<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   Form 10-QSB

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2000
                                               ------------------

                                       OR

            [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                 For the transition period from _____to ______

                         Commission file number: 0-30536

                     --------------------------------------

                                 FoneCash, Inc.
             (Exact name of registrant as specified in its charter)

                  ---------------------------------------------


            Delaware                                     22-3530573
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

90 Park Avenue, 1700, New York, New York                 10016-1301
(Address of principal executive offices)                 (Zip-Code)

Registrant's telephone number, including area code: (212) 984-0641

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                   Yes _X_  No__

         The number of outstanding shares of the registrant's Common Stock, par
value $.0001 per share, was 3,861,338 on September 30, 2000.


<PAGE>


                                 Fonecash, Inc.
                         Quarterly Report on Form 10-QSB
                   For the Quarter Ended on September 30, 2000

                                Table of Contents

Part I.           FINANCIAL INFORMATION

Item 1            Financial Statements (Unaudited)

                  Balance Sheets as of September 30, 2000 and December 31, 1999

                  Statements of Operations for Period Ending September 30, 2000

                  Statements of Cash Flow for Period Ending September 30, 2000

                  Notes to Financial Statements

Item 2            Management's Discussion and Analysis of Financial Condition
                  and Results of Operations

Part II           OTHER INFORMATION

                  Incorporated by reference to the Company's Form 10-SB,
                  Amendment 3 registration statement, along with all exhibits,
                  submitted on May 23, 2000









                                       2
<PAGE>




                               STEWART H. BENJAMIN
                       CERTIFIED PUBLIC ACCOUNTANT, P. C.
                              27 SHELTER HILL ROAD
                               PLAINVIEW, NY 11803
                            TELEPHONE: (516) 933-9781
                            FACSIMILE: (516) 827-1203





To the Board of Directors and Stockholders
FoneCash, Inc.
New York, New York

I have reviewed the accompanying balance sheets of FoneCash, Inc. (a development
stage company) as of September 30, 2000 and December 30, 1999, and the related
statements of operations, stockholders' equity and cash flows, for the nine
months ended September 30, 2000 and 1999, and for the period from August 7, 1997
(inception), to September 30, 2000, in accordance with the statements on
Standards for Accounting and Review Service, issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of FoneCash, Inc.

A review consists principally of inquiries of Company personnel analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.

Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.

/s/ Stewart H. Benjamin
Certified Public Accountant, P.C.

Plainview, New York
November 21, 2000





                                       3

<PAGE>


                                  FONECASH, INC
                          (A Development Stage Company)
                                 Balance Sheets

                                     ASSETS
<TABLE>
<CAPTION>

                                                              September 30        December 30
                                                                 2000                1999
<S>                                                          <C>                  <C>
Current assets:
   Cash                                                      $   15,572           $  208,702

   Inventory (Note 1)                                            80,054               45,143
   Prepaid expenses (Note 4)                                     25,000               25,000
                                                             ----------            ---------
                                                                120,626              278,845
                                                             ----------            ---------


Property and equipment, net (Note 5)                             59,425               83,333
                                                             ----------            ---------

Other assets:
   Organization costs, net (Note 1)                                 136                  190
   Patent rights, net (Note 6)                                    3,250                4,000
   Cash surrender value of life insurance (Note 8)                   --               17,732
   Deposits                                                         250                  250
                                                             ----------            ---------
                                                                  3,636               22,172
                                                             ----------            ---------
                                                             $  183,687           $  384,350
                                                             ==========           ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

   Accounts payable                                          $    8,184           $    9,790
   Due to an officer/stockholder (Note 10)                       20,829               26,586
   Note payable (Note 9)                                         42,492                7,500
                                                             ----------            ---------
                                                                 71,505               43,876
                                                             ----------            ---------

Stockholders' equity(deficit): (Note 2)
   Preferred stock; $.0001 par value; authorized -
   5,000,000 shares; issued - none                                   --                   --
   Common stock; $.0001 par value; authorized -
   20,000,000 shares; issued and outstanding -
   3,836,338 shares                                                 386                  383
Additional paid-in capital                                    1,313,319            1,282,072
Treasury stock, 500 shares at cost                               (1,500)                  --
Deficit accumulated during the development stage             (1,200,023)            (941,981)
                                                             ----------            ---------
          Total stockholders' equity                            112,182              340,474
                                                             ----------            ---------

