<PAGE>
========================================================================
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                 AMENDMENT NO. 1
                                       TO
                                  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 MARCH 31, 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
  incorporation or organization)                    Identification No.)


     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__

      Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12,13,or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

                                   Yes X No__

      The number of outstanding shares of the registrant's Common Stock, par
value $.001 per share, was 3,836,338 on March 31, 2000.

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<PAGE>

                                 Fonecash, Inc.
                         Quarterly Report on Form 10-QSB
                     For the Quarter Ended on March 31, 2000

                                Table of Contents

Part  I.   FINANCIAL INFORMATION

Item  1    Consolidated Financial Statements (Unaudited)

           Balance Sheets as of March 31, 2000 and December 31, 1999

           Statement of Operations for Three Month Period Ending March 31, 2000

           Statement of Cash Flow for Three Month Period Ending March 31, 2000

           Notes to Consolidated Financial Statements

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

Part II    OTHER INFORMATION


Items 1-4  None


                                       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 March 31, 2000 and December 31, 1999, and the related
statements of operations, stockholders' equity and cash flows, for the three
months ended March 31, 2000 and 1999, and for the period from August 7, 1997
(inception), to March 31, 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
May 18,  2000


                                       3
<PAGE>

                                 FONECASH, INC
                          (A Development Stage Company)
                                 Balance Sheets

                                    ASSETS

<TABLE>
<CAPTION>
                                                         March 31      December 31
                                                           2000            1999
                                                           ----            ----
<S>                                                    <C>              <C>
Current assets:
   Cash                                                $    121,020     $  208,702
   Inventory  (Note 1)                                       68,524         45,143
   Prepaid expenses (Note 4)                                 25,000         25,000
                                                       ------------     ----------
                                                            214,544        278,845
                                                       ------------     ----------

Property and equipment, net  (Note 5)                        81,889         83,333

Other assets:
   Organization cost, net (Note 1)                              172            190
   Patent rights, net (Note 6)                                3,750          4,000
   Cash surrender value of life insurance (Note 8)           13,638         17,732
   Deposit                                                      250            250
                                                       ------------     ----------
                                                             17,810         22,172
                                                       ------------     ----------
                                                        $   314,243     $  384,350
                                                       ------------     ----------
                                                       ------------     ----------

             LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

   Accounts payable                                     $     8,304     $    9,790
   Due to an officer/stockholder (Note 10)                   26,586         26,586
   Note payable (Note 9)                                     47,761          7,500
                                                       ------------     ----------
                                                             82,651         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                                           383            383
Additional paid-in capital                                1,282,072      1,282,072

Deficit accumulated during the development stage         (1,050,863)      (941,981)
                                                       ------------     ----------
          Total stockholders' equity                        231,592        340,474
                                                       ------------     ----------
                                                        $   314,243    $   384,350
                                                       ------------     ----------
                                                       ------------     ----------

</TABLE>


See accompanying notes and accountant's review report


                                       4
<PAGE>

                                 FONECASH, INC.
                         (A Development Stage Company)
                            STATEMENTS OF OPERATION

<TABLE>
<CAPTION>
                                           Three          Three         Aug.7,1997
                                        Months Ended  Months Ended    (Inception) to
                                         March 31,      March 31,        March 31,
                                            2000          1998             2000
                                         ----------    -----------     -------------
<S>                                    <C>               <C>            <C>
Cost and expenses
   Depreciation                        $       11,232    $    2,083     $      52,899
   Amortization                                   268           268             1,446
   Research and development, related
    party                                      19,172            --           372,078
   Officer's compensation                      16,000            --             91,000
   Impairment of investment in
    related party                                  --            --            50,000
   General and administrative                  64,996        24,046           486,842
                                       --------------   -----------      ------------
                                              111,668        26,397         1,054,265
                                       --------------   -----------      ------------
Other income (expenses)
   Interest income                              2,786            --             3,402
                                       --------------   -----------      ------------
Net loss                               $     (108,882)   $  (26,397)     $ (1,050,863)
                                       --------------   -----------      ------------
                                       --------------   -----------      ------------
Primary and diluted loss per common
 share                                     $     (.03)    $    (.01)             (.36)
                                       --------------   -----------      ------------
                                       --------------   -----------      ------------
Weighted average common shares              3,836,338     2,452,833         2,889,563
 outstanding
                                       --------------   -----------      ------------
                                       --------------   -----------      ------------
</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 MARCH 31, 2000

<TABLE>
<CAPTION>
                                                                          Deficit
                                        Common Stock      Additional    Accumulated
                                     ------------------     Paid-in        from
                                     Shares      Amount     Capital      Inception
                                     ------      ------     -------      ---------
<S>                                 <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 $.15
    per share                         333,333        33      269,967             --
   Net loss                                          --           --       (785,366)
                                   ----------    ------    ---------    -----------
   Balances, December 31, 1999      3,836,338       383    1,282,072       (941,981)
     Net Loss for the period                                               (108,882)
                                   ----------    ------    ---------    -----------
Balances, March 31, 2000            3,836,338       383    1,282,072    $(1,050,863)
                                   ----------    ------    ---------    -----------
                                   ----------    ------    ---------    -----------
</TABLE>


           See accompanying notes and accountant's review report.


