SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

(Mark one)

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

                For the quarterly period ended September 30, 2000

                                       OR

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

               For the transition period from ________to________.


                           Commission File No. 0-23900


                         FUSION NETWORKS HOLDINGS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           Delaware                                         51-0393382
--------------------------------               ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


                   8115 N.W. 29th Street, Miami, Florida 33122
                  ---------------------------------------------
                    (Address of principal executive offices)


                                 (305) 477-6701
              -----------------------------------------------------
              (Registrant's telephone number, including area code)


             ------------------------------------------------------
              (Former name, former address and formal 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
_____

     As of November  6, 2000,  37,036,226  shares of Common  Stock of the issuer
were outstanding.

<PAGE>

                 FUSION NETWORKS HOLDINGS, INC. AND SUBSIDIARIES

                                      INDEX

                                                                          Page
                                                                          Number
                                                                         -------
PART I - FINANCIAL INFORMATION

   Item 1.  Financial Statements

            Consolidated Balance Sheets - September 30, 2000 and
            December 31, 1999..........................................        3

            Consolidated Statements of Operations - For the three
            and nine months ended September 30, 2000 and 1999..........        4

            Consolidated Statements of Cash Flows - For the nine months ended
            September 30, 2000 and 1999................................        5

            Notes to Consolidated Financial Statements.................        7

   Item 2.  Management's Discussion and Analysis of Financial
            Condition and Results of Operations........................       10

   Item 3.  Quantitative and Qualitative Disclosures about Market
            Risk.......................................................       15

PART II - OTHER INFORMATION

   Item 2.  Changes in Securities and Use of Proceeds..................       15
   Item 6.  Exhibits and Reports on Form 8-K...........................       15

SIGNATURES.............................................................       16
<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                 FUSION NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>


                                                                        Unaudited
                                                                       September 30,   December 31,
ASSETS                                                                     2000           1999
                                                                      ---------------  -------------
<S>                                                              <C>                  <C>

Current Assets:
     Cash                                                         $      942,695      $  7,044,458
     Accounts receivable                                                  99,109                 -
     Employee and other loans receivable                                  64,847               535
     Note receivable                                                      58,881                 -
     Prepaid expenses and other current assets                           454,508            21,858
                                                                    -------------      ------------
         Total Current Assets                                          1,620,040         7,066,851

Investment in affiliate, at cost                                      25,500,000        25,500,000
Web site costs                                                           352,503                 -
Property, plant and equipment, net                                     1,690,674           642,558
                                                                    -------------      ------------
                                                                    $ 29,163,217      $ 33,209,409
                                                                    =============      ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
     Accounts payable and accrued expenses                         $     646,672      $   131,080
                                                                    -------------      ------------
         Total Current Liabilities                                       646,672          131,080

Long-Term Debt                                                         4,000,000                -
                                                                    -------------      ------------
         Total Liabilities                                             4,646,672          131,080
                                                                    -------------      ------------
Commitments and Contingencies

Stockholders' Equity:
     Common stock, authorized 60,000,000 shares $.00001
      par value, issued and outstanding 37,036,226 at
      September 30, 2000 and 33,113,333 at December 31, 1999                 374             331
     Additional paid-in capital                                       65,063,482      54,437,419
     Foreign currency translation                                         (4,482)         14,551
     Retained earnings (deficit)                                     (40,542,829)    (21,373,972)
                                                                    -------------     -------------
                                                                      24,516,545      33,078,329
                                                                    -------------     -------------
                                                                    $ 29,163,217    $ 33,209,409
                                                                    =============     =============
</TABLE>



________________________________________________________________________________
       The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       3
<PAGE>


                 FUSION NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>

                                                    For the Three Months                 For the Nine Months
                                                     Ended September 30,                  Ended September 30,
                                                   2000             1999              2000                1999
                                                 --------        ---------          --------            ---------
<S>                                       <C>                  <C>               <C>                   <C>

Revenues from licensing agreements        $       106,243       $       -        $   106,243            $       -
                                               -----------      ----------       ------------           ----------
     Total revenues                               106,243               -            106,243                    -
                                               -----------      ----------       ------------           ----------
Costs and Expenses:
     General and administrative expenses        1,493,369          39,111          4,735,456               39,111
     Product development and engineering          517,918         310,931          3,036,000              310,931
     Sales and marketing                          432,502          17,655          1,305,032               17,655
     Merger expenses                                    -          46,000                  -               46,000
     Depreciation and amortization                  4,784               -            153,079                    -
                                               -----------      ----------       ------------           ----------
                                                2,439,573         413,697          9,229,567              413,697
                                               -----------      ----------       ------------           ----------
Loss from Operations                           (2,333,330)       (413,697)        (9,123,324)            (413,697)
                                               -----------      ----------       ------------           ----------
Other Income (Expense):
     Loss on sale of subsidiary                (1,320,847)              -         (1,320,847)                   -
     Miscellaneous other income, net               83,447               -             10,707                    -
     Interest income (expense), net               (57,802)          4,459             24,422                4,459
                                               -----------      ----------       ------------           ----------
                                               (1,295,202)          4,459         (1,285,718)               4,459
                                               -----------      ----------       ------------           ----------
Loss before credit for income taxes            (3,628,532)       (409,238)       (10,409,042)            (409,238)

Provision (credit) for income taxes                     -               -                  -                    -
                                               -----------      ----------       ------------           ----------
Loss from continued operations                 (3,628,532)       (409,238)       (10,409,042)            (409,238)