                                                             $  183,687            $ 384,350
                                                             ==========            =========
</TABLE>


              See accompanying notes and accountant's review report

                                       4
<PAGE>

                                 FONECASH, INC.
                          (A Development Stage Company)
                            Statements of Operations

<TABLE>
<CAPTION>
                                                           Nine               Nine           Aug. 7, 1997
                                                       Months Ended       Months Ended      (Inception) to
                                                       September 30,      September 30       September 30,
                                                           2000               1999                2000
                                                       -------------      ------------       -------------
<S>                                                      <C>                <C>               <C>
Cost and expenses
   Depreciation                                          $  33,696          $   6,250         $    75,363
   Amortization                                                804                805               1,982
   Research and development, related party                  24,090                 --             376,996
   Officer's compensation                                   33,529                 --             108,529
   Impairment of investment in related party                    --                 --              50,000
   General and administrative                              170,487            282,748             592,333
                                                         ---------          --------          -----------
                                                           262,606            289,803           1,205,203
                                                         ---------          --------          -----------

Other Income (expenses)
   Interest income                                           4,564              3,382               5,180
                                                         ---------          --------          -----------

Net loss                                                 $(258,042)         $(286,421)        $(1,200,023)
                                                         =========          =========         ===========

Primary and diluted loss per common share                $    (.07)         $    (.06)               (.40)
                                                         =========          =========         ===========
Weighted average common shares outstanding               3,839,116          2,797,484           2,992,660
                                                         =========          =========         ===========
----------------------------------------------------------------------------------------------------------
</TABLE>







             See accompanying notes and accountant's review report.


                                       5
<PAGE>
                                 FONECASH, INC.
                          (A Development Stage Company)
                  Statements of Change in Stockholders' Equity
         For the Period August 7,1997 (Inception) to September 30, 2000

<TABLE>
<CAPTION>
                                                                                                                     Deficit
                                                                                 Additional     Treasury Stock     Accumulated
                                                        Common         Stock      Paid-in       --------------        from
                                                        Shares         Amount     Capital       Share   Amount      Inception
                                                       ---------       ------    ----------     -----  -------     ----------
<S>                                                   <C>             <C>        <C>            <C>    <C>        <C>
Balances, August 7,1997 (Inception)                                              $                     $          $
   Common stock issued for services
   and costs advanced, valued at $.0001
   per share                                           2,000,000         200            --                                 --

   Common stock issued for services
      Valued at $.15 per share                           200,000          20        29,980
   Net loss for the period                                    --          --            --                            (61,404)
                                                       ---------         ---     ---------        ---  -------    -----------

Balances, December 31,1997                             2,200,000         220        29,980                            (61,404)

   Sale of common stock                                  204,500          20        84,965                                 --
   Net Loss                                                   --          --            --                            (95,211)
                                                       ---------         ---     ---------        ---  -------    -----------

Balances, December 31,1998                             2,404,500         240       114,945                           (156,615)
   Sale of common stock                                1,098,505         110       837,160                                 --
   Services contributed by the president of
        the Company                                           --          --        60,000                                 --
   Common stock issued for services
       Valued at $.81 per share                          333,333          33       269,967
   Net loss                                                               --            --                           (785,366
                                                       ---------         ---     ---------        ---  -------    -----------

   Balances, December 31, 1999                         3,836,338         383     1,282,072                           (941,981)
      Sale of common stock                                25,000           3        31,247                                 --
      Purchases of treasury stock                                                                 500   (1,500)
      Net Loss for the period                                                                                        (258,042)
                                                       ---------         ---     ---------        ---  -------    -----------
Balances, September 30, 2000                           3,861,338         386     1,313,319        500  $(1.500)   $(1,200,023)
                                                       =========         ===     =========        ===  =======    ===========
</TABLE>



             See accompanying notes and accountant's review report.

