UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10QSB



[X]      Quarterly Report Pursuant to Section 13 OR 15(d) of the 
         Securities Exchange Act of 1934

         For the quarterly period ended   December 31, 1998

                                       or

[  ]     Transition Report Pursuant to Section 13 or 15(d) of the 
         Securities Exchange Act of 1934

         For the transition period from N/A  to N/A
                                        ---     ---
                           Commission File No. 0-23391

                       INTERNATIONAL CAPITAL FUNDING, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Colorado                                     84-1434313
------------------------------           ---------------------------------------
State or other jurisdiction of           (I.R.S. Employer Identification Number)
incorporation or organization

              3140 So. Peoria Street, Suite K230, Aurora, CO 80014
              ----------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


        Registrant's telephone number, including area code (303) 755-9832

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. [X]Yes [ ]No

The number of shares outstanding of the issuer's classes of common shares, as of
the latest practicable date:

                Class                           Outstanding at December 31, 1998
        Common Stock, $.0001                             500,000 shares
              par value                                  --------------
                                                    Outstanding Securities

                                       

<PAGE>



                       INTERNATIONAL CAPITAL FUNDING, INC.

                                   FORM 10-QSB

                                December 31, 1998

                                TABLE OF CONTENTS


                                                                        Page No.

Part I.  FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Financial Statements

          Condensed Balance Sheets as of December 31, 1998..................3

          Condensed Statements of Operations for the three Months
          Ended December 31, 1998...........................................4

          Condensed Statements of Cash Flows for the Six Months
          Ended December 31, 1998...........................................5

          Notes to financial Statements.....................................6

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations.....................7

Part II.  OTHER INFORMATION

Item 1.   Legal Proceedings.................................................9

Item 2.   Changes in Securities.............................................9

Item 3.   Defaults Upon Senior Securities...................................9

Item 4.   Submission of Matters to a Vote of Security-Holders...............9

Item 5.   Other Information.................................................9

Item 6.   Exhibits and Reports on Form 8-K..................................9

                                        2

<PAGE>



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

Forward-Looking Statements May Not Prove Accurate

         When used in this Form  10-QSB,  the  words  "anticipate,"  "estimate,"
"expect,"   "project,"  and  similar   expressions   are  intended  to  identify
uncertainties  and  assumptions  including  the  possibility  that the Company's
Internet backbone will fail to generate  projected  revenues or the Company will
be unable to satisfy certain settlement agreements.  Should one or more of these
risks of  uncertainties  materialize,  or should  underlying  assumptions  prove
incorrect, actual results may vary materially from those anticipated,  estimated
or projected.

Liquidity and Capital Resources

         The  Company is in the  development  stage and,  since  inception,  has
experienced  no  significant   change  in  liquidity  or  capital  resources  or
stockholder's  equity other than the receipt of services valued in the amount of
$1,500.  The Company's  balance sheet as of December 31, 1998 reflects no assets
and no liabilities.  Further,  there exists no agreements or understandings with
regard to loan  agreements  by or with the  Officers,  Directors,  principals or
affiliates of the Company.

         The Company will attempt to carry out its plan of business as discussed
above.  The  Company  cannot  predict to what extent its lack of  liquidity  and
capital  resources will hinder its business plan prior to the  consummation of a
business combination.

Results of Operations

         During the period from June 1991 (inception) through December 31, 1998,
the Company has engaged in no significant  operations other than  organizational
activities and the  preparation  for  registration  of its securities  under the
Securities  Exchange Act of 1934, as amended.  No revenues have been received by
the Company during this period.

         The Company anticipates that until a business  combination is completed
with an acquisition candidate,  it will not generate revenues and may operate at
a loss after completing a business  combination,  depending upon the performance
of the acquired business.

Need for Additional Financing

         The Company  believes that its existing  capital will not be sufficient
to meet the Company's  cash needs,  including  the costs of compliance  with the
continuing  reporting  requirements  of the Securities  Exchange Act of 1934, as
amended.  Once a business  combination  is completed,  the  Company's  needs for
additional  financing  are  likely to  increase  substantially,  however,  there
currently  exists no plan or  understanding  by which  the  Company  will  raise
capital, either debt or equity, over the next twelve (12) months.

