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 MARCH 31, 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.)

                    Calle Fantino Falco, J.A. Baez Building,
                  2nd Floor, Santo Domingo, Dominican Republic
                  --------------------------------------------
                    (Address of Principal Executive Offices)

                                 (809) 368-2001
                          ----------------------------
                          (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    .
                                       ----   ----

         As of March 31, 2005, the Company had 96,910,634 shares of common stock
issued and outstanding.

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

                                       1

<PAGE>

                                TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION                                              PAGE

         ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

                 CONDENSED CONSOLIDATED BALANCE
                 SHEET AS OF MARCH 31, 2005...................................3

                 CONDENSED CONSOLIDATED STATEMENTS OF
                 OPERATIONS FOR THE THREE AND NINE MONTHS
                 ENDED MARCH 31, 2005 AND MARCH 31, 2004......................4

                 CONDENSED CONSOLIDATED STATEMENTS
                 OF CASH FLOWS FOR THE NINE MONTHS ENDED
                 MARCH 31, 2005 AND MARCH 31, 2004............................5

                 NOTES TO CONDENSED CONSOLIDATED
                 FINANCIAL STATEMENTS.........................................7

         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS..............17

         ITEM 3.  CONTROLS AND PROCEDURES....................................33

PART II - OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS..........................................34

         ITEM 2.  UNREGISTERED SALES OF EQUITY
                  SECURITIES AND USE OF PROCEEDS.............................35

         ITEM 3.  DEFAULTS UPON SENIOR SECURITIES............................36

         ITEM 4.  SUBMISSION OF MATTERS TO A VOTE
                  OF SECURITY HOLDERS........................................36

         ITEM 5.  OTHER INFORMATION..........................................36

         ITEM 6.  EXHIBITS...................................................37

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

                                       2

<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS.

                         FREESTAR TECHNOLOGY CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 2005
                                   (UNAUDITED)

                                     ASSETS

Current assets:
   Cash and cash equivalents                                       $  206,906
   Accounts receivable, net of allowance for
      doubtful accounts of $39,644                                    190,329
   Other current assets                                               122,514
                                                                   ----------

         Total current assets                                         519,749

Property, plant and equipment, net of accumulated
   depreciation and amortization                                       83,928
Software license, net of accumulated amortization                   1,734,594
Customer relationships and contracts, net of
   accumulated amortization                                         1,649,630
Software, net of accumulated amortization                           1,090,062
                                                                   ----------

             Total assets                                          $5,077,963
                                                                   ----------

          LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Demand loans                                                       900,000
   Accounts payable and accrued expenses                              895,500
   Due to related parties for advances                                184,208
   Accrued salaries - officers                                        196,053
                                                                   ----------

         Total current liabilities                                  2,175,761
                                                                   ----------
Commitments and contingencies
Stockholders' Equity:
   Convertible preferred stock, series A, $0.001
      par value, 1,000,000 shares  authorized;
      1,000,000 shares issued and outstanding                           1,000
   Convertible preferred stock, series B, $0.001
      par value, 4,000,000 shares  authorized;
      2,500,000 shares issued and outstanding                           2,500
Additional paid-in capital - preferred stock                        2,229,558
Common stock, $0.001 par value, 500,000,000 shares
   authorized; 96,910,634 shares issued and outstanding                96,911
Additional paid-in capital - common stock                          35,049,554
Share cancellation receivable                                      (2,434,628)
Subscription receivable                                              (698,693)
Deferred compensation                                                (604,943)
Accumulated deficit                                               (30,753,473)
Accumulated other comprehensive gain  (loss)                           14,416
             Total stockholders' equity                             2,902,202
                                                                   ----------

                                                                   $5,077,963
                                                                   ==========

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

                                       3

<PAGE>

                         FREESTAR TECHNOLOGY CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                               Three Months    Three Months     Nine Months     Nine Months
                                                  Ended           Ended           Ended            Ended
                                                 March 31,       March 31,       March 31,       March 31,
                                                   2005            2004            2005            2004
                                               ------------    ------------    ------------    ------------
<S>                                            <C>             <C>             <C>             <C>
Revenue                                        $    412,778    $    329,659    $  1,203,502    $    991,033
Cost of revenue                                     359,071         334,555         787,366         769,990
                                               ------------    ------------    ------------    ------------

Gross profit                                         53,707          (4,896)        416,136         221,043

Non-cash compensation                             6,309,450         814,051       7,582,642       2,457,459
Selling, general and administrative expenses        498,912         610,560       1,914,743       1,926,516
Loss on investment                                       --         100,000              --         100,000
                                               ------------    ------------    ------------    ------------

Loss from operations                             (6,754,655)     (1,529,507)     (9,081,249)     (4,262,932)

Gain on extinguishment of debt                           --         727,459              --         727,459
Gain on legal settlement                            350,000              --         350,000              --
Loss on disposal of assets                           (1,371)             --          (1,371)             --
Interest income (expense)                            (7,474)           (926)         (9,378)        (33,387)
                                               ------------    ------------    ------------    ------------

Net Loss                                         (6,413,501)       (802,974)     (8,741,999)     (3,568,860)

Other comprehensive income (loss)                   (41,112)         29,445          23,831         155,341
                                               ------------    ------------    ------------    ------------

Comprehensive loss                             $ (6,454,613)   $   (773,529)   $ (8,718,168)   $ (3,413,519)
                                               ============    ============    ============    ============

Loss per share - basic and diluted             $      (0.08)   $      (0.01)   $      (0.13)   $      (0.07)
                                               ============    ============    =============   ============
Weighted average shares outstanding -
    basic and diluted                            81,807,128      61,083,237      69,408,410      48,368,239
                                               ============    ============    =============   ============
</TABLE>

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

                                       4

<PAGE>

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

<TABLE>
<CAPTION>
                                                                     Nine Months    Nine Months
                                                                       Ended          Ended
                                                                      March 31,      March 31,
                                                                        2005           2004
                                                                    -----------    -----------
<S>                                                                 <C>            <C>
Cash flows from operating activities:
   Net loss                                                         $(8,741,999)   $(3,568,860)
      Adjustments  to  reconcile  net loss to net cash
         provided  by (used for) operating activities:
             Gain on extinguishment of debt                                  --       (727,459)
             Gain on legal settlement                                  (350,000)            --
             Loss on investment                                              --        100,000
             Loss on sales of fixed assets                                1,371             --
             Depreciation and amortization                              470,453        416,798
             Non-cash compensation                                    7,582,642      2,457,459
      Changes in assets and liabilities:
         (Increase) decrease in assets
             Accounts receivable                                        (28,347)       (13,860)
             Prepaid expenses                                                --        114,053
             Other current assets                                            --       (125,363)
             Other assets                                              (102,411)         3,162
         Increase (decrease) in liabilities
             Accounts payable and accrued expenses                     (341,344)       270,223
             Deferred revenue                                                --        (31,404)
             Due to shareholders                                        196,053             --
                                                                    -----------    -----------

