<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                      ------------------------------------

                                   FORM 10-QSB

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

                For the Quarterly Period Ended December 31, 1999

                                       OR

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


For the Transition Period from ___________________ to __________________________


                         Commission file number 0-10909

                               AMERICAN ATM CORP.
             (Exact name of registrant as specified in its charter)


                Florida                                          65-0656168
    (State of other jurisdiction of                           (I.R.S. Employer
     incorporation or organization                           Identification No.)

       5061 North Dixie Highway                                     33431
          Boca Raton, Florida                                    (zip code)
(Address of principal executive office)

Registrant's telephone number, including areas code:            561-367-8433

                                 Not Applicable
         (Former name, former address and former fiscal year, if changed
                               since last report)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_  No ___

               175,675 shares (reflective of the December 31, 1999
              reverse split 50 common shares into 1 common share),
                    $.001 par value, as of February 24, 2000.

       (Indicate the number of shares outstanding of each of the issuer's
          classes of common stock, as of the latest practicable date)


                                  Page 1 of 22
<PAGE>


                               AMERICAN ATM CORP.

                                DECEMBER 31, 1999



                                    I N D E X

<TABLE>
<CAPTION>

                                                                                                        Page No.
                                                                                                        --------
<S>       <C>                                                                                          <C>
Part I  -  Financial Information:

           Item 1.  Financial Statements:

                    Balance Sheets as at December 31, 1999
                    (Unaudited) and June 30, 1999 .................................................       3

                    Statements of Operations For the Six and Three Months
                    Ended December 31, 1999 and 1998 (Unaudited) ..................................       4

                    Statements of Stockholders' Equity (Capital
                    Deficiency) For the Six Months Ended
                    December 31, 1999 (Unaudited) and For the
                    Year Ended June 30, 1999 ......................................................       5

                    Statements of Cash Flows For the Six Months
                    Ended December 31, 1999 and 1998 (Unaudited) ..................................       6

                    Notes to Financial Statements .................................................     7-15


           Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations .................................    16-20


PART II - Other Information:

                    Item 3 Through Item 9 - Not Applicable ........................................      21

                    Signatures ....................................................................      22
</TABLE>



                                  Page 2 of 22

<PAGE>



                               AMERICAN ATM CORP.

                                 BALANCE SHEETS
                                    (Note 1)

<TABLE>
<CAPTION>
                                     ASSETS

                                                                               December 31,          June 30,
                                                                                   1999                1999
                                                                               ------------         ---------
                                                                               (Unaudited)
<S>                                                                           <C>                  <C>
Current assets:
  Cash and equivalents                                                          $  97,525           $ 155,553
  Restricted cash                                                                  10,000              10,000
  Accounts receivable - trade                                                      16,111              13,478
  Advances receivable                                                             125,000                   -
  Due from affiliates                                                              21,950               2,700
  Assets held for resale                                                                -              11,500
  Prepaid expense and other current assets                                          8,500               5,300
                                                                                ---------           ---------
        Total current assets                                                      279,086             198,531
                                                                                ---------           ---------
Property assets:
  Furniture and equipment                                                         182,759             182,759
  Software                                                                          8,693               8,693
  Leasehold improvements                                                              830                 830
                                                                                ---------           ---------
                                                                                  192,282             192,282
  Less:  Accumulated depreciation                                                 180,877             161,525
                                                                                ---------           ---------
        Net property assets                                                        11,405              30,757
                                                                                ---------           ---------
Other assets                                                                        2,606               2,643
                                                                                ---------           ---------
                                                                                $ 293,097           $ 231,931
                                                                                =========           =========

                          LIABILITIES AND CAPITAL DEFICIENCY

Current liabilities:
  Lines of credit payable                                                       $ 260,000           $ 260,000
  Notes and loans payable - stockholders                                           20,000             110,000
  Accounts payable                                                                  5,277              13,375
  Taxes payable                                                                     8,215               8,344
  Accrued expenses and other current liabilities                                  116,768             115,968
  Due to stockholder                                                                    -               5,000
                                                                                ---------           ---------
        Total current liabilities                                                 410,260             512,687
                                                                                ---------           ---------

Capital deficiency:
  Preferred stock, $10.00 par value
    Authorized and unissued - 100,000 shares
  Common stock, $.001 par value
    Authorized - 10,000,000 shares
    Issued and outstanding  - 175,675 shares and
      58,175 shares, respectively                                                     176                  58
  Additional paid-in capital                                                    2,038,077           1,803,195
  Accumulated deficit                                                          (2,155,416)         (2,084,009)
                                                                                ---------           ---------
        Total capital deficiency                                                 (117,163)           (280,756)
                                                                                ---------           ---------
                                                                                $ 293,097           $ 231,931
                                                                                =========           =========
</TABLE>

                                  Page 3 of 22


<PAGE>

                               AMERICAN ATM CORP.

