SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

[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 number 2-96392-A

                       ELECTRONIC BUSINESS SERVICES, INC.
        (Exact name of small business issuer as specified in its charter)


             DELAWARE                                        59-2493183
(State or other jurisdiction of                            (IRS Employer
 incorporation or organization)                         Identification No.)


                 6801 POWERLINE ROAD, FORT LAUDERDALE, FL 33309
                    (Address of principal executive offices)


                                 (954) 935-8100
                           (Issuer's telephone number)


                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [X] No [_]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 49,893,625

Transitional Small Business Disclosure Format (Check one): Yes [_] No [X]


                                       1
<PAGE>


                       ELECTRONIC BUSINESS SERVICES, INC.

                                   FORM 10-QSB

                                      INDEX


PART I                 FINANCIAL INFORMATION

                                                                        Page No.
Item 1.   Financial Statements:

          Consolidated Balance Sheet June 30, 2001                         3

          Consolidated Statements of Operations for the Three
               Months Ended June 30, 2001 and 2000                         4

          Consolidated Statements of Operations for the Six
               Months Ended June 30, 2001 and 2000                         5

          Consolidated Statements of Cash Flows for the Six
               Months Ended June 30, 2001 and 2000                         6

          Selected Notes to Consolidated Financial Statements            7 - 8

Item 2.   Management's Discussion and Analysis of
               June 30, 2001 Results                                      10

PART II           OTHER INFORMATION

Item 1.   Legal Proceedings                                               14

Item 2.   Changes in Securities                                           15

Item 3.   Defaults Upon Senior Securities                                 15

Item 4.   Submission of Matters to a Vote of Security Holders             16

Item 5.   Exhibits and Reports on Form 8-K                                16

Signatures                                                                17


                                       2
<PAGE>


                         PART 1 -- FINANCIAL INFORMATION

                          Item 1. Financial Statements

               ELECTRONIC BUSINESS SERVICES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET
                                  (Unaudited)

                                                                   June 30, 2001
                                                                   ------------
ASSETS

Current assets

   Cash and cash equivalents                                        $   892,437
   Accounts receivable net of allowance for                             107,464
      doubtful accounts of: $48,736
   Other current assets                                                   5,577
                                                                    -----------
   Total current assets                                               1,005,478

   Property, plant and equipment, net                                    12,484

   Reorganization Value, net                                          1,278,613
                                                                    -----------
                                                                    $ 2,296,575
                                                                    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabillities
   Accounts payable                                                 $   313,504
   Deferred revenue                                                     109,282
                                                                    -----------
   Total current liabilities                                            422,786
                                                                    -----------

Long term debt                                                          531,738
                                                                    -----------

Stockholders' deficit

   Preferred stock, authorized 1,000,000 and 0 outstanding                    0

   Common stock, $.001 par value, authorized 100,000,000;                49,894
      issued 49,893,625
   Additional paid in capital                                         1,335,106
   Accumulated deficit                                                  (42,949)
                                                                    -----------
   Total stockholders' deficit                                        1,342,051
                                                                    -----------
                                                                    $ 2,296,575
                                                                    ===========


The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>


               ELECTRONIC BUSINESS SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                              Predecessor               The Company
                                                 -----------------------------------  ----------------
                                                 Three months ended  One month ended  Two months ended
                                                       June 30,          April 30,        June 30,
                                                        2000               2001             2001
                                                 ------------------  ---------------  ----------------
<S>                                                 <C>               <C>               <C>
Sales                                               $    915,258      $    294,952      $    219,838

Cost of sales                                            672,812            34,076            83,983
                                                    ------------      ------------      ------------
Gross profit                                             242,446           260,876           135,855
Expenses
   Selling, general and administrative expenses          684,012           186,262           178,266
   Product development                                   113,002
   Stock based compensation expense                       10,295
   Amortization expense and goodwill write-off            36,552
   Litigation expense                                     64,410
                                                    ------------      ------------      ------------
      Total expenses                                     908,271           186,262           178,266
                                                    ------------      ------------      ------------
Profit (loss) from operations                           (665,825)           74,614           (42,411)

Other income and (expense)
   Interest expense, net                                 (53,032)                               (538)
                                                    ------------      ------------      ------------
      Total other income and expenses                    (53,032)             --                (538)
                                                    ------------      ------------      ------------
Loss before income tax provision                        (718,857)           74,614           (42,949)

