<PAGE>

                 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark  One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the quarterly period ended June 30, 2001

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

    For the transition period from         to
                                  ---------  ---------

                          Commission File No. 000-28749

                              FREESTAR TECHNOLOGIES

                 (Name of Small Business Issuer in Its Charter)

             Nevada                                          88-0446457
  (State or Other Jurisdiction of                           (IRS Employer
  Incorporation or Organization)                        Identification Number)

16130 Ventura Blvd., Suite 600
Encino, CA                                                        91436
(Address of Principal Executive Offices)                       (Zip Code)

                                 (818) 907-3353
                           (Issuer's Telephone Number)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or such shorter
period of time that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X]   No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of June 30, 2000: Common stock 6,861,500 shares, Preferred Stock 0
shares

Transitional Small Business Disclosure Format

(Check one):       Yes  [ ]  No  [x]

                                        1


<PAGE>
                                TABLE OF CONTENTS

PART 1 - FINANCIAL INFORMATION
                                                                   PAGE
                                                                   ----
Item 1. Financial Statements.....................................  3/10

Item 2. Plan of Operation........................................  11

PART 11- OTHER INFORMATION

Item 1. Legal Proceedings........................................  15

Item 2. Changes in Securities....................................  16

Item 3. Defaults Upon Senior Securities..........................  17

Item 4. Submission of Matters to a Vote of Security Holders......  17

Item 5. Other Information........................................  17

Item 6. Exhibits and Reports on Form 8-K.........................  18

SIGNATURES.......................................................  18

                                        2





<PAGE>

                              FREESTAR TECHNOLOGIES
                              FINANCIAL STATEMENTS
                                   (Unaudited)
                                 March 31, 2001

                                TABLE OF CONTENTS

                                                          PAGE

BALANCE SHEET - ASSETS                                      4

BALANCE SHEET - LIABILITIES AND SHAREHOLDER'S EQUITY        5

STATEMENT OF OPERATIONS                                     6

STATEMENT OF CASH FLOWS                                     7

NOTES TO FINANCIAL STATEMENTS                               8








                                        3


<PAGE>



<PAGE>

                              FREESTAR TECHNOLOGIES
                                  BALANCE SHEET
                                     ASSETS

CURRENT ASSETS                              June 30, 2001        June 30, 2000
                                              (Unaudited)          (Unaudited)
                                             -------------        -------------
                                           (Unconsolidated)      (Consolidated)

Cash                                                 0.00            71,340.00
Accounts Receivable                                  0.00           433,163.00
Employee Advances                                    0.00             1,500.00
Inventory                                            0.00            54,633.00
Prepaid Expenses                                     0.00             1,651.00
                                             -------------        -------------
Total Current Assets                                 0.00           562,287.00
                                             -------------        -------------

PROPERTY AND EQUIPMENT

Furniture, fixtures and equipment                    0.00           105,451.00
         Embroidery machinery                        0.00           220,570.00
         Capital lease asset                         0.00            74,693.00
         Automobile                                  0.00            55,732.00
                                             -------------        -------------
                                                                    456,446.00
         Less Accumulated Depreciation               0.00          (351,093.00)
                                             -------------        -------------
        Net Value of Equipment:                      0.00           105,353.00

OTHER ASSETS

Security Deposits                                    0.00             6,000.00
Goodwill                                             0.00         2,758,030.00
                                             -------------        -------------
Total Other Assets                                   0.00         2,764,030.00
                                             -------------        -------------
TOTAL ASSETS                                         0.00         3,431,670.00
                                             =============        =============

                 See accompanying notes to financial statements

                                        4


<PAGE>

                              FREESTAR TECHNOLOGIES

                                  BALANCE SHEET

                              LIABILITIES & EQUITY


CURRENT LIABILITIES                         June 30, 2001          June 30, 2000
                                             (Unaudited)            (Unaudited)
                                           --------------         --------------
Accounts Payable                                    0.00             193,511.00
Accrued Expenses                                    0.00              37,003.00
Income Taxes Payable                                0.00                 800.00
Line of Credit                                      0.00             445,000.00
                                           --------------         --------------
Total Current Liabilities                           0.00             676,314.00

OTHER LIABILITIES

Long Term Liabilities
Notes Payable                                 750,000.00             567,334.00
                                           --------------         --------------
Total Other Liabilities                       750,000.00             567,334.00
                                           --------------         --------------
Total Liabilities                             750,000.00           1,243,648.00