                            STATEMENTS OF OPERATIONS
                                    (Note 1)

<TABLE>
<CAPTION>
                                                             For the Six                                  For the Three
                                                             Months Ended                                  Months Ended
                                                             December 31,                                  December 31,
                                                   --------------------------------              ------------------------------
                                                      1999                   1998                    1999                1998
                                                   ----------             ---------               ----------          ---------
                                                               (Unaudited)                                   (Unaudited)
<S>                                                 <C>                    <C>                     <C>                 <C>
Fee income                                          $192,094               $191,901                $ 87,707            $ 84,668
                                                    --------               --------                --------            --------
Direct costs:
  Location expenses                                  113,870                 98,645                  64,714              29,009
  Financing costs                                     31,316                 31,314                  15,900              14,772
                                                    --------               --------                --------            --------
Total direct costs                                   145,186                129,959                  80,614              43,781
                                                    --------               --------                --------            --------
Gross profit                                          46,908                 61,942                   7,093              40,887
                                                    --------               --------                --------            --------
Operating expenses:
  Selling                                             50,844                 57,041                  23,964              24,992
  General and administrative                          66,327                124,892                  17,999             100,308
                                                    --------               --------                --------            --------
Total operating expenses                             117,171                181,933                  41,963             125,300
                                                    --------               --------                --------            --------
Loss from operations                                 (70,263)              (119,991)                (34,870)            (84,413)
                                                    --------               --------                --------            --------
Other income (deductions):
  Interest expense                                         -                 (6,600)                      -              (3,300)
  Interest income                                        856                  1,375                     576                 454
                                                    --------               --------                --------            --------
Total other income (deductions)                          856                 (5,225)                    576              (2,846)
                                                    --------               --------                --------            --------
Loss before income taxes                             (69,407)              (125,216)                (34,294)            (87,259)
Provision for income taxes                             2,000                  2,000                   1,000               1,000
                                                    --------               --------                --------            --------
Net loss                                            ($71,407)             ($127,216)               ($35,294)           ($88,259)
                                                    ========               ========                ========            ========
Net loss per share                                    ($0.86)                ($2.26)                 ($0.23)             ($1,57)
                                                    ========               ========                ========            ========
Weighted average share outstanding                    82,654                 56,325                 156,092              56,325
                                                    ========               ========                ========            ========

</TABLE>

                                  Page 4 of 22
<PAGE>
                               AMERICAN ATM CORP.

             STATEMENT OF STOCKHOLDERS' EQUITY (CAPITAL DEFICIENCY)

                      FOR THE YEAR ENDED JUNE 30, 1999 AND
               THE SIX MONTHS ENDED DECEMBER 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
                                        $.001 Par Value           $10 Par Value
                                         Common Stock *          Preferred Stock            Additional
                                    ---------------------     --------------------           Paid-In              Deferred
                                     Shares       Amount      Shares       Amount            Capital            Compensation
                                    -------      -------      ------      --------          ----------          ------------
<S>                                <C>           <C>          <C>           <C>             <C>                      <C>
Balance - July 1, 1998              56,325        $ 56           -        $   -             $1,721,160             $   -

Stockholders' waiver of
  salary-contributed to
  capital                                -           -           -            -                 30,000                 -

Net proceeds from the
  conversion of warrants
  to common stock                    1,350           1           -            -                 32,036                 -

Net proceeds from the
  exercise of stock option             500           1           -            -                 19,999                 -

Net loss for the year
  ended June 30, 1999                    -           -           -            -                      -                 -
                                   -------       -----        ----         ----             ----------              ----
Balance June 30, 1999               58,175          58           -            -              1,803,195                 -

Conversion of notes
  payable - stockholders
  into common stock                117,500         118           -            -                234,882                 -

Net loss for the six
  months ended
  December 31, 1999
   (Unaudited)                           -           -           -            -                      -                 -
                                   -------       -----        ----         ----             ----------              ----
Balance December 31, 1999
   (Unaudited)                     175,675       $ 176           -        $   -             $2,038,077             $   -
                                   =======       =====        ====         ====             ==========              ====
</TABLE>

[RESTUB]
<TABLE>
<CAPTION>
                                                             Total
                                                         Stockholders'
                                                             Equity
                                    Accumulated             (Capital
                                      Deficit              Deficiency)
                                    -----------          -------------
<S>                                 <C>                     <C>
Balance - July 1, 1998              ($1,681,263)            $ 39,953

Stockholders' waiver of
  salary-contributed to
  capital                                     -               30,000

Net proceeds from the
  conversion of warrants
  to common stock                             -               32,037

Net proceeds from the
  exercise of stock option                    -               20,000

Net loss for the year
  ended June 30, 1999                  (402,746)            (402,746)
                                     ----------             --------
Balance June 30, 1999                (2,084,009)            (280,756)

Conversion of notes
  payable - stockholders
  into common stock                           -              235,000

Net loss for the six
  months ended
  December 31, 1999
   (Unaudited)                          (71,407)             (71,407)
                                     ----------             --------
Balance December 31, 1999
   (Unaudited)                      ($2,155,416)           ($117,163)
                                     ==========             ========
</TABLE>
*Gives effect to a 50 to 1 reverse stock split.

                       See notes to financial statements.

                                  Page 5 of 22
<PAGE>


                               AMERICAN ATM CORP.

