<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     6/30/01
                                                ---------------

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

         For the transition period from                to
                                        --------------    --------------

         Commission file number             000-28107
                                ---------------------------------------

                                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)

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 [ ]

As of September 5, 2001, 27,142,325 shares of the issuer's common stock, par
value $.0002 per share, were outstanding.

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

<PAGE>

PART I.  FINANCIAL INFORMATION



                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                        - INTERIM FINANCIAL STATEMENTS -
                                  (U.S. FUNDS)
                                   (UNAUDITED)
                                  JUNE 30, 2001


<PAGE>

                                INCITATIONS, INC.

                                  JUNE 30, 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-VIII

<PAGE>

                                                                          PAGE I

                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

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

<TABLE>
<CAPTION>
                                     ASSETS
                                                           JUNE 30       DECEMBER 31
                                                            2001            2000
                                                          ---------       ---------
<S>                                                       <C>             <C>
CURRENT
     Cash                                                 $   2,905       $   2,905
                                                          =========       =========
                                   LIABILITIES
CURRENT
     Accounts payable                                     $  70,043       $  88,080
     Advances from related company (Note 5)                 193,905         124,788
     Loans payable                                                -         267,905
                                                          ---------       ---------
                                                            263,948         480,773
                                                          ---------       ---------
                               CAPITAL DEFICIENCY
AUTHORIZED
     300,000,000  Common stock at $0.0002 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           (567,448)       (516,368)
                                                          ---------       ---------
                                                           (261,043)       (477,868)
                                                          ---------       ---------
                                                          $   2,905       $   2,905
                                                          =========       =========
</TABLE>

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>
                                FOR THE THREE MONTHS          FOR THE SIX MONTHS        FROM INCEPTION ON
                                    ENDED JUNE 30               ENDED JUNE 30           MARCH 28, 1995 TO
                                                                                             JUNE 30
                                 2001          2000           2001          2000              2001
                                 ----          ----           ----          ----              ----
                                  $              $             $             $                  $
REVENUE                           -              -             -             -                  -
<S>                             <C>            <C>           <C>            <C>              <C>
EXPENSES                        30,964         1,617         51,080         4,178            567,448
                               -------     ---------      ---------     ---------            -------
NET LOSS FROM                  (30,964)       (1,167)       (51,080)       (4,178)          (567,448)
  OPERATIONS                   ========    ==========       ========    ==========           =======

Weighted average number of   27,142,325    24,463,275     26,491,064    24,463,275
  shares outstanding         ==========    ==========     ==========    ==========

Basic loss per share            $0.00          $0.00         $0.00         $0.00
                                =====          =====         =====         =====
</TABLE>

See accompanying notes to financial statements.

<PAGE>

                                                                        PAGE III

                                INCITATIONS, INC.
                          (A DEVELOPMENT STAGE COMPANY)

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

                    FOR THE PERIOD FROM THE DATE OF INCEPTION
                         MARCH 28, 1995 TO JUNE 30, 2001

<TABLE>
<CAPTION>
                                                                                                          DEFICIT
                                                                                                        ACCUMULATED
                                                                                        ADDITIONAL       DURING THE
                                                              COMMON STOCK               PAID-IN        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)
    June 30, 2001                                              -                -              -           (30,964)
                                                     -----------      -----------    -----------       ------------
Balance, June 30, 2001                                27,142,325           25,423        280,982          (567,448)
                                                     ===========      ===========    ===========       ============
</TABLE>

See accompanying 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
                                                                                                         MARCH 28,
                                              FOR THE THREE MONTHS            FOR THE SIX MONTHS          1995 TO
                                                  ENDED JUNE 30                 ENDED JUNE 30             JUNE 30
                                               2001           2000           2001           2000            2001
                                               ----           ----           ----           ----            ----
                                                $               $              $              $              $
<S>                                          <C>              <C>           <C>            <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Loss from operations                      (30,964)         (1,617)       (51,080)       (4,178)       (567,448)
   Increase (decrease) in accounts payable    30,964         (14,781)       (18,037)      (56,547)         70,043
   Investment in shares of stock
      written off                                  -               -              -              -        250,000
                                            --------        --------       --------       --------       ---------
                                                   -         (16,398)       (69,117)      (60,725)       (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                   -          16,398         69,117         60,725        193,905
   Issuance of common stock                        -               -              -              -         40,500
   Loans payable                                   -               -              -              -        267,905
                                          ----------      ----------     ----------     ----------     ----------
                                                   -          16,398         69,117         60,725        502,310
                                          ----------      ----------     ----------     ----------     ----------
INCREASE IN CASH                                   -               -              -              -          2,905
CASH, beginning of period                      2,905           2,905          2,905          2,905              -
                                          ----------      ----------     ----------     ----------     ----------
CASH, end of period                            2,905           2,905          2,905          2,905          2,905
                                          ==========      ==========     ==========     ==========     ==========
SCHEDULE OF NON-CASH TRANSACTION
   Conversion of loans payable into
      common stock                                 -               -        267,905              -        267,905
                                          ==========      ==========     ==========     ==========     ==========
</TABLE>

See accompanying notes to financial statements.

<PAGE>

                                                                          PAGE V


                               INCITATIONS, INC.

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

                                  JUNE 30, 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 $409,000, 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)

                                  JUNE 30, 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)

                                  JUNE 30, 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).

    In April 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 June 30, 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)

                                  JUNE 30, 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 $263,948. The Company's net losses to date are $567,448.

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.

                                       3
<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 $263,948. 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

                                       4
<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 June 30, 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 $567,448. The
operating expenses for the six months ended June 30, 2001 of $30,964 were
$29,347 higher than the $1,617 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
$(567,448). The net loss on operations for the six months ended June 30, 2001
was $(30,964) compared to a net loss on operations for the comparable period a
year ago of $(1,617). The increase in losses for the six months ended June 30,
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.

                                       5
<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.

                                       6
<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.

                                        7
<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: September 6, 2001                By: /s/ Dominique M. Bellemare
     ------------------                --------------------------------------
                                          Dominique M. Bellemare
                                          President; Principal Financial Officer


                                        8