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                    U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                  FORM 10-QSB/A

1.   (Mark One)

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

For the quarterly period ended  March 31, 1999
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                                       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:

                        Internet Financial Services Inc.
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       (Exact name of small business issuer as specified in its charter)

           New York                                  13-3911867
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(State or other jurisdiction of                     (IRS Employer
incorporation or organization                    Identification No.)

                      40 Wall Street, New York, N.Y.10005
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                    (Address of principal executive offices)

                                 (212) 422-1100
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                        (Registrant's telephone number)

Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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         NO   X
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State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date:

                                                  Outstanding at
         Class of Common Stock                     May 15, 1999
         ---------------------                     ------------

            $.001 par value                         7,931,745

Transitional small business disclosure format (check one):
      YES        NO   X
          -----     -----

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To correct certain numerical and other details, Internet Financial Services Inc.
(the "Company") hereby restates in its entirety the paragraph entitled
"Liquidity and Capital Resources" contained in the Management's Discussion and
Analysis of Financial Condition and Results of Operations of the Company's Form
10-QSB for the quarterly period ended March 31, 1999, as filed with the
Securities and Exchange Commission on June 2, 1999.

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Liquidity and Capital Resources

Our capital requirements have historically exceeded our cash flow from
operations as we have been building our business. As a result, we have depended
upon sales of our common stock and borrowings from officers, directors and
stockholders and third parties to finance our working capital requirements.

In December 1998, we obtained a $500,000 line of financing from General Electric
Capital Corporation which we use primarily for the purchase or leasing of
additional equipment and software. We are required to deliver to the lender a
letter of credit in the amount of 50% of any amount borrowed under this
financing. As of March 31, 1999, we borrowed approximately $311,208 under this
line of financing, which we used to purchase equipment. In connection with our
borrowing under this financing, we have granted the lender a security interest
in certain existing equipment as well as in all equipment purchased using funds
obtained under this financing.

In January 1999, we obtained a $400,000 loan from New York Community Investment
Company L.L.C., bearing interest at an annual rate of 12%, payable monthly. In
connection with this loan, we issued to the lender a $400,000 principal amount
promissory note and warrants to purchase 140,000 shares of our common stock at
an exercise price equal to the initial public offering price of our common
stock. We granted the lender a security interest in substantially all of our
assets to secure our obligations under the loan. We are using these funds for
marketing expenses and working capital.

In January 1999, we sold an aggregate of 221,500 shares of common stock to 12
investors in a private placement at a price of $4.80 per share for which we
received aggregate net proceeds of approximately $1,050,000. In connection with
this private placement:

     o Anthony Huston, our Executive Vice President purchased 50,000 shares at a
       price of $240,000;

     o Leon Ferguson, Senior Vice President, purchased 52,000 shares at a price
       of $249,600; and

     o Mark Chambre, who is now a director, purchased 15,000 shares at a price
       of $72,000.

On April 23, 1999 the Company consummated its initial public offering of common
stock. The Company sold 2,300,000 shares of at a gross offering price of $7 per
share, receiving net proceeds of approximately $13,250,000. The Company utilized
approximately $776,800 for the repayment of outstanding notes payable  including
any accrued interest on these same notes payable. The Company also used $139,770
for certain leasehold improvements. Most of the balance of approximately
$12,315,000 has been invested in short-term money market funds. We will use the
proceeds of the initial public offering to expand our operations and finance our
future working capital requirements. Based upon our current plans and
assumptions relating to our business plan, we anticipate that the net proceeds
of this offering, together with our other available financing sources, will
satisfy our capital requirements for at least twelve months following the
closing. If our plans change or our assumptions prove to be inaccurate, we may
need to seek additional financing sooner than currently anticipated or curtail
our operations. We may seek additional debt or equity financing to fund the cost
of continued expansion. If we incur debt, we will become subject to the risks
that interest rates may fluctuate and cash flow may be insufficient to make
payments on the debt.

Cash provided by operating activities during the six months ending March 31,
1999 was $23,611 compared to $296,157 provided by operating activities during
the six months ending March 31, 1998.

Cash used in investing activities was $1,443,267 during the six months ended
March 31, 1999 compared to $776,903 during the six months ending March 31, 1998.
Uses of cash in the six months ending March 31, 1999 related to purchases of
equipment and leasehold improvements made in the Company's new facility at 40
Wall Street, and the continued development of software for internal use. In
addition to the cash used in investing activities during the six months ended
March 31, 1999, the Company accrued accounts payable relating to purchases of
property and equipment and leasehold improvements of $222,500 during this
period.

Cash provided by financing activities was $1,448,627 during the six months
ending March 31, 1999 compared to $745,870 during the six months ended March 31,
1998. Cash provided by financing activities during the six months ending
March 31, 1998 consisted primarily of proceeds from the sale of common stock.
Cash provided by financing activities during the six months ending March 31,
1999 consisted of proceeds from the sale of common stock in a private placement
in the net amount of $1,050,000 and the issuance of notes payable to New York
Community Investment Company L.L.C. in the amount of $900,000. These proceeds
were partially offset by deferred offering costs of $483,873 and repayment of
bank loans amounting to $20,000.