Provision for income tax                                    --                --                --
                                                    ------------      ------------      ------------

Net profit (loss) from continuing operations            (718,857)           74,614           (42,949)
                                                    ------------      ------------      ------------
Net Profit (loss)                                       (718,857)           74,614           (42,949)

Preferred dividends                                      108,785              --                --

Net loss to common stockholders                     $   (827,642)     $     74,614      $    (42,949)
                                                    ============      ============      ============
Net loss per share
   Basic and diluted                                $      (0.06)     $       0.00      $      (0.00)
                                                    ============      ============      ============

Number of shares used in computation
   Basic and diluted                                  14,004,144        15,473,965        49,683,625
                                                    ============      ============      ============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>


                       ELECTRONIC BUSINESS SERVICES, INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                              Predecessor                The Company
                                                    ------------------------------      ------------
                                                     Six months       Four months         Two months
                                                       ended              ended             ended
                                                      June 30,          April 30,          June 30,
                                                        2000              2001               2001
                                                    ------------      ------------      ------------
<S>                                                 <C>               <C>               <C>
Sales                                               $  1,793,075      $    659,421      $    219,838

Cost of sales                                          1,206,848           202,339            83,983
                                                    ------------      ------------      ------------

Gross profit                                             586,227           457,083           135,855

Expenses
   Selling, general and administrative expenses        1,355,590           901,663           178,266
   Product Development                                   246,884            18,465
   Stock based compensation                               20,590
   Amortization expense and goodwill write-off            73,104
   Litigation expenses                                    89,047            26,374
                                                    ------------      ------------      ------------
      Total expenses                                   1,785,215           946,502           178,266
                                                    ------------      ------------      ------------

Loss from operations                                  (1,198,988)         (489,419)          (42,411)

Provision for income tax                                    --                --                --
                                                    ------------      ------------      ------------

Net loss from continuing operations                   (1,198,988)         (489,419)          (42,411)

Other income and (expense),net                           (88,775)             (538)
                                                    ------------      ------------      ------------
Net loss                                              (1,287,763)         (489,419)          (42,949)

Preferred dividends                                      217,569              --                --

Net loss to common stockholders                     $ (1,505,332)     $   (489,419)     $    (42,949)
                                                    ============      ============      ============

Net loss per share
   Basic and diluted                                $      (0.11)     $      (0.03)     $      (0.00)
                                                    ============      ============      ============

Number of shares used in computation
   Basic and diluted                                  14,004,144        15,473,965        49,683,625
                                                    ============      ============      ============
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       5
<PAGE>


               ELECTRONIC BUSINESS SERVICES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                               Predecessor                The Company
                                                                   -----------------------------------  ----------------
                                                                   Six months ended  Four months ended  Two months ended
                                                                    June 30, 2000     April 30, 2001     June 30, 2001
                                                                   ----------------  -----------------  ----------------
<S>                                                                  <C>                <C>                <C>
Cash flow from operating activities
   Net Income (loss)                                                 $(1,287,763)       $  (489,419)      $  (42,949)
   Adjustments to reconcile net income (loss) to
      net cash used in operating activities:
         Depreciation                                                    104,692              4,000            2,000
         Amortization                                                    387,813             40,035           20,000
         Stock based compensation                                         20,590
         Accounts receivable                                             258,921            (33,115)          48,556
         Reorganization Value                                           (113,551)
         Accounts payable and accrued expenses                           255,838            330,315           54,089
         Reorganization loan from third party investor                   239,969           (700,000)
         Deferred revenue                                                 49,175            (78,495)           2,153
                                                                     -----------        -----------       ----------
Net cash used by operations                                             (210,732)            13,290         (729,702)

Cash flows from investing activities
   Other assets                                                          (13,405)
   Development & purchase of software                                   (217,778)
                                                                     -----------        -----------       ----------
Net cash used by investing activities                                   (231,183)

Cash provided by financing activities
   Preferred dividends paid and accrued                                 (137,500)
   Funds provided by new financing                                       615,814                           1,385,000
   Repayment of debt                                                    (146,500)
   Value of options issued for convertible note                           20,000
                                                                     -----------        -----------       ----------
Net cash provided by financing activities                                351,814                           1,385,000
                                                                     -----------        -----------       ----------
Net increase (decrease) in cash                                          (90,101)            13,290          655,298

Cash - beginning of the period                                           117,667             12,310          237,139
                                                                     -----------        -----------       ----------
Cash - end of the period                                             $    27,566        $    25,600       $  892,437
                                                                     ===========        ===========       ==========

Supplemental Disclosure of Investing and Financial Activities:
   Debt Relieved in Bankruptcy Proceedings                                              $ 4,677,898
   Long Term Debt Relieved in Bankruptcy Proceedings                                    $   531,738
   Preferred Stock Cancelled in Bankruptcy Proceedings                                  $ 1,730,381
</TABLE>


The accompanying notes are an integral part of these financial statements.