                Total adjustments                                     7,428,417      2,463,609
                                                                    -----------    -----------

                Net cash used in operating activities                (1,313,582)    (1,105,251)
                                                                    -----------    -----------
Cash flows from investing activities:
      Purchase of fixed assets                                          (50,258)            --
      Cash from sale of fixed assets                                      4,054             --
      Purchase of software and capitalized software cost               (326,438)      (522,821)
      Deposit on acquisition of Unipay, Inc.                                 --        (25,000)
      Investment in TransAxis, Inc.                                          --        (75,000)
                                                                    -----------    -----------

                Net cash used in investing activities                  (372,642)      (622,821)
                                                                    -----------    -----------
Cash flows from financing activities:
      Repayment of line of credit                                            --         (5,091)
      Proceeds from issuance of demand loans                            900,000             --
      Proceeds from sale of common stock                                     --      1,554,616
      Proceeds from exercise of stock options/warrants                  804,000        307,500
      Advances (repayments) from related party, net                     192,086       (191,642)
                                                                    -----------    -----------

                Net cash provided by financing activities             1,896,086      1,665,383
                                                                    -----------    -----------
</TABLE>

                                       5

<PAGE>

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

<TABLE>
<CAPTION>
                                                                    Nine Months    Nine Months
                                                                      Ended          Ended
                                                                     March 31,      March 31,
                                                                       2005           2004
                                                                    -----------    -----------
<S>                                                                <C>           <C>
Net increase (decrease) in cash and cash equivalents                    209,862        (62,689)
Foreign currently translation adjustments                              (209,161)        21,188
Cash and cash equivalents, beginning of period                          206,205        264,423
                                                                    ===========    ===========

Cash and cash equivalents, end of period                            $   206,906    $   222,922
                                                                    ===========    ===========
Supplemental disclosure of cash flow information:
       Interest paid                                                $        --    $    23,795
                                                                    ===========    ===========

       Income tax paid                                              $        --    $        --
                                                                    ===========    ===========

       Effect of reverse split of common stock                      $   410,112    $        --
                                                                    ===========    ===========

       Shares and warrants and options - issued for services        $   586,558    $ 2,457,459
                                                                    ===========    ===========

       Expensing of deferred services                               $ 1,296,084    $        --
                                                                    ===========    ===========

       Cancellation of shares of common stock                       $   500,000
                                                                    ===========

       Issuance of 20 million shares of common stock to officers    $ 4,600,000
                                                                    ===========

       Issuance of options to officers                              $ 1,100,000
                                                                    ===========

       Gain on extinguishment of debt                               $   727,459
                                                                    ===========

       Gain on legal settlement                                     $   350,000
                                                                    ===========

       Loss on investment                                                          $   100,000
                                                                                   ===========
       Issuance of 8,383,418 shares for
          investment in TransAxis, Inc.                                            $ 1,431,028
                                                                                   ===========
</TABLE>

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

                                       6

<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, 2004. In the opinion of management,  these condensed consolidated
financial  statements  reflect all adjustments  which are of a normal  recurring
nature and which are necessary to present  fairly the financial  position of the
Company as of March 31, 2005, the results of operations for the  three-month and
nine-month  periods  ended March 31, 2005 and 2004,  and cash flows for the nine
months  ended  March 31,  2005 and  2004.  The  results  of  operations  for the
nine-month  period ended March 31, 2005 are not  necessarily  indicative  of the
results that may be expected for the entire fiscal year.

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 increase its operations from its core payment  processing
products,  which include:  (1) Authorization:  transaction fees it receives from
processing online point of sale terminal transactions; (2) Sale of Point of Sale
Solutions:  sales  of  "Point  of Sale"  terminals  as well as  integrated  cash
register  systems;  (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.

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  continuation  of the  Company as a going  concern.
However,  the Company has reported a net loss of $8,741,999  for the nine months
ended March 31, 2005 and $6,335,273 for the year ended June

                                       7

<PAGE>

30, 2004,  and had an  accumulated  deficit of $30,753,473 as of March 31, 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 revenue when products are shipped or services provided to
its customers.  Provisions for discounts and other  adjustments are provided for
in the same period the related revenue is recorded.

Processing  fee revenue is earned based upon the actual  number of  transactions
processed  through  its  processing  system.  Transaction  processing  fees  are
recognized in the period that the service is  performed.  These fees are charged
on a per transaction  basis,  depending on the  arrangement  with the customers.
Pre-billing for the estimated number of transactions processed in the future was
classified as deferred revenue.

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  Statement  of
Financial  Accounting  Standards  ("SFAS") No. 123,  "Accounting for Stock-Based
Compensation."  Under APB Opinion No. 25,  compensation cost recognized over the
vesting period based on the excess,  if any, on the grant date of the fair value
of the Company's  shares over the employee's  exercise price.  When 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  Financial  Accounting

                                       8

<PAGE>

Standards  Board ("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
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."  This statement amends SFAS No. 123 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  the  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 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:

<TABLE>
<CAPTION>
                                     Three Months Ended             Nine Months Ended
                                          March 31,                    March 31,
                                    2005           2004           2005           2004
                                -----------    -----------    -----------    -----------
<S>                             <C>            <C>            <C>            <C>
Net loss, as reported           $(6,413,501)   $  (802,974)   $(8,741,999)   $(3,568,860)

Compensation recognized
Under APB Opinion No. 25          1,100,000             --      1,100,000             --

Compensation recognized under
SFAS No. 123                     (1,100,019)            --     (1,100,019)            --
                                -----------    -----------    -----------    -----------

Pro forma net loss              $(6,413,520)   $  (802,974)   $(8,742,018)   $(3,568,860)
                                ===========    ===========    ===========    ===========

Pro forma loss per share        $     (0.08)   $     (0.01)   $     (0.13)   $     (0.07)
                                ===========    ===========    ===========    ===========
</TABLE>

CAPITALIZED SOFTWARE DEVELOPMENT COSTS.

In accordance with 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

                                       9

<PAGE>

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 June 30, 2004, the Company capitalized $458,522 of software development in
accordance  with SFAS No. 86.  During the nine months ended March 31, 2005,  the
Company placed into service $148,341, and capitalized an additional $266,776. As
of March 31, 2005, the Company has  capitalized a net amount of $576,957 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 years. These costs have been  substantially  amortized as
of March 31, 2005.

RECENT ACCOUNTING PRONOUNCEMENTS.