                                       6
<PAGE>
                                  FONECASH, INC
                          (A Development Stage Company)
                             Statements of Cash Flow
<TABLE>
<CAPTION>
                                                                   Nine                Nine           Aug. 7, 1997
                                                                Months Ended       Months Ended      (Inception) to
                                                                September 30       September 30       September 30
                                                                    2000               1999               2000
                                                                ------------       ------------       -------------
<S>                                                              <C>                <C>               <C>
Cash flows from operating activities
   Net loss                                                       $(258,042)         $(286,421)        (1,200,023)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Depreciation                                                    33,696              6,250             75,363
     Amortization                                                       804                805              1,982
     Cash surrender value of life insurance                          17,732            (12,297)                --
     Common stock issued for services                                    --                 --            360,200
     Changes in assets and liabilities:
       (Increase) in inventory                                      (34,911)           (15,789)           (80,054)
       (Increase) in prepaid expenses                                    --            (25,000)           (25,000)
       (Increase) in utility deposit                                     --               (250)              (250)
       Increase (decrease) in accounts payable                       (1,606)             5,562              8,184
       Increase (decrease) in amounts due to an
             officer/stockholder                                     (5,757)           (13,074)            20,926
       Increase (decrease) in short-term loans                           --             (5,000)                --
                                                                  ---------          ---------          ---------
       Net cash used in operating activities                       (248,084)          (345,214)          (838,769)
                                                                  ---------          ---------          ---------
Cash flows from investing activities:
   Organization costs                                                    --                 --               (368)
   Purchase of property and equipment                                (9,788)           (25,000)          (134,788)
   Acquisition of patent rights                                          --             (5,000)            (5,000)
   Increase in notes receivable                                          --            (40,382)                --
   Investment in related company                                         --            (50,000)                --
   Deposit                                                               --           (271,400)                --
                                                                  ---------          ---------          ---------
       Net cash used in investing activities                         (9,788)          (391,782)          (140.156)
                                                                  ---------          ---------          ---------

Cash flow from financing activities:
   Proceeds from short-term debt                                     42,500                 --             50,000
   Repayment of short term debt                                      (7,508)                --             (7,508)
   Purchase of treasury stock                                        (1,500)                --             (1.500)
   Proceeds from sale of common stock                               (31,250)           727,757            953,505
                                                                  ---------          ---------          ---------
       Net cash provided by financing activities                     64,742            727,757            994,497
                                                                  ---------          ---------          ---------

Net increase (decrease) in cash                                    (193,130)            (9,239)            15,572
Cash at beginning of year                                           208,702              9,628                 --
                                                                  ---------          ---------          ---------

Cash at end of period                                             $  15,572          $     389          $  15,572
                                                                  =========          =========          =========

Supplemental disclosure of noncash investing and financing
 activities:
   Services contributed by the president of the Company           $      --          $      --          $  60,000
   Common stock issued for research and development costs         $      --          $      --          $ 270,000
   Common stock issued for services and costs advanced            $      --          $      --          $     200
                                                                  =========          =========          =========
</TABLE>


             See accompanying notes and accountant's review report.
<PAGE>

                                 FONECASH, INC.
                          (A Development Stage Company)

                          Notes to Financial Statements

Note 1 - Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

The financial statements presented are those of FoneCash, Inc., a development
stage company (the "Company"). The Company was incorporated under the laws of
the State of Delaware on August 7, 1997. The Company has acquired the rights to
market a patented electronic terminal that is used by retail merchants and
in-home salespersons when payment is made with a credit or debit card. Revenues
will be generated from sales of the terminals and from transaction charges to
banks. No revenues have been earned as of September 30, 2000, but management
anticipates sales to commence in December 2000 after real-time trials are
performed with a select group of merchants and in-home salespersons.

These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information. In the opinion
of management, such interim statements reflect all adjustments (consisting of
normal recurring accruals) necessary to present fairly the financial position
and the results of operations and cash flows for the interim periods presented.
The results of operations for these interim periods are not necessarily
indicative of the results to be expected for the full year.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reporting amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the period. Actual results
could differ from those estimates.

Inventory

Inventory is stated at the lower of cost or market, with cost determined on a
first-in, first-out basis and market based on the lower of replacement cost or
realizable value.

Property and equipment and depreciation

Property and equipment are stated at cost. Depreciation for both financial
reporting and income tax purposes is computed using the straight-line method
over the estimated lives of the assets. Maintenance and repairs are charged to
expense when incurred. When property and equipment are retired or otherwise
disposed of, the related cost and accumulated depreciation are removed from the
respective accounts and any gain or loss is credited or charged to income.