Loss on discontinued operations                         -               -         (8,759,818)                   -
                                               -----------      ----------       ------------           ----------
Net loss on common stock                      $(3,628,532)     $ (409,238)      $(19,168,860)          $ (409,238)
                                               ===========      ==========       ============           ==========
Loss per share:
     Basic loss per share:
       From continued operations             $      (0.10)     $    (0.01)      $      (0.29)          $   (0.01)
       From discontinued operations                     -               -              (0.25)                  -
                                               -----------      ----------       ------------           ----------
                                             $      (0.10)     $    (0.01)      $      (0.54)          $   (0.01)
                                               ===========      ==========       ============           ==========
     Basic common shares outstanding           37,129,782      27,450,136         35,745,753          27,450,136
                                               ===========      ==========       ============         ============
     Diluted common shares outstanding         37,129,782      27,450,136         35,745,753          27,450,136
                                               ===========      ==========       ============         ============

</TABLE>



________________________________________________________________________________
       The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       4
<PAGE>


                 FUSION NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>

                                                                   For the Nine Months Ended September 30,
                                                                       2000                 1999
                                                                    ------------        -------------
<S>                                                                <C>                 <C>

Cash Flows from Operating Activities:
     Net loss on Common Stock                                       $(19,168,860)    $    (409,238)
     Adjustments to reconcile net loss on common stock
     to net cash used in operating activities:
         Depreciation and amortization                                   153,079                 -
         Adjustment for discontinued operations                        8,824,401                 -
         Loss on sale of subsidiary                                    1,320,847                 -

     Decrease (Increase) In:
         Accounts receivable                                             (99,109)                -
         Employee and other loans                                        (64,312)                -
         Prepaid expenses and other current assets                      (432,650)                -

     Increase (Decrease) In:
         Accounts payable and accrued expenses                           515,592           204,609
                                                                     -------------      ------------
             Net cash used in operating activities                    (8,951,012)         (204,629)
                                                                     -------------      ------------
Cash Flows from Investing Activities:
     Disposal (purchase) of property, plant and equipment             (1,201,114)         (308,659)
     Payment for Web site costs                                         (352,503)                -
     Deposits on equipment                                                     -          (134,353)
     Loan receivable from sale of subsidiary                             (58,881)                -
                                                                     -------------      ------------
         Net cash used in investing activities                        (1,612,498)         (443,012)
                                                                     -------------      ------------
Cash Flows from Financing Activities:
     Net proceeds from issuance of common stock and warrants             475,000         3,359,501
     Proceeds from private placement                                   4,000,000                 -
     Proceeds from exercise of stock options and warrants                  5,780                 -
                                                                     -------------      ------------
         Net cash provided by financing activities                     4,480,780         3,359,501
                                                                     -------------      ------------
Effect of exchange rate changes on cash                                  (19,033)                -
                                                                     -------------      ------------
Net (Decrease) in Cash and Cash Equivalents                           (6,101,763)        2,711,860

Cash and Cash Equivalents, beginning of period                         7,044,458                 -
                                                                     -------------      ------------
Cash and Cash Equivalents, end of period                            $    942,695       $ 2,711,860
                                                                     =============      ============
</TABLE>



________________________________________________________________________________
       The accompanying notes are an integral part of these consolidated
                             financial statements.


                                       5
<PAGE>

                 FUSION NETWORKS HOLDINGS, INC. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   THE COMPANY

     Fusion  Networks  Holdings,  Inc.  (the  "Company")  is a  holding  company
     incorporated  under the laws of the State of  Delaware  in August 1999 with
     its operations conducted through Fusion Networks,  Inc. ("Fusion").  Fusion
     was incorporated  under the laws of the State of Delaware on June 30, 1999.
     Fusion   develops,   markets   and   provides   software   for   One-to-One
     Internet-based business solutions. Fusion's products encompass a full range
     of Internet Customer  Relationship  Management  ("ICRM") tools within "next
     generation" Internet platforms and customer-oriented applications including
     a  dynamic  multimedia  portal  design,  e-commerce  platforms.  integrated
     One-to-One   marketing   solutions,   personalized  content  and  community
     services.

2.   MERGER

     On July 26, 1999, Fusion and IDM Environmental Corp. ("IDM") announced that
     they had entered into a  nonbinding  letter of intent to form a new holding
     company  with  Fusion and IDM to become  wholly-owned  subsidiaries  of the
     holding company through the merger of those companies with  subsidiaries of
     the holding company (the "Merger"). On August 18, 1999, the Company, Fusion
     and IDM entered into a definitive merger agreement.

     In March 2000,  the Merger was approved by the  shareholders  of Fusion and
     IDM and the Merger was completed on April 13, 2000.

     The  stockholders of Fusion and IDM each received one share of common stock
     of the Company for each share of Fusion or IDM common stock held, resulting
     in the shareholders of Fusion owning  approximately 90% of the common stock
     of the  Company and  shareholders  of IDM owning  approximately  10% of the
     common stock of the Company.

     The Merger has been  accounted  for as a purchase  with Fusion being deemed
     the acquiror for accounting and financial  reporting  purposes.  Historical
     financial  statements of the Company are the financial statements of Fusion
     with  financial  statements of IDM being included only from the date of the
     Merger  forward.  In  connection  with the  Merger,  the  Company  recorded
     goodwill of $7,354,181.  The purchase price and goodwill were determined as
     follows:

                  IDM common shares outstanding                 3,922,893
                  Estimated fair value of shares issued             $2.47    (a)
                                                               -----------
                  Purchase price before merger costs           $9,689,546
                  Merger costs                                    450,000
                                                               -----------
                  Purchase price                               10,139,546
                  IDM net book value                            2,785,365
                                                               -----------
                  Goodwill                                     $7,354,181
                                                               ===========

     (a)  The  estimated  fair value of shares issued was  determined  using the
          average  closing  market  price of IDM's  common  stock for the 3 days
          prior  to and 3 days  subsequent  to the  public  announcement  of the
          letter of intent.