   EQUITY
Common Stock, $0.001 par value,
  authorized 20,000,000
  shares; issued and outstanding at
 6/30/2000, 5,969,000 common shares                                    5,969.00
Issued and outstanding at
 6/30/2001, 6,861,500 common shares             6,861.00
Additional Paid in Capital                   (299,228.00)          2,432,031.00
Retained Earnings (Deficit)                  (457,633.00)           (249,978.00)
                                           --------------         --------------
Total Stockholders' Equity                          0.00           2,188,022.00
                                           --------------         --------------
   TOTAL LIABILITIES & OWNER'S EQUITY               0.00           3,431,670.00
                                           ==============         ==============

                 See accompanying notes to financial statements

                                        5

<PAGE>
<TABLE>

                              FREESTAR TECHNOLOGIES

                             STATEMENT OF OPERATIONS
                                    Unaudited
<CAPTION>

    REVENUE                          Three Months     Six Months       Three Months      Six Months
                                         Ended           Ended            Ended            Ended
                                     June 30, 2001    June 30, 2001    June 30, 2000    June 30, 2000
                                     --------------  --------------   --------------    -------------
<S>                                    <C>               <C>                   <C>              <C>
Sales                                    747,427.00      747,427.00       970,050.00    1,445,559.00
                                     --------------  --------------   --------------    -------------
Total Sales                              747,427.00      747,427.00       970,050.00    1,445,559.00
Less: Cost of Goods Sold                 (85,281.00)     (85,281.00)     (759,193.00)  (1,233,801.00)
                                     --------------  --------------   --------------    -------------
Gross Profit on Sales                    662,146.00      662,146.00       210,857.00      211,758.00

SELLING EXPENSES                                                          (17,676.00)     (27,966.00)

GENERAL & ADMINISTRATIVE EXPENSES       (199,261.00)    (199,261.00)     (151,411.00)    (247,106.00)
                                     --------------  --------------   --------------    -------------
NET PROFIT (LOSS) FROM OPERATIONS        462,885.00      462,885.00        41,711.00      (63,314.00)
                                     --------------  --------------   --------------    -------------
OTHER INCOME (EXPENSES)
Other Income                                   0.00            0.00             7.00            7.00
 Interest Expenses                             0.00            0.00     (   7,729.00)    ( 25,680.00)
                                     --------------  --------------   --------------    -------------
NET INCOME (LOSS) BEFORE TAXES           462,885.00      462,885.00        36,049.00      (89,793.00)
Less: Provision for Income Tax          (157,381.00)    (157,381.00)            0.00            0.00
                                     --------------  --------------   --------------    -------------
NET INCOME (LOSS)                        305,594.00      305,594.00        36,049.00      (89,793.00)
                                     ==============  ==============   ==============    =============

Net Income (Loss) Per Share                 0.045            0.045             0.006          (0.015)

Weighted average number of common
   shares outstanding                   6,681,500        6,681,500         5,969,000       5,969,000


</TABLE>

                 See accompanying notes to financial statements

                                        6


<PAGE>

                              FREESTAR TECHNOLOGIES

                             STATEMENT OF CASH FLOWS
                                    Unaudited


                                                        Three months ended
                                                  June 30, 2001    June 30, 2000
                                                 --------------   --------------

CASH FLOWS FROM OPERATING ACTIVITIES
 Net Profit (loss) from operations                   305,594.00      (89,793.00)
  (Increase) Decrease in Accounts Receivable         189,456.00
  (Increase) Decrease in Notes Receivable             72,000.00
  (Increase) Decrease in Inventory                   366,585.00
  (Increase) Decrease in Other Current Assets         13,151.00
   Increase (Decrease) in Accounts Payable          (158,262.00)     232,334.00
   Increase (Decrease) in Notes Payable             (750,000.00)
   Increase (Decrease) in Taxes Payable              (12,714.00)
   Increase (Decrease) in Deposits                  (150,000.00)
                                                 --------------   --------------
 Net Cash Provided by Operating Activities          (124,190.00)     142,541.00

CASH FLOWS FROM INVESTING ACTIVITIES
 (Acquisition) Discontinuance of Business            554,600.00     (516,201.00)
                                                 --------------   -------------
 Net Cash Provided by Investing Activities                          (516,201.00)

CASH FLOWS FROM FINANCING ACTIVITIES
Increase (Decrease) in Lines of Credit              (225,000.00)     445,000.00
Increase (Decrease) in Loans to Officers            (394,866.00)
                                                 --------------   --------------
      Net cash provided by financing activities     (619,866.00)     445,000.00