In November 2004, the FASB issued SFAS No. 151,  "Inventory Costs - An Amendment
of ARB No. 43,  Chapter 4." This  Statement  amends the  guidance in ARB No. 43,
Chapter 4, "Inventory  Pricing," to clarify the accounting for abnormal  amounts
of  idle  facility  expense,   freight,  handling  costs,  and  wasted  material
(spoilage).  Paragraph 5 of ARB No. 43, Chapter 4, previously stated that "under
some  circumstances,  items such as idle facility expense,  excessive  spoilage,
double freight,  and rehandling costs may be so abnormal as to require treatment
as  current  period  charges."  This  Statement  requires  that  those  items be
recognized  as  current-period  charges  regardless  of  whether  they  meet the
criterion of "so abnormal." In addition, this Statement requires that allocation
of fixed production  overheads to the costs of conversion be based on the normal
capacity of the production facilities. This Statement is effective for inventory
costs incurred  during fiscal years  beginning  after June 15, 2005.  Management
does not believe the adoption of this Statement will have any immediate material
impact on the Company.

In December 2004, the FASB issued SFAS No. 123 (revised), "Share-Based Payment."
SFAS No. 123R  eliminates  the intrinsic  value method under APB Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees"  as  an  alternative  method  of
accounting  for  stock-based  awards.  SFAS  No.  123R  also  revises  the  fair
value-based   method  of  accounting  for   share-based   payment   liabilities,
forfeitures and modifications of stock-based awards and clarifies SFAS No. 123's
guidance in several areas, including measuring fair value,  classifying an award
as equity or as a  liability  and  attributing  compensation  cost to  reporting
periods.  In  addition,  SFAS No. 123R amends  SFAS No. 95,  "Statement  of Cash
Flows," to require  that excess tax  benefits  be  reported

                                       10

<PAGE>

as a financing  cash inflow  rather than as a reduction of taxes paid,  which is
included within  operating cash flows. The Company is required to adopt SFAS No.
123R for the interim period  beginning July 1, 2005 using a modified  version of
prospective   application   or  may  elect  to  apply  a  modified   version  of
retrospective  application.  The Company currently  accounts for its stock-based
awards under the intrinsic  value approach in accordance with APB Opinion No. 25
and  discloses  the effect of  stock-based  awards as  required by SFAS No. 148,
"Accounting for Stock-Based  Compensation  -- Transition and  Disclosure.".  The
adoption of the new standard would require the Company to recognize compensation
expense  for  equity-based  awards.  This will have the effect of  reducing  the
Company's net income by the fair value of the options in future years, beginning
in 2005.  Management is not in a position to know the effects of adoption of the
new standard at this time.

On December  16,  2004,  FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,  An  Amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions."  This Statement  amends APB Opinion 29 to eliminate the exception
for nonmonetary  exchanges of similar  productive  assets and replaces it with a
general  exception  for  exchanges  of  nonmonetary  assets  that  do  not  have
commercial  substance.  Under SFAS No. 153, if a nonmonetary exchange of similar
productive  assets  meets a  commercial-substance  criterion  and fair  value is
determinable,  the transaction  must be accounted for at fair value resulting in
recognition  of any gain or loss.  SFAS No.  153 is  effective  for  nonmonetary
transactions  in fiscal periods that begin after June 15, 2005. The Company does
not  anticipate  that the  implementation  of this standard will have a material
impact on its financial position, results of operations or cash flows

2. DEMAND LOAN

During the three months ended March 31, 2005, the Company received the aggregate
amount of $900,000 from investors under a non-interest  bearing demand loan. The
Company  expects to convert these funds to equity during the three months ending
June 30, 2005.

3. COMMON STOCK

REVERSE STOCK-SPLIT.

Effective  November 8, 2004, the Company  implemented a 1-for-7 reverse split of
its common stock. All references to the financial  statements and notes thereto,
numbers  of  shares  and share  amounts  outstanding,  have  been  retroactively
restated to reflect the reverse stock-split.

ISSUANCE OF COMMON STOCK FOR SERVICES.

During the nine  months  ended March 31,  2005,  the  Company  entered  into the
following transactions

The Company  issued  242,857  shares  (post  reverse-split)  of its common stock
registered  under Form S-8 at $0.56 per share to various  consultants  and legal
counsel for current and future

                                       11

<PAGE>

services for a value of $136,000.

The Company  issued  142,857  shares  (post  reverse-split)  of its common stock
registered  under Form S-8 at $0.49 per share to a  consultant  for  current and
future services for a value of $70,000.

The Company  issued  200,000  shares  (post  reverse-split)  of its common stock
registered  under Form S-8 at $0.237 per share to a  consultant  for current and
future services for a value of $47,358.

The Company  issued  200,000  shares  (post  reverse-split)  of its common stock
registered  under  Form  S-8 at $0.39  per  share to a  consultant  for  current
services for a value of $78,000.

The Company  issued  300,000  shares  (post  reverse-split)  of its common stock
registered  under  Form  S-8 at $0.29  per  share to a  consultant  for  current
services for a value of $87,000.

The Company  issued  85,715  shares  (post  reverse-split)  of its common  stock
registered  under  Form  S-8 at $0.28  per  share to a  consultant  for  current
services for a value of $24,000.

The Company  issued  71,248  shares  (post  reverse-split)  of its common  stock
registered  under  Form  S-8 at $0.27  per  share to a  consultant  for  current
services for a value of $19,237.

The Company  issued  200,000  shares  (post  reverse-split)  of its common stock
registered  under  Form  S-8 at $0.24  per  share to a  consultant  for  current
services for a value of $48,000.

The Company  issued  350,000  shares (post  reverse-split)  of its  unregistered
common  stock at $0.24 per share to a  consultant  for  services  to be provided
through February 2006 for a value of $84,000.

The Company  issued  350,000  shares (post  reverse-split)  of its  unregistered
common  stock at $0.21 per share to a  consultant  for  services  to be provided
through February 2006 for a value of $73,500.

The Company  issued  250,000  shares  (post  reverse-split)  of its common stock
registered  under  Form  S-8 at $0.31  per  share to a  consultant  for  current
services for a value of $77,500.

The Company  issued  250,000  shares  (post  reverse-split)  of its common stock
registered  under  Form  S-8 at $0.31  per  share to a  consultant  for  current
services for a value of $77,500.

The Company  issued  50,000  shares  (post  reverse-split)  of its common  stock
registered  under  Form  S-8 at $0.28  per  share to a  consultant  for  current
services for a value of $14,000.

The Company issued  20,000,000  shares (post  reverse-split) of its unregistered
common stock at $0.23 per share to officers for services to be provided  through
January 2010 for a value of $4,600,000. This amount was charged to subscriptions
receivable during the nine months ended March 31, 2005.

                                       12

<PAGE>

The Company issued  5,000,000  shares (post  reverse-split)  of its unregistered
common  stock for options  exercised  by its  officers  at $0.01.  The amount of
$50,000 was charged to stock options receivable.

Also during the nine months ended March 31, 2005,  the Company issued options to
consultants  to purchase  2,142,857  shares of common stock at a price of $0.175
per  share.   The  fair  value  of  these  options  was  calculated   using  the
Black-Scholes  pricing  model,  and  the  amount  of  $255,200  was  charged  to
operations during the nine months ended March 31, 2005.