3.   SALE OF IDM

     On July 25, 2000, the Company  entered into a letter of intent  pursuant to
     which the Company  agreed in  principal  to sell all of its stock of IDM to
     two  principal  officers of IDM. The Company  completed  the sale of IDM on
     August  18,  2000.  Pursuant  to the  terms of the IDM  sale,  the  Company
     received a  promissory  note in the amount of $58,881 and were  relieved of
     guarantees in the amount of $300,000.

     Based on the  agreement in  principal  to sell IDM, the Company  recorded a
     write-down of the goodwill  associated  with the  acquisition of IDM in the
     amount of $7,354,181 in the second quarter of 2000 and recorded the loss on
     the sale of $1,320,847 in the third quarter of 2000.

                                        6
<PAGE>


4.   INTERIM PRESENTATION

     The interim consolidated  financial statements are prepared pursuant to the
     requirements  for  reporting  on Form 10-Q.  These  statements  include the
     accounts of Fusion Networks Holdings, Inc. and all of it's wholly-owned and
     majority-owned  subsidiary  companies.  The December 31, 1999 balance sheet
     data was derived from audited financial statements of Fusion (the acquiror)
     but does  not  include  all  disclosures  required  by  generally  accepted
     accounting principles. The Merger has been accounted for as a purchase with
     Fusion being deemed the acquiror for  accounting  and  financial  reporting
     purposes.  Historical financial statements of the Company are the financial
     statements of Fusion with  financial  statements  of IDM being  included as
     discontinued  operations  from the date of the Merger  through  the date of
     sale. The interim financial  statements and notes thereto should be read in
     conjunction  with  the  financial  statements  and  notes  included  in the
     Company's  Form 8-K/A dated April 13, 2000.  In the opinion of  management,
     the  interim  financial  statements  reflect  all  adjustments  of a normal
     recurring  nature  necessary  for a fair  statement  of the results for the
     interim periods presented. The current period results of operations are not
     necessarily indicative of results which ultimately will be reported for the
     full year ending December 31, 2000.

5.   EARNINGS (LOSS) PER SHARE

     Earnings  (loss)  per  share are based on the  weighted  average  number of
     common  shares  outstanding  including  common stock  equivalents.  For the
     periods reported within these consolidated  financial statements,  weighted
     average  shares  for basic  and  diluted  computations  are the same due to
     losses reported for each of the periods.

6.   ADDITIONAL SIGNIFICANT ACCOUNTING POLICIES -- WEBSITE COSTS

     Website  costs  include  only  those  costs paid to third  parties  for the
     purchase  of  websites  or  relating  to the  purchase  of  websites or the
     application  development  phase of website design and  implementation.  The
     costs  will be  amortized  over  their  future  expected  utility  which is
     estimated to be 3-5 years.

7.   CONVERTIBLE DEBENTURES AND WARRANTS

     On June 15, 2000,  the Company sold  $4,000,000  of 6% Secured  Convertible
     Debentures and 1,500,000 Warrants. The Debentures and Warrants were sold to
     three  accredited  investors.  The Debentures and Warrants were sold for an
     aggregate  offering price of $4,000,000.  A finders fee of 5%, or $200,000,
     was paid in connection  with the sale of the Debentures  and Warrants.  The
     Debentures   and  Warrants  were  sold  pursuant  to  the  exemption   from
     registration set out in Rule 506 as promulgated pursuant to Section 4(2) of
     the Securities Act of 1933. The  securities  were offered  without  general
     solicitation in a privately  negotiated  transaction  with three accredited
     investors.

     The Debentures bear interest at 6% per annum,  are due on June 13, 2001 and
     are  secured  by a pledge of the  investment  in  affiliates  of  Marketing
     Services Group,  Inc. The Debentures are convertible  into shares of Common
     Stock of the Company at a fixed  conversion  price of $1.75 per share.  The
     Warrants are  exercisable to purchase  Common Stock of the Company at $1.50
     per share.

8.   CONTINGENCIES AND COMMITMENTS

     In May 2000 the Company  entered into an employment  contract with Mr. Gary
     Goldfarb to serve as President and Chief  Executive  Officer of the Company
     for an  undisclosed  period of time.  The  contract  provides for a monthly
     compensation  of $18,750 per month.  The contract also grants Mr.  Goldfarb
     1,000,000  five year stock options  exercisable at the closing price of the
     Company's  common stock on the effective date. The options will vest 25% on
     each of the  first  three  anniversaries,  the  remaining  25% will vest at
     various times.


                                        7
<PAGE>


9.   CHANGE IN STRATEGIC FOCUS

     Overview

     In July, 2000, following the appointment of the Company's new President and
     Chief  Executive  Officer,  the  Company  altered  its  business  model and
     strategic  focus in  response  to  changing  market  conditions.  Under the
     revised  business model, the Company's focus will be the sale and licensing
     of its Rapid  Deployment  Portals called ICRM/V2 as well as its proprietary
     suite of One-to-One  Internet-based  software and business  solutions which
     were  developed  in  conjunction  with  the  development  of the  Company's
     www.latinfusion.com  Web portal.  The Company has changed it web address to
     www.fusionnetworks.net  and is using  the  existing  technology  originally
     developed to create its previous portal, plus new developments and advances
     evident in this portal as a marketing  tool to highlight  the  capabilities
     offered by the Company's software.  Additionally, the Company will continue
     to offer Internet design, development and support services.

     Products

     The  Company's  products  encompass  a  full  range  of  Internet  Customer
     Relationship  Management  ("ICRM") tools within "next generation"  Internet
     platforms and customer-oriented applications including a dynamic multimedia
     portal  design,  e-commerce  platforms,   integrated  One-to-One  marketing
     solutions,  personalized  content and  community  services.  The Company is
     currently deploying its version 2.0 ICRM/V2 Rapid Deployment Portal as well
     as beginning to deliver the individual modules of its software suite.