                            STATEMENTS OF CASH FLOWS
                                    (Note 1)

<TABLE>
<CAPTION>
                                                                                        For the Six
                                                                                        Months Ended
                                                                                        December 31,
                                                                             --------------------------------
                                                                                 1999                 1998
                                                                             ----------            ----------
                                                                                        (Unaudited)
<S>                                                                          <C>                   <C>
Cash flow from operating activities:
  Net loss                                                                   ($ 71,407)            ($127,216)
                                                                             ---------             ---------
  Adjustments to reconcile net loss to net cash
      used in operating activities:
    Depreciation                                                                19,389                30,714
    Increase (decrease) in cash flows as
        a result of changes in asset and
        liability account balances:
      Accounts receivable                                                       (2,633)                6,689
      Assets held for resale                                                    11,500                     -
      Prepaid expenses and other current assets                                 (3,200)              (11,594)
      Other assets                                                                   -                   748
      Accounts payable                                                          (8,098)                7,546
      Accrued expenses and other current liabilities                               671                 6,786
                                                                             ---------             ---------
  Total adjustments                                                             17,629                40,889
                                                                             ---------             ---------
Net cash used in operating activities                                          (53,778)              (86,327)
                                                                             ---------             ---------
Cash flows from investing activities:
  Advances receivable                                                         (125,000)                    -
  Due from affiliates                                                          (19,250)                    -
                                                                             ---------             ---------
Net cash used in investing activities                                         (144,250)                    -
                                                                             ---------             ---------
Cash flows from financing activities:
  Deferred offering costs                                                            -               (20,000)
  Proceeds from (payments of) stockholder
    notes and loans                                                            140,000               (20,000)
                                                                             ---------             ---------
Net cash provided by (used in) financing activities                            140,000               (40,000)
                                                                             ---------             ---------
Net decrease in cash and cash equivalents                                      (58,028)             (126,327)
Cash and cash equivalents at beginning of period                               155,553               171,958
                                                                             ---------             ---------
Cash and cash equivalents at end of period                                    $ 97,525              $ 45,631
                                                                             =========             =========
Supplemental Disclosures of Cash Flow Information:
  Interest paid                                                               $ 31,316              $ 26,314
                                                                             =========             =========
  Taxes paid                                                                  $      -              $      -
                                                                             =========             =========
Supplemental Schedules of Noncash Financing Activities:
  Offering costs written off to additional paid-in capital                    $      -              $ 89,682
                                                                             =========             =========
Conversion of stockholders' notes payable
    into common stock                                                         $235,000              $      -
                                                                             =========             =========
</TABLE>


                       See notes to financial statements.

                                  Page 6 of 22


<PAGE>


                               AMERICAN ATM CORP.

                          NOTES TO FINANCIAL STATEMENTS

                   FOR THE SIX MONTHS ENDED DECEMBER 31, 1999





NOTE 1 - GOING CONCERN.

                          The Company was incorporated in Florida in March 1996
                as a development stage company. The Company left the development
                stage in September 1996 when it commenced operations of its
                business, which is independent owner and operator of automatic
                teller machines (ATMs) at leased locations. The ATMs provide
                individuals with credit or debit cards the ability to obtain on
                the spot cash from their bank accounts.

                          The accompanying financial statements have been
                prepared in conformity with generally accepted accounting
                principles, which contemplate continuation of the Company as a
                going concern. The Company has sustained substantial losses from
                operations since inception through December 31, 1999 of
                $2,154,666 of which $94,114 was incurred while the Company was
                in the development stage. The accompanying financial statements
                reflect a working capital deficiency of $110,424 at December 31,
                1999. The Company's source of funds have been the proceeds from
                the sale of its common stock, its lines of credit and notes to
                stockholders. The Company presently has a rental agreement with
                a bank for the use of the bank's cash in its ATMs, which
                replaced a funding agreement with a private lender.

                          Management in December 1998 registered with the
                Securities and Exchange Commission 3,562,500 shares of the
                Company's common stock, all of which underlie common stock
                purchase warrants (warrants). If all warrant holders exercise,
                the Company will receive approximately $8,550,000 in cash
                proceeds. Through December 31, 1999, the Company has received
                $162,000 from the exercise of warrants for 67,500 shares of
                common stock. Management's plan is to continue its present ATM
                operations and to pursue diversification into other industries.
                The Company in December 1999 began preliminary exploratory
                discussions with a start-up entity in the telecommunications
                industry. The Board of Directors in October 1999 authorized
                management to sell in a private placement to accredited
                investors up to $750,000 of the Company's common stock for
                working capital. There can be no assurance that the sale of the
                securities will be successful.


                           These conditions, among others, raise substantial
                doubt about the Company's ability to continue as a going
                concern. The accompanying financial statements do not include
                any adjustments relating to the recoverability and
                classification of asset carrying amounts or the amount and
                classification of liabilities that might result should the
                Company be unable to continue as a going concern.


                                  Page 7 of 22
<PAGE>


NOTE 2 - BASIS OF PRESENTATION.

                          The accompanying unaudited financial statements have
                been prepared in accordance with generally accepted accounting
                principles for interim financial information and with the
                instructions for Form 10-QSB and Article 10 of Regulation S-X.
                Accordingly, they do not include all of the information and
                footnotes required by generally accepted accounting principles
                for complete financial statements. In the opinion of management,
                the statements contain all adjustments (consisting only of
                normal recurring accruals) necessary to present fairly the
                financial position as of December 31, 1999 and the results of
                operations and cash flows for the six months ended December 31,
                1999 and 1998. The results of operations for the six months
                ended December 31, 1999 and 1998 are not necessarily indicative
                of the results to be expected for the full year.

                          The June 30, 1999 balance sheet has been derived from
                the audited financial statements at that date included in the
                Company's annual report on Form 10-KSB. These unaudited
                financial statements should be read in conjunction with the
                financial statements and notes thereto included in the Company's
                annual report on Form 10-KSB.


