<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB



         (Mark One)

         [X]  Quarterly report under Section 13 or 15(d) of the Securities
              Exchange Act of 1934

         For the quarterly period ended       3/31/01
                                         -----------------

         [ ]  Transition report under Section 13 or 15(d) of the Exchange Act

         For the transition period from ___________ to ______________

         Commission file number        00-28107
                                ---------------------


                                INCITATIONS, INC.
        -----------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

                    NEVADA                               88-0335710
        -----------------------------             -----------------------
        (State or Other Jurisdiction of              (I.R.S. Employer
          Incorporation or Organization)            Identification No.)


       1800 MCGILL COLLEGE, SUITE 2480, MONTREAL, QUEBEC, H3A 3J6, CANADA
       ------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (514) 288-1687
       ------------------------------------------------------------------
                           (Issuer's Telephone Number)


                      MERCANTILE FACTORING & CREDIT ONLINE CORP.
       ------------------------------------------------------------------
              (Former Name, Former Address and Former Fiscal year,
                         if Changed Since Last Report)


         Check whether the issuer; (1) filed all reports required to be filed by
         Section 13 or 15(d) of the Exchange Act during the past 12 months (or
         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
             ---------                 --------


                                       1

<PAGE>

         As of August 10, 2001, 27,142,235 shares of the issuer's common stock,
par value $.0002 per share, were outstanding.

         Transitional Small Business Disclosure Format (check one):
Yes         No   X
    ------     ------




















                                       2


<PAGE>


PART I.  FINANCIAL INFORMATION



                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                        - INTERIM FINANCIAL STATEMENTS -
                                  (U.S. FUNDS)
                                   (UNAUDITED)


                                 MARCH 31, 2001

<PAGE>


                                INCITATIONS, INC.


                                 MARCH 31, 2001


                                    CONTENTS


                                                                PAGE

INTERIM FINANCIAL STATEMENTS

     Balance Sheet                                                 I

     Statement of Operations                                      II

     Statement of Stockholders' Equity (Deficit)                 III

     Statement of Cash Flows                                      IV

     Notes to Financial Statements                                 V



<PAGE>


                                                                          PAGE I
                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                              INTERIM BALANCE SHEET
                                  (U.S. FUNDS)
                                   (UNAUDITED)

                                     ASSETS



                                                        MARCH 31    DECEMBER 31
                                                          2001          2000
                                                        --------    -----------
CURRENT
Cash                                                    $  2,905    $    2,905
                                                        ========    ===========

                             LIABILITIES

CURRENT
     Accounts payable                                   $ 39,079    $   88,080
     Advances from related company (Note 5)              193,905       124,788
     Loans payable                                          -          267,905
                                                        --------    -----------
                                                         232,984       480,773
                                                        --------    -----------

                          CAPITAL DEFICIENCY

AUTHORIZED
     300,000,000  Common stock at $0.01 par value

ISSUED AND OUTSTANDING
     27,142,325   Common shares                           25,423        25,155

ADDITIONAL PAID-IN CAPITAL                               280,982        13,345

DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE
                                                        (536,484)     (516,368)
                                                        --------    -----------
                                                        (230,079)     (477,868)
                                                        --------    -----------

                                                        $  2,905    $    2,905
                                                        ========    ===========


See accompanying notes to financial statements.


<PAGE>


                                                                         PAGE II

                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                         INTERIM STATEMENT OF OPERATIONS
                                  (U.S. FUNDS)
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                 FROM INCEPTION ON
                                                      FOR THE THREE MONTHS       MARCH 28, 1995 TO
                                                          ENDED MARCH 31              MARCH 31
                                                      2001           2000               2001
                                                  -----------     -----------        -----------
<S>                                              <C>              <C>             <C>
REVENUE                                           $     -         $    -             $     -


EXPENSES                                               20,116           2,561           536,484
                                                  -----------     -----------        -----------

NET LOSS FROM OPERATIONS                          $   (20,116)    $    (2,561)       $ (536,484)
                                                  ===========     ===========        ===========


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING       24,800,909     24,462,275
                                                  ===========     ===========

BASIC LOSS PER SHARE                                     $0.00          $0.00
                                                         =====          =====
</TABLE>







See accompanying notes to financial statements.