      Net increase (decrease) in cash               (189,456.00)      71,340.00

      Cash at beginning of period                    189,456.00            0.00
                                                 --------------   --------------
      Balances as at end of period                         0.00       71,340.00

SUPPLEMENTAL DISCLOSURES Cash paid for:
 Interest Paid                                             0.00       35,687.00
 Income Tax Paid                                           0.00            0.00

                 See accompanying notes to financial statements

                                        7


<PAGE>

                              FREESTAR TECHNOLOGIES

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------
                                  June 30, 2001

                                   (Unaudited)

NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES
-------------------------------------------

General Policies & Procedures
-----------------------------

1.       Freestar Technologies ("the Company") uses the accrual method of
         accounting, recording revenues when a transaction occurs where the
         Company has a reasonable expectation of receiving the revenue.

2.       The Company has not yet adopted any policy regarding payment of
         dividends. No dividends have been paid since inception.

3.       The preparation of these financial statements are in conformity with
         generally accepted accounting principles. Therefore management has made
         estimates and assumptions that affect the reported amounts of assets
         and liabilities as of the date of the financial statements and revenues
         and expenses for the period reported. Actual results may differ from
         these estimates.

         These interim results are not necessarily indicative of results for a
         full year.


4.       The Company accounts for income taxes in accordance with Statement of
         Financial Accounting Standards No. 109 ("SFAS 109"), "ACCOUNTING FOR
         INCOME TAXES." Under SFAS 109, the asset and liability method is used
         in accounting for income taxes. Under this method, deferred tax assets
         and liabilities are determined based on differences between the
         financial reporting and the tax basis of assets and liabilities and are
         measured using the enacted tax rates and laws that will be in effect
         when the differences are expected to reverse.

                                        8


<PAGE>
                              FREESTAR TECHNOLOGIES

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------
                                  June 30, 2001

                                   (Unaudited)

NOTE 2 - ACQUISITION & SUBSEQUENT DISPOSITION OF SOCAL LOGO
-----------------------------------------------------------

On January 4, 2000, the Company acquired all of the issued and outstanding
common stock of Southern California Logo, Inc. ["SOCAL"] for 900,000 shares of
the Company stock at $2.1667 per share plus $800,000 in a note payable to Rick
Songer at an interest rate of prime plus one due on or before July 15, 2000.
During the year 2000, a total of $500,000 of the note for $800,000 was paid
leaving a balance due of $300,000 which has not been paid. The Company also
assumed the outstanding liabilities of SOCAL.

Then on April 30, 2001, the Board of Directors entered into a settlement
agreement with Rick & Judy Songer under the terms of which, the Board
acknowledged that the Company had not met its obligations under the terms of the
original purchase agreement and extensions and, as a result, SOCAL was returned
to the Songers. They retained their stock in Freestar and $500,000 which
Freestar had invested into SOCAL during the period when Freestar was operating
SOCAL.

As a result of the write-off of the payment to SOCAL of $500,000 during the
period ended June 30, 2001, the Company was required to take a one time
reduction in retained earnings of that amount leaving a deficit of ($457,633)
rather than retained earnings of $42,467 but for the write-off.

NOTE 3 - COMMON STOCK TRANSACTIONS
-----------------------------------

On April 5, 1999, the Company completed a public offering that was exempt from
federal registration pursuant to Regulation D, Rule 504 of the Securities Act of
1933 as amended. The Company sold 5,000,000 shares of common stock at a price of
$.001 per share for a total amount of $5,000.

On or about December 10, 1999 the Company purchased equipment (the "Equipment")
to manufacture neoprene wet suits valued at $5,180,000 by issuing 969,000 shares
of the Company's stock and issuing a promissory note in the original principal
amount of $335,000. The Company did not obtain a report from a licensed
independent appraiser as to the valuation of the Equipment. The Company later
defaulted on the purchase of the equipment and all right, title and interest in
and to that equipment returned to the seller and the 969,000 shares which were
issued in connection with the purchase of that equipment were cancelled.

On May 2, 2000, the Company issued 900,000 shares at $2.1667 per share to
acquire SOCAL (see Note 2).

On May 4, 2000, the Company issued 100,000 shares of stock to John Cruickshank
of Defined Holding Corporation for work done in lieu of monetary compensation
which was registered by the filing of an S-8 Registration Statement on October
20, 2000.

On August 4, 2000, the Company issued 349,000 restricted shares of the Company's
Common stock in lieu of cash payments to World Alliance Consulting,
Incorporated.

