shares of common stock, or the average weekly reported
trading volume during the four calendar weeks preceding such sale,
provided that current public information is then available.  If a
substantial number of the shares owned by these shareholders were sold
under Rule 144 or a registered offering, the market price of the
common stock could be adversely affected.

Forward Looking Statements.

     The foregoing Plan of Operation 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, including statements regarding, among other items, the
Registrant's business strategies, continued growth in the Registrant's
markets, projections, and anticipated trends in the Registrant's
business and the industry in which it operates.  The words "believe,"
"expect," "anticipate," "intends," "forecast," "project," and similar
expressions identify forward-looking statements.  These forward-
looking statements are based largely on the Registrant's expectations
and are subject to a number of risks and uncertainties, certain of
which are beyond the Registrant's control.  The Registrant cautions
that these statements are further qualified by important factors that
could cause actual results to differ materially from those in the
forward looking statements, including, among others, the following:
reduced or lack of increase in demand for the Registrant's products,
competitive pricing pressures, changes in the market price of
ingredients used in the Registrant's products and the level of
expenses incurred in the Registrant's operations.  In light of these
risks and uncertainties, there can be no assurance that the forward-
looking information contained herein will in fact transpire or prove
to be accurate.  The Registrant disclaims any intent or obligation to
update "forward looking statements."

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

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

     By letter dated November 1, 2000, the staff of the Securities and
Exchange Commission has informed the Registrant that it has completed
its investigation, and intends to recommend to the Commission that a
civil action in federal court be taken against the Registrant alleging
violations of Section 17(a) of the Securities Act of 1933, Sections
10(b), 12(g) 13(a), 13(b)(2)(A) and 13(b)((2)(b) of the Securities
Exchange Act of 1934, and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-
13 thereunder.  The staff believes that, among other things, the
Registrant made false or misleading statements in filings with the
Commission during calendar year 2000 that the Registrant had purchased
assets in Costa Rica worth $5.18 million and that later sold those
assets.  The staff also plans to recommend that the Commission seek
injunctive relief, but not a civil penalty or other collateral
remedies.  The Registrant and the staff are in discussions regarding
the foregoing.  The Registrant anticipates that it will resolve the
foregoing proposed action by entering into a consent to an order,
without admitting or denying the  allegations, that it be permanently
enjoined from violating any of the foregoing sections of the
Securities Act, and the Exchange Act and rules thereunder.

     It should be noted that the foregoing allegations pertain to
conduct by former officers and directors of the Registrant.  Current
management of the Registrant has retained counsel to vigorously pursue
state and federal legal action against those individuals and others
that it believes have caused damage to the Registrant.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

Specific Sales.

     The following securities of the Registrant were sold without
registration during the three months ended December 31, 2001:

     (a)  In November 2001, the Registrant issued 14,400,000 million
shares of common stock in the value of $1,612,800 to a Paul Egan,
President of the Registrant.  $900,000 was used to pay off a loan he
made to the Registrant; the remaining $712,800 was considered
compensation to him related to service he performed in the quarter
ended September 30, 2001.

     (b) In November 2001, the Registrant issued 6,668,000 shares of
common stock to certain shareholders pursuant to the asset purchase
agreement dated August 10, 2001.  The Registrant recorded these shares
as stock dividends as issued.

General Information.

     No commissions or fees were paid in connection with these sales.
All of theses sales  were undertaken pursuant to the limited offering
exemption from registration under the Securities Act of 1933 as
provided in Rule 506 of Regulation D by the fact that:

     the sales were made to sophisticated investors as defined in Rule 502;

     the information specified in paragraph (b)2(ii)(B) and paragraph
     (b)(2)(ii)(C) of this section was provided to each investor;

     the Registrant gave each purchaser the opportunity to ask
     questions and receive answers concerning the terms and conditions
     of the offering and to obtain any additional information which
     the Registrant possessed or could acquire without unreasonable
     effort or expense that is necessary to verify the accuracy of
     information furnished;

     at a reasonable time prior to the sale of securities, the
     Registrant advised the purchasers of the limitations on resale in
     the manner contained in paragraph Rule 502(d)2 of this section;

     neither the Registrant nor any person acting on its behalf sold
     the securities by any form of general solicitation or general
     advertising; and

     the Registrant exercised reasonable care to assure that the
     purchasers of the securities are not underwriters within the
     meaning of section 2(11) of the Securities Act of 1933 in
     compliance with Rule 502(d).

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

     Included in current liabilities in the balance sheet in this Form
10-QSB is a $750,000 note payable that was a liability of the
Registrant as of August 10, 2001, the date of the reverse-merger.
This note originated when the Registrant was known as Freedom Surf,
Inc. and is currently in default; however, it is being disputed by the
Registrant.  It will be reflected as a liability until determined otherwise.

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

     None

ITEM 5.  OTHER INFORMATION.

     The Registrant filed an amended Form 8-K on February 6, 2002 to
clarify that the Registrant is adopting the fiscal year (June 30) of
ePayLatina, S.A.

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

Exhibits.

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

Reports on Form 8-K.

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

     (a)  An amended Form 8-K was filed on November 1, 2001 to include
the audited financial statements of ePayLatina, S.A. in connection
with the acquisition of this company by the Registrant.

     (b)  A Form 8-K was filed on October 24, 2001 to reflect the
dismissal of the former accountants for the Registrant, Ludlow &
Harrison, and the engagement of Stonefield Josephson, Inc. as the new
accountants for the Registrant.  The Registrant has requested Ludlow &
Harrison to respond to the Securities and Exchange Commission
regarding its agreement with the statements made by the Registrant in
that Form 8-K in response to Item 304(a)(1) of Regulation S-B;
however, that firm has never responded to this request.

                                     SIGNATURE

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

                                                  Freestar Technologies



Dated: February 13, 2002                          By: /s/ Paul Egan
                                                  Paul Egan, President

                                 EXHIBIT INDEX

Number                          Exhibit Description

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

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

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

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

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

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

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

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

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

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

4.3     Certificate of Powers, Designations, Preferences and Rights
        of Series A Preferred Stock of Freestar Technologies, 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 8, 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 8, 2001).

10.1    Agreement between the Registrant and Southern California
        Logo, Inc., dated April 30, 2001 (incorporated by reference
        to Exhibit 10.1 of the Form 8-K filed on July 25, 2001).

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

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

10.4    Employment Agreement between the Registrant and Dennis H.
        Johnston, dated August 9, 2001 (incorporated by reference to
        Exhibit 10.4 of the Form 8-K filed on August 14, 2001).

10.5    Consulting Services Agreement between the Registrant and
        Henry Bohl, dated October 17, 2001 (see below).

10.6    Consulting Agreement between the Registrant and America
        Fermin, dated October 25, 2001 (see below).

10.7    Consulting Agreement between the Registrant and Marcelina
        Ramos, dated October 25, 2001 (see below).

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