     The  Company's  ICRM/V2  delivers  a  dynamic   multimedia  portal  design,
     e-commerce  platform,   innovative   advertising,   integrated   One-to-One
     marketing  solutions  and  personalized   content.   ICRM/V2   functionally
     integrates six modules including a portal server,  user  administration and
     profiling server,  advertising server,  e-commerce server,  content server,
     and direct e-mail server. The individual modules are:

     *    The user  administration  and profiling server creates user preference
          profiles  based  on  individuals'   navigational  habits,   e-commerce
          behavior  and  personal  preferences,  allowing  companies  to  obtain
          customer  insight  vital to  creating  and  managing  online  business
          strategies.  This  module  includes  the  report  generator  which  is
          utilized by the other 5 modules.

     *    The ad server  delivers  advertisements  to individual  users based on
          navigation  and  e-commerce  habits,  enabling a company to manage and
          maximize the effect of online advertising campaigns.

     *    The  e-commerce  server  allows  e-commerce  merchants to  effectively
          target  product   promotions   based  on  shoppers'   preferences  and
          purchasing behavior.

     *    The  content  server  provides  companies  with the ability to enhance
          overall customer satisfaction via the delivery of personalized content
          focused on each customer's usage habits.


     *    The  direct  e-mail  server  gives  marketers  the tools to create and
          manage targeted e-mail campaigns and track the results in real time.

     IRCM/V2 One-to-One  applications are designed for use in  mission-critical,
     high-performance  environments  by companies with  demanding  architecture,
     deployment and maintenance  requirements.  Some of the key  capabilities of
     the applications include:

     Ease of use -- tools  designed  with  graphical  user  interfaces  allowing
     non-technical  business  managers to modify  business  rules and content in
     real time.

     Scalability -- robust  embedded  application  server  functionality  allows
     One-to-One  applications  to support large numbers of concurrent  customers
     and transactions.

     Secure  transaction  processing  --  secure  handling  of a wide  range  of
     commerce and financial  services  transactions  includes  order pricing and
     discount/incentive   handling,  tax  computation,   shipping  and  handling
     charges,  payment  authorization,  credit card processing,  order tracking,
     news and stock feeds through a combination  of built-in  functionality  and
     integration with other products.

                                        8
<PAGE>


     Application Service Provider Model

     The Company plans to offer, and is presently  offering,  its broad suite of
     customizable  software  applications  on an  application  service  provider
     ("ASP")  model  whereby we offer  complete  Web  solutions,  utilizing  our
     ICRM/V2 software, at a low initial cost with a predictable monthly fee.

     Target Markets - Ibero-America and Mid-Tier U.S.

     The Company  initially  plans to target,  and  believes  that its  software
     solutions  and  ASP  model  are  ideally  suited  for,  the  Ibero-American
     (Spanish- and  Portugese-speaking)  and mid-tier U.S. markets,  where rapid
     time to market and competitive, predictable pricing are key determinants of
     Internet solutions adopted.

     Distribution Channels

     The Company's initial marketing and distribution efforts are expected to be
     conducted  by our direct  sales  force in the  countries  where the Company
     presently  has  offices.  Longer  term,  the Company  plans to focus on the
     establishment  of relationships  with Value Added Resellers,  consisting of
     systems integrators and information technology consultants,  as its primary
     means of delivering its software and solutions to customers.

10.  PROPOSED VISUALCOM PURCHASE

     In August  2000,  the  Company  entered  into a letter of intent to acquire
     Visualcom,  Inc., a Miami based Internet consulting company specializing in
     Strategic Consulting, I-Business Solutions, Internet Marketing and Internet
     Wireless.  Under the terms of the letter of intent,  the Company  agreed to
     issue 2 million  shares of common stock and 2.5 million five year warrants,
     exercisable  at 110% of the average  closing price of the Company's  common
     stock over the seven trading days preceding closing, in exchange for all of
     the issued and outstanding  shares of Visualcom.  One million of the shares
     and one  million of the  warrants  issuable  under the letter of intent are
     issuable  in  escrow  subject  to  release  upon  satisfaction  of  certain
     "earn-out"  criteria.  The  letter of intent  also  provided  that  certain
     shareholders  of Visualcom  would purchase  shares of the Company's  common
     stock  with  the  proceeds  of that  sale  to be  used  to  fund  Visualcom
     operations pending closing.

11.  PRIVATE PLACEMENT AND VISUALCOM CREDIT FACILITY

     In September 2000, certain Visualcom  shareholders acquired an aggregate of
     359,574  shares of common stock of the Company for $475,000,  or $1.321 per
     share.  The Company  utilized  the  proceeds  from the sale to  establish a
     credit  facility  for  Visualcom  with  funds  being  advanced  subject  to
     forgiveness on closing of the acquisition of Visualcom by the Company.

12.  SUBSEQUENT EVENTS

     A.   Visualcom Purchase

          In November 2000, the Company and Visualcom  signed a definitive  Plan
          of  Share  Exchange  and the  Company  completed  the  acquisition  of
          Visualcom.

     B.   Bridge Loan

          In October and November 2000, the Company secured a short-term  bridge
          loan in the amount of  $500,000  from the sale of  Convertible  Bridge
          Loan Notes and 125,000 Bridge Loan Warrants. The Bridge Loan Notes are
          due on or before  December 31, 2000 with interest  accruing at 12% per
          annum. The Bridge Loan Notes are convertible into common stock, at the
          option of the  holder,  at market  value on the date of  closing.  The
          Bridge  Loan  Warrants  are  exercisable  for a term of five  years to
          purchase  common  stock at $0.845 per share with respect to 100,000 of
          the  warrants  and  $0.875  per share  with  respect  to 25,000 of the
          warrants.