On August 4, 2000, the Company issued 500,000 restricted shares of the Company's
Common stock in lieu of cash payments to International Capital Group LLC.

On November 6, 2000, the Company issued 12,500 restricted shares of the
Company's Common stock in lieu of cash payments to the Geneva Group.

NOTE 4 - STOCK OPTIONS

On March 15, 2000, the Company granted 4,560,000 stock options at an exercise
price of $0.01 to its key employees and service providers considered essential
to the continuation of the business.

All of those stock options and any exercise of those stock options which
occurred during the year 2000, were cancelled by action of the Board of
Directors on February 5, 2001.

                                   9

<PAGE>

                              FREESTAR TECHNOLOGIES

                        NOTES TO THE FINANCIAL STATEMENTS
                        ---------------------------------
                                  June 30, 2001

                                   (Unaudited)

NOTE 5 - EARNINGS (LOSS) PER SHARE
----------------------------------

Earnings (loss) per share is computed based on the weighted average number of
shares of common stock outstanding during the period. Basic income per share for
the quarter ended March 31, 2001 is $0.003.

NOTE 6 - SEGMENT REPORTING
---------------------------

SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" requires that a publicly traded company must disclose information
about its operating segments when it presents a complete set of financial
statements. Since the Company is presently without any business entity, there
are no reportable segments.


NOTE 7 - GOING CONCERN

The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company presently has no assets and no revenues. It also
has no cash. Without realization of additional capital or merger into the
Company of a going business entity, the Company cannot continue as a going
concern.

NOTE 8 - SUBSEQUENT EVENTS

On July 23, 2001, the Company entered into a Binding Letter of Intent under the
terms of which ePaylatina, S.A. will make a bulk transfer of all it's existing
and to be developed assets into Freestar, in exchange for 1,000,000 shares of
Convertible Preferred stock in Freestar, said shares to be issued pursuant to
Section 4(2) of the Securities Act of 1934, as amended [the Act], to be
disbursed to the present shareholders of ePaylatina in proportion to their
respective interests in said corporation. These Preferred shares shall convert
into 12,000,000 shares of Common stock, one third of the number of shares
convertible over a period of three years commencing 12 months after the
consummation of the transaction. The Preferred stock shall be voting and each
share shall receive 12 votes on any issue brought before the shareholders.
Additionally, a total of 12,000,000 shares shall be issued to various
consultants who have arranged this transaction and will have worked on the
transaction to see it through to completion. 4,000,000 of these shares shall be
registered on a Form S-8 and the balance of these shares likewise, shall be
issued under Section 4(2) of the Act. 2,000,000 of the above referenced S-8
shares shall be locked up and released to the owners on a schedule based upon
meeting certain goals.

                                       10

<PAGE>

Item 2 - Management's Discussion & Analysis or Plan of Operation

History of the Company
----------------------

The Company was organized on August 2, 1997 under the laws of the State of
Delaware as Interstate Capital Corporation. The Company at that time had no
operations and was considered a development stage company. On November 17, 1999,
the Company caused a Nevada corporation to be formed under the name of Freedom
Surf, Inc. which then merged with Interstate Capital Corporation for the purpose
of changing the corporate domicile to Nevada.

Previously, on April 5, 1999, Interstate Capital Corporation had completed a
public offering that was exempt from Federal registration under Regulation D,
Rule 504 of the Securities & Exchange Act of 1933, as amended. The Company sold
5,000,000 shares of common stock at a price of $.001 per share raising a total
of $5,000.00.

The SOCAL Transaction
---------------------

Effective January 4, 2000, the Company, then known as Freedom Surf, acquired all
of the issued and outstanding shares of stock in Southern California Logo, Inc.
["SOCAL"]. The contract was executed on May 12, 2000 but was deemed effective
for purposes of reporting income and expense as of January 4, 2000.

SOCAL was acquired through a structured acquisition under the terms of which the
former owners of SOCAL, Rick & Judy Songer, received a total of 900,000 shares
of stock. They, in turn, transferred a total of 13,150 shares to some long time
employees. Judy Songer retained a total of 236,850 shares of common stock in
Freestar and Rick Songer owns a total of 650,000 shares. Additionally, the
Company then known as Freedom Surf was to pay a total of $800,000 in cash to the
Songers. $500,000 of that amount was paid in August, 2000 and the balance is
still owed.

Effective April 30, 2001, the Board of Directors entered into an agreement with
the Songers whereby the assets of SOCAL were returned to them and they were
allowed to retain the stock that had been issued in Freestar and were also
allowed to keep the $500,000 which Freestar had invested in SOCAL.