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

                (a) Use of Estimates:

                          The presentation of financial statements in conformity
                with generally accepted accounting principles requires
                management to make estimates and assumptions that affect the
                reported amounts of assets and liabilities and the disclosure of
                contingent liabilities or assets at the date of the financial
                statements and the amounts of revenues or expenses during the
                reporting period.


                (b) Concentration of Risk and Revenue Recognition:

                          The fee income from ATM machines represents 100% of
                the Company's operating revenues. The Company records its fees
                on a daily basis from the service charges it assesses directly
                to the user for monetary transactions. In addition, the Company
                recognizes its proportionate share of the transaction fees
                charged by the national network to its participating banks
                reported to the Company by its electronic reporting vendor. Fee
                income from ATM processing is limited by the hours of operation
                at the sites leased by the Company. In some states, the amount
                and nature of fees charged is limited or restricted by
                regulation, and in some states private ATM machines are not
                permissible.

                          The Company deposits the majority of its cash in
                commercial banks and with a national brokerage firm in money
                market accounts. From time to time, cash balances in the
                commercial banks exceed federally insured limits. To date, the
                Company has not experienced any losses in such accounts and
                believes it is not exposed to any significant credit risk on its
                cash and equivalents.


                                  Page 8 of 22
<PAGE>


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.  (Continued)

                (c) Cash and Equivalents:

                          The Company considers all highly-liquid, short-term
                investments with an original maturity of three months or less to
                be cash equivalents. Cash equivalents at December 31, 1999 and
                1998 and June 30, 1999 were $5,790, $20,901 and $24,095,
                respectively.


                (d) Property Assets:

                          Property assets are stated at cost. Repairs or
                maintenance, which do not extend the useful life of the assets,
                are charged to expense as incurred. As the equipment is retired
                or otherwise disposed of, the asset and the related accumulated
                depreciation are removed from the accounts and any resulting
                profit or loss is reflected in income. The Company expenses its
                site acquisition costs to operations as they are incurred due to
                the short length of the site leased and the parties' unilateral
                ability to terminate the lease with minimal notice.

                          Depreciation is provided primarily over the estimated
                useful lives of the assets using the straight-line method. The
                estimated useful lives of the assets are seven years for
                machinery and equipment and five years for furniture and
                fixtures. Leasehold improvements are being amortized over the
                life of the lease. Additionally, management in June 1999
                determined that certain of its ATMs value had been impaired due
                to new technology. In September 1999, 10 machines were sold for
                $11,500 resulting in a loss of $42,985 which was charged to
                operations in fiscal 1999 along with a charge for $67,000
                reflecting management's estimate of the impairment to some of
                its remaining property assets which were not sold and remain in
                operation.


                (e) Organization Costs:

                          Organization costs are included in other assets net of
                accumulated amortization.


                (f) Income Taxes:

                          The Company adopted Statement of Financial Accounting
                Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes" at
                its inception. Under SFAS 109, the deferred tax provision is
                determined under the liability method. Under this method,
                deferred tax assets and liabilities are recognized based on
                differences between the financial statement carrying amount and
                the tax basis of assets and liabilities using presently enacted
                tax rates.

                          The Company has net operating loss carryforwards
                available of approximately $1,956,000 at December 31, 1999 and
                $1,886,000 at June 30, 1999 expiring through 2013 which upon
                recognition may result in future tax benefits of approximately
                $763,000 and $744,000, respectively. At December 31, 1999 and
                June 30, 1999, management is unable to determine if the
                utilization of the future tax benefit was more likely than not
                and, accordingly, the asset has been fully reserved.


                                  Page 9 of 22
<PAGE>


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.  (Continued)

                (g) Fair Value of Financial Instruments:

                          The Company at its inception adopted Statement of
                Financial Accounting Standards No. 121 ("SFAS No. 121"),
                "Accounting for the Impairment of Long-Lived Assets and for
                Long-Lived Assets to be Disposed of." The Statement requires
                that the Company recognize and measure impairment losses of
                long-lived assets, certain identifiable intangibles, value
                long-lived assets to be disposed of and long-term liabilities.

                          The Company reviews long-lived assets and certain
                identifiable intangibles held and used for possible impairment
                whenever events or changes in circumstances indicate that the
                carrying amount of an asset may not be recoverable. All of the
                Company's ATMs were functional at June 30, 1999, although did
                not possess the state of the art software and hardware styling
                which some of the Company's customers desired. Management
                attempted to replace these ATMs with new machines and in
                September 1999 sold 10 machines for $11,500 resulting in a loss
                of $42,985. Management estimated that its remaining ATMs' value
                has been impaired by an additional $67,000. The entire loss of
                $109,985 was charged to operations in fourth quarter of fiscal
                1999.

                          At December 31, 1999 and June 30, 1999, the carrying
                values of the Company's other assets and liabilities approximate
                their estimated fair values.


                (h) Per Share Data:

                          Net loss per share was computed by the weighted
                average number of shares outstanding during each year.


NOTE 4 - FINANCING.