                                        9
<PAGE>


Item 2. Management's  Discussion and Analysis Of Financial Condition And Results
        Of Operations.

This report contains  forward-looking  statements  within the meaning of Section
27A of the Securities Act of 1933 and Section 21e of Securities  Exchange Act of
1954.  Actual  results  could  differ  materially  from those  projected  in the
forward-looking  statements  as a result of the risk  factors  set forth in this
report.

Merger

On July 26, 1999, Fusion Networks,  Inc.  ("Fusion") and IDM Environmental Corp.
("IDM")  announced  that they had entered into a nonbinding  letter of intent to
form  a  new  holding  company  with  Fusion  and  IDM  to  become  wholly-owned
subsidiaries  of the holding  company through the merger of those companies with
subsidiaries  of the holding  company (the  "Merger").  On August 18, 1999,  the
Company,  Fusion and IDM entered into a definitive  merger  agreement.  In March
2000,  the Merger was  approved  by the  shareholders  of Fusion and IDM and the
Merger was completed on April 13, 2000. The  stockholders of Fusion and IDM each
received  one share of common  stock of the  Company for each share of Fusion or
IDM  common  stock  held,   resulting  in  the  shareholders  of  Fusion  owning
approximately  90% of the common  stock of the Company and  shareholders  of IDM
owning approximately 10% of the common stock of the Company.

The Merger has been  accounted  for as a purchase  with Fusion  being deemed the
acquiror for accounting and financial reporting purposes.  Historical  financial
statements of the Company are the financial  statements of Fusion with financial
statements of IDM being  included only from the date of the Merger  forward.  In
connection with the Merger, the Company recorded goodwill of $7,354,181.

Sale of IDM

In August 2000,  following a determination  by management that the operations of
IDM were not compatible  with the Company's  long-term  objectives,  the Company
sold  of  all of  the  stock  of IDM to  the  principal  officers  of  IDM.  The
consideration  paid  for the  stock of IDM  consisted  of a three  year  secured
interest bearing promissory note in the amount of $58,881 and the release of the
Company from guarantees in the aggregate amount of $300,000.

Following the sale of IDM, the Company's  operations consist  exclusively of the
technology and software development operations conducted by Fusion.

Change in Strategic Focus

Overview

In July,  2000,  following  the  appointment  of the Company's new President and
Chief  Executive  Officer,  the Company altered its business model and strategic
focus in response  to changing  market  conditions.  Under the revised  business
model,  the  Company's  focus  will  be the  sale  and  licensing  of its  Rapid
Deployment Portals called ICRM/V2 as well as its proprietary suite of One-to-One
Internet-based   software  and  business   solutions  which  were  developed  in
conjunction  with  the  development  of the  Company's  www.latinfusion.com  Web
portal. The Company has changed it web address to www.fusionnetworks.net  and is
using the  existing  technology  originally  developed  to create  its  previous
portal, plus new developments and advances evident in this portal as a marketing
tool  to  highlight  the  capabilities   offered  by  the  Company's   software.
Additionally,  the Company will continue to offer Internet  design,  development
and support services.

Products

The Company's products encompass a full range of Internet Customer  Relationship
Management  ("ICRM")  tools  within "next  generation"  Internet  platforms  and
customer-oriented  applications  including a dynamic  multimedia  portal design,
e-commerce platforms,  integrated  One-to-One marketing solutions,  personalized
content and community  services.  The Company is currently deploying its version
2.0  ICRM/V2  Rapid  Deployment  Portal  as well as  beginning  to  deliver  the
individual modules of its software suite.

                                       10
<PAGE>


The Company's ICRM/V2 delivers a dynamic  multimedia  portal design,  e-commerce
platform, innovative advertising,  integrated One-to-One marketing solutions and
personalized  content.  ICRM/V2 functionally  integrates six modules including a
portal server,  user  administration and profiling server,  advertising  server,
e-commerce  server,  content  server,  and direct e-mail server.  The individual
modules are:

*    The user  administration  and  profiling  server  creates  user  preference
     profiles based on individuals' navigational habits, e-commerce behavior and
     personal  preferences,  allowing companies to obtain customer insight vital
     to creating and managing online business  strategies.  This module includes
     the report generator which is utilized by the other 5 modules.

*    The  ad  server  delivers  advertisements  to  individual  users  based  on
     navigation and e-commerce habits, enabling a company to manage and maximize
     the effect of online advertising campaigns.

*    The e-commerce  server allows  e-commerce  merchants to effectively  target
     product promotions based on shoppers' preferences and purchasing behavior.

*    The content server  provides  companies with the ability to enhance overall
     customer  satisfaction via the delivery of personalized  content focused on
     each customer's usage habits.

*    The direct  e-mail  server gives  marketers  the tools to create and manage
     targeted e-mail campaigns and track the results in real time.

The suite interacts  within a report  generator module that allows for real-time
reporting and sophisticated multi- dimensional analysis of customer behavior and
e-marketing campaign efficiency.

IRCM/V2  One-to-One  applications  are  designed  for  use in  mission-critical,
high-performance   environments   by  companies  with  demanding   architecture,
deployment and  maintenance  requirements.  Some of the key  capabilities of the
applications include:

*    Ease of use -- tools  designed  with  graphical  user  interfaces  allowing
     non-technical  business  managers to modify  business  rules and content in
     real time.

*    Scalability -- robust  embedded  application  server  functionality  allows
     One-to-One  applications  to support large numbers of concurrent  customers
     and transactions.

*    Secure  transaction  processing  --  secure  handling  of a wide  range  of
     commerce and financial  services  transactions  includes  order pricing and
     discount/incentive   handling,  tax  computation,   shipping  and  handling
     charges,  payment  authorization,  credit card processing,  order tracking,
     news and stock feeds through a combination  of built-in  functionality  and
     integration with other products.