Based on the above activity, cash and cash equivalents increased by
$28,971 to $999,279 for the six months ended March 31, 1999.

Net Operating Loss Carryforwards

Our net operating loss carryforwards expire beginning in the year 2012. The
issuance of additional equity securities, together with our recent financing
and this offering, could result in an ownership change and, thus, could limit
our use of our prior net operating losses. If we achieve profitable operations,
any significant limitation on the utilization of our net operating losses would
have the effect of increasing our tax liability and reducing net income and
available cash reserves. We are unable to determine the availability of these
net operating losses since this availability is dependent upon profitable
operations, which we have not achieved in periods prior to the most recent
quarter.

Relevant Accounting Standards

We generally grant stock options to employees and consultants with an exercise
price not less than the fair market value at the date of grant. We account for
stock option grants to employees in accordance with Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and, accordingly,
recognize no compensation expense related to option grants. In cases where we
grant options below the fair market value of the stock at the date of grant the
difference between the strike price and the fair market value is treated as
compensation expense and amortized over the vesting period of the option, if
any. Stock options granted to consultants and others instead of cash
compensation are recorded based upon management's estimate of fair

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value of the options or the related services provided and expensed over the
vesting period, if any.

Pro forma information regarding net income (loss) is required under Statement
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," and has been determined as if we had accounted all the 1998 and
1997 stock option grants on the fair value method.

We account for income taxes under the provisions of SFAS No. 109, "Accounting
for Income Taxes." We recognize the current and deferred tax consequences of
all transaction that have been recognized in the financial statements, using
the provisions of enacted tax laws. Deferred tax assets are recognized for
temporary differences that will result in deductible amounts in future years
and for tax loss carryforwards, if in the opinion of our management, it is more
likely than not that the deferred tax asset will be realized. SFAS No. 109
requires companies to set up a valuation allowance for the component of net
deferred tax assets which does not meet the more likely than not criteria for
realization. We have established this valuation allowance for our deferred tax
assets.

In 1997, the Financial Accounting Standards Board issued SFAS No. 128,
"Earnings per Share." The new rules are effective for both interim and annual
financial statements for the periods ending after December 15, 1997. SFAS No.
128 supersedes APB No. 15 to conform earnings per share with international
standards as well as to simplify the complexity of the computation under APB
No. 15. The previous primary earnings per share calculation is replaced with a
basic earnings per share calculation. The basic earnings per share differs from
the primary earnings per share calculation in that the basic earnings per share
does not include any potentially dilutive securities. Fully dilutive earnings
per share is replaced with diluted earnings per share and should be disclosed
regardless of dilutive impact of basic earnings per share. Accordingly, we have
adopted SFAS No. 128 effective September 30, 1998.

Year 2000 Issues

We have devised a plan and have substantially completed a review and assessment
of all hardware and software and believe that our hardware and software are
substantially year 2000 compliant so that the computer programs do not cease
functioning because of an inability to process on a date occurring from and
after January 1, 2000. Our review has not revealed any year 2000 issues that
cannot be remediated in a timely manner. We do not believe that any remediation
costs will be material.

We are highly dependent upon third-party financial information vendors,
telecommunications suppliers and our clearing brokers. We have sent letters to
a number of our vendors requesting assurances of their compliance. Such third
parties have generally advised us that their review of their operating systems
indicate that their operating systems are year 2000 compliant or will be year
2000 compliant in a timely

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manner. We are currently developing a contingency plan if any third parties
with which we do business have any material year 2000 compliance problems.

We would be materially adversely affected if there are any failures or
interruptions in service resulting from the inability of our computing systems
or any third-party's systems to recognize the year 2000. Moreover, since our
evaluation of these issues is continuing, we may discover additional issues
which could present a material risk of disruption to our operations.

Forward Looking Statements

Certain statements contained in this report, including statements regarding
the development of services and markets and future demand for services and
other statements regarding matters that are not historical facts, discuss
future expectations or other forward-looking information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause our actual results to differ materially from those contemplated by the
statements. Factors that might cause a difference include, but are not limited
to, customer trading activity, loss of one or more significant customers,
changes in technology, shifts in competitive patterns, ability to manage
growth effectively, risks associated with acquisitions including integration
risks, risks associated with strategic partnerships, various
project-associated risks, substantial competition, general economic and
securities markets conditions, risks associated with intellectual property
rights, risks associated with international operations and other risk factors
listed from time to time in the Company's filings and reports with the
Securities and Exchange Commission.

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                                   SIGNATURES

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

Date: June 4, 1999
                                    INTERNET FINANCIAL SERVICES INC.
                                    --------------------------------
                                              (Registrant)

                                     By: /s/ Steven Malin
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                                         Steven Malin
                                         Chairman, Chief Executive Officer

                                     By: /s/ Harry Simpson
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                                         Harry Simpson
                                         President, Chief Financial Officer
                                         [Chief Accounting Officer]

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