                                       6
<PAGE>


                       ELECTRONIC BUSINESS SERVICES, INC.

                     SELECTED NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)


1.   Basis of Presentation

     The accompanying  unaudited consolidated financial statements of Electronic
Business  Services,  Inc. (the  "Company") have been prepared in accordance with
generally accepted accounting  principles for interim financial  information and
with  the  instructions  to  Form  10-QSB  and  Article  10 of  Regulation  S-X.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
In the opinion of management,  all adjustments  considered  necessary for a fair
presentation  (consisting of normal recurring accruals) have been included.  The
preparation  of financial  statements  in  conformity  with  generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.  Operating  results for the six-month
period ended June 30, 2001 is not necessarily indicative of the results that may
be expected for the year ending December 31, 2001. For further information refer
to the consolidated  financial  statements and footnotes thereto included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2000.

2.   Business

     Electronic  Business Services,  Inc., a Delaware  corporation,  through its
operating  subsidiaries  (collectively  with the  subsidiaries,  the "Company"),
creates  software and provides  services  primarily to the mortgage  lending and
credit agency  industries.  The Company also fulfills  requests from independent
membership clubs for credit information products.  All of the Company's business
operations are conducted through Engineered  Business Systems,  Inc. ("EBS") and
QuickCREDIT  Corp.  ("QCC").  EBS,  acquired by the  Company in  December  1996,
develops  and sells  software  quality  assurance  products and services for the
mortgage and credit industry.  QCC is a wholly owned corporation,  formed by the
Company   in   February   1998,   which   compiles   information   provided   by
credit-reporting agencies,  organizes the information in the form of reports and
sells the comprehensive credit reports to its customers.

     On October 8, 1999, the Company's Florida  predecessor merged with and into
Electronic Business Services, Inc., a Delaware company that survived the merger.


                                       7
<PAGE>


3.   Plan of Reorganization

     On September 1, 2000 (the "Petition  Date"),  the Company filed a voluntary
petition  for  creditor  protection  under  Chapter  11  of  the  United  States
Bankruptcy Code in the United States  Bankruptcy Court for the Southern District
of Florida.  On November 24, 2000, the presiding CEO transferred  management and
control of the Company to former management.  The Company, under new management,
embarked immediately in implementing  operational and systems improvements.  The
Company under creditor  protection (the "Debtors") was operating the business as
debtor-in-possession.

     New management arranged for "Debtor In Possession" financing in the form of
a convertible  "line of credit".  The total amount funded during the  bankruptcy
proceeding  was  $700,000.  The funds were used to operate  the  Company and its
subsidiaries  while in Chapter 11  Bankruptcy.  Much of this funding was used to
settle  negotiated  amounts  with key vendors of the  Company.  These  essential
vendors   include   the   credit    repositories,    equipment   vendors,    and
telecommunication  providers.  The funds  were  also used to settle  outstanding
obligations with secured  creditors of the Company.  During this  reorganization
period,  the Company,  in accordance  with  Bankruptcy  law,  rejected  numerous
contracts.  These contract rejections resulted in substantial initial savings to
the Company and has reduced the financial burden of the Company significantly.

     Management submitted a "Joint Plan of Reorganization", subsequently amended
on March 12, 2001,  which was  accepted by the  creditors  and  confirmed by the
United  States  Bankruptcy  Court  on May 01,  2001.  Highlights  of the  "Plan"
included:  (1) the  cancellation  of all of the  existing  Capital  Stock of the
Company, including all Common and Preferred Stock, Options and Warrants; (2) the
issuance of new Common Stock to (a) unsecured creditors of the Company (2%), (b)
employees of the Company (2%), (c) DIP investors,  upon  conversion of the "line
of credit" and (d) to  "service  provider  professionals"  during the Chapter 11
Bankruptcy  proceedings.  Additionally,  all of the unsecured  creditors will be
paid in  installments an amount equal to 5% of their allowed  unsecured  claims.
Upon  confirmation of the Joint Plan of  Reorganization,  the DIP Investor Group
converted its entire "line of credit" into  36,000,000  New Common Shares of the
Company.