         No commitments to provide additional funds have been made by management
or other  stockholders.  Accordingly,  there can be no assurance  that any funds
will be available to the Company to allow it to cover its expenses.

                                        3

<PAGE>



         The Company might seek to compensate  providers of services by issuance
of stock in lieu of cash.

Impact of the Year 2000 Issue

         The Year 2000 Issue is the result of computer  programs  being  written
using two digits  rather  than four to define the  applicable  year.  Any of the
Company's  computer programs that have date- sensitive  software may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a  system  failure  or  miscalculations   causing   disruptions  of  operations,
including,  among other things, a temporary  inability to process  transactions,
send invoices, or engage in similar normal business activities.

         Based on a recent  assessment,  the  Company,  in its  present  status,
determined  that it will  not be  required  to  modify  or  replace  significant
portions of its software so that its  computer  systems  will  properly  utilize
dates beyond December 31, 1999.

                                        4

<PAGE>



                                     PART II


Item No. 1 - Legal Proceedings

                  Not Applicable.

Item No. 2 - Changes in Securities

                  Not Applicable.

Item No. 3 - Defaults upon Senior Securities

                  Not Applicable.

Item No. 4 - Submission of Matter to a Vote of Securities Holders

                  Not Applicable

Item No. 5 - Other Information

                  Not Applicable.

Item No. 6 - Exhibits and Reports on Form 8-k

                  (a)      No reports  on Form 8-K were  filed  during the three
                           months ended December 31, 1998.

                                        5

<PAGE>


                                   SIGNATURES


In accordance with 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.


INTERNATIONAL CAPITAL FUNDING, INC.


By: /s/ MATTHEW J. KAVANAUGH
    ------------------------
    Matthew J. Kavanuagh
    President


Date: February 12, 1999

                                        6

<PAGE>

International Capital Funding, Inc.
(A Development Stage Company)
Balance Sheet

                                                    Unaudited    Audited
                                                    December     September
                                                    31, 1998     30, 1998
ASSETS                                              ---------    ---------

Current Assets:
  
Total Current Assets                                     $0          $0      
  
TOTAL ASSETS                                             $0          $0      
  
LIABILITIES AND SHAREHOLDERS' EQUITY
  
LIABILITIES - Accounts Payable                          800       2,249 
  
SHAREHOLDERS' EQUITY: 
  
Preferred Stock, Par Value $.01 Per Share;   
 Authorized  100,000,000  Shares;
 Issued  and outstanding -0-   
Common Stock, $.0001 Par Value; 
 Authorized 500,000,000 Shares; Issued 
 and outstanding 500,000 shares.                         50          50 
  
Additional Paid-In Capital                            9,172       7,723      
  
Deficit Accumulated During The Development Stage    (10,022)    (10,022)     
  
TOTAL SHAREHOLDERS' EQUITY                             (800)     (2,249)     
                                                    -------     -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               $0          $0      
                                                    =======     =======
      
         See Accompanying Notes To These Unaudited Financial Statements.
  
<PAGE>
  
International Capital Funding, Inc. 
(A Development Stage Company) 
Unaudited Statement Of Operations 
  
<TABLE>
<CAPTION>
                                                                            June 10, 
                                                                              1991 
                                                   3 Months     3 Months  (Inception) 
                                                    Ended        Ended      Through 
                                                   December     December   December 
                                                   31, 1998     31, 1997   31, 1997 
                                                   --------     --------  ----------
<S>                                                 <C>         <C>        <C>     
Revenue:                                                 $0          $0         $0 
  
  
Consulting                                                0           0      1,500 
Office                                                    0         525      2,679 
Legal & Accounting                                        0       3,843      5,843 
                                                    -------     -------    -------
Total Expenses                                            0       4,368     10,022 
  
Net (Loss)                                                0      (4,368)   (10,022) 
                                                    =======     =======    =======
Basic (Loss) Per Common Share                         $0.00      ($0.01)    ($0.02) 
                                                    =======     =======    =======
Weighted Average Common Shares Outstanding          500,000     500,000    500,000 
                                                    =======     =======    =======
</TABLE>
                          
         See Accompanying Notes To These Unaudited Financial Statements.