                                       6
<PAGE>


                                 FONECASH, INC
                         (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                   Three          Three         Aug. 7,1997
                                                Months Ended   Months Ended   (Inception) to
                                                  March 31,      March 31,       March 31,
                                                    2000           1999            2000
                                                ------------   ------------   --------------
<S>                                             <C>            <C>            <C>

Cash flows from operating activities
   Net loss                                     $ (108,882)     $ (26,397)    $ (1,050,863)
   Adjustments to reconcile net loss
     to net cash used in operating activities:
     Depreciation                                   11,232          2,083           52,899
     Amortization                                      268            268            1,446
     Cash surrender value of life insurance          4,094             --          (13,638)
     Common stock issued for services                   --             --          360,200

     Changes in assets and liabilities:
       (Increase) in inventory                     (23,381)            --          (68,524)
       (Increase) in prepaid expenses                   --             --          (25,000)
       (Increase) in utility deposit                    --             --             (250)
       Increase (decrease) in accounts payable      (1,486)            23            8,304
       Increase (decrease) in amounts due
        to officer/stockholder                          --        (12,913)          26,586
                                                -----------     ----------    -------------
       Net cash used in operating activities      (118,155)       (36,936)        (708,840)
                                                -----------     ----------    -------------
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)
                                                -----------     ----------    -------------
       Net cash used in investing activities        (9,788)       (30,000)        (140.156)
                                                -----------     ----------    -------------

Cash flow from financing activities:
   Proceeds from short-term debt                    42,500             --           50,000
   Repayment of short term debt                     (2,239)            --           (2,239)
   Proceeds from sale of common stock                   --         95,464          922,255
                                                -----------     ----------    -------------
       Net cash provided by financing
        activities                                  40,261         95,464          970,016
                                                -----------     ----------    -------------
Net increase (decrease) in cash                    (87,682)        28,528          121,020
Cash at beginning of year                          208,702          9,628               --
                                                -----------     ----------    -------------
Cash at end of period                           $  121,020      $  38,156     $    121,020
                                                -----------     ----------    -------------
                                                -----------     ----------    -------------
Supplemental disclosure of noncash investing
   and financing activities:
   Services contributed by the president of
      the Company                               $       --      $      --     $     40,000
   Common stock issued for research and
      development costs                         $       --      $      --     $    276,000
   Common stock issued for services and costs
      advanced                                  $       --      $      --     $        200
                                                -----------     ----------    -------------
                                                -----------     ----------    -------------
</TABLE>


         See accompanying notes and accountant's review report.


                                       7
<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 March 31, 2000, but management
anticipates sales to commence in the second quarter of 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 three months ended March 31, 2000 was $268.

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 3,836,338 shares of common
stock which includes 2,000,000 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 $15,000 received in cash).
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.


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 March 31, 2000, the Company has net operating loss carry
forwards of


                                       9
<PAGE>

$1,014,537, 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 March 31, 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 three months ended March 31, 2000. The
mold has an estimated useful life of 3 years and is depreciated using the
straight-line method. Depreciation expense was $11,232 for the three months
ended March 31, 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 March 31, 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.

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 assets 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 assets. Assets to
be disposed of are reported at the lower of carrying amount or fair value
less costs to sell.


                                       10
<PAGE>

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 $13,638 on March 31, 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 was an
outstanding  balance  on the bank line of credit of $47,761 as of March 31,
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 $26,586 at March 31, 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 in 1999 and
the first quarter of 2000).



The Company has leased its executive offices and storage facilities from the
president of the Company under a month-to-month operating lease since the
Company's inception. Rent expenses was $3,800 for the three months ended
March 31, 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 $19,172 were charged to operations during the three months ended
March 31, 2000.



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. As of March 31, 2000, 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 Statements of Operations.


                                       11
<PAGE>

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
three months ended March 31, 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 Capital Corp. ("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 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 was $37,990 as of December 31, 1999 includes accrued interest of $990.
Discussions on 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 6 months later with the first note due December 14, 1999.
Re-negotiation 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 principal or
interest had been made. The terms of this receivable were extended but not
written down.