Application Service Provider Model

The  Company  plans to offer,  and is  presently  offering,  its broad  suite of
customizable  software  applications on an application  service provider ("ASP")
model whereby we offer complete Web solutions,  utilizing our ICRM/V2  software,
at a low initial cost with a predictable monthly fee.

Target Markets - Ibero-America and Mid-Tier U.S.

The Company initially plans to target,  and believes that its software solutions
and  ASP  model  are  ideally  suited  for,  the  Ibero-American  (Spanish-  and
Portugese-speaking)  and mid-tier U.S.  markets,  where rapid time to market and
competitive,  predictable  pricing are key  determinants  of Internet  solutions
adopted.

Distribution Channels

The  Company's  initial  marketing and  distribution  efforts are expected to be
conducted by our direct sales force in the countries where the Company presently
has offices.  Longer term,  the Company plans to focus on the  establishment  of
relationships with Value Added Resellers,  consisting of systems integrators and
information  technology  consultants,  as its primary  means of  delivering  its
software and solutions to customers.


                                       11
<PAGE>

Comparability of Financial Data

Fusion,  and the  Company,  had no  operations  during  the  three and six month
periods  ended  June 30,  1999.  From July 1999  through  May 2000,  Fusion  was
involved in the  development of its Internet  portal  network,  with sites being
launched in Bogota,  Miami, Buenos Aires, Mexico City, Sao Paulo and Madrid, and
additional  sites  planned to be  launched  in ten  additional  markets in North
America, South America and Europe.

Based on the  agreement  to sell IDM, the Company  recorded a write-down  of the
goodwill  associated  with the acquisition of IDM at June 30, 2000 and a loss on
the sale of IDM in the third quarter.

From the date of the Merger,  April 13, 2000, until June 30, 2000, the Company's
results include IDM as discontinued operations.

Because the Company and Fusion had limited operations during 1999 and because of
the shift in the Company's  business model during 2000,  prior year  comparative
financial information may be of limited value.

Results of Operations for the Three and Nine Months ended September 30, 2000 and
September 30, 1999

Revenues.  The Company's  consolidated revenues totaled $106,000 for the quarter
and nine months ended  September  30, 2000 compared to $-0- for the same periods
in 1999.  Revenues for the 2000 periods were attributable to the commencement of
software  licensing by the Company during the September  2000 quarter.  Prior to
the  September  2000  quarter,  the Company  was engaged in product  development
activities and reported no revenues.

General and  Administrative  Expenses.  The Company's  consolidated  general and
administrative   ("G&A")  expense  totaled  $1,493,000  for  the  quarter  ended
September 30, 2000 and $4,735,000  for the nine months ended  September 30, 2000
compared to G&A  expenses  of $39,000 for the quarter and nine month  periods in
1999.  Sequentially,  G&A expense was down 34%, from $2,245,000,  excluding IDM,
for the second  quarter of 2000.  General and  administrative  expense  consists
primarily  of  salaries  and  corporate  overhead.  The  increase  in  G&A  on a
year-over-year  basis was  attributable  to the start-up nature of the Company's
operations during the 1999 quarter.  The sequential  decline in G&A expense from
the second quarter to the third quarter of 2000 was attributable to cost control
and efficiency  measures  implemented by the Company's new management  beginning
late in the second quarter of 2000.

Product  Development  and  Engineering.   The  Company's   consolidated  product
development  and  engineering  expenses  totaled  $518,000 for the quarter ended
September 30, 2000 and $3,036,000  for the nine months ended  September 30, 2000
compared  to  $311,000  for  the  quarter  and  nine  month   periods  in  1999.
Sequentially, product development and engineering expenses were down 48.5%, from
$1,007,000 for the second quarter of 2000.  Product  development and engineering
expenses  consist of engineering  salaries and  consulting  fees relating to the
development  of the  Company's  software and web sites.  The increase in product
development and engineering  expenses on a year-over-year basis was attributable
to the start-up nature of the Company's  operations during the 1999 quarter. The
sequential  decline in product  development  and  engineering  expense  from the
second quarter to the third quarter of 2000 was  attributable to the substantial
completion of development of the Company's  suite of software  products early in
the third quarter of 2000.

Sales and Marketing.  The Company's  consolidated  sales and marketing  expenses
totaled $433,000 for the quarter ended September 30, 2000 and $1,305,000 for the
nine months  ended  September  30, 2000  compared to $18,000 for the quarter and
nine month periods in 1999. Sequentially, sales and marketing expenses were down
28%, from $602,000 for the second quarter of 2000. Sales and marketing  expenses
consist of salaries,  travel expense and outdoor advertising costs. The increase
in sales and marketing  expenses on a  year-over-year  basis was attributable to
the start-up  nature of the Company's  operations  during the 1999 quarter.  The
sequential decline in sales and marketing expense from the second quarter to the
third quarter of 2000 was  attributable  to our transition from a portal company
to a software company.

Merger Expenses.  The Company reported $46,000 in merger expenses in the quarter
and nine month periods ended September 30, 1999. The Company reported no similar
expenses in the quarter and nine month periods ended September 30, 2000.  Merger
expenses during 1999 were attributable to the merger  transaction with IDM which
was consummated in April 2000.



                                       12
<PAGE>

Depreciation  and  Amortization.   Consolidated  depreciation  and  amortization
expense totaled $5,000 for the quarter ended September 30, 2000 and $153,000 for
the nine months ended  September  30, 2000  compared to $-0- for the quarter and
nine month  periods in 1999.  The  increase  in  depreciation  and  amortization
expense on a year-over-year basis was attributable to the start-up nature of the
Company's operations during the 1999 quarter.