As a result of the write-off of the payment to SOCAL of $500,000 during the
period ended June 30, 2001, the Company was required to take a one time
reduction in retained earnings of that amount leaving a deficit of ($457,633)
rather than retained earnings of $42,467 but for the write-off.

The Costa Rican Equipment Transaction
-------------------------------------

On December 10, 1999, Freedom Surf reported that it had purchased equipment (the
"Equipment") to manufacture neoprene wet suits which was stored in Costa Rica.
Freedom Surf valued the Equipment at $5,180,000. Freedom Surf did not obtain a
report from a licensed independent appraiser. However, Raece Richardson, then
President of Freedom Surf, arranged for an appraisal of this Equipment by a
local appraiser of boats who valued the Equipment at $5,180,000.00. Freedom Surf
then issued 969,000 shares of its common stock to the seller of the Equipment,
STS de Costa Rica, S.A. ["STS"], and also issued a promissory note in the amount
of $335,000 to the same company.

                                 11

<PAGE>

On October 19, 2000, Freedom Surf reported that it had sold the Equipment to
Ronbridge Investments Limited, a Hong Kong company ("Ronbridge") for $4,750,000,
accepting a down payment of $750,000 in cash which was received on August 31,
2000 and a promissory note for the balance of $4,000,000. At the time of the
sale, the only shareholder and President of Ronbridge was Raece Richardson's
father. At the time, Raece Richardson was a principal shareholder of Freedom
Surf. At the time the transaction was completed on the sale of the Equipment,
Ronbridge did not have sufficient resources to pay the amount due on the balance
of $4,750,000. Also, neither Freedom Surf nor Ronbridge had the capacity to pay
the promissory note to the original owner of the Equipment who was still owed
$335,000.

Based on advice from outside consultants, the equipment transaction was
structured so that Pacific Standard Financial Group, Inc. ["Pacific"] acquired
the Equipment from STS and resold it to the Freedom Surf.

Pacific is believed to have purchased the Equipment from STS for the same
consideration that the Company agreed to pay Pacific except that the promissory
note issued by Pacific to the STS was in the original principal amount of
$300,000. Pacific transferred the 969,000 shares to STS and also executed a
promissory note to STS for $300,000, as noted.

After this transaction, Freedom Surf never took possession of the Equipment and
it remained in storage under the control of STS. As a part of the agreement,
Freedom Surf was required to pay storage fees but never paid them. Also, Freedom
Surf never paid Pacific the $335,000 which was owed and Pacific, in turn, never
paid STS the $300,000 which was owed to them. On November 16, 2000, Freedom Surf
received a notice ("Notice") from STS declaring a default. The Notice stated
that STS was terminating the agreement. STS returned the 969,000 shares of
common stock and has not given any indication that it would bring suit for the
monies owed to it. They have accepted the Equipment in lieu of payment.

Finally, Freedom Surf informed Ronbridge that it was not in a position to refund
Ronbridge the $750,000 which it received as a down payment on the sale of the
Equipment.

Changes in the Board of Directors
---------------------------------

On December 8, 2000, Freedom Surf reported on Form 8-K to the Securities &
Exchange Commission that the above described situation had occurred.

On January 23, 2001, a group of shareholders who had formed a committee known as
the Committee for Corporate Governance, Larinda Nilsen, Chairman, filed a
Preliminary Proxy Statement [PRE 14a] with the Securities & Exchange Commission
stating that they intended to call a special meeting of the shareholders for the
purpose of removing the remaining members of the Board and electing new Board
members.

Prior to the filing of this Preliminary Proxy Statement, certain members of the
Board of Directors had already resigned. On December 1, 2000, John W.
Cruickshank resigned as a member of the Board of Directors of the Company.
Shortly thereafter, Holly Richardson, another member of the Board resigned
leaving two members of the Board, Rick Songer and David McKenzie.

The remaining Board members, Rick Songer & David McKenzie met in a special
meeting of the Board of Directors on February 2, 2001 to consider the matters
raised by the Preliminary Proxy Statement which had been filed by Larinda
Nilsen. Both Rick Songer and David McKenzie tendered their resignation as
members of the Board of Directors, those resignations to become effective on
February 5, 2001 at 12:00 P.M. Pacific Standard Time. Prior to their
resignations becoming effective, pursuant to Article II, Section 2 of the By
Laws of the corporation, the resigning Board elected new members to replace the
present Board until the next annual meeting of the shareholders, those persons
to become Board members effective on February 5, 2001 at 12:00 P.M. Pacific
Standard Time.