<PAGE>


                                                                        PAGE III

                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

               INTERIM STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                                  (U.S. FUNDS)
                                   (UNAUDITED)

                    FOR THE PERIOD FROM THE DATE OF INCEPTION
                        MARCH 28, 1995 TO MARCH 31, 2001
<TABLE>
<CAPTION>
                                                                                                                      DEFICIT
                                                                        COMMON STOCK              ADDITIONAL    ACCUMULATED DURING
                                                                                                   PAID-IN        THE DEVELOPMENT
                                                                   SHARES        AMOUNT             CAPITAL            STAGE
                                                                     #                $                $                 $
                                                                ----------       ------             -------          ---------
<S>                                                             <C>              <C>                <C>              <C>
Inception on March 28, 1995                                          -             -                    -                -
Common stock issued for cash at $0.0058
  per share                                                      1,850,540
Common stock issued for cash at $0.0334
  per share                                                      1,862,349
Net loss for the period ended December 31, 1995                      -             -                    -                -
                                                                ----------       ------             -------          ---------
Balance, December 31, 1995                                       3,712,889         -                    -                -
Net loss for the year ended December 31, 1996                        -             -                    -              (1,500)
                                                                ----------       ------             -------          ---------
Balance, December 31, 1996                                       3,712,889         -                                   (1,500)
Net loss for the year ended December 31, 1997                        -             -                    -                (535)
                                                                ----------       ------             -------          ---------
Balance, December 31, 1997                                       3,712,889         -                    -              (2,035)
Common stock issued for cash at $0.0356
  per share (Note 4)                                               421,728         -                    -                -
Net loss for the year ended December 31, 1998                        -             -                    -              (3,035)
                                                                ----------       ------             -------          ---------
Balance, December 31, 1998                                       4,134,617         -                    -              (5,070)
Common stock cancelled (Note 4)                                    (28,115)        -                    -                -
Common stock cancelled (Note 3)                                 (2,534,615)        -                    -                -
Common stock cancelled (Note 4)                                   (383,612)        -                    -                -
Common stock issued in exchange for all
  issued and outstanding common shares
  of MFCC (Note 3)                                              22,500,000        25,000             (2,000)             -
Common stock issued for professional fees
  at $0.02 per share (Note 4)                                      775,000         155               15,345              -
Net loss for the year ended December 31, 1999                        -             -                    -            (429,997)
                                                                ----------       ------             -------          ---------
Balance, December 31, 1999                                      24,463,275       25,155              13,345          (435,067)
Net loss for the year ended December 31, 2000                        -             -                    -             (81,301)
                                                                ----------       ------             -------          ---------
Balance, December 31, 2000                                      24,463,275       25,155              13,345          (516,368)
Conversion of loan payable into
  common stock (Note 6)                                          2,679,050          268             267,637           -
Net loss for the three months ended
  March 31, 2001                                                     -             -                    -             (20,116)
                                                                ----------       ------             -------          ---------

Balance, March 31, 2001                                         27,142,325       25,423             280,982          (536,484)
                                                                ==========       ======             =======          =========
</TABLE>

See accompany notes to financial statements.


<PAGE>


                                                                         PAGE IV

                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                         INTERIM STATEMENT OF CASH FLOWS
                                  (U.S. FUNDS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                FROM INCEPTION ON
                                                                   FOR THE THREE MONTHS         MARCH 28, 1995 TO
                                                                       ENDED MARCH 31                MARCH 31
                                                                  2001             2000                2001
                                                                --------         --------          ----------
<S>                                                             <C>              <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Loss from operations                                         $(20,116)        $ (2,561)         $ (536,484)
   Increase (decrease) in accounts payable                       (49,001)         (41,766)             39,079
   Investment in shares of stock written off                         -               -                250,000
                                                                --------         --------          ----------
                                                                 (69,117)         (44,327)           (247,405)
                                                                --------         --------          ----------
CASH FLOWS FROM INVESTING ACTIVITIES
   Amount paid for the acquisition of Cynergy shares                 -               -               (250,000)
   Accounts payable acquired on merger                               -               -                 (2,000)
                                                                --------         --------          ----------
                                                                     -               -               (252,000)
                                                                --------         --------          ----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Advances from related company                                  69,117           44,327             193,905
   Issuance of common stock                                          -               -                 40,500
   Loans payable                                                     -               -                267,905
                                                                --------         --------          ----------
                                                                  69,117           44,327             502,310
                                                                --------         --------          ----------