Loss on Sale of  Subsidiary.  The Company  recorded a loss on the sale of IDM of
$1,321,000 during the quarter and nine months ended September 30, 2000.

Miscellaneous other Income, Net. Consolidated other income, net, totaled $83,000
for the quarter  ended  September 30, 2000 and $11,000 for the nine months ended
September 30, 2000 compared to $-0- for the same quarter in 1999.  Miscellaneous
other income consisted principally of foreign currency translation gains.

Interest Income (Expense),  Net. Net interest income (expense) totaled ($58,000)
for the quarter  ended  September 30, 2000 and $24,000 for the nine months ended
September  30, 2000 compared to $4,000 for the quarter and nine month periods in
1999.  The adverse  change in net interest was  attributable  to the sale during
June 2000 of $4.0 million of convertible debentures.

Loss on Discontinued  Operations.  For the nine month period ended September 30,
2000, the Company  reported a loss from  discontinued  operations of $8,760,000.
The loss from discontinued operations reflects the operating loss and write-down
of goodwill attributable to the sale of IDM and reflecting the operations of IDM
during the period its was owned by the Company.

Liquidity and Capital Resources

At  September  30,  2000,  the  Company  had  consolidated  working  capital  of
approximately  $973,000  and a cash  balance of  $943,000.  Fusion  had  working
capital of $3.1 million and a cash  balance of $3.2 million  compared to working
capital of $6.9  million and a cash  balance of $7 million at December 31, 1999.
The decrease in working  capital and cash of Fusion was  attributable  to losses
incurred  in  connection  with the  roll-out  of  Fusion's  portal  network  and
development of various technologies which was partially offset by the sale of $4
million of convertible debentures.

On June  15,  2000,  the  Company  sold  $4,000,000  of 6%  Secured  Convertible
Debentures  and 1,500,000  Warrants.  The  Debentures  and Warrants were sold to
three  accredited  investors.  The  Debentures  and  Warrants  were  sold for an
aggregate  offering price of $4,000,000.  A finders fee of 5%, or $200,000,  was
paid in connection with the sale of the Debentures and Warrants.  The Debentures
and Warrants were sold pursuant to the exemption  from  registration  set out in
Rule 506 as promulgated  pursuant to Section 4(2) of the Securities Act of 1933.
The  securities  were  offered  without  general  solicitation  in  a  privately
negotiated transaction with three accredited investors.

The Debentures  bear interest at 6% per annum,  are due on June 13, 2001 and are
secured by a pledge of 1,500,000  shares of common  stock of Marketing  Services
Group,  Inc. The Debentures are  convertible  into shares of Common Stock of the
Registrant  at a fixed  conversion  price of $1.75 per share.  The  Warrants are
exercisable to purchase Common Stock of the Registrant at $1.50 per share.

The Company requires substantial working capital to support ongoing operations.

The Company began  realizing  operating  revenues in the quarter ended September
30, 2000.  Monthly  expenditures  averaged $813,000 per month during the quarter
ended  September  30, 2000  compared  to average  monthly  expenditures  of $1.2
million during the first six months of 2000.  Projected monthly expenditures for
the following  twelve months are  approximately  $12,000,000,  or $1,000,000 per
month. The decrease in monthly  expenditures  during the quarter ended September
30, 2000 and the decrease in the projected monthly  expenditures is attributable
to cost containment  measures  implemented by management and a decision to defer
the opening of  additional  portal  sites in favor of an  increased  emphasis on
Fusion's  offering of Internet  software  packages which are expected to produce
more  predictable  revenue streams more rapidly and at less initial cost.  There
can be no  assurance  that  actual  expenditures  will not exceed the  projected
expenditures over the next twelve months.

In conjunction with the shift in the Company's  business model, the Company sold
IDM Environmental Corp. during the quarter ended September 30, 2000. The Company
received  a  promissory  note in the amount of $58,881  and was  release  from a
guarantee in the amount of $300,000 in connection with the sale of IDM.


                                       13
<PAGE>

In  August  2000,  the  Company  entered  into a letter  of  intent  to  acquire
Visualcom,  Inc., a Miami based  Internet  consulting  company  specializing  in
Strategic  Consulting,  I-Business  Solutions,  Internet  Marketing and Internet
Wireless. Under the terms of the letter of intent, the Company agreed to issue 2
million shares of common stock and 2.5 million five year  warrants,  exercisable
at 110% of the average  closing  price of the  Company's  common  stock over the
seven  trading  days  preceding  closing,  in exchange for all of the issued and
outstanding  shares of  Visualcom.  One million of the shares and one million of
the warrants  issuable under the letter of intent are issuable in escrow subject
to release  upon  satisfaction  of certain  "earn-out"  criteria.  The letter of
intent also  provided  that certain  shareholders  of Visualcom  would  purchase
shares of the  Company's  common stock with the proceeds of that sale to be used
to fund Visualcom operations pending closing.

In  September  2000,  certain  Visualcom  shareholders  acquired an aggregate of
359,574 shares of common stock of the Company for $475,000, or $1.321 per share.
The Company  utilized the proceeds from the sale to establish a credit  facility
for Visualcom with funds being advanced subject to forgiveness on closing of the
acquisition of Visualcom by the Company.

In October and November  2000, the Company  secured a short-term  bridge loan in
the  amount of  $500,000  from the sale of  Convertible  Bridge  Loan  Notes and
125,000  Bridge  Loan  Warrants.  The  Bridge  Loan  Notes  are due on or before
December 31, 2000 with interest accruing at 12% per annum. The Bridge Loan Notes
are convertible into common stock, at the option of the holder,  at market value
on the date of closing.  The Bridge Loan Warrants are  exercisable for a term of
five years to purchase  common stock at $0.845 per share with respect to 100,000
of the warrants and $0.875 per share with respect to 25,000 of the warrants.