                          In January 1998, the Company entered into a rental
                agreement with a commercial bank. The rental agreement as
                memorialized on August 18, 1998, provides for the Company to
                rent from the bank the cash that is used in the operation of the
                Company's ATMs. In May 1999, the Company terminated the first
                rental agreement replaced it with another cash rental agreement.
                The conditions of both rental agreements are essentially the
                same except that under the current agreement the lessor is
                responsible for any loss due to theft, vandalism, or other
                non-operational losses. The monthly rental charge for the cash
                varies and is determined by the amount of cash utilized in the
                machines at a rate of 2% over the bank's prime lending rate. The
                lessor bank also earns a portion of the transaction fees that
                each ATM transaction generates. The Company is respon sible to
                maintain insurance with the bank as loss payee for loss or theft
                of the machine cash. Although the Company controls the location
                of each ATM and determines the amount of cash in each ATM, the
                Company may not handle the rented cash. Only armored transport
                service carriers under the bank's direct control may handle the
                rented cash.


                                 Page 10 of 22

<PAGE>

NOTE 4 - FINANCING.  (Continued)

                          The Company entered into a funding agreement on
                December 30, 1997 for $260,000 with a corporation whose
                president is a stockholder of the Company. The funding
                agreement, as amended on June 1, 1998, requires interest at 10%
                to be paid monthly. The agreement has no termination date and
                accordingly is classified as a current liability. The loan is
                collateralized by the Company's ATMs. The Company's Chairman has
                personally guaranteed 25% of this obligation.


NOTE 5 - LOANS PAYABLE - STOCKHOLDERS.

                          Commencing in December 1997, through May 1998, the
                Company borrowed $110,00 from two stockholders. The original
                terms of the 12% interest bearing notes were approximately seven
                months. The stockholders subsequently extended the due dates of
                all the notes to December 31, 1999. In September another
                stockholder loaned the Company $125,000. In October 1999, all of
                the loans were converted into 117,500 shares, as adjusted for
                the December 15, 1999 stock split, of the Company's common stock
                at $2.00 per share, which was the fair market value at the time
                of conversion.


NOTE 6 - STOCKHOLDERS' EQUITY ADJUSTED FOR THE DECEMBER 15, 1999, 50
           TO 1 REVERSE STOCK SPLIT.

                (a) Sale of Securities:

                          In 1997, the Company completed its sale of 17,500
                shares of its common stock and 50,000 warrants to accredited
                investors for $689,216 (net of offering costs).

                          In January 1997, the Company issued 1,500 shares of
                its common stock in satisfaction of a $180,000 capital lease
                obligation of machinery.

                          In October 1999, three stockholders agreed to accept
                117,500 shares of the Company's common stock as payment of loans
                payable to them aggregating $235,000.

                          Through March 1999, warrants to acquire 1,350 common
                stock were converted for $132,037 before offering costs of
                $129,963.


                (b) Contribution of Capital:

                          The Company's CEO waived $42,000 of his annual $60,000
                salary in 1998 and waived $30,000 of his accrued salary in 1999.
                Such waivers were recorded as contribution to additional paid-in
                capital in the accompanying financial statements in the year of
                waiver.


                                 Page 11 of 22

<PAGE>



NOTE 6 - STOCKHOLDERS' EQUITY.  (Continued)

                (c) Warrants:

                          In connection with the sale of securities in 1996 and
                1997, the Company sold warrants to acquire 50,000 shares of the
                Company's common stock (as adjusted for the December 1997 and
                1999 stock splits) at $120 per share. Effective December 28,
                1996, five consultants received warrants to purchase an
                aggregate of 21,250 shares of the Company's common stock at $120
                per share for services previously rendered. The fair value of
                the warrants issued to the consultant and the services rendered
                (as determined by the Board of Directors and consultants) was
                $85,000 which was charged to operations as public relations
                costs.

                          The Company filed with the Securities and Exchange
                Commission a registration statement on Form SB-2 to register
                71,250 shares of its common stock all of which underlie warrants
                to acquire a like number of common shares at $120 per share. The
                proceeds received by the Company through December 31, 1999 from
                the conversion of warrants into 1,350 common shares were
                $132,037 before offering costs of $129,963.


                (d) Common Stock Split:

                          The Company's Board of Directors approved a split of
                its outstanding common shares of five (5) shares of each four
                (4) shares outstanding on December 11, 1997. On December 15,
                1999, the Board of Directors authorized a reverse split of the
                Company's common stock at a rate fifty 50) common shares
                outstanding into one (1) common share, which has been
                effectuated for all periods presented.


                (e) Stock Options:

                          The Board of Directors adopted the American ATM Corp.
                1996 Stock Option Plan ("1996 Plan") on December 16, 1996 which
                the shareholders subsequently approved. The 1996 Plan provides
                for the total issuance of an aggregate of 13,750 common shares
                under nonqualified and qualified grants. Qualified options are
                intended to comply with Section 422 of the Internal Revenue
                Service Code of 1986, as amended. To date options granted under
                the 1996 Plan to acquire 3,300 common shares have been qualified
                grants and options to acquire 8,240 common shares have been
                non-qualified grants.

                          On December 16, 1996, the Company's outside directors
                and an officer were granted options to acquire an aggregate of
                2,000 common shares at an exercise price of $40 per share which
                was the common stock's fair value on the date of grant. The
                directors options were originally exercisable in full at any
                time through December 15, 2000. The officer's option vests pro
                rata over its life. On March 21, 1997, the Board of Directors
                reduced the exercise period of these options to March 25, 2000
                for the directors and May 1, 1999 for the officer.