                                       8
<PAGE>

Intangible Assets

Intangible assets consist of organization costs and patent rights. Intangible
assets are amortized on a straight-line basis over five years. Amortization
expense for the nine months ended September 30, 2000 was $804.

Fair Value of Financial Instruments

The fair value of the Company's receivables due from an officer/stockholder is
not practicable to estimate due to the related party nature of the underlying
transactions and the indefinite payment terms.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date.

Loss Per Common Share

Loss per common share is computed by dividing the net loss by the weighted
average shares outstanding during the period.

Note 2 - Stockholders' Equity

Common Stock

Since the date of inception, the Company has issued 3,861,338 shares of common
stock, which includes 2,000,000 shares that were issued to officers and
directors of the Company for services and costs advanced, valued at $.0001 per
share, 200,000 shares that were valued at $.15 per share, and 333,333 shares
that were valued at $.81 per share. In 1999 the president of the Company
contributed services to the Company valued at $60,000, as reflected in the
statements of stockholders' equity and statements of operations (in addition to
$31,000 received in cash).

Treasury Stock

On August 7, 2000, the Company purchased 500 shares of its common stock for
$1,500.

Dividends may be paid on outstanding shares as declared by the Board of
Directors from time to time. Each share of common stock is entitled to one vote.

                                       9
<PAGE>

Preferred Stock

No shares of the Company's no par value preferred stock have been issued or are
outstanding. Dividends, voting rights and other terms, rights and preferences of
the preferred shares have not been designated but may be designated by the Board
of Directors from time to time.

Note 3 - Income Taxes

There is no provision for income taxes since the Company has incurred net
operating losses. At September 30, 2000, the Company has net operating loss
carry forwards of $1,138,757, which may be available to offset future taxable
income through 2020. A deferred tax asset has not been recorded for the net
operating loss carryforwards due to uncertainties as to the ultimate realization
of the deferred tax asset.

Note 4 - Prepaid Expenses

Prepaid expenses consists of a payment of $25,000 on April 29,1999 for the cost
of printing brochures containing product and company information. The printing
costs will be charged to income as the brochures are distributed. No brochures
have been distributed as of September 30, 2000.

Note 5 - Property and Equipment

Property and equipment consist entirely of a production mold purchased during
the year ended December 31, 1999 for $125,000. The Company purchased additional
molds in the amount of $9,788 during the nine months ended September 30, 2000.
The molds have an estimated useful life of 3 years and are depreciated using the
straight-line method. Depreciation expense was $33,696 for the nine months ended
September 30, 2000.

Note 6 - Patent Rights

On November 1, 1997 the Company entered into a license agreement with Thomas J.
Ulrich. Under this agreement the Company will acquire an exclusive license under
the licensor's patent rights for U.S. patent number 4,803,719, pertaining to
telephone line powered applications, for the primary purpose of utilizing the
licensor's invention through sales of products and services. The Company is
required to make payments of $30,000 for a non-refundable license execution fee
based upon capital funding, and for royalties based upon gross sales of all
licensed products sold. As of September 30, 2000 a license execution fee of
$5,000 was capitalized and is being amortized over the remaining life of the
patent of 5 years. The balance of the license execution fee of $25,000 is due
upon funding of an Initial Public Offering or other financing exceeding
$500,000. The agreement also provides for a royalty of 3% of the gross sales of
all licensed products and an annual minimum fee of $10,000 in 2000 and $20,000
for each year thereafter. In addition, minimum sales revenues of $500,000 for
the year 2000 to a total of $2 million in sales after the year 2003 and
thereafter were agreed to.

                                       10
<PAGE>

Note 7 - Long-Lived Assets

The Company accounts for long-lived assets in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for the
Impairment of Long-lived Assets and for Long-lived Assets to be Disposed Of.
This statement requires that long-lived assets and certain identifiable
intangibles be reviewed for impairment whenever events or changes in
circumstance indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by an asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the of the assets. Assets to be
disposed of are reported at the lower of carry amount or fair value less costs
to sell.

Note 8 - Cash Surrender Value of Life Insurance

The variable universal life insurance policy carried on the life of the
president of the Company has a cash value of $0 on September 30, 2000. There
were no borrowings against the cash surrender value.