INCREASE IN CASH                                                     -               -                  2,905

CASH, beginning of period                                          2,905            2,905                -
                                                                ---------        --------          ----------

CASH, end of period                                             $  2,905         $  2,905          $    2,905
                                                                ========         ========          ==========

SCHEDULE OF NON-CASH TRANSACTION
   Conversion of loans payable into common stock                $267,905         $   -             $     -
                                                                ========         ========          ==========
</TABLE>




See accompanying notes to financial statements.



<PAGE>
                                                                          PAGE V

                                INCITATIONS, INC.

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                  (U.S. FUNDS)
                                   (UNAUDITED)

                                 MARCH 31, 2001


1.       ORGANIZATION AND DESCRIPTION OF BUSINESS

         Incitations, Inc. ("Incitations" or the "Company") was incorporated
         under the laws of the state of Nevada on March 28, 1995 under the name
         of Truco, Inc. The shareholders approved a name change on March 22,
         1996, March 18, 1997, September 13, 1999 and October 3, 2000 to Web
         Tech, Inc., Cynergy, Inc., Mercantile Factoring Credit Online Corp. and
         to its present name, respectively.

         Prior to the merger in September 1999 (Note 3), the Company's
         activities had been in the development of proprietary technology and
         services using smart and remote memory cards and wireless and landline
         networks in the fields of commerce, publishing and network based
         systems.

         The financial statements of the Company are prepared in accordance with
         generally accepted accounting principles in the United States of
         America.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A)      ACCOUNTING METHOD

                  The Company's financial statements are prepared using the
                  accrual method of accounting.

         (B)      INCOME TAXES

                  No provision for income taxes has been made due to the
                  inactive status of the Company. The Company has net operating
                  loss carry-forwards of approximately $378,500, including
                  Cynergy's net operating loss carry-forward of $92,000 at the
                  time of merger, which expire up to 2015. The potential tax
                  benefit of the loss carry-forwards has been offset in full by
                  a valuation allowance.

         (C)      ESTIMATES

                  The preparation of financial statements in accordance with
                  generally accepted accounting principles in the United States
                  of America requires management to make estimates and
                  assumptions that affect the reported amount of assets and
                  liabilities and disclosure of contingent assets and
                  liabilities at the date of the financial statements and the
                  reported amount of revenues and expenses during the reported
                  period. These estimates are reviewed periodically, and, as
                  adjustments become necessary, they are reported in earnings in
                  the period in which they become known.

         (D)      BASIC LOSS PER COMMON SHARE

                  Basic loss per common share has been calculated based on the
                  weighted average number of shares of common stock outstanding
                  during the period.


<PAGE>

                                                                         PAGE VI

                                INCITATIONS, INC.

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                  (U.S. FUNDS)
                                   (UNAUDITED)

                                 MARCH 31, 2001

3.       BUSINESS COMBINATION

         On September 29, 1999, the Company and Mercantile Factoring & Credit
         Corp. ("MFCC") completed their agreement to merge upon the filing of
         the Articles of Merger with the Secretary of State of the state of
         Nevada.

         Pursuant to a separate transaction, MFCC bought 2,534,615 shares of the
         Company (61.3%) from the shareholders for cash of $250,000 and, prior
         to the Merger, contributed those shares to the Company for
         cancellation. The investment was written off and charged to expenses on
         the statement of operations for the year ended December 31, 1999.