                                 Page 12 of 22
<PAGE>


NOTE 6 - STOCKHOLDERS' EQUITY.  (Continued)

                (e) Stock Options:  (Continued)

                          The Company's Chairman and CEO was granted options to
                acquire 5,000 common shares at $44 per share, as adjusted for
                the December 1997 and 1999 stock splits. The CEO's options were
                granted in recognition of his decision to forego $40,000 in
                salary for calendar 1996. The wavier of the salary was reflected
                in the accompanying financial statements as a charge to
                operations and a credit to additional paid-in capital of $40,000
                during fiscal 1997.

                          Also on March 25, 1997, the outside directors were
                issued additional options to acquire an aggregate of 1,250
                common shares for $40 per share. The outside directors' options
                were issued as partial payment for their services pursuant to
                the Company's directors compensation policy which was approved
                by the Board of Directors in December 1996.

                          The excess of the fair value of the common stock at
                March 25, 1997 ($120 per share after the December 15, 1999
                reverse split) over the option exercise prices aggregated
                $400,000 which was classified in the accompanying financial
                statement as deferred compensation with a corresponding increase
                to additional paid-in capital. The deferred compensation was
                charged to operations in the periods that the Chairman and the
                other directors rendered their services resulting in a $200,000
                charge to operations in the years ended June 30, 1998 and 1997.

                          In October 1998, a former director exercised options
                to acquire 500 common shares at $40 per share for an aggregate
                of $20,000 for which the director remitted $25,000 to the
                Company. The overpayment of $5,000 is reflected as a current
                obligation in the accompanying financial statements.

                          On March 31, 1999, the Company issued options
                aggregating 3,300 shares to officers, employees and directors.
                The excerise price of the options is $143.75 per share which is
                the fair market value at the date of the grant. The options are
                exercisable at any time through March 31, 2009.

                          Pursuant to the 1996 Plan, each of the non-employee
                directors of the Company is to receive yearly - at the
                conclusion of the stockholders' annual meeting - an option to
                acquire 200 shares of the Company's common stock for the next
                fiscal year. Since the Company had not had its annual meeting
                for 1999, the five non-employee directors were not granted their
                options for fiscal 1999. Upon the conclusion of the 1999 annual
                stockholders' meeting, the directors will receive options to
                acquire an aggregate of 1,000 common shares.

                          On December 31, 1998, the Company adopted the 1999
                Stock Option Plan ("1999 Plan"). The 1999 Plan provides for the
                total issuance of an aggregate of 10,000 common shares under
                non-qualified and qualified grants. No options have been granted
                under the 1999 plan.

                                 Page 13 of 22
<PAGE>


NOTE 6 - STOCKHOLDERS' EQUITY.  (Continued)

                (e) Stock Options:  (Continued)

                          At December 31, 1999 and June 30, 1999, the Company
                had options for 11,050 common shares issued and unexercised at
                exercise prices ranging from $40 to $143.75. At December 31,
                1999 and June 30, 1999, 11,050 shares under options were
                exercisable at prices ranging from $40 to $143.75 per share.

                          Assuming the fair market value of the stock at the
                date of grant to be $40 per share in December 1996, $120 per
                share in March 1997 and $143.75 per share in March 1999, the
                life of the options to be three years to ten years, the expected
                volatility at 200%, expected dividends of none, and the
                risk-free interest rate of 10%, the Company would have recorded
                compensation expense of $74,011 and $29,448 in each of the six
                and three month periods ended December 31, 1999 and 1998 as
                calculated by the Black-Scholes option pricing model. As such,
                proforma net loss and loss per share would be as follows:


                                       For the Three           For the Six
                                       Months Ended            Months Ended
                                       December 31,            December 31,
                                 ----------------------  -----------------------
                                   1999          1998       1999         1998
                                 ---------    ---------  ----------   ----------
                                       (Unaudited)              (Unaudited)

Net loss as reported            ($ 34,544)    $ 88,259   ($ 70,657)   ($127,216)
                                =========     ========   =========    =========
Additional compensation          $ 74,011     $ 29,448    $148,022     $ 58,896
                                =========     ========   =========    =========
Adjusted net loss               ($108,555)   ($117,707)  ($218,679)   ($186,112)
                                =========     ========   =========    =========
Loss per share as reported         ($0.22)      ($1.57)     ($0.85)      ($2.26)
                                =========     ========   =========    =========
Adjusted loss per share            ($1.44)      ($2.09)     ($2.65)      ($3.30)
                                =========     ========   =========    =========


NOTE 7 - COMMITMENTS AND CONTINGENCIES.

                (a) Contingencies:

                          The Company is contingently liable for cash in the
                machines, which it rents from a bank. The amount of rented cash
                at December 31, 1999 was $272,940.


                (b) Leases:

                          The Company is a lessee under an operating real
                property lease for office space which expired on June 30, 1999.

                          The Company also leases space for its ATMs under
                operating leases. Although the stated term of each lease is from
                one to five years, either party may cancel the lease with
                minimal notice. Rent charged to operations in the six months
                ended December 31, 1999 and 1998 was $3,609 and $9,950,
                respectively. Additionally, the Company has agreements with
                electronic transaction reporting and transfer system service
                providers, which are a crucial component of the Company's
                operations. These agreements typically require payment based
                upon the number of transactions processed by the provider.