     The  Company  has  accounted  for  its  reorganization  using  fresh  start
accounting.  All assets and  liabilities  have been  restated  to reflect  their
reorganization  values that approximate fair values at the reorganization  date.
See Plan of  Reorganization  Schedule  on page 9 which  details  the fresh start
opening balances as of May 1, 2001.

     Following the confirmation of the Joint Plan of Reorganization, the Company
raised in a private placement the sum of $685,000.  These funds will be used for
general working  capital and should be sufficient to meet the Company's  working
capital needs through the fourth quarter of 2001.


                                       8
<PAGE>


                       Electronic Business Services, Inc.
                             Plan of Reorganization
                                Recovery Analysis


<TABLE>
<CAPTION>
                                                                       New        Fresh Start
                               Balance            Recovery         Common Stock    Accounting
                            April 30, 2001      Adjustments        Adjustments      5/1/2001
                             -----------        -----------         ---------      ----------
<S>                           <C>               <C>                  <C>            <C>
Cash                              25,600            211,539                           237,139

A/C Receivable                   156,020                                              156,020

Other Current Assets               5,577                                                5,577

PP & E                            14,484                                               14,484

Reorganization Value                                485,062           700,000       1,185,062

Accounts Payable                (590,163)           330,748                          (259,415)

Reorganization Loan             (318,469)           318,469                                 0

Deferred Revenue                (107,129)                                            (107,129)

Liabilities/Compromise        (4,677,898)         4,677,898                                 0

Long Term Liabilities                              (531,738)                         (531,738)


Preferred Stock               (1,770,416)         1,770,416                                 0

Common Stock                     (15,473)            15,473           (40,180)        (40,180)

Add Paid in Capital           (6,728,502)         6,728,502          (659,820)       (659,820)

Accumulated  Deficit          12,776,369        (12,776,369)                                0

Puts                           1,230,000         (1,230,000)                                0
</TABLE>


                                       9
<PAGE>


4.   Uncertainty-Going Concern

     The Company's  continued  long-term existence is dependent upon its ability
to  implement  its  Bankruptcy  Reorganization  Plan and resolve  its  liquidity
problems,  principally by obtaining  financing,  increasing  sales and achieving
profitable operations. While undertaking the above, the Company must continue to
operate from cash flow generated from  operations  and  financings.  The Company
continues to operate at a loss and  stockholders'  deficit is increasing.  These
factors raise  substantial  doubt about the  Company's  ability to continue as a
going concern.

     Management's   plans  in  regard  to  this  matter  are  to  implement  the
reorganization  plan,  execute its new business  plan,  increase  its  marketing
efforts  and  increase  sales in an  effort  to  generate  positive  cash  flow.
Additionally,  the  Company  may  seek to  raise  equity  and may  also  rely on
financings and cost reductions to improve liquidity and sustain  operations.  As
part of the DIP financing, a company in which the CEO and the CFO of the Company
had a  beneficial  interest,  loaned  the  Company  approximately  $700,000  for
operating  expenses.  At confirmation of the  Reorganization  Plan, the loan was
converted  into  equity.  Additionally,  in 2001,  the Company sold common stock
totaling $685,000 in a private placement before expenses.

     The financial  statements do not include any  adjustment  that might result
from the outcome of this uncertainty.

Item 2. Management's Discussion and Analysis or Plan of Operation.

     The following  discussion of the Company's  financial condition and results
of operations  should be read in conjunction  with the Financial  Statements and
Notes thereto appearing elsewhere in this document.

     Statements  in this  "Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operations" and elsewhere in this document,  as well as
statements  made in press  releases  and/or  statements  that may be made by the
Company or by officers,  directors,  or  employees of the Company  acting on the
Company's  behalf  that  are not  statements  of  historical  or  current  fact,
constitute  "forward  looking  statements"  within the  meaning  of the  Private
Securities  Litigation Reform Act 1995. Such forward looking  statements involve
known and unknown  risks,  uncertainties,  and other unknown  factors that could
cause the actual  results of the  Company to be  materially  different  from the
historical  results  or from any  future  results  expressed  or implied by such
forward looking  statements.  In addition to statements that explicitly describe
such risks and uncertainties,  readers are urged to consider  statements labeled
with the terms "believes",  "belief", "expects",  "intends",  "anticipates",  or
"plans"  to  be  uncertain  forward  looking  statements.  The  forward  looking
statements  contained  herein  are also  subject  generally  to  other  risk and
uncertainties  that are described from time to time in the Company's reports and
registration statements filed with the Securities and Exchange Commission.