         Under the merger agreement, the Company issued 22,500,000 post-merger
         shares to the former owner of MFCC in consideration for all of the
         issued and outstanding common shares of MFCC. As the former shareholder
         of MFCC obtained control (91.97%) of the Company through the share
         exchange, this transaction has been accounted for in these financial
         statements as a reverse takeover and the purchase method of accounting
         has been applied. Under reverse takeover accounting, MFCC is considered
         to have acquired Incitations with the results of operations included in
         these financial statements from the date of acquisition. MFCC was then
         merged into the Company.

4.       STOCK TRANSACTIONS

         In March 1995, the Company issued 1,850,540 shares of common stock to
         individuals at $0.029 per share for cash.

         At the end of 1995, the Company completed a public offering. A total of
         1,862,348 shares of common stock were issued at $0.0334 per share. The
         stock offering costs were offset against the proceeds of the common
         stock. On January 10, 1996, the Company effected a 10-for-1 reverse
         stock split. On March 28, 1996, the Company effected a 6-for-1 forward
         stock split and changed its par value from $0.01 per share to $0.001
         per share. The authorized shares were 300,000,000 after these
         amendments. The financial statements reflect the stock splits on a
         retroactive basis.

         On March 24, 1998, the Company entered into a Rescission Agreement with
         the shareholders of Geo Ram, Inc. whereby the shareholders of Geo Ram,
         Inc. returned the 6,000,000 shares issued in connection with the Share
         Exchange Agreement dated November 30, 1996. The rescission has been
         reflected on a retroactive basis.

         Per a letter of understanding, dated May 25, 1998, the Company acquired
         the rights to purchase a 100% working interest, subject to a 21%
         royalty (79% net revenue interest), in oil and gas leases consisting of
         960 acres for a total of $240,000. The leases were located in the San
         Joaquin Valley, Kern County, California.


<PAGE>
                                                                        PAGE VII

                                INCITATIONS, INC.

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                  (U.S. FUNDS)
                                   (UNAUDITED)

                                 MARCH 31, 2001


4.       STOCK TRANSACTIONS (CONTINUED)

         The Company decided not to proceed with the option. No further payments
         were made and the option expired. The initial payment of $15,000 was
         paid by shareholders who were issued 421,728 shares of common stock at
         $0.0356 per share.

         On September 3, 1999, the Company cancelled 28,115 common stock and
         credited the paid-in capital for the original par value.

         On September 13, 1999, the Company effected a 17.784 for 1 reverse
         stock split. The financial statements reflect the stock splits on a
         retroactive basis.

         On September 22 and 23, 1999, the Company cancelled 2,534,615 and
         383,612 common stock, respectively, and credited the paid-in capital
         for the original par value.

         In accordance with the merger agreement (Note 3), the Company issued
         22,500,000 common shares at $0.001 per share to the former owner of
         MFCC in exchange for all issued and outstanding shares of MFCC.

         The Company issued 400,000 and 375,000 common shares at $0.02 per share
         in September 1999 as finders' and legal fees, respectively, in
         connection with the merger.

         On October 3, 2000, the Company effected a 5 for 1 stock split. The
         financial statements reflect the stock splits on a retroactive basis.

         The company issued 2,679,050 common shares at $0.10 per share on
         February 15, 2001 in connection with the cancellation of the financing
         agreement and conversion of loan payable (Note 6).

         Subsequent to March 31, 2001, the par value of the Company's common
         stock was changed from $0.001 to $0.0002 per Certificate of Amendment
         to the Articles of Incorporation.

5.       ADVANCES FROM RELATED COMPANY

         Although the financing agreement with Worldnet described in Note 7 was
         cancelled, Worldnet continues to advance monies to the Company to cover
         certain ongoing expenses. As of March 31, 2001, $193,905 in advances
         were made by Worldnet to the Company. The advances are non-interest
         bearing with no specific terms of repayment.

6.       LOANS PAYABLE

         On July 30, 1999, the Company entered into an agreement with Worldnet
         Connections, Inc. ("Worldnet"), an affiliated company incorporated
         under the laws of the state of Nevada, United States of America.
         Worldnet agreed to provide funds up to US $2,500,000, to be issued in
         multiples of $100,000, upon a 15 day notice by the Company.