In November 2000, the Company completed the acquisition of Visualcom.

In order to fund operations at its current level,  the Company  anticipates that
it will require as much as $12 million of additional  funding over the following
12 months. The Company has entered into an investment banking  relationship with
Credit  Lyonnais  Securities  pursuant  to which it is  anticipated  that Credit
Lyonnais  will act as advisor  and  placement  agent for the Company in securing
additional capital to meet its financing requirements. Other than funds expected
to be  provided  by  operations  and the  potential  receipt  of funds  from the
exercise of  outstanding  warrants and  options,  the Company  presently  has no
sources of financing or commitments to provide financing.  There is no assurance
that the Company  will be  successful  in securing  the  financing  necessary to
support its operations or projected growth.

Certain Factors Affecting Future Operating Results

Beginning  with the hiring of a new Chief  Executive  Officer  in May 2000,  the
Company has substantially  altered certain aspects of its operating plan. First,
the focus of Fusion has been  modified to adopt as its  principal  objective the
marketing,  sales and support of turnkey Internet software and service packages.
Second,  Fusion re-developed its integrated software as six separate stand alone
components,  which are applications  suitable for any Internet presence (Website
or Portal) as well as working  along  with most third  party  applications.  The
"new"  products are  scheduled to be rolled out by the end of the first  quarter
2001.  Third,  a  determination  was made to abandon  the  Company's  efforts to
turn-around  and grow the  environmental  services  business  of IDM and IDM was
sold.

Relative to Fusion's Internet software business model, new management determined
that, in order to expand and accelerate the revenue and profit  potential of the
Fusion, Fusion should utilize, package and market the "next generation" Internet
capabilities  which it had developed in connection with the roll-out of Fusion's
portal network to develop and offer turnkey web-site development and maintenance
software  and  services.  To that end, in August  2000,  Fusion  began  actively
marketing and providing a suite of "next  generation"  Internet tools,  services
and  customer-oriented  applications  including  integrated  One-to-One Internet
marketing software,  portal technology,  applications and personalized  content,
community services,  Internet portal design and e-commerce  platforms which will
be sold separately as add-on  applications,  suitable for any website or portal,
as well as an entire portal package,  all designed to enable corporate customers
to  develop  effective   Spanish,   English  and   Portuguese-related   Internet
strategies.


                                       14
<PAGE>


Initial efforts with respect to the marketing of turnkey  Internet  software and
service  packages has  produced,  from July 1, 2000 to September  30, 2000,  ten
agreements  to create and maintain  co-branded  portals for  customers.  Each of
those  contracts  provides for a revenue share in the range of 50% to 75% of the
ongoing portal's  revenues.  Fusion will serve the future portals it licenses as
an  ASP  (Application  Service  Provider)  hosting,  maintaining,  updating  and
invoicing on behalf of its  customers  for a licensing  fee of $ 6,800 per month
for the basic package.  Additional implementation and customization fees will be
charged, as specifications require at the time of deployment.

In November 2000, the Company acquired  Visualcom,  Inc., a Miami based Internet
consulting company specializing in Strategic  Consulting,  I-Business Solutions,
Internet Marketing and Internet Wireless.

This Form 10-Q contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21e of the Securities Exchange Act
of 1934.  Actual  results  could differ  materially  from those set forth in the
forward-looking  statements.  Certain factors that might cause such a difference
include the  following:  uncertainty  with respect to the market  acceptance  of
Fusion's  offering of turnkey Internet  services and software;  uncertainty with
respect to the timing of collection of turnkey fees;  the ability of the Company
to finance  continuing  operating losses; the ability of the Company to complete
the sale of IDM and the terms of that  sale;  increases  in  competition  in the
Internet  software and services  market which may adversely  impact revenues and
profitability;  and other factors generally  affecting the timing and receipt of
revenues and cost of operations.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

         Not Applicable.

                           PART II - OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

     In October and November 2000, the Company secured a short-term  bridge loan
in the amount of  $500,000  from the sale of  Convertible  Bridge Loan Notes and
125,000  Bridge  Loan  Warrants.  The  Bridge  Loan  Notes  are due on or before
December 31, 2000 with interest accruing at 12% per annum. The Bridge Loan Notes
are convertible into common stock, at the option of the holder,  at market value
on the date of closing.  The Bridge Loan Warrants are  exercisable for a term of
five years to purchase  common stock at $0.845 per share with respect to 100,000
of the warrants and $0.875 per share with respect to 25,000 of the warrants. The
Convertible  Bridge  Loan Notes and Bridge Loan  Warrants  were sold to a single
accredited investor in a privately  negotiated  transaction without the use of a
broker or the payment of placement  fees. The sale of those  securities was made
pursuant  to the  exemption  from  registration  set out in Section  4(2) of the
Securities Act of 1933, as amended.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          Exhibit No.               Description

           10.1         Loan Agreement re: Bridge Loan
           10.2         12% Convertible Bridge Loan Note
           10.3         Bridge Loan Warrant
           27.1         Financial Data Schedule

     (b)  Reports on Form 8-K

          Form 8-K,  dated August 18, 2000, was filed  reporting,  under Item 2,
          the sale of IDM Environmental Corp.



                                       15
<PAGE>

                                   SIGNATURES

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

                                          FUSION NETWORKS HOLDINGS, INC.


Dated: November 13, 2000                  By: /s/ Gary M. Goldfarb
                                             -----------------------------------
                                               Gary M. Goldfarb, President


Dated: November 13, 2000                  By: /s/ Enrique Bahamon
                                              ----------------------------------
                                               Enrique Bahamon, Principal
                                               Financial and Accounting Officer



                                       16