                                       10
<PAGE>


     The following  table sets forth  information  on operations for the periods
indicated:

                           PERCENTAGE OF NET REVENUES

<TABLE>
<CAPTION>
Consolidated                          One month ended        Two months ended       Three months ended      Three months ended
                                     4/1/01 to 4/30/01       5/1/01 to 6/30/01           06/30/01                 06/30/00
                                        $           %           $           %           $           %           $           %
                                    -------------------     -------------------     -------------------     -------------------
<S>                                 <C>            <C>      <C>            <C>      <C>            <C>      <C>            <C>
Net Sales                            294,952       100%      219,838       100%      514,790       100%      915,258       100%
Cost of Sales                         34,076        12%       83,983        38%      118,059        23%      672,812        74%
Operating Expenses                   186,262        63%      158,266        72%      344,528        67%      908,271        99%
Income from Operations                74,614        25%      (22,411)      -10%       52,203        10%     (665,825)      -73%
Earnings (Loss) on Common             74,614        25%      (22,949)      -10%       51,665        10%     (827,642)      -90%

<CAPTION>
Engineered Business Systems           One month ended          Two months ended     Three months ended      Three months ended
                                     4/1/01 to 4/30/01         5/1/01 to 6/30/0           06/30/01                 06/30/00
                                        $           %           $           %           $           %           $           %
                                    -------------------     -------------------     -------------------     -------------------
<S>                                 <C>            <C>      <C>            <C>      <C>            <C>      <C>            <C>
Net Sales                            242,786       100%      121,388       100%      364,174       100%      415,425       100%
Cost of Sales                         12,596         5%       16,750        14%       29,346         8%      286,461        69%

<CAPTION>
Quick Credit Corporation             One month ended          Two months ended      Three months ended      Three months ended
                                         04/30/01                  06/30/01               06/30/01               06/30/00
                                        $           %           $           %           $           %           $           %
                                    -------------------     -------------------     -------------------     -------------------
<S>                                 <C>            <C>      <C>            <C>      <C>            <C>      <C>            <C>
Net Sales                             52,166       100%       98,450       100%      150,616       100%      499,834       100%
Cost of Sales                         21,480        41%       67,233        68%       88,713        59%      378,851        76%

$1 difference due to rounding.

<CAPTION>
                           PERCENTAGE OF NET REVENUES

Consolidated                         Four months ended      Two months ended          Six months ended       Six months ended
                                         04/30/01           05/1/01 to 06/30/01            06/30/01              06/30/00
                                        $           %           $           %            $           %           $          %
                                    -------------------     -------------------     -------------------     -------------------
<S>                                 <C>            <C>      <C>            <C>      <C>            <C>      <C>            <C>
Net Sales                            659,421       100%      219,838       100%       879,259       100      1,793,075     100%
Cost of Sales                        202,339        31%       83,983        38%       286,322        33      1,208,848      67%
Operating Expenses                   946,502       144%      158,266        72%     1,104,768       126      1,785,215     100%
Income from Operations              (489,419)      -74%      (22,411)      -10%      (511,830)      -58     (1,198,987)    -67%
Earnings (Loss) on Common           (489,419)      -74%      (22,949)      -10%      (512,368)      -58     (1,505,332)    -84%

<CAPTION>
Engineered Business Systems          Four months ended        Two months ended       Six months ended        Six months ended
                                         04/30/01             5/1/01 to 6/30/01          06/30/01                06/30/00
                                        $           %           $           %           $           %           $           %
                                    -------------------     -------------------     -------------------     -------------------
<S>                                 <C>            <C>      <C>            <C>      <C>            <C>      <C>            <C>
Net Sales                            429,746       100%      121,388       100%      551,134       100%      987,690       100%
Cost of Sales                         42,725        10%       16,750        14%       59,475        11%      627,652        64%

<CAPTION>
Quick Credit Corporation             Four months ended        Two months ended       Six months ended        Six months ended
                                         04/30/01                  06/30/01              06/30/01                06/30/00
                                        $           %           $           %           $           %           $           %
                                    -------------------     -------------------     -------------------     -------------------
<S>                                 <C>            <C>      <C>            <C>      <C>            <C>      <C>            <C>
Net Sales                            229,675       100%       98,450       100%      328,125       100%      805,385       100%
Cost of Sales                        159,614        69%       67,233        68%      226,847        69%      564,196        70%
</TABLE>

$1 difference due to rounding.