Article II, Section 2 of the By Laws of the corporation provides as follows:

     "SECTION 2. When any vacancy occurs among the Directors by death,
resignation, disqualification or other cause, the stockholders, at any regular
or special meeting, or at any adjourned meeting thereof, or the remaining
Directors, by the affirmative vote of a majority thereof, shall elect a
successor to hold office for the unexpired portion of the term of the Director
whose place shall have become vacant and until his successor shall have been
elected and shall qualify."

                                       12
<PAGE>

The new members of the Board of Directors who were elected to serve until the
next Annual Meeting of the Shareholders were: Charles Cortland Hooper, Arthur F.
Wigand and James L. Flippen.

Then on June 28, 2001, Mr. Hooper, Mr. Wigand and Mr. Flippen all resigned and
Dennis Johnston was appointed sole director.

Mr. Johnston then acted to appoint two other new directors, Paul Egan and his
brother, Ciaran Egan as members of the Board and they, in turn elected officers
for the Company.

The following is the name, ages and biographical information on the newly
appointed Directors and officers of the corporation:

Dennis H. Johnston, Age 48, Interim Chief Executive Officer, Secretary
                            & Director

Mr. Johnston is an attorney licensed to practice in the State of California and
has been acting for the last 20 years as an attorney specializing in the
representation of corporations and financial institutions. He has assisted in
organizing and financing numerous private and publicly traded companies and has
handled mergers and acquisitions with a total value of in excess of $3 billion.
Mr. Johnston received degrees in business and economics from the University of
California at Los Angeles and a law degree from Loyola University in Los Angeles
where he was the editor of the law review. He is a former partner of the law
firm of Manatt, Phelps, Rothenberg & Tunney and was also with Wyman, Bautzer,
Kuchel and Silbert at one time.

Paul Egan, Age 38, Chief Executive Officer, Director and Chairman of
                   The Board of Directors

Mr. Egan is currently the President and Chief Executive Officer of ePayLatina
S.A., a company which has developed it own secure electronic payment device. Mr.
Egan was born in Dublin, Ireland in 1963, is a graduate from Terenure College
Dublin in 1981, studied Construction Management in Birmingham, England, worked
for Trafalgar House Construction Division, on Major Projects in London EC2
Banking Districts. In 1992, he was recruited by the South African Firm ENGEN to
oversee the New Project Division after their acquisition of Mobil Oil South
Africa and to implement the new company's construction projects and corporate
identity. In 1997, Mr. Egan moved to Santo Domingo in the Dominican Republic
where he became Vice-President of Inter-Leisure, S. A. In 2000 he founded
ePayLatina.

Ciaran Egan, Age 37, Chief Financial Officer and Director

Mr. Egan is Chief Financial Officer of ePayLatina S.A., is the brother of Paul
Egan, also born in Dublin, Ireland in 1964. He graduated from Terenure College
Dublin in 1982 from the College of Commerce Rathmines Dublin from 1982 to 1986,
took up a position as sales manager of Sellrange Ltd (Ireland) in 1986, was
promoted to National Sales Director in 1988 increasing sales from $8 million to
$15 million pounds sterling and became managing director in 1990. He was
recruited by Medipro International Recruitment based in Johannesburg, South
Africa in 1994 as Managing Director, with the central focus on establishing new
markets in the Middle East, United Kingdom and Ireland. He was successful in
obtaining and completing contracts with the Ministry of Defense and Aviation in
Saudi Arabia and the United Arab Emirates. He was also responsible for
successfully implementing contracts with the National Health Services in the
United Kingdom and several private institutions in Ireland. He relocated to the
Dominican Republic in 2000 to become Senior Vice President of ePayLatina S.A.

                               13
<PAGE>


Results of Operations
---------------------

The results of operations of the Company for the period ended June 30, 2001
compared to the period ended June 30, 2000 are discussed below.

Revenues
--------

Presently, Freestar receives no income from any source. Prior to the divestiture
of SOCAL, it had received income from its SOCAL operations totaling $747,427 for
the six month period ended June 30, 2001. For the same period ended June 30,
2000, the Company had income totaling $ 1,445,559.

Operating Expenses
------------------

Sales, General and Administrative:

Selling, general and administrative costs for the period ended June 30, 2001
totaled ($199,261)whereas for the same period ended June 30, 2000, those
expenses totaled ($207,106).