                                       12
<PAGE>


In April 2000, the Company entered into negotiations with Fusion for
deployment and installation services for 500 terminals which the Company
planned for its trials with merchants in order to prove its revenue concept.
The Company requested Fusion to estimte the cost for the deployment and
installation of 500 terminals. Fusion replied that they would undertake
these services in exchange for converting the principal and interest on the
promissory notes and that this would be a fixed cost contract. Since the
Company had made its own estimate for the cost of these services to be
$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 (which amount is included in
general and administrative expenses in the statements of operations). The
Company, however, elected to write off the interest of $990 that had
accumulated at the period ending December 31, 1999.

Fusion has agreed to deploy, install, and train the merchants who have been
selected to participate in the first trials of the Company's terminals.
Further, the Company agreed to convert the principal of the loan payment of
$37,000 into an advance payment for the services connected with the placement
of 500 terminals.


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 (the "Exchange Act").
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.


                                       13
<PAGE>


The Company has had no revenues since its inception in August 1997 due to the
fact that the Company is in the development state mode. There were no
compensation expenses for the first two years. There were organizational
expenses of $910 which are being amortized on a straight-line basis over five
years. The Company had a net loss of $353,618 for the initial two year
period. Depreciable assets for this period consisted of $25,000 for
production molds which have a useful life of three years. $6,250 was
considered as a depreciation expense for this period.


The Company incurred operating losses of $1,050,863 from Inception to March
31, 2000. The Company expects its accumulated deficit to grow for the
foreseeable future as total costs and expenses increases due principally to
increased marketing expenses associated with its plans to undertake trials of
its products and services. There can be no assurances that the Company will
complete successful trials of its products and services, nor that sufficient
revenues will be generated from the possible sales of such products and services
to allow the Company to operate profitably.

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 low volume 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 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.


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<PAGE>

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 three months ending March 31,
2000 were $64,996 as compared to $24,046 for the same period in 1999,
representing an increase of $40,950. The increase during the three month period
ending March 31, 2000 was primarily due to an expansion of the general
operations of the Company, including legal, accounting, and printing associated
with the filing of various documents with the Securities and Exchange
Commission.

Compensation and related benefits during this three months was $16,000 and
represented the first compensation to its president; there were no compensation
expenses for the nine months ended March 31,1999.


The Company's combined cash and cash equivalents totaled $121,020 for the
period ending March 31, 2000. This is an increase of $82,864 from $38,156 for
the period ending March 31, 1999.

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 Capital Corp. ("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 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 was $37,990 as of December 31, 1999. Discussions on
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 6 months later with the first note due December
14, 1999. Re-negotiation 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, as noted in the notes to the financial statements for the
year ending December 31, 1999 and the three months ended March 31, 2000.
Therefore, for the period ending March 31, 2000, no payment of principal or
interest had been made. The terms of this receivable were extended but not
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 as
explained further under Item 2 below. The Company requested Fusion to
estimate the cost for the deployment and installation of 500 terminals.
Fusion replied that they would undertake these services in exchange for
converting the principal and interest on the promissory notes and that this
would be a fixed cost contract. Since the Company had made its own estimate
for the cost of these services to be $72.50, the Company agreed to convert
the notes as 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
(which amount is included in general and administrative expenses in the
Company's Statements of Operations). The Company, however, elected to write
off the interest of $990 that had accumulated at the period ending December
31, 1999.



                                       15
<PAGE>


Fusion has agreed to deploy, install, and train the merchants who have been
selected to participate in the first trials of the Company's terminals.
Further, the Company agreed to convert the principal of the loan payment of
$37,000 into an advance payment for the services connected with the placement
of 500 terminals. The entire Agreement is attached as an exhibit.

The Company currently has limited internal and external sources of liquidity.

At this time the Company has no material commitment for capital expenditures.


Balance Sheet Data

The Company's combined cash and cash equivalents totaled $121,020 for the period
ending March 31,2000. This is an increase of $82,864 from $38,156 for the period
ending March 31, 1999.

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

Property and equipment was valued at $134,788 for the period ending March 31,
2000 and this represents an increase of $9,788 for 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

            None

Items 3     Defaults upon Senior Securities

            None

Item 4      Submission of Matters to a Vote of Security Holders

            None


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<PAGE>

Item 5      Other Information

            None

Item 6      Exhibits and reports on Form 8-K

            a.    Exhibit Index

            b.    Reports of Form 8-K

            The Company did not file any reports on Form 8-K during the quarter
            ended March 31, 2000.


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
      -------------------------------------
      Daniel E. Charboneau, Chairman/CEO

Date: June 19, 2000

Exhibit Index

Exhibit No:

27    Financial Data Schedule*


*Previously filed.


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