Also during the nine months ended March 31, 2005,  the Company issued options to
purchase  5,000,000  shares of common stock at a price of $0.01 per share to its
officers.  The intrinsic value of these options was calculated as the difference
between the market  value at the time of the grant and the exercise  price,  and
the amount of $1,100,000 was charged to operations  during the nine months ended
March 31, 2005. These options were immediately exercised.

Also during the nine months ended March 31, 2005,  deferred  compensation in the
amount of $1,296,084 was charged to operations.

All  valuations of common stock and options  issued for services were based upon
the value of the services  rendered,  which did not differ  materially  from the
fair value of the  Company's  common stock  during the period the services  were
rendered.

RECOVERY OF SHARES ISSUED IN ERROR.

During the nine months ended March 31, 2005, the Company recovered 142,857 (post
reverse-split)  shares of common stock valued at $150,000  previously  issued in
error.

SHARES RECOVERED IN LEGAL SETTLEMENT.

During the nine months  ended March 31,  2005,  the  Company  recovered  714,285
shares of its common stock through a legal dispute with a service provider.  The
Company  cancelled  these  shares,  and the amount of $350,000  was  credited to
operations during the nine months ended March 31, 2005.

SALE OF COMMON STOCK.

During the nine months ended March 31, 2005,  the Company  received  $429,000 in
cash relating to stock options exercised during the twelve months ended June 30,
2004. No cash was received at the time of the exercise. The total exercise price
of these options was $500,000  representing the purchase of 10,000,000 shares of
the Company's restricted common stock. At March 31, 2005, the amount of $429,000
has  been  collected  for  this  options   exercise,   and  $71,000  remains  in
subscriptions receivable.  Also during the nine months ended March 31, 2005, the
Company  received  an  additional  $375,000 in cash  relating  to stock  options
exercised during the nine months ended March 31, 2005.

                                       13

<PAGE>

4. 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,  which  are  eliminated  in  consolidation  and
therefore, do not themselves impact consolidated results.

<TABLE>
<CAPTION>
                                                Three Months Ended          Nine Months Ended
                                                     March 31,                  March 31,
                                           ---------------------------------------------------------
                                              2005           2004           2005           2004
                                           -----------    -----------    -----------    -----------
<S>                                        <C>            <C>            <C>            <C>
Sales to external customers:
PaySafe                                    $        --    $        --    $        --    $        --
Rahaxi                                         412,778        329,659      1,203,502        991,033
                                           -----------    -----------    -----------    -----------
Total sales to external customers:         $   412,778    $   329,659    $ 1,203,502    $   991,033
                                           ===========    ===========    ===========    ===========
Depreciation and amortization:
PaySafe                                    $    16,865    $    17,462    $    40,440    $    76,713
Rahaxi                                         144,381         23,138        412,216        222,109
                                           -----------    -----------    -----------    -----------
Total depreciation and amortization:       $   161,246    $    40,600    $   452,656    $   298,822
                                           ===========    ===========    ===========    ===========
General and administrative expense:
PaySafe                                    $   148,930    $   489,319    $   932,255    $ 1,449,428
Rahaxi                                         188,736         80,641        529,832        218,866
                                           -----------    -----------    -----------    -----------
Total general and administrative expense   $   337,666    $   569,960    $ 1,462,087    $ 1,668,294
                                           ===========    ===========    ===========    ===========
Capital expenditures:
PaySafe                                    $    10,142    $     2,725    $    35,913    $    31,271
Rahaxi                                          99,953        122,779        342,155        491,550
                                           -----------    -----------    -----------    -----------
Total capital expenditures                 $   110,095    $   125,504    $   378,068    $   522,821
                                           ===========    ===========    ===========    ===========
Net income (loss):
PaySafe                                    $(2,511,132)   $(1,443,970)   $(4,616,654)   $(4,979,279)
Rahaxi                                        (135,029)       (85,537)      (356,101)      (192,653)
                                           -----------    -----------    -----------    -----------
Total operating income (loss)              $(2,646,161)   $(1,529,507)   $(4,972,755)   $(5,171,932)
                                           ===========    ===========    ===========    ===========
Segment assets:
PaySafe                                    $    88,348    $   168,721    $    88,348    $   168,721
Rahaxi                                       4,989,515      4,957,625      4,989,515      4,957,625
                                           -----------    -----------    -----------    -----------
Total segment assets                       $ 5,077,963    $ 5,163,705    $ 5,077,963    $ 5,163,705
                                           ===========    ===========    ===========    ===========
</TABLE>

                                       14

<PAGE>

5. RELATED PARTY TRANSACTIONS

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
March 31,  2005,  the  Company  has  recorded  the amount of $113,253 in accrued
salary due to Mr. Egan.  This amount is shown as Accrued  Salaries - Officers in
the accompanying Consolidated Condensed Balance Sheet as of March 31, 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 March 31,  2005,  the  Company has  recorded  the amount of
$82,800  in  accrued  salary due to Mr.  Egan.  This  amount is shown as Accrued
Salaries - Officers in the accompanying  Consolidated Condensed Balance Sheet as
of March 31, 2005.

ADVANCES BY RELATED PARTIES.

Paul Egan has advanced funds to the Company for its operations.  The Company was
indebted to the Mr. Egan for  $22,658 at June 30,  2004.  During the nine months
ended March 31,  2005,  Mr. Egan  advanced  the Company an  additional  $118,153
(net).  At March 31, 2005, the Company is indebted to Mr. Egan in the net amount
of $156,278,  including interest of $15,467.  The entire amount of principal and
interest is shown in the Due To Related Parties For Advances in the accompanying
Condensed  Consolidated  Balance  Sheet as of March 31,  2005.  Interest  on the
unpaid balances is accrued at the rate of 7% per annum.

Ciaran Egan has advanced  funds to the Company for its  operations.  The Company
was  indebted to Mr. Egan for $30,178 at June 30,  2004.  During the nine months
ended March 31, 2005, the Company  repaid Mr. Egan the net amount of $3,501.  At
March 31,  2005,  the  Company  is  indebted  to Mr.  Egan in the net  amount of
$27,930,  including  interest  of $1,253.  The entire  amount of  principal  and
interest  is shown in Due To Related  Parties For  Advances in the  accompanying
Condensed  Consolidated  Balance  Sheet as of March 31,  2005.  Interest  on the
unpaid balances is accrued at the rate of 7% per annum.

STOCK ISSUANCES.

On February 21, 2005, the Company issued 20,000,000 shares (post  reverse-split)
of its unregistered common stock at $0.23 per share to Messrs. Egan for services
to be provided  through January 2010 for a value of $4,600,000.  This amount was
charged to subscriptions receivable during the nine months ended March 31, 2005.

On February 21,  2005,  the Company  also issued  options to purchase  5,000,000
shares  of  common  stock at a price  of $0.01  per  share to  Messrs.  Egan for
services to be rendered to the Company.