                                 Page 14 of 22
<PAGE>


NOTE 7 - COMMITMENTS AND CONTINGENCIES.  (Continued)

                (c) Consulting the Employment Agreements:

                          The Board of Directors authorized compensation for the
                Company's CEO and Chairman at $60,000 per year plus 2% of
                defined operating profits commencing January 1, 1997. In
                February 1999, this officer resigned and waived the $30,000 in
                unpaid salary, which was reflected as a contribution to capital.
                The Company has a three year agreement with a consultant for
                public relations and financial services. The consultant will
                receive $96,000 over the term of the agreement, which expires in
                October 1999.


NOTE 8 - YEAR 2000.

                          The Year 2000 issue is the result of computer programs
                being written using two digits rather than four to define the
                applicable year. Management of the Company does not anticipate
                that any significant modification or replacement of the
                Company's software will be necessary for its computer systems to
                properly utilize dates beyond December 31, 1999 or that the
                Company will incur significant operating expenses to make any
                such computer system improvements. The Company has commenced
                requesting data concerning Year 2000 compliance from its
                suppliers, lenders, service providers and others. The Company is
                not able to determine, however, whether any of its suppliers,
                lenders, or service providers will need to make any such
                modifications or replacements. Although it is management's
                belief that the failure by such entities not to have made their
                required software corrections could have adverse material effect
                on the Company's operations or financial condition, the Company
                has not experienced any adverse effects in its operations
                through February 24, 2000.



NOTE 9 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS.

                          The Financial Accounting Standards Board issued
                Statement of Financial Accounting Standards No. 130 - "Reporting
                Comprehensive Income," NO. 131 - "Employer's Disclosures about
                Segments of an Enterprise and Related Information, " No. 132 -
                "Employer's Disclosures about Pension and Other Postretirement
                Benefits" and No. 133 - "Accounting for Derivative Instruments
                and Hedging Activities." Management does not believe that the
                effect of implementing these net standards will be material to
                the Company's financial position, results of operations and cash
                flows.


                                 Page 15 of 22
<PAGE>


                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERAITONS


The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto contained elsewhere in this Form 10-QSB.
Certain statements under this caption "Management's Discussion and Analysis of
Financial Conditions and Results of Operations," constitute "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995. See
"Risk Factors - Forward Looking Statements."


Plan of Operation

         The Company's plan of operation for the next six months of fiscal 2000
and the fiscal year thereafter will be to continue to maintain its profitable
ATM's and possibly expand to additional locations. Management is currently
exploring the feasibility of entering into other industries. Management believes
that the ATM industry might be subjected to possible additional governmental
scrutiny - possibly regulations - in the future. This possibility could have an
adverse effect on the Company's operations. Management has had preliminary
exploratory discussions with an entity in the telecommunications industry
concerning starting up a venture and/or other working arrangement.

         Assuming that the Company will be able to maintain or increase its
ATM's in operation, there is no guarantee that cash funds from such operations
will be sufficient for it to meet its cash requirements to fund and operate its
business on an ongoing basis. The Board of Directors in October 1999 authorized
management to issue up to $750,000 in capital through the sale of its securities
in private placements to accredited investors. There can be no guarantee that
such sale will be successful or that the cash proceeds from such sale, if any,
will be sufficient for the Company to meet its obligations as they mature.


Results of Operations

         The Company derives its revenues from fees charged for the operation of
ATMs which dispense cash to the customer who uses his/her bank ATM debit or
credit card. These machines are located in high traffic retail areas and
selected convenience stores. The Company has 20 ATMs at these locations to date.

Six months ended December 31, 1999 vs. December 31, 1999

Fee Income and Direct Costs:

         For the six months ended December 31, 1999 and 1998 the Company's fee
income remained the same at $192,000. Location expenses increased $15,000
(15.2%) to $114,000 in the current period (59.4%) of fee income) from $99,000
(51.6% of fee income) in 1998. Financing costs remained constant at $31,000. The
location expense increase is attributable to additional machine costs and
armored car service fees.



                                 Page 16 of 22

<PAGE>


Six months ended December 31, 1999 vs. December 31, 1999 (Continued)

Operating Expenses:

         Selling expenses decreased $6,000 (10.5%) to $51,000 (26.6% of fee
income) in the six months ended December 31, 1999 from $57,000 (29.7% of fee
income) in the comparable prior period. The reduction is attributable to reduced
advertising, travel and entertainment expenditures in the current period.

         General and administrative expenses decreased $59,000 (47.2%) to
$66,000 (34.4% of fee income) in the six months ended December 31, 1999 from
$125,000 (65.1% of fee income) in the comparable prior period.

         The decrease is attributable to decreased professional and consulting
fees in the current period.

         Interest expense decreased because of the conversion of debt to common
stock of the Company.

         The net loss for the current period decreased $56,000 (44.8%) to
$71,000 from the prior year's net loss for the six months of $127,000. The
reduction in the loss is attributable to the reduced operating expenses offset
by increased direct costs as described above.



Three months ended December 31, 1999 vs. December 31, 1998

Fee Income and Direct Costs:

         During the current quarter fee income increased $3,000 (3.4%) to
$88,000 while direct costs increased $37,000 (84.1%) to $81,000, resulting in
gross profit decreasing $34,000 (82.9%) to $7,000 in the current period (8.0% of
fee income) from $41,000 (48.2% of fee income) in 1998. The decrease in the
gross profit in the current quarter is the result of additional machine costs
and armored car service fees.