<PAGE>
  
  
International Capital Funding, Inc. 
(A Development Stage Company) 
Unaudited Statement Of Cash Flow 
  
  
                                                                June 10, 
                                                                  1991 
                                       3 Months    3 Months   (Inception) 
                                        Ended       Ended       Through 
                                       December    December     December 
                                       31, 1998    31, 1997     31, 1998 
Cash Flows From Operating Activities:  --------    --------    ----------
  
Net (Loss)                                   $0     ($4,368)   ($10,022) 
  
Stock Issued For Services                     0           0       1,500 
Expenses Paid By Shareholder On Behalf 
 of Company                               1,449       1,500       7,722 
  
Increase (Decrease) In Accounts Payable  (1,449)      2,868         800 
                                         ------     -------     -------
Net Cash Flows From Operations                0           0           0 
  
Cash Flows From Investing Activities: 
  
  
Net Cash Flows Provided By Investing          0           0           0 
                                         ------     -------     -------
  
Cash Flows From Financing Activities: 
  
  
Net Cash Flows Provided By Financing          0           0           0 
                                         ------     -------     -------
  
Net Increase (Decrease) In Cash               0           0           0 
Cash At Beginning Of Period                   0           0           0 
                                         ------     -------     -------
Cash At End Of Period                        $0          $0          $0 
                                         ======     =======     =======
  
Supplementary Disclosure Of Cash Flow Information: 
  
Noncash Financing Activities: - Stoc         $0          $0      $1,500 
                                         ======     =======     =======
Expenses Paid by Shareholder on Behalf 
 of Company                              $1,149      $1,500      $7,722 
                                         ======     =======     =======
  
  
  
  
  
  
  
         See Accompanying Notes To These Unaudited Financial Statements.
  
<PAGE>

International Capital Funding, Inc. 
(A Development Stage Company) 
Unaudited Statement Of Shareholders' Equity 
  
<TABLE>
<CAPTION>
                                                                                                 Net (Loss) 
                                                                                                Accumulated 
                                     Number Of   Number Of              Capital Paid             During The 
                                       Shares      Shares      Common   In Excess Of  Preferred  Development 
                                       Common    Preferred     Stock     Par Value      Stock      Stage      Total  
                                     ----------  ----------    -------- ------------  ---------  -----------  -----
<S>                                     <C>               <C>       <C>     <C>             <C>    <C>       <C>
Balance At June 10, 1991                      0           0          $0         $0          $0          $0       $0 
  
January 13, 1995 issued   
 500,000 Shares Of $.0001 Par Value  
 Common Stock for services valued at 
 $1,500 or $.003 per share              500,000           0          50      1,450           0                1,500 
  
Net (Loss)                                                                                          (1,500)  (1,500) 
                                        -------   ---------    --------     ------     -------    --------   ------
Balance At September 30, 1995, 1996 
 And 1997                               500,000           0         $50     $1,450          $0     ($1,500)      $0 
                                        =======   =========    ========     ======     =======    ========   ======
Expenses Paid by Shareholder                                                 6,273                            6,273 
  
Net (Loss)                                                                                          (8,522)  (8,522) 
                                        -------   ---------    --------     ------     -------    --------   ------
Balance At September 30, 1998           500,000           0          50      7,723           0     (10,022)  (2,249) 
  
Expenses Paid by Shareholder                                                 1,449                            1,449 
  
Net (Loss)                                                                                               0        0 
                                        -------   ---------    --------     ------     -------    --------   ------
Unaudited Balance At December 31, 19    500,000           0         $50     $9,172          $0    ($10,022)   ($800) 
                                        =======   =========    ========     ======     =======    ========   ======
  
</TABLE>
  
  
  
  
  
  
         See Accompanying Notes To These Unaudited Financial Statements.
<PAGE>


International Capital Funding, Inc.
Notes To Unaudited Financial Statements
For The Three Month Period Ended December 31, 1998

Note 1 - Unaudited Financial Information

The  unaudited  financial  information  included for the three month and interim
period  ended  December  31, 1998 were taken from the books and records  without
audit.  However,  such information reflects all adjustments  (consisting only of
normal recurring adjustments, which are of the opinion of management,  necessary
to reflect  properly the results of interim periods  presented).  The results of
operations  for  the  three  month  period  ended  December  31,  1998  are  not
necessarily  indicative  of the  results  expected  for the  fiscal  year  ended
September 30, 1999.