                                       15

<PAGE>

The intrinsic  value of these options was calculated as the  difference  between
the market value at the time of the grant and the exercise price, and the amount
of $1,100,000  was charged to operations  during the nine months ended March 31,
2005.  These options were  immediately  exercised  into  5,000,000  shares (post
reverse-split)  of its  registered  common  stock for options  exercised  by its
officers  at $0.01  under the  Company's  Stock  Incentive  Plan.  The amount of
$50,000 was charged to stock options receivable.

Finally,  on February 21, 2005,  the Company  issued a total of 1,500,000 of its
Series B  preferred  stock to Messrs.  Egan for  services  to be rendered to the
Company.

6. CHANGE IN PRIOR PERIOD

During the audit of the  Company's  financial  statements  for the twelve months
ended June 30, 2004,  the Company made an  accounting  adjustment  for a certain
transaction  that occurred during the three months ended September 30, 2003. The
Company  sold  15,700,000  restricted  shares  of common  stock to a  previously
unaffiliated third party at $0.01 per shares. The Company originally charged the
difference between the sales price of the stock and the market price of $909,000
to non-cash  compensation.  This adjustment  reverses the charge to expense,  in
order to maintain  consistency in the manner which similar transactions had been
recorded.  The result of this adjustment was a decrease in non-cash compensation
expense of $909,000 and a  corresponding  decrease in the net less for the three
months ended  September  30, 2003 and nine months ended March 31, 2004.  The net
effects  of the  adjustment  for the nine  months  ended  March 31,  2004 are as
follows:

                                    Nine Months
                                  Ended March 31,
                                      2004
                          ---------------------------
                          As Originally
                             Reported       Restated
                          ---------------------------
Non-cash compensation     $  3,366,459    $ 2,457,459
                          ============    ===========

Net loss                  $ (4,477,861)   $(3,568,860)
                          ============    ===========
Loss per share -
      basic and diluted   $      (0.07)   $     (0.07)
                          ============    ===========

                                       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 unaudited condensed  consolidated financial statements and
related notes included  elsewhere in this Form 10-QSB,  which have been prepared
in  accordance  with  accounting  principles  generally  accepted  in the United
States.

OVERVIEW.

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

            The  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 increase its operations from its core payment
processing  products,  which  include:  (1)Authorization:  transaction  fees  it
receives from processing online point of sale terminal transactions; (2) Sale of
Point of Sale Solutions:  sales of Point of Sale terminals as well as integrated
cash register  systems;  (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 12 months  ended June 30,  2004 was
primarily generated from the transaction 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

                                       17

<PAGE>

quickly and easily to changing  business  needs,  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.

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

            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 Santo  Domingo,  Dominican
Republic; the Company also has offices in Helsinki,  Finland;  Dublin,  Ireland;
and Geneva,  Switzerland.  While the Company's  offices in Finland,  Ireland 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;  representatives  of the company  have visited  China,  the
introductions being hosted and arranged by Xinhua Financial Network.

            Effective November 8, 2004, the Company  implemented a one for seven
reverse  split  of  its

                                       18

<PAGE>

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."

RESULTS OF  OPERATIONS  - THREE  MONTHS  ENDED MARCH 31, 2005  COMPARED TO THREE
MONTHS ENDED MARCH 31, 2004.

(a)         REVENUE.

            The Company  reported revenue of $412,778 for the three months ended
March 31, 2005  compared to $329,659  for the three months ended March 31, 2004,
an increase of $83,119 or approximately 25%. The increase was due to an increase
in processing fees generated by the Company's subsidiary,  Rahaxi Processing Oy.
The Company  expects this trend to continue  throughout  the remainder of fiscal
2005 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 March 31,  2005,  the Company  processed
3,494,013  transactions,  an increase of 442,353, or approximately 14%, over the
3,049,760  transactions  that were processed in the  corresponding  period ended
March 31,2004.

            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.  The Company believes
that  it  will  derive  a  higher  price  per  transaction  for  processing  EMV
transactions  as  compared  to non-EMV  transactions;  however,  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."

            The  majority of the  Company's  revenue for the three  months ended
March 31, 2005 was from indirect merchant  services,  where revenue is generated
on services primarily priced on a specified amount per transaction.  The Company
believes  that for the  remainder  of fiscal  2005 it will also  begin to derive
revenue from direct  merchant  services,  which revenue is generated on services
primarily  priced as a percentage of the transaction  value. The majority of the
Company's  revenue for the three months ended March 31, 2005 was also  generated
from indirect merchant services.

            A  significant  percentage  of the  Company's  revenue for the three
months  ended  March 31,  2005 has been  derived  from a  limited  number of its
customers,  primarily Finnish customers for its transaction processing products.
Approximately  55% of the Company's  total revenue was  attributable  to its ten
largest  customers.  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  2005.  The Company  believes  that this  customer
concentration  will be diluted in the second  half of fiscal  2006 as it pursues
operations outside of Finland.  The majority of Company's revenues for the three
months ended March 31, 2005 have been generated by its operations outside of the

                                       19

<PAGE>

United  States,  and its future growth rate is, in part,  dependent on continued
growth in  international  markets.  The Company  expects  this trend to continue
through the remainder of fiscal year 2005.

(b)         COST OF REVENUE.

            Cost of revenue was  $359,071  for the three  months ended March 31,
2005,  compared to  $334,555  for the three  months  ended  March 31,  2004,  an
increase of $24,516 or approximately  7%. The increase in cost of revenue is due
in part to continued  investment in its technical  infrastructure  and hiring of
additional staff.

            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.

(c)         NON-CASH COMPENSATION.

            The Company reported  non-cash  compensation of $6,309,450 for three
months  ended March 31, 2005  compared to $814,051  for the three  months  ended
March 31, 2004,  an increase of  $5,495,399 or  approximately  675%.  During the
three  months  ended  March 31,  2005,  the  Company's  president  and its chief
financial officer were paid compensation under their employment contracts, which
were amended in August 2004. As partial  consideration  for these renewals,  the
Company  granted  to these  two  officers  a total of (i)  20,000,000  shares of
restricted  common  stock,  valued at  $4,600,000;  and (ii) options to purchase
5,000,000  shares  of  common  stock at a price of $0.01  per  share,  valued at
$1,100,000. The aggregate fair value of the stock and option grants to these two
officers  was  $5,700,000,  and  the  Company  charged  this  entire  amount  to
operations during the three months ended March 31, 2005.

         The Company does not expect to incur  significant  additional  non-cash
compensation  to its  president  and its chief  financial  officer in the coming
twelve months.  However, the Company does expect non-cash  compensation to other
employees and to  consultants to increase  during the coming twelve months.  The
Company's  expected  continued  expansion in its various geographic markets will
create a growing need for local  consultants and advisors that will be satisfied
in large part via  non-cash  compensation.  Management  intends to  continue  to
utilize non-cash  compensation in order to conserve cash, and until such time as
it is able to satisfy its cash needs through its operations

(d)         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

            Selling,  general, and administrative expenses were $498,912 for the
three  months  ended March 31,  2005,  compared to $610,560 for the three months
ended March 31, 2004,  a decrease of $111,648 or  approximately  18%.  While the
Company  continued  to add to its  product  capabilities,  it  benefited  from a
reduction in  accounting  and legal fees during the period ended March 31, 2005,
compared to the comparable period in the prior year.