<PAGE>

                                                                       PAGE VIII

                                INCITATIONS, INC.

                      NOTES TO INTERIM FINANCIAL STATEMENTS
                                  (U.S. FUNDS)
                                   (UNAUDITED)

                                 MARCH 31, 2001

6.       LOANS PAYABLE (CONTINUED)

         As of December 31, 2000, Worldnet had made advances to the Company
         totalling $267,905. On February 15, 2001, the financing agreement and
         related note were cancelled. In exchange for the cancellation of the
         note, the Company issued 2,679,050 shares of common stock to Worldnet
         at $0.10 per share.

7.       GOING CONCERN

         The Company financial statements are prepared using generally accepted
         accounting principles in the United States of America applicable to a
         going concern which contemplates the realization of assets and
         liquidation of liabilities in the normal course of business. The
         Company has not established revenues sufficient to cover its operating
         costs and allow it to continue as a going concern.

         Over the next twelve months, the Company's business plan is to seek,
         investigate, and, if warranted, acquire one or more properties or
         businesses, and to pursue other related activities intended to enhance
         shareholder value. The acquisition of a business opportunity may be
         made by purchase, merger, exchange of stock, or otherwise, and may
         encompass assets or a business entity, such as a corporation, joint
         venture or partnership. The Company does not have significant capital,
         and it is unlikely that the Company will be able to take advantage of
         more than one such business opportunity.

         The Company's operations during the next 12 months will be limited
         solely to the seeking of an appropriate merger or acquisition
         candidate. The Company does not intend to pay any salaries nor incur
         any expenses other than those expenses necessary to ensure that the
         Company remains in good standing with the State of Nevada and in
         compliance with the regulatory requirements of the SEC and other
         regulatory bodies. The majority shareholder of the Company has orally
         committed to advance to the Company whatever funds may be necessary to
         maintain regulatory compliance until the Company completes a merger or
         acquisition.


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Company Background

Incitations, Inc. (the "Company"), a Nevada corporation, has its principal
offices at 1800 McGill College, Suite 2480, Montreal, Quebec, H3A 3J6 Canada.
The telephone number is (514) 288-1687. Through December 31, 2000, the Company
has generated no revenues from operations. The Company's auditors have expressed
doubt about the Company's ability to continue as a going concern. The Company
has current assets in the form of cash of $2,905, total assets of $2,905 and
current liabilities of $232,984. The Company's net losses to date are $536,484.

The Company was incorporated in March 1995 under the name of Truco, Inc. and was
to engage in the business of manufacturing, selling and marketing a product
described as the "Belt Wallet." However, soon thereafter the Company elected not
to proceed with its intended business objective of marketing and selling the
"Belt Wallet" but instead elected to change its focus to the area of developing
proprietary technology and services using smart and remote memory cards and
wireless and land-line networks in the fields of commerce, publishing, and
network-based systems. The Company entered into a licensing agreement for the
exclusive right to market and manufacture a technology known as the "ARCard,
ARCommerce Reader, ARCinternet Computer", and its application programming
bundled together as the "ARCommerce Kit" as a way of doing business over the
Internet. On March 22, 1996, the Company changed its name to "Web Tech
Incorporated".

Subsequently, on November 30, 1996, in an effort to diversify its product and
manufacturing base, the Company acquired all the issued and outstanding shares
of Geo-Ram, Inc., a Texas corporation, by issuing 6,000,000 shares of the
Company's common stock to the shareholders of Geo-Ram, Inc. Geo-Ram, Inc. was in
the business of manufacturing geophysical equipment which included a new drill
bit, the "Duckbill Bit", designed to implant explosive charges and geophones for
seismic surveys in harsh and environmentally fragile geographic areas known as
transition zones. On March 18, 1997, the Company changed its name to "Cynergy,
Inc."