Operating Expenses:

         Selling expenses decreased $1,000 (4.0%) to $24,000 (23.3% of fee
income) in the three months ended December 31, 1999 from $25,000 (29.4% of fee
income) in the comparable prior period. The reduction is attributable to reduced
advertising, travel and entertainment expenditures in the current period.

         General and administrative expenses decreased $82,000 (82.0%) to
$18,000 (20.5% of fee income) during the current quarter from $100,000 (117.6%
of fee income) in the prior period. The decrease is attributable to decreased
professional and consulting fees in the current period.

         Interest income and the provision for taxes remained relatively
constant in both periods. Interest expense decreased due to the conversion of
debt to common stock of the Company.

         The net loss for the current period decreased $53,000 (60.2%) to
$35,000 from the prior year's net loss for the quarter of $88,000. The reduction
in the loss is attributable to the reduced operating expenses which were offset
by the increased direct costs as described above.


                                 Page 17 of 22
<PAGE>


Financial Condition

December 31, 1999 Compared to June 30, 1999:

         The Company's working capital deficiency decreased from $314,000 at
June 30, 1999 to $131,000 at December 31, 1999 through the proceeds of $140,000
notes and loans from stockholders. This loan as well as $115,000 in loans to
other stockholders were converted into common stock in October 1999.

         The capital deficiency decreased $164,000 to $117,000 at December 31,
1999 because of the net loss incurred in the period offset by the conversion of
debt to common stock.


Liquidity and Capital Resources

         The Company had a working capital deficiency of $131,000 and $314,000
at December 31, 1999 and June 30, 1999, respectively. The Company's primary
sources of working capital have been (i) the proceeds from its lines of credit,
(ii) proceeds from related party indebtedness, (iii) the rental cash agreement,
and, (iv) the issuance of its securities for cash, as payment for debt and as
payment for services rendered. Currently, the Company's cash requirements
include (i) the funding for its existing and new machines, (ii) the costs
associated with opening, maintaining and operating machines at new locations,
and, (iii) ongoing selling, general, administrative and other operating
expenses. Management believes that the Company's cash liquidity position will be
enhanced primarily from its efforts to sell its securities in a private
placement. Management does not believe that any significant additional warrant
holders will exercise in the immediate future because of the unfavorable
variances between the market price of the common stock and the exercise price of
the warrants. If the Company is not successful in its efforts to generate cash
funds from the sale of its securities, the Company will not be able to generate
sufficient cash funds from its operations to meet its obligations as they
mature. These conditions, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Even, if the Company is
successful (or partially successful) in its effort to convert the warrants into
common shares for cash or in the sale of its securities, the Company may need
additional financing thereafter. There can be no assurance that the Company will
be able to obtain financing on a favorable or timely basis. The type, timing and
terms of financing elected by the Company will depend upon its cash needs, the
availability of other financing sources and the prevailing conditions in the
financial markets. Moreover, any statement regarding the Company's ability to
fund its operations from expected cash flows is speculative in nature and
inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified.

Impact of New Accounting Pronouncements

         The Financial Accounting Standards Boards issue Statement of Financial
Accounting Standards No. 130 - "Reporting Comprehensive Income", No. 131 -
"Disclosures about Segments of an Enterprise and Related Information", No. 132 -
"Employer's Disclosure about Pension and Other Postretirement Benefits", and No.
133 - "Accounting for Derivative Instruments and Hedging Activities". Adoption
of these standards, which is required in fiscal years beginning after December
15, 1997 is not expected to have an effect on the Company's financial
statements, financial position or results of operations. The Company has
reviewed all other recently issued accounting pronouncements to determine their
effect, if any, on the results of operations or financial position of the
Company. Based on that review, the Company believes that none of these
pronouncements will have a significant effect on the Company's current or future
earnings or operations.

                                 Page 18 of 22
<PAGE>

Year 2000

         The Year 2000 issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Management of
the Company does not anticipate that any significant modification or replacement
of the Company's software will be necessary for its computer systems to properly
utilize dates beyond December 31, 1999 or that the Company will incur
significant operating expenses to make any such computer system improvements.
The Company has commenced requesting data concerning Year 2000 compliance from
its suppliers, lenders, service providers and others. The Company is not able to
determine, however, whether any of its suppliers, lenders, or service providers
will need to make any such modifications or replacements. Although it is
management's belief that the failure by such entities not to have made their
required software corrections could have adverse material effect on the
Company's operations or financial condition, the Company has not experienced any
adverse effect in its operations through February 24, 2000.


Inflation

         Inflation has not had a significant effect on the Company's or
financial position, and management believes that the future effects of inflation
on the Company's operations and financial position will be insignificant.



                                 Page 19 of 22
<PAGE>


                           PART II - OTHER INFORMATION








        Item 1.           LEGAL PROCEEDINGS

                          Not applicable


        Item 2.           CHANGES IN SECURITIES

                          Not applicable


        Item 3.           DEFAULTS UPON SENIOR SECURITIES

                          Not applicable


        Item 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                          Not applicable


        Item 5.           OTHER INFORMATION

                          Not applicable


        Item 6.           EXHIBITS AND REPORTS ON FORM 8-K

                          Not applicable.



                                 Page 20 of 22
<PAGE>


                                   SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.







                                                  AMERICAN ATM CORP.
                                                     (Registrant)







                                                  ___________________________
                                                  Wayne Kight, President


Date:  February 4, 2000



                                 Page 21 of 22