                                       20

<PAGE>

            During the three months ended March 31, 2005, the primary components
of selling, general, and administrative expenses were: legal and accounting fees
of approximately $35,000;  payroll and employee costs of approximately $172,000;
depreciation and amortization expense of approximately $162,053;  facility costs
(rent, telephone, utilities, and building maintenance) of approximately $68,990;
and consulting fees of approximately $35,000.  The Company also recorded a gain
on legal settlement of $350,000 during the three months ended March 31, 2005

            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.

(e)         GAIN ON LEGAL SETTLEMENT

            During the three months ended  March 31, 2005, the  Company recorded
a non-recurring  gain of $350,000  representing the recovery and cancellation of
714,286  shares of common  stock  which had been issued as  compensation  to its
prior investment  banker.  The gain was recorded at the fair value of the shares
when they were originally issued. There was no such gain during the three months
ended March 31, 2004.

(f)         GAIN ON EXTINGUISHMENT OF DEBT

            During the three months ended March 31, 2004, the Company recorded a
non-recurring  gain of  $727,459  representing  settlement  of a dispute  with a
lender. There was no such gain during the three months ended March 31, 2005.

(g)         INTEREST EXPENSE.

            The Company reported net interest expense of $7,474 during the three
months ended March 31, 2005,  compared to interest expense of $926 for the three
months ended March 31, 2004, an increase of $6,548 or approximately 707%. Higher
interest  expense  was due to higher  borrowing  levels  during the most  recent
quarter.

            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.

(h)         NET LOSS.

            For the reasons  stated  above,  the Company  recorded a net loss of
$6,413,501  for the three months  ended March 31, 2005  compared to $802,974 for
the  three  months  ended  March  31,  2004,   an  increase  of   $5,610,527  or
approximately 700%.

            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.

                                       21

<PAGE>

            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 2005.

RESULTS OF OPERATIONS - NINE MONTHS ENDED MARCH 31, 2005 COMPARED TO NINE MONTHS
ENDED MARCH 31, 2004.

(a)         REVENUE.

            The Company reported revenue of $1,203,502 for the nine months ended
March 31, 2005 compared to $991,033 for the nine months ended March 31, 2004, an
increase of $212,569 or  approximately  21%. The primary reason for the increase
in revenue is directly related to the increase in transactions  processed by the
Company during the period. For the nine months ended March 31, 2005, the Company
processed 11,539,873  transactions,  an increase of 1,883,446,  or approximately
19%, over the 9,656,427  transactions that were processed during the nine months
ended March 31, 2004.

(b)         COST OF REVENUE.

            Cost of revenue was  $787,366  for the nine  months  ended March 31,
2005  compared to $769,990 for the nine months ended March 31, 2004, an increase
of $17,376 or  approximately  2%. The increase in cost of revenue is due in part
to the Company hiring of additional  staff and servicing the increased volume of
business.

(c)         NON-CASH COMPENSATION.

            The Company  reported  non-cash  compensation  of $7,582,642 for the
nine  months  ended March 31, 2005  compared to  $2,457,459  for the nine months
ended March 31, 2004, an increase of $5,125,183 or  approximately  209%.  During
the nine months  ended March 31, 2005,  the  Company's  president  and its chief
financial officer renewed their employment  agreements for additional three-year
terms. As partial consideration for these renewals, the Company granted to these
two officers a total of (i) 20,000,000 shares of restricted common stock, valued
at $4,600,000;  and (ii) options to purchase 5,000,000 shares of common stock at
a price of $0.01 per share,  valued at  $1,100,000.  The aggregate fair value of
the  stock and  option  grants to these two  officers  was  $5,700,000,  and the
Company  charged this entire amount to  operations  during the nine months ended
March 31, 2005.

(d)         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.

            Selling,  general,  and administrative  expenses were $1,914,743 for
the nine months ended March 31, 2005, compared to $1,926,516 for the nine months
ended March 31, 2004, a decrease of $11,773 or  approximately  0.6%. The primary
components of these expenses were depreciation and amortization of approximately
$453,000;  payroll  and  related  costs of  approximately  $512,000;  legal  and
accounting  fees  of  approximately   $255,000;   travel  and  entertainment  of

                                       22

<PAGE>

approximately   $234,000;   consulting  fees  of  approximately   $115,000;  and
facilities expenses (rent, utilities,  telephone,  maintenance) of approximately
$113,000.

(e)         GAIN ON LEGAL SETTLEMENT

            During the nine months ended  March 31, 2005, the  Company  recorded
a non-recurring  gain of $350,000  representing the recovery and cancellation of
714,286  shares of common  stock  which had been issued as  compensation  to its
prior investment  banker.  The gain was recorded at the fair value of the shares
when they were originally issued.  There was no such gain during the nine months
ended March 31, 2004.

(f)         GAIN ON EXTINGUISHMENT OF DEBT

            During the nine months ended March 31, 2004,  the Company recorded a
non-recurring  gain of  $727,459  representing  settlement  of a dispute  with a
lender. There was no such gain during the nine months ended March 31, 2005.

(g)         INTEREST EXPENSE.

            The Company  recognized  net interest  expense of $9,378  during the
nine months ended March 31, 2005 compared to interest expense of $33,387 for the
nine months ended March 31, 2004, a decrease of $24,009 or  approximately  707%.
Lower  interest  expense was due to lower  levels of debt during the most recent
quarter. Pursuant to the vFinance settlement agreement, the Company reversed the
liability it had recorded to its president in the amount of $679,869,  which had
been  accruing  interest on this  amount at the rate of 7% per annum  during the
nine months ended March 31, 2004.

            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 case
interest expense would significantly increase.

(h)         NET LOSS.

            For the reasons  stated  above,  the Company  recorded a net loss of
$8,741,999  for the nine months ended March 31, 2005 compared to $3,568,860  for
the nine months ended March 31 2004, an increase of $5,173,139 or  approximately
145%.

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;

                                       23

<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 is not  successful in promoting its services and expanding
its  client  base,  this may have a  material  adverse  effect on its  financial
condition and the ability to continue to operate the business.

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

(a)         COMPETITION.

             The  market for  electronic  payment  systems  and  electronic  POS
systems is  intensely  competitive  and we expect  competition  to  continue  to
increase.  The  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 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

(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

                                       24

<PAGE>

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.

                                       25

<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 represents 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 a service  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 Company 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 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  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

                                       26

<PAGE>

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  2005 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 2005 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.

(g)         LITIGATION.