                                       11
<PAGE>


     The Company  emerged from its Chapter 11 proceeding and adopted fresh start
accounting on May 1, 2001. Thus, the Company's  balance sheets and statements of
operations  and cash  flows  after  this  date  reflect  a  material  change  in
accounting  principles,  while balance  sheets and  statements of operations and
cash flows for periods prior to 5/1/01 do not.

     For purposes of comparative  analysis,  the three and six months ended June
30,  2001  include the  results of the  Predecessor  Company for the period from
April 1,  2001 to April  30,  2001  and  January  1,  2001 to  April  30,  2001,
respectively  and the  Successor  Company for the period May 1, 2001 to June 30,
2001.  The  principal  differences  between  these  periods  relate to reporting
changes regarding the Company's capital  structure,  changes in indebtedness and
the  revaluation  of the Company's  long-term  assets to reflect  reorganization
value at May 1, 2001. These changes  primarily affect  amortization  expense and
interest expense.

Three Months Ended June 30, 2001 vs. Three Months Ended June 30, 2000

Consolidated

     Sales for the three months ended June 30, 2001 were  $514,790 or a decrease
of 44% from the $915,258 in sales for the same period  ended June 30, 2000.  The
major factor that contributed to the Company's reduction in sales was that since
the filing of the Chapter 11  Bankruptcy  Petition on September  1, 2000,  sales
decreased  due to the lack of  confidence  in the Company to operate as a viable
going  concern.  The Company also  believes that certain of its clients may have
been  redirected to other  competitors due to the expiration of a non-compete to
which  certain  affiliates  of the  Company  were  previously  subject.  Also on
September  1, 2000,  the Company  purportedly  divested  itself of the  Mortgage
Quality  Control  Outsourcing  division.  (That  purported  divestiture is being
contested by the Company in Bankruptcy Court.)

     Cost of sales for the  second  quarter  ended  June 30,  2001 was  $118,059
compared with $672,812 for the same period ended June 30, 2000. This decrease is
primarily a result of the purported  divestiture of the Mortgage Quality Control
Outsourcing  Division and its related  overhead  and the  reduction of allocated
overhead in general.  Gross profit as a percentage of revenue has increased from
$242,446  for the three  months  ended June 30,  2000 to  $396,731  for the same
period ended June 30, 2001.

     Selling,  general and administrative  (SG&A) expenses decreased to $344,528
for the three  months ended June 30, 2001 from  $684,012  during the same period
ended June 30, 2000. The Company has reduced SG&A expenses for the long term.


                                       12
<PAGE>


     The profit from operations for the quarter ended June 30, 2001 was $52,203,
which  represents  a difference  of $718,028  from the loss from  operations  of
$665,825 for the quarter ended June 30, 2000. The net profit was $51,665 for the
three  months  ended June 30, 2001  compared  to a net loss of $827,643  for the
three  months  ended June 30,  2000.  The  Company is  beginning  to realize the
benefits from efforts by management in the implementation of its business plan.

Six Months Ended June 30, 2001 vs. Six Months Ended June 30, 2000

Consolidated

     Sales for the six months ended June 30, 2001 were $879,259 or a decrease of
51% from the  $1,793,075  in sales for the same period ended June 30, 2000.  The
major factor  contributing  to the  Company's  reduction in sales was due to the
lack of  customer  confidence  in the Company  since its  Chapter 11  Bankruptcy
Petition on September 01, 2000, to be able to operate as a viable going concern.
Also on September 1, 2000, the Company purportedly  divested itself of the sales
generating Mortgage Quality Control Outsourcing Division.

     Cost of sales for the six months ended June 30, 2001 was $286,322  compared
with  $1,206,848  for the same period ended June 30,  2000.  This is primarily a
result of not only the purported  divestiture  of the Mortgage  Quality  Control
Outsourcing  Division  and its  related  overhead  but  also  the  reduction  of
allocated  overhead  in  general,  the  effects  of  Bankruptcy,  the  costs  of
bankruptcy legal expenses,  the costs of moving,  and the costs of our marketing
initiative.  Gross profit as a percentage of revenue has increased from $586,227
for the six months  ended June 30,  2000 to $592,937  for the same period  ended
June 30, 2001.