Note 9 - Note Payable

The Company has a bank line of credit with Fleet Bank, N.A. that provides
short-term borrowings up to $50,000. Interest on advances is payable monthly at
two and three quarters of one percent (2.75%) over the prime rate. The note
payable to the bank is uncollateralized and is personally guaranteed by the
officers of the Company. There is an outstanding balance on the bank line of
credit of $42,492 as of September 30, 2000

Note 10 - Related Party Transactions

The Company was indebted to an officer/stockholder for expenses advanced on
behalf of the Company, in the amount of $20,829 at September 30, 2000. There are
no specific terms for repayment.

In 1999 the president of the Company contributed services to the Company valued
at $60,000, as reflected in the statements of stockholders' equity and
statements of operations (in addition to $31,000 received in cash).

The Company leases its executive offices and storage facilities from the
president of the Company under a month-to-month operating lease. Rent expenses
was $15,973 for the nine months ended September 30, 2000, $17,373 for the year
ended December 31, 1999, and $32,485 for the periods prior to 1999.

The Company utilizes Advance Data Information Corporation ("ADI"), a Taiwan
corporation owned by a director/shareholder of the Company, as its research and
development laboratory. Research and development expenses under this arrangement
totaling $24,090 charged to operations during the nine months ended September
30, 2000.

                                       11
<PAGE>

The Company purchased 1,000,000 shares representing an 8% interest in
Tradeandswap.com, Inc. ("Trade and Swap") for $50,000. A consultant of the
Company is a shareholder and principal officer of Trade and Swap.
Tradeandswap.com, Inc. is a privately-held corporation that facilitates barter
and trade swaps for individuals and businesses over a proprietary Internet web
site. The investment in Trade and Swap is carried at cost, as there is no
readily available market for these shares. If an other-than-temporary impairment
resulting from a decline in fair value in the investment shall be considered to
have occurred, the cost basis shall be written down to fair value as a new cost
basis and the amount of the write-down shall be included in earnings as a
realized loss. During the year ended December 31, 1999, the Company has written
its investment in Trade and Swap down to zero since no future benefit can be
determined as Trade and Swap operates in a volatile industry and has no proven
record of success. An impairment loss $50,000 has been reported in the Statement
of Operations.

Note 11 - Consulting Agreements

On February 4, 1998 the Company entered into a consulting agreement with East
Coast Entertainment, Inc. ("ECE") requiring payments of $50,000 per year in
monthly installments once the Company attains gross revenues of $300,000.ECE
will be assigned administrative duties including, but not limited to, publicity,
advertising, public relations, investors relations programs, news releases,
hiring of all necessary outside contractors for any specialized projects,
printing and development of the Company's annual reports, preparation of any
design, print or art work, camera ready art, distribution of reports and
corporate releases to State and Federal securities agencies. ECE is entitled to
$100,000 annually once the Company achieves $500,000 in gross revenues. ECE is
entitled to participate in the Company's stock option plans and group health
plans pursuant to the same terms that apply to all senior key executives and
other employees of the Company. The agreement is renewable annually for a period
of ten years. No expenses have been recognized under this arrangement for the
nine months ended September 30, 2000.

The Company entered into another consulting agreement with Advance Data
Information Corporation ("ADI"), a Taiwan corporation owned by Dr. Wu, a
director/stockholder of the Company, in which ADI will act as the research and
development laboratory for the Company. The Company shall have exclusive
ownership rights to any and all products that are developed as a result of this
agreement. The Company has issued 200,000 shares of its common stock to Dr. Wu
in August 1997, valued at $.15 per share, and 333,333 shares in June 1999,
valued at $.81 per share for services rendered.

Note 12 - Contract for Deployment and Installation Services

Pursuant to a letter of intent dated June 5, 1999 between the Company and Fusion
Capital Corp. ("Fusion"), a Florida corporation, the Company agreed to purchase
a majority of the common stock of Fusion. The Company simultaneously issued a
loan to Fusion of $37,000 to be granted in 10 installments of $3,700 from June
14,1999 through August 16,1999. Ten separate promissory notes of $3,700 were
executed, each

                                       12
<PAGE>


providing for interest at a rate of 6%, and each of the ten notes payable within
12 months from the date of issuance with the first payment due on June 14, 2000.
The balance due on the notes of $37,990 as of December 31, 1999 includes accrued
interest of $990. Discussions of the proposed acquisition have commenced, but no
definitive terms have been agreed upon.