            As stated under Legal Proceedings, the Company is subject to certain
lawsuits  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  $1,313,582  for the
nine  months  ended March 31, 2005  compared to  $1,105,251  for the nine months
ended March 31,  2004,  an increase of  $208,331  or  approximately  18.8%.  The
decrease in cash for the current  period is  attributable

                                       27

<PAGE>

primarily  to the net  loss of  $8,741,999,  partially  offset  by the  non-cash
charges of $7,582,642 of non-cash  compensation and $470,453 of depreciation and
amortization.

INVESTING ACTIVITIES.

            Net cash used in investing  activities  decreased to $372,642 during
the three  months  ended March 31,  2005 as  compared to $622,821  for the three
months ended March 31, 2004, a decrease of $250,179 or  approximately  40%. This
change was primarily  due to decreased  investing by the Company in software and
capitalized software costs.

LIQUIDITY AND CAPITAL RESOURCES.

            As of March  31,  2005,  the  Company  had total  current  assets of
$519,749 and total current  liabilities  of  $2,175,761,  resulting in a working
capital  deficit of  $1,656,012.  The Company had cash and cash  equivalents  of
$209,906 at March 31, 2005. As of March 31, 2005, the Company had an accumulated
deficit  of  $30,753,473.  These  factors  raise  substantial  doubt  as to  the
Company's 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 retain its current  financing,  to
obtain additional financing, and ultimately attain profitability.

            Management  plans to continue raising  additional  capital through a
variety  of fund  raising  methods  during  2005  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.  In addition,  we will continue to seek additional funds to ensure our
successful growth strategy and to allow for potential investments into a diverse
portfolio  of  companies   with   strategic   information   and   communications
technologies  or  applications.  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

                                       28

<PAGE>

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
will 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 its operational
needs, the Company may seek to compensate providers of services by issuing stock
in lieu of cash, which will 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  $1,896,086  during the nine months  ended  March 31,  2005  compared to
$1,665,383  for the nine months ended March 31, 2004, an increase of $230,703 or
approximately  14%.  During the nine months  ended March 31,  2005,  the Company
received  $375,000 in cash relating to stock options exercised during the twelve
months  ended  June  30,  2004;  this  amount  was  credited  to   subscriptions
receivable.  At March 31,  2005,  there is also a balance  due of  $500,000  for
common stock sold in a prior period.

            The  independent  auditors  report  on our June 30,  2004  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

CERTAIN INDEBTEDNESS.

            Paul Egan has advanced funds to the Company for its operations.  The
Company was  indebted to the Mr. Egan for $22,658 at June 30,  2004.  During the
nine months ended March 31, 2005,  Mr. Egan  advanced the Company an  additional
$118,153  (net).  At March 31, 2005,  the Company is indebted to Mr. Egan in the
net amount of  $156,278,  including  interest of $15,467.  The entire  amount of
principal  and  interest is shown in the Due To Related  Parties For Advances in
the  accompanying  Condensed  Consolidated  Balance  Sheet as of March 31, 2005.
Interest on the unpaid balances is accrued at the rate of 7% per annum.

                                       29

<PAGE>

            Ciaran Egan has  advanced  funds to the Company for its  operations.
The Company was  indebted to Mr. Egan for $30,178 at June 30,  2004.  During the
nine months ended March 31, 2005,  the Company repaid Mr. Egan the net amount of
$3,501. At March 31, 2005, the Company is indebted to Mr. Egan in the net amount
of $27,930,  including  interest of $1,253.  The entire  amount of principal and
interest  is shown in Due To Related  Parties For  Advances in the  accompanying
Condensed  Consolidated  Balance  Sheet as of March 31,  2005.  Interest  on the
unpaid balances is accrued at the rate of 7% per annum.

            The  Company  expects to repay these  amounts as soon as  sufficient
cash flow from operations is generated.

ACCRUED SALARIES.

            Paul Egan has delayed payment of a portion of his salary in order to
conserve the  Company's  cash.  At March 31, 2005,  the Company has recorded the
amount of $113,253 in accrued  salary due to Mr.  Egan.  This amount is shown as
Accrued Salaries - Officers in the accompanying  Consolidated  Condensed Balance
Sheet as of March 31, 2005.

            Ciaran Egan has delayed  payment of a portion of his salary in order
to conserve the Company's  cash. At March 31, 2005, the Company has recorded the
amount of $82,800 in accrued  salary due to Mr.  Egan.  This  amount is shown as
Accrued Salaries - Officers in the accompanying  Consolidated  Condensed Balance
Sheet as of March 31, 2005.

EXCHANGE RATES.

            A  significant  portion of the  Company's  revenues  and expenses is
denominated in currencies other than U.S. dollars.  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 Rahaxi subsidiary,  operated in its local currency,  the Euro.
All assets and liabilities are translated at exchange rates in effect at the end
of the year.  Income statement  accounts are translated at average rates for the
year. Gains and losses from translation of foreign currency financial statements
into U.S. dollars are included in the accumulated  comprehensive  income (loss).
The accumulated foreign currency translation  adjustment is $14,416 at March 31,
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.


                                       30
<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 its 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 have any off-balance sheet arrangements.

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 Securities and Exchange  Commission ("SEC") has issued Financial
Reporting Release No. 60, "Cautionary Advice Regarding Disclosure About Critical
Accounting  Policies"  ("FRR  60"),   suggesting  companies  provide  additional
disclosure and commentary on their most critical accounting policies. In FRR 60,
the  Commission  has defined the most critical  accounting  policies as the ones
that are most important to the portrayal of a company's  financial condition and
operating  results,  and  require  management  to make  its most  difficult  and
subjective judgments, often as a result of the need to make estimates of matters
that are  inherently  uncertain.  Based on this  definition,  the Company's most
critical  accounting  policies  include:  (a) use of estimates;  (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.

            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.

(b)         STOCK-BASED COMPENSATION ARRANGEMENTS.

            The  Company  intends  to issue  shares of common  stock to  various
individuals  and  entities

                                       31

<PAGE>

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

            Processing  fee  revenue is earned  based upon the actual  number of
transactions  processed through its processing  system.  Transaction  processing
fees are recognized in the period that the service is performed.  These fees are
charged  on a per  transaction  basis,  depending  on the  arrangement  with the
customer.  Prebilling  for  estimated  number of  transactions  processed in the
future periods was classified as deferred revenue.

(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.

            Information   in  this  Form  10-QSB   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,  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 cash,  expectations
regarding net losses and cash flow,  statements  regarding our growth,  our need
for future financing, our dependence on personnel, and our operating expenses.

            Forward-looking   statements   are  subject  to  certain  risks  and
uncertainties  that could cause actual results to differ  materially  from those
projected.  These risks and uncertainties include, but are not limited to, those
discussed  above as well as risks set forth above under "Factors That May Affect
Our Results." These forward-looking statements speak only as of the date hereof.
The

                                       32

<PAGE>

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  ("Exchange  Act"))  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  (chief)  executive
officer and our principal (chief) financial  officer,  as appropriate,  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  (chief)  executive  officer and our principal  (chief)  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  (chief)  executive  officer and principal  (chief)  financial officer
concluded  that our  disclosure  controls and procedures are effective 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.