However, the Company was neither able to (1) successfully develop and market the
"ARCommerce Kit", or (2) provide any further funding for the growth and
development of the geophysical equipment business. Consequently, the Company did
not continue its licensing of the "ARCommerce Kit" and further, on March 24,
1998, the Company entered into a Recission Agreement with the shareholders of
Geo-Ram, Inc. whereby the shareholders of Geo-Ram, Inc. returned the 6,000,000
shares that the Company issued in connection with the November 30, 1996
acquisition.

On September 22, 1999, the Company (1) entered into an Agreement and Plan of
Merger with Mercantile Factoring & Credit Corp. (formerly known as Advanced
Medical Technologies Research Corp.), a Nevada corporation (the "Merger"), (2)
changed its name to " Mercantile Factoring Credit Online Corp."("MFCO"), (3)
effected a reverse stock split of the Company's issued and outstanding shares of
common stock on a basis of one new share for every 17.784 old shares, and (4)
elected four new directors to the Company's board of directors (the "Board").
The Merger became effective upon the filing of the Articles of Merger on
September 29, 1999.

                                       4
<PAGE>

In February 2000, the Company determined that the then intended business of MFCO
(to provide an Internet web-site where (1) borrowers could post their offers to
borrow money secured by pledged collateral (primarily accounts receivable and
real estate), and (2) lenders could competitively bid to supply the money, with
the competition being in the form of the amount of money the lender was willing
to lend and the interest rate at which the lender was willing to supply the
money), would be difficult to initiate. Further, the Company determined that in
certain countries in which the Company had intended to offer its services, the
costs of complying with banking laws and regulations would be prohibitive. The
Company therefore decided to seek to enter into another business.

In October 2000, the Company contemplated changing its business strategy so as
to design, manufacture, market, and sell over the Internet women's intimate
apparel. In connection with such business strategy shift, the Company changed
its name to Incitations, Inc. As a result of the downturn in the marketplace at
the end of 2000 and the beginning of 2001, the Board elected not to proceed with
its then intended business objective.

The Company's current business plan is to seek, investigate, and, if warranted,
acquire one or more properties or businesses, and to pursue other related
activities intended to enhance shareholder value. The acquisition of a business
opportunity may be made by purchase, merger, exchange of stock, or otherwise,
and may encompass assets or a business entity, such as a corporation, joint
venture, or partnership. The Company does not have significant capital, and it
is unlikely that the Company will be able to take advantage of more than one
such business opportunity. See "Management's Discussion and Analysis or Plan of
Operation."

It is the view of the Staff of the Securities and Exchange Commission (the
"Staff") that, both before and after the business combination or transaction
with an operating entity or other person, the promoters or affiliates of blank
check companies, as well as their transferees, are "underwriters" of the
securities issued. It is also the view of the Staff that securities issued by a
blank check company can only be resold through registration under the Securities
Act of 1933, as amended (the "Act"), unless there is an applicable exemption.
Further, it is the view of the Staff that the shares owned by affiliates or
transferees of affiliates of the Company may not be sold pursuant to Rule 144.


Results of Operations

The Company remains in the development stage and, since inception, has
experienced significant liquidity problems and has no capital resources or
stockholder's equity. The Company has current assets in the form of cash of
$2,905, total assets of $2,905 and current liabilities of $232,984. The cash
assets will have been depleted by the expenses of accounting and the filing of
this Form 10Q-SB. The Company will need additional capital in the next twelve
months for any expenditures, and at present has no source of such capital.

Over the next twelve months, the Company's business plan is to seek,
investigate, and, if warranted, acquire one or more properties or businesses,
and to pursue other related activities intended to enhance shareholder value.
The acquisition of a business opportunity may be made by purchase, merger,
exchange of stock, or otherwise, and may encompass assets or a business entity,
such as a corporation, joint venture, or partnership. The Company does not have


                                       5
<PAGE>


significant capital, and it is unlikely that the Company will be able to take
advantage of more than one such business opportunity. The Company cannot predict
to what extent its lack of liquidity and capital resources will impair the
consummation of a business combination or whether it will incur further
operating losses through any business entity which the Company may eventually
acquire.