     Selling, general and administrative (SG&A) expenses decreased to $1,059,929
for the  six-month  period ended June 30, 2001 from  $1,355,590  during the same
period ended June 30, 2000.  The Company has reduced SG&A  expenses for the long
term and the  filing by the  Company  for  protection  under  bankruptcy  caused
certain Company service providers and vendors to accelerate payments due.

     At June 30, 2001 the Company had working capital of $582,692 as compared to
a working capital deficit of $4,483,943 at June 30, 2000 largely due to infusion
of new capital in a private placement and cancellation of debt in the bankruptcy
proceeding.

     Management believes that the Company is well positioned towards meeting its
business  objectives  as  it  embarks  on  a  post  bankruptcy  stratagem.  Most
importantly,  the Company was  successful in emerging out of bankruptcy on terms
significantly  favorable to the Company.  The Company has succeeded in forming a
credible management team that has gained the confidence of outside investors who
have  contributed  the  necessary  funding to  sustain  the  Company  during the
uncertainty of the bankruptcy proceedings and


                                       13
<PAGE>


beyond,  as well as provide an attractive  organizational  strategy for success.
Further,  the Company is extremely  encouraged by a dynamic  marketing and sales
group that has gained  the  respect  and  support of Company  personnel  and has
revitalized  its  recognition in the industry and anticipates new and profitable
contracts  to be  consummated  in the near  future.  The Company has taken every
precaution  in assuring  that  expenses are kept at a minimum,  and as indicated
earlier,  salaries  have been  kept at a modest  level  and  expenses  have been
reduced.  The research and  development  of the two previous years will serve as
the  foundation  for  additional  R&D to improve  and  upgrade  its  proprietary
software  in the  marketplace.  The  Company  has  moved to a new site  that has
provided a boost in morale among the  employees  and believes that these factors
have collectively contributed to a positive outlook for the Company.

     The Company has recently entered the  business-to-consumer  market with the
launch of its Consumer  Services  business,  Consumer  Guardian,  for the credit
reporting  and credit card  industries.  The Company  started this division as a
result of marketing  research and analysis that leads management to believe that
there  would be strong  interest  in its  services  and  products,  although  no
assurances  could be made.  This will  minimize the impact of the  boom-and-bust
cycles of the mortgage industry affecting the Company going forward. The Company
is currently  preparing a  comprehensive  identity  theft  program for launch in
early 2002.

     Recently,  the Company  teamed up with IBM through  partners in development
program and joined IBM's ASP Business  Partner  program.  The Company's  time to
market will be greatly reduced.  Having access to world-class technology both in
hardware and software  development  tools will give all the  Company's  products
tremendous  scalability and reliability as well as cross platform  availability.
The Company's ability to access the IBM laboratories and IBM's development teams
will keep the Company on the leading edge in  technology.  The Company will also
be able to take advantage of IBM's vast marketing channels and financing options
for the  Company's  customers.  The Company is currently in the process of being
certified  by  the  ICSA  for   Internet   security.   Immediately   after  ICSA
certification,  the Company will officially  release its QuickInfo software that
will replace its QuickCREDIT  software.  QuickInfo allows users to access credit
solutions securely through the Internet.


PART II - OTHER INFORMATION

Item 1. Legal Proceedings

     Since the entry of the confirmation order by the U.S. Bankruptcy Court, the
Company has been pursuing  objections to claims that have been  outstanding  and
delayed. There are two remaining issues as follows:

     In connection with the 1998  acquisitions of Credit Bureau  Services,  Inc.
("CBS"), Steven and Kim Naimoli,  shareholders of CBS, have asserted a claim for
$600,000  (referred to as QCC Puts Payable in the  financial  statements  in the
annual Form 10-KSB).


                                       14
<PAGE>


It is the  Company's  position  that the  Naimoli  claim is merely  equity  and,
pursuant  to the Plan of  Reorganization,  all  equity has been  cancelled.  The
Naimoli Claims Objection has been delayed due to Mr.  Naimoli's  personal filing
of  bankruptcy  which  necessitated  relief  from stay in his  bankruptcy  case.
Furthermore, other proceedings in his case have delayed the Company's ability to
schedule the matter for hearing.  The Company expects the matter to be scheduled
and resolved in September 2001.