When the notes were first issued in June,1999, payment of principal and interest
on the notes was due six months later with the first note due December
14,1999.Re-negotaition of the payment dates took place in November 1999, and the
Company agreed in December 1999 to extend the due date of the principal and
interest on these notes for 12 months with the first note due on June 14, 2000.
Therefore, for the period ending March 31, 2000, no payment of the principal or
interest had been made. The terms of this receivable were extended but nor
written down.

In April 2000, the Company entered into negotiations with Fusion for deployment
and installation services for the 500 terminals which the Company planned for
its trials with merchants in order to prove its revenue concept. The Company
requested Fusion to estimate the cost for the deployment and installation of 500
terminals. Fusion replied that it would undertake these services in exchange for
converting the principal and interest on the promissory note and that would be a
fixed cost contract. Since the Company has made its own estimate for the cost of
these services to $72.50, the Company agreed to convert the notes from a loan to
an advance pursuant to a contract for Deployment and Installation which was
signed on May 1, 2000. By converting the note payable to cover the cost of
deployment and installation, the cost per unit was $74.00 (which amount is
included in general and administrative expenses in the Statement of Operations.)
The Company, however, elected to write off the interest of $990 that had
accumulated at the period ending December 31, 1999

Note 13 - Planned Acquisition

On June 19, 2000, the Company signed a letter of intent to acquire 50% of the
stock of Fonecash.com Ltd. ("FoneCash Hong Kong"), a newly created Hong Kong
company. Under the terms of the letter of intent, in exchange for its ownership
interest, the Company will grant to FoneCash Hong Kong, an exclusive license in
the Company's proprietary technology, referred to as the "FoneCash Terminal".
The transaction is subject to carious terms and condition, including the
execution of a definitive acquisition agreement, complete of due diligence and
shareholder approval.

                                       13

<PAGE>

Item 2.  Management's Discussion and Analysis

This Quarterly Report on Form 10-QSB, including the information incorporated by
reference herein, includes "forward looking statement" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Act") and Section
21E of the Securities Act of 1934, as amended ("Act of 34"). All of the
statements contained in this Quarterly Report on Form 10-QSB, other than
statements of historical fact, should be considered forward looking statements,
including, but not limited to, those concerning the Company's strategies,
objectives and plans for expansion of its operation, products and services and
growth in demand for it's products and services. There can be no assurances that
these expectations will prove to have been correct. Certain important factors
that could cause actual results to differ materially from the Company's
expectations (the "Cautionary Statements") are disclosed in this Quarterly
report on Form 10-QSB. All subsequent written and oral forward looking
statements by or attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by such Cautionary Statements. Investors
are cautioned not to place undue reliance on these forward looking statements
which speak only as of the date hereof and are not intended to give any
assurance as to future results. The Company undertakes no obligation to publicly
release any revisions to these forward-looking statements to reflect events or
reflect the occurrence of unanticipated events.

Fonecash, Inc. (the "Company") was incorporated under the laws of the State of
Delaware on August 7,1997 and is in its development stage. It has had no
operating revenues to date and has not sold any of its products and services.

On July 3, 2000, the National Association Of Securities Dealers (NASD) approve
the Company's stock for public trading under the symbol FCSH on the Over the
Counter Bulletin Board. (OTC:BB)

The Company incurred operating losses of $258,042 from Inception to September
30, 2000. The Company expects its accumulated deficit to grow for the
foreseeable future as total costs and expense increases due principally to
increased marketing expenses associated with its plans to undertake
manufacturing of its terminals in China and setting up its servers which are
used in the processing of the credit and debit card data.

General

The Company has developed, under an exclusive license agreement with a holder of
a U.S. Patent, a system of processing credit cards for an under served community
of mobile merchants and in-home salespersons consisting of a terminal and a
system of computers, utilizing established communications networks, both wired
and wireless, for processing the data from credit and debit cards.