The Company's operations during the next twelve months will be limited solely to
the seeking of an appropriate merger or acquisition candidate. The Company does
not intend to pay any salaries nor incur any expenses other than those expenses
necessary to ensure that the Company remains in good standing with the State of
Nevada and in compliance with the regulatory requirements of the SEC and other
regulatory bodies. The majority shareholder of the Company has orally committed
to advance to the Company whatever funds may be necessary to maintain regulatory
compliance until the Company completes a merger or acquisition.

The Company currently has no product research and development that it will
perform over the term of the business plan. There is no current plan to purchase
or sell any significant equipment. The Company currently has no plans to
purchase or sell any significant equipment or to make any significant changes in
the number of employees.

There are no arrangements, agreements or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management or affairs of the
Company. No shareholders have been approved to fund any potential advances in
the next twelve months nor is there any basis for believing that shareholder
advances would be available in the next twelve months.

There are no current plans, understandings, agreements, or commitments with
anyone to act as a finder of opportunities for the Company. In the case that
such efforts will ever be undertaken, it is unknown at this time who if anyone
would act as a finder. Such a finder would be engaged or used prior to or
concurrent with acquisition of an opportunity.

During the period from March 28, 1995 through March 31, 2001 the Company has
engaged in no significant operations other than organizational activities,
acquisition of capital and preparation for registration of its securities under
the Exchange Act. No revenues were received by the Company during this period.
The Company has incurred operating expenses since inception of 536,484. The
operating expenses for the three months ended March 31, 2001 of $20,116 were
$17,555 higher than the $2,561 of operating expenses for the comparable period a
year ago. The increase of operating expenses was primarily due to an increase in
legal and accounting expenses as a result of the Company making Exchange Act
filings with the Commission. The net loss on operations since inception was
$(536,484). The net loss on operations for the three months ended March 31, 2001
was ($20,116) compared to a net loss on operations for the comparable period a
year ago of $(2,561). The increase in losses for the three months ended March
31, 2001 compared to the same period of the prior year is predominantly due to
increased legal and accounting expenses. Such losses will continue unless
revenues and business can be acquired by the Company. There is no assurance that
revenues or profitability will ever be achieved by the Company.


                                       6
<PAGE>

The Company does not have capital sufficient to meet the Company's cash needs,
including the costs of compliance with the continuing reporting requirements of
the Exchange Act. The Company will have to seek loans or equity placements to
cover such cash needs. In the event the Company is able to complete a business
combination during this period, lack of its existing capital may be a sufficient
impediment to prevent it from accomplishing the goal of competing a business
combination. There is no assurance, however, that without funds it will
ultimately allow the Company to complete a business combination. Once a business
combination is completed, the Company's needs for additional financing are
likely to increase substantially.
























                                       7
<PAGE>


                                    PART II.


ITEM 1.  LEGAL PROCEEDINGS.

None.


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

None.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

None.


ITEM 4.  SUBMISSION oF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8 - K.

(a)

Exhibit No.                Exhibit Name/Description
---------------------------------------------------

3.1     Articles of Incorporation of Registrant*

3.2     By-laws of Registrant*

3.3     Articles of Merger*

4.1     Form of Unsecured Convertible Note*

10.1    Loan Agreement by and between Mercantile Factoring and Credit Corp. and
        Worldnet, dated July 30, 1999*

10.2    Agreement and Plan of Merger, dated as of September 22, 1999 by and
        among Mercantile Factoring and Credit Corp. and Cynergy, Inc.*

10.3    Lease Agreement between Credit Mutuel de Montreal CMM Inc., and MFCO,
        dated October 1, 1999*

* Incorporated by reference the exhibits contained in the Company's Form 10-SB.

(b) No reports on Form 8-K were filed during the quarter for which this report
    is being filed.






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<PAGE>


                                   SIGNATURES


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


                                     INCITATIONS, INC.


Date: August 9,2001                  By: /s/ Dominique M. Bellemare
     -------------------                 --------------------------------------
                                         Dominique M. Bellemare
                                         President; Principal Financial Officer










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