         Because  of  the  inherent  limitations  in  all  control  systems,  no
evaluation of controls can provide  absolute  assurance  that all control issues
and instances of fraud,  if any, will be or have been  detected.  These inherent
limitations  include the  realities  that  judgments in  decision-making  can be
faulty,  and that  breakdowns  can occur  because  of simple  error or  mistake.
Additionally,  controls  can be  circumvented  by the  individual  acts  of some
persons,  by collusion of two or more people,  and/or by management  override of
the  control.  The design of any system of  controls  also is based in part upon
certain  assumptions about the likelihood of future events,  and there can be no
assurance  that any design will succeed in achieving  its stated goals under all
potential future conditions;  over time,  controls may become inadequate because
of changes in conditions,  and/or the degree of compliance with the policies and
procedures  may   deteriorate.   Because  of  the  inherent   limitations  in  a
cost-effective internal control system,  misstatements due to error or fraud may
occur and not be detected.

CHANGES IN DISCLOSURE CONTROLS AND PROCEDURES.

            There  were  no  significant  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.

                                       33

<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

            Other  than as set forth  below,  the  Company is not a party to any
material pending legal proceedings.

SPORTINGHET PLC V. FREESTAR TECHNOLOGY CORPORATION.

            On May 7,  2004,  Sportingbet,  PLC filed a  complaint  against  the
Company in the Clark County Nevada Superior Court. The complaint alleges,  among
other  things,  that  the  Company  breached  a  settlement  agreement  and debt
guarantee. Sportingbet has alleged damages in excess of $10,000, to be proven at
trial.  Sportingbet also sought immediate possession of 7,100,592 Company shares
under a payment  guarantee  and stock pledge  agreement.  On June  14,2004,  the
Company  filed  an  answer  and  counterclaim   seeking  damages  in  excess  of
$1,400,000.

            The Company has denied,  and  continues  to deny,  any  liability or
wrongdoing with respect to all claims alleged in the  litigation.  Nevertheless,
the Company has  determined  that it is desirable to settle the  litigation  and
thereby eliminate the substantial burden, expense, inconvenience and distraction
that the litigation would entail and to dispel any uncertainty that may exist as
a result of the litigation.  Pursuant to a stipulation of settlement dated as of
May 12, 2005 the parties have agreed in principal  to settle the  litigation  on
the following  terms:  (i) full mutual  releases of all known and unknown claims
that have been or could be asserted by both parties; (ii) the Company will issue
to Sportingbet a one-year term  convertible  note without interest in the amount
of  $650,000;  (iii) the Company  will issue a warrant  for  750,000  restricted
shares of common stock, exercisable at $0.75 per shares for a three-year period;
and (iv) the Company  will issue a warrant for 750,000  shares of common  stock,
exercisable at $1.00 for a five-year period.

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, in turn, asserts that as a
minority  stockholder in TransAxis it is not  responsible  for the debts of that
company.

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

                                       34

<PAGE>

SHELLY SINGHAL V. FREESTAR TECHNOLOGY CORPORATION.

            On August 24, 2004,  Shelly Singhal,  a former investment banker for
the  Company,  filed a lawsuit in the Clark  County  Nevada  Superior  Court for
breach of contract,  breach of covenant of fair dealing,  civil  conspiracy  and
specific  performance.  Mr.  Singhal  claims  that he is  entitled  to a fee for
services of 10,000,000 (1,428,571 post reverse-split) unrestricted shares of the
Company's common stock. On October 20, 2004, Mr. Singhal sought summary judgment
on his complaint. That motion was denied in its entirety.

            The Company has denied,  and  continues  to deny,  any  liability or
wrongdoing with respect to all claims alleged in the  litigation.  Nevertheless,
the Company has  determined  that it is desirable to settle the  litigation  and
thereby eliminate the substantial burden, expense, inconvenience and distraction
that the litigation would entail and to dispel any uncertainty that may exist as
a result of the  litigation.  The Company  anticipates  settling  the  foregoing
litigation, but has not yet finalized a settlement, pursuant to a stipulation of
settlement  in which the parties  would agreed to settle the  litigation  on the
following  terms:  (i) full mutual releases of all known and unknown claims that
have been or could be asserted by both parties;  and (ii) the Company will issue
to Mr. Singhal 714,286 Company restricted shares of common stock.

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 March 31, 2005 (not previously  reported
in a Form 8-K):

            (a) On February 4, 2005,  the Company  issued  350,000  shares (post
reverse-split)  of its common stock to a consultant  for services to be provided
through February 2006. These shares were valued at $84,000, or $0.24 per share.

                                       35

<PAGE>


            (b) On February 17, 2005,  the Company  issued  350,000 shares (post
reverse-split)  of its common stock to a consultant  for services to be provided
through February 2006. These shares were valued at $73,500, or $0.21 per share.

            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 March 31, 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 May 6, 2005,  the Company  entered into an  employment  agreement
with Angel Pacheco, the Company's chief technical officer (effective as of April
1, 2005) (see Exhibit  10.7).  Although not  considered  by the Company to be an
executive officer, the Company does consider this agreement, because of the size
of the compensation, to be material.

            Under this  agreement,  Mr.  Pacheco  serves as the chief  technical
officer of the Company.  He is to be paid the following  compensation under this
agreement:

            (a)  A fixed salary in the amount of $180,000 per annum.

            (b) (i) a one-time stock issuance of 2,000,000  unregistered  shares
            of common  stock  (Rule  144);  and (ii) one time  options  grant to
            purchase 500,000 shares of common stock at a exercise price of $0.15
            per share (the  options are  pursuant to the terms of the  Company's
            Stock Incentive Plan under which shares have registered under a Form
            S-8 with the Securities and Exchange Commission).

                                       36

<PAGE>

ITEM 6.  EXHIBITS.

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

                                   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: May 13, 2005                              By: /s/ Paul Egan
                                                     ---------------------------
                                                 Paul Egan
                                                 Chief Executive Officer

Dated: May 13, 2005                              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).

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).

                                       39

<PAGE>

NUMBER                                   DESCRIPTION
------            --------------------------------------------------------------
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).

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).

                                       41

<PAGE>

NUMBER                                   DESCRIPTION
------            --------------------------------------------------------------
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).

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).

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).

                                       42

<PAGE>

NUMBER                                   DESCRIPTION
------            --------------------------------------------------------------
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    Certified   Public   Accountants
                  (incorporated  by reference to Exhibit 23 of the Form 10-KSB/A
                  filed on October 28, 2004).

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).

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).

                                       43

<PAGE>

NUMBER                                   DESCRIPTION
------            --------------------------------------------------------------
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