Terminals are electronic collectors of credit and debit data from the magnetic
stripe on cards. In the case of debit and credit cards the Fonecash system
collects the data from the magnetic stripe when a merchant accepts the card for
payment of goods or services. This

<PAGE>

data is transmitted to processors where the validity of the card number is
confirmed and the amount of the purchase is authorized to the cardholder's
account. Settlement occurs when the collected and stored data is sent to the
card issuing bank which charges the customer's account and electronically
deposits payment in the merchant's bank account, usually within 24 - 48 hours.

The Company intends to market a product line and a complete processing system
that is high quality and simple to operate, because the Company, and not the
individual merchant, takes the responsibility for closing the day's receipts and
uploading the data to a third party payment processor, such as Paymenttech,
Visanet, or First Data Resources, for settlement which results in payments being
deposited in the merchants' bank account within 48 hours. Because the Company,
not only provides a terminal, but also, provides a service that facilitates the
collection of daily payment receipts, and transmits these electronic receipts
for payment and deposit of funds to each merchant, the Company believes that it
will be able to compete with the current makers of terminals, who only sell
terminals, but also, able to compete with payment processors who only support
terminals which transmit credit card data to their computers after the merchant
has manually closed out the day's electronic receipts and transmitted the totals
to the payment processor.

The Company intends to establish up to three master distributors in the United
States with the most likely candidates being current Independent Sales
Organizations (ISO's) who are already engaged in the business of distributing
automated credit card processing terminals to established merchants who have
been approved by their sponsoring banks. These ISO's have trained commissioned
sales persons and have an interest in placement of any terminal in the market
regardless of manufacturer.

The Company has never operated under any other name, nor has it ever been
involved with any bankruptcy, receivership or similar proceeding or engaged in
any material reclassification, merger, consolidation, or purchase or sale of
assets.

Results of Operation

General and administrative expenses during the nine months ending September 30,
2000 were $170,487 as compared to $282,748 for the same period in 1999,
representing an decrease of 39.7%. The decrease during the nine month period
ending September 30, 2000 was primarily due to reduction of overhead in the
general operations of the Company, including less expenses for legal,
accounting, and printing associated since the filing of the registration of
shares with the Securities and Exchange Commission were completed.

Officer compensation and related benefits during this nine months was $5,757
compared to $13,074 at the end of September 30,1999 and represented compensation
to its president.

<PAGE>

Balance Sheet Data

The Company's combined cash and cash equivalents totaled $15,572 for the period
ending September 30, 2000. This is a decrease of $193,1340 from $208,702 for the
period ending September 30, 1999.

The Company does not expect to generate a positive internal cash flow for at
least the next nine months due to expected increases in spending for salaries
and the expected costs of marketing and sales activities.

Property and equipment was valued at $59,425 for the period ending September 30,
2000 and this represents purchases of additional molds used the manufacturing of
its products in Taiwan. The molds have a useful life of 3 years and are
depreciated on a straight-line basis.

Part II     Other Information

Item 1      Legal Proceedings

            None

Item 2      Changes in Securities

         During this period, the Company sold a total of 25,000 shares of common
stock pursuant to regulation S of the Securities Act of 1933, as amended to one
non-U.S. investor for a total of $31,250. The holding period for these
securities is one year.

  Shares Issued to:                Class of Shares                    Amount
  -----------------                ---------------                    ------
   Hsu, Yu-Chiung                     Common                          25,000

         On September 21, The Company registered on Form S-8 a total of 800,000
shares of it common stock to be issued to a consultant in the United Kingdom
upon exercise of options granted at $0.75 per share as compensation for services
rendered pursuant to his consulting agreement in which the consultant will seek
a licensee for the Company's technology. As of the date of this Report, none of
the options have been exercised and, therefore, no shares have been issued.

Items 3     Defaults upon Senior Securities

            None

Item 4      Submission of Matters to a Vote of Security Holders

            None

Item 5      Other Information

Item 6      Exhibits and reports on Form 8-K

<PAGE>


a.       Exhibit Index

b.       Reports of Form 8-K

         The Company did not file any reports on Form 8-K during the quarter
ended September 30, 2000.

<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 who is duly authorized
to sign as an officer and as the principal officer of the Company.

                                        Fonecash, Inc

                                        By: /s/ Daniel E. Charboneau
                                            ------------------------------------






Date: September 21, 2000