Interest Expense
----------------

Interest expense for the period ended June 30, 2001 was a credit of ($18,546)
after credit for interest earned on deposits of $300,000 which Freestar
maintained as additional collateral for its credit line prior to the divestiture
of SOCAL. Interest expense for the same period ended June 30, 2000 was $25,680.

Net Profit
----------

Our net operating income before taxes for the period ended June 30, 2001 was
$462,885 as compared to a net operating loss of (89,793) for the same period
ended June 30, 2000. This translates to a net operating income per share of
$0.045 per share, basic and diluted, for the period ended June 30, 2001 and a
net loss of (0.015) per share, basic and diluted for the period ended March 31,
2000.

Liquidity and Capital Resources
-------------------------------

The Company presently has no cash and no capital resources. Unless the Company
merges a new business into it, the Company will not be able to continue in
business.

Our Capital Requirements
------------------------

During the next two years, the Company plans to merge assets into the Company in
the form of a going business concern which, it is intended, will generate income
to meet necessary capital requirements. It may also be necessary to borrow money
either from lending institutions or seek equity financing in the market.

                                 14
<PAGE>

Forward Looking Statements:

This Quarterly Report on Form 10-QSB may be deemed to contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. The Company intends that
such forward-looking statements be subject to the safe harbors created by such
statutes. The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. Accordingly, to
the extent that this Annual Report contains forward-looking statements regarding
the financial condition, operating results, business prospects or any other
aspect of the Company, please be advised that the Company's actual financial
condition, operating results and business performance may differ materially from
that projected or estimated by the Company in forward-looking statements. The
differences may be caused by a variety of factors, including but not limited to
adverse economic conditions, intense competition, including intensification of
price competition and entry of new competitors and products, adverse federal,
state and local government regulation, inadequate capital, unexpected costs and
operating deficits, increases in general and administrative costs, lower sales
and revenues than forecast, loss of customers, customer returns of products sold
to them by the Company, disadvantageous currency exchange rates, termination of
contracts, loss of suppliers, technological obsolescence of the Company's
products, technical problems with the Company's products, price increases for
supplies and components, inability to raise prices, failure to obtain new
customers, litigation and administrative proceedings involving the Company, the
possible acquisition of new businesses that result in operating losses or that
do not perform as anticipated, resulting in unanticipated losses, the possible
fluctuation and volatility of the Company's operating results, financial
condition and stock price, losses incurred in litigating and settling cases,
dilution in the Company's ownership of its business, adverse publicity and news
coverage, inability to carry out marketing and sales plans, loss or retirement
of key executives, changes in interest rates, inflationary factors, and other
specific risks that may be alluded to in this Annual Report or in other reports
issued by the Company. In addition, the business and operations of the Company
are subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements. In light of the significant uncertainties inherent
in the forward-looking information included herein, the inclusion of such
information should not be regarded as a representation by the Company or any
other person that the objectives or plans of the Company will be achieved.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company may from time to time be involved in various claims, lawsuits,
disputes with third parties, actions involving allegations of discrimination, or
breach of contract actions incidental to the operation of its business. The
Company is not currently involved in any such litigation which it believes could
have a materially adverse effect on its financial condition or results of
operations other than a potential dispute with the Seller of the Equipment in
connection with the Seller's declaration of a default and a possible claim by
Ronbridge, each as discussed more fully in Management's Discussion & Analysis
and Plan of Operation.

Presently, neither the Company nor any of its officers or directors are involved
in any legal proceedings.

                                   15
<PAGE>

Item 2 - Changes in Securities

In the last three years, we have made transactions with our common stock for
cash, services, and acquisitions which were not registered under the Securities
Act of 1933.

We have issued stock for services rendered for investor relations and other
consulting services which were performed by Geneva Group, Inc. 12,500 shares of
common stock were issued on November 11, 2000 in lieu of cash payments or in
addition to cash payments in certain circumstances.

Additionally, we have issued stock for services for services rendered for
investor relations and other consulting services which were performed by World
Alliance Consulting, Inc. 349,000 shares of common stock were issued on
September 1, 2000 in lieu of cash payments.

Finally, on August 4, 2000, we issued stock for consulting services rendered by
International Capital Group, LLC which resulted in the issuance of 500,000
shares of common stock in lieu of cash payments.

Additionally, we have issued stock to acquire assets as follows:

On May 12, 2000, the Company completed the purchase of Southern California Logo,
Inc. in exchange for 900,000 shares of common stock which was issued to the
prior shareholders of that company, Rick & Judy Songer who gave a portion of the
shares to their long time employees.