     In regard to the  disposition of the  Outsourcing  Services  Division,  the
Company has asserted that the assets were  transferred  prior to the  bankruptcy
filing without adequate  consideration  and has filed an Adversary  Complaint to
recover those assets. The assets constitute the outsourcing  division of EBS and
upon recovery of the assets; EBS intends to operate, once again, the outsourcing
division. The trial on the Adversary Proceeding has been set for September 2001.
It is expected that the trial will be short as the defendant has defaulted as to
liability and will be defending the damage/remedy portion of the Complaint.

     From time to time, various claims,  charges, and litigation may be asserted
or  commenced  against  the Company  arising  from,  or related to,  contractual
matters,   intellectual  property,   personal  injury,  insurance  coverage  and
personnel  and  employment  disputes.  The  Company  may  be  involved  in  some
litigation  that,  while the outcome  cannot be predicted  with  certainty,  the
Company does not expect to have a material or adverse effect on the consolidated
financial position.

Item 2. Changes in Securities

     The Company  currently  has a total of  49,893,625  shares of Common Stock,
$.001 par  value,  issued and  outstanding.  In June 2001,  the  Company  raised
$685,000 in a private  placement  with new investors  under  Regulation D of the
Securities  Act of 1933.  The total number of Common Shares issued in connection
with this placement was 9,713,333  shares.  Upon  confirmation  of the Company's
Joint Plan of  Reorganization  by the United States  Bankruptcy  Court on May 1,
2001,  the Company  cancelled  all of its existing  capital stock and issued new
Common Stock.  Also upon confirmation of the Joint Plan of  Reorganization,  the
DIP Investor  Group  converted  its entire  $700,000  line of credit and accrued
interest  into  36,000,000  Common  Shares of the  Company.  The  balance of the
Company's  issued  and  outstanding  shares  were  issued  to  service  provider
professionals,  employees and unsecured creditors in connection with the Chapter
11 Bankruptcy proceedings.

Item 3. Defaults Upon Senior Securities

     In fiscal 2000,  the Company  issued Series E Preferred  Stock to a venture
capitalist  pursuant to an agreement to establish a line of credit. The Series E
Preferred  Stock  accrued  dividends at the rate of twelve and one-half  percent
(12.5%) per year payable  quarterly.  The Company accrued an additional  $40,035
during the first quarter of 2001. All the preferred  stock issued by the Company
was  cancelled  in  accordance  with the  Joint  Plan of  Reorganization  at the
Confirmation Date and contemporaneously


                                       15
<PAGE>


the United States  Bankruptcy  Court approved a settlement of an unsecured claim
of $750,000 and  issuance of 413,816 of newly  issued  shares of common stock to
the preferred shareholders.

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

     In connection  with the filing of the First Amended  Plan,  the  Bankruptcy
Court required that the common shareholders, who are a class of interest holders
in the bankruptcy proceeding,  vote on the acceptance of the First Amended Joint
Plan of  Reorganization.  The Bankruptcy Court  procedures  required that such a
vote be taken in spite of the cancellation of all pre-petition securities.

Item 5. Exhibits and Reports on Form 8-K

A.   Exhibits:

     None

B.   Reports on Form 8-K

     On April 16, 2001,  the Company filed six separate  Forms 8-K and submitted
the "Debtor's Monthly Financial Report" for each month beginning  September 2000
through  February  2001 in lieu of the Form 10-K and Form 10-Q while  bankruptcy
proceedings were pending.

     On April 20, 2001,  two separate  Forms 8-K were filed in which the Company
disclosed a) approval of the  appointment  of Thomas A. Secreto as a director of
the Company and b) the mailing of ballots to all common shareholders (as a class
of creditors) for a vote on the Amended Joint Plan of Reorganization and Amended
Disclosure Statement.

     On June 1, 2001,  a Form 8-K was filed  addressing  the a)  approval by the
United States Bankruptcy Court of the Amended Joint Plan of  Reorganization  and
b) the  assignment  of a new Cusip Number and trading  symbol for the new Common
Stock of the Company.  On June 6, 2001,  Form 8-K was filed in which the Company
announced  the  resignation  of the prior year  certifying  accountants  and the
appointment of new certifying accountants.


                                       16
<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                              Electronic Business Services, Inc.


                              ------------------------------------------------
                              Vito A. Bellezza, President and CEO and Director


Date:  August 30, 2001


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