In all of the transactions shown above, the issuance, delivery and sale of our
common stock was made pursuant to the asset exchange exemption within the
meaning of Section 4(2) of the Act; and we have issued stop transfer orders
concerning the transfer of certificates representing all the common stock issued
and outstanding as reported above.

We have issued our common stock for services to our employees and others as
follows:

<TABLE>
<CAPTION>

Name              Date of Issuance       Number of Shares      Value of Shares at Issuance
--------------    ----------------       ----------------      ---------------------------
<S>               <C>                   <C>                    <C>
John Cruickshank  May 4, 2000           100,000                $10,000

International     Aug. 4, 2000          500,000                $50,000
Capital Group

World Alliance    Aug. 4, 2000          349,000                $34,900
Consulting

Geneva Group      Nov. 11, 2000          12,500                $12,500

</TABLE>

The Board of Directors cancelled warrants, options and common stock issued to
former officers and directors as follows:

Raece Richardson received a total of 4,000,000 warrants and David McKenzie
received a total of 500,000 warrants which were convertible into common stock in
the corporation at any time upon the payment of $.01 per share. These warrants
were cancelled by the Board of Directors of Freestar on February 5, 2001. Raece
Richardson had converted 2,000,000 warrants in October, 2000 but never paid the
option price. The Board of Directors cancelled all shares which had been issued
pursuant to the exercise of these warrants for failure to properly exercise the
warrants or to pay the option price. David McKenzie never attempted to exercise
his warrants which have now been cancelled.

                                       16
<PAGE>

The Board of Directors in August, 2000 authorized the issuance of 200,000
warrants to each of the then members of the Board of Directors, Rick Songer,
David McKenzie, Holly Richardson and John Cruickshank. These warrants could be
exercised over a period of two years on certain specified option dates. All of
these warrants were cancelled by the Board of Directors of Freestar on February
5, 2001 prior to any of them ever being exercised.

Additionally, it was discovered by the Board of Directors in February, 2001 that
Raece Richardson had caused stock to be issued without the approval of the Board
of Directors and without authority to various friends and acquaintances. All of
these shares were cancelled by the Board on February 5, 2001. The total number
of 3,152,750 common shares were cancelled as a result of this inquiry including
the reversal of the shares held by Raece Richardson which had resulted from
exercised warrants.

Item 3 - Defaults upon Senior Securities

There have been no defaults upon senior securities

Item 4 - Submission to a Vote of Security Holders

None

Item 5 - Other Information

Name Change:
------------

On February 14, 2001, the Secretary of State of the State of Nevada accepted an
Amendment to the Articles of Incorporation of the Registrant changing its name
from Freedom Surf, Inc. to Freestar Technologies.

Additionally, the Board of Directors implemented a reverse stock split of 1
share of common stock for each 4 shares owned. The reverse split is to become
effective on February 22, 2001. The reverse split was authorized by the Board of
Directors at a special meeting held on February 5, 2001 pursuant to Section
78.207 of the Nevada Revised Statutes which provides in pertinent part as
follows:

"1. Unless otherwise provided in the articles of incorporation, a corporation
organized and existing under the laws of this state that desires to change the
number of shares of the same class and series and correspondingly increasing or
decreasing the number of shares issued and outstanding shares of the same class
and series held by each shareholder of record as of the effective date and time
of the change, may, . . ,do so by a resolution adopted by the board of
directors, without obtaining the approval of the shareholders."


                                       17
<PAGE>

Item 6 - Exhibits and Reports on Form 8-K

The following Reports were filed by Freestar formerly known as Freedom Surf on
Form 8-K during the three month period ended June 30, 2001:

       a. An 8-K Report filed on July 25, 2001 reporting the disposition of
SOCAL as an asset of the Company, the resignation of officers and directors and
the appointment of new officers and directors.

The following exhibits are attached hereto or are incorporated herein by
reference:

Exhibit       10.1: (Incorporated by Reference from Form 8-K filed on July 25,
              2001) Agreement between Southern California Logo, Inc.
              & Freestar Dated April 30, 2001

Exhibit       10.2: (Incorporated by Reference from Form 8-K filed on July 25,
              2001) Binding Letter of Intent between ePaylatina, S.A. and
              Freestar Dated July 23, 2001


   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form 10Q-SB and has duly caused this Quarterly Report
to be signed on its behalf by the undersigned, there unto duly authorized, in
the City of Los Angeles, State of California, on this 13th day of August, 2001.

          FREESTAR TECHNOLOGIES

          By:/s/ Dennis H. Johnston
          -------------------------------
          Interim Chief Executive Officer
          & Director

                                       18