U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
<P>
FORM 10-QSB
<P>
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended September 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
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For the transition period from to
<P>
Commission File No. 000-29585
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EUROSOFT CORPORATION
(Name of Small Business Issuer in Its Charter)
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<S> <C> <C>
Florida 22-3538310
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
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703 LUCERNE AVENUE, SUITE 201, LAKE WORTH, FLORIDA 33460
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
<P>
(561)540-5886
(Issuer's Telephone Number, Including Area Code)
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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.
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Yes X No
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State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: As of August 8, 2000, the Company had
24,623,320 shares of Common Stock outstanding, $0.001 par
value.
<P>
EUROSOFT CORPORATION
Form 10-QSB Quarterly Report
For the Period Ended June 30, 2000
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<S> <C>
Part I - FINANCIAL INFORMATION Page
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Item 1. Financial Statements 3
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Consolidated Balance Sheet at December 31, 1999 and June 30, 2000 4
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Consolidated Statements of Operations and Comprehensive 5
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Income (Loss) for the Six Months Ended June 30, 2000 and June 30, 1999
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Consolidated Statement of Stockholders' Equity 6
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Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2000 and June 30, 1999 7-8
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Notes to Condensed Financial Statements 9-11
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
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PART II - OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Signatures 14
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements:
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BASIS OF PRESENTATION
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The accompanying reviewed financial statements are presented
in accordance with generally accepted accounting principles
for interim financial information and the instructions to
Form 10-QSB and item 310 under subpart A of Regulation S-B.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting
principles for complete financial statements. The
accompanying statements should be read in conjunction with
the audited financial statements for the years ended
December 31, 1999. In the opinion of management, all
adjustments (consisting only of normal occurring accruals)
considered necessary in order to make the financial
statements not misleading, have been included. Operating
results for the nine months ended September 30, 2000 are not
necessarily indicative of results that may be expected for
the year ending December 31, 2000. The financial statements
are presented on the accrual basis.
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EUROSOFT CORPORATION
TABLE OF CONTENTS
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<TABLE>
<S> <C>
Consolidated Balance Sheets F-2
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Consolidated Statements of Operations and
Comprehensive Income (loss) F-3
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Consolidated Statements of Stockholders' Equity F-4
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Consolidated Statements of Cash Flows F-5
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Consolidated Notes to Financial Statements F-6
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</TABLE>
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<TABLE>
Eurosoft Corporation
Consolidated Balance Sheets
<S> <C> <C>
September 30, December 31,
2000 1999
-------------------------------
(unaudited)
CURRENT ASSETS
Cash $48,246 $66,035
Accounts receivable - net of allowance of
$46,919 and $0, respectively 100,633 192,699
Accounts receivable - related parties 4,038 20,532
Accounts receivable - projects in process 33,071 170,415
VAT receivable 0 16,728
Government grants receivable 55,803 60,437
Prepaid expenses and other current assets 9,263 7,369
---------------------------------
Total current assets 251,054 534,215
---------------------------------
PROPERTY AND EQUIPMENT
Automobiles 103,112 113,202
Computer equipment 99,976 113,259
Office furniture and equipment 57,941 63,407
---------------------------------
Total property and equipment 261,029 289,868
Less: accumulated depreciation (106,648) (84,341)
---------------------------------
Total property and equipment 154,381 205,527
--------------------------------
OTHER ASSETS
Goodwill, net 15,773 0
Deposits 1,111 1,173
--------------------------------
Total other assets 16,884 1,173
--------------------------------
Total Assets $422,319 $740,915
================================
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $130,187 $174,567
Accounts payable - related parties 0 568
Accrued salaries and payroll taxes 179,514 144,037
Current portion of long-term debt 40,992 44,566
Accrued expenses 17,761 11,543
-------------------------------
Total current liabilities 368,454 375,281
-------------------------------
LONG-TERM DEBT 0 33,502
-------------------------------
Total Liabilities 368,454 408,783
-------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized;
0 shares outstanding at December 31, 1999
and September 30, 2000 0 0
Common stock, $0.0001 par value,
50,000,000 shares authorized;
23,320 and 22,963,320 outstanding 2,472 2,296
Additional paid-in capital 13,280,326 12,679,002
Accumulated comprehensive income (loss) (136,392) (103,342)
Accumulated deficit (13,092,541) (12,245,824)
---------------------------------
Total stockholders' equity 53,865 332,132
---------------------------------
Total Liabilities and Stockholders' Equity $ 422,319 $740,915
=================================
</TABLE>
<TABLE>
Eurosoft Corporation
Consolidated Statements of Operations and Comprehensive Income(Loss)
(Unaudited)
<S> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
REVENUES
Software consulting, training,
Y2K repair $15,609 $522,503 $158,112 $1,386,397
Software resales, hardware sales 11,610 397,867 155,408 1,114,100
---------------------------------------------------
Total revenues 27,219 920,370 313,520 2,500,497
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COST OF SALES
Cost of sales: hardware and software 23,235 305,110 191,505 857,001
---------------------------------------------------
Gross margin 3,984 615,260 122,015 1,643,496
<P>
OPERATING EXPENSES
Compensation:
Officers 52,481 6,697 145,531 119,773
Others 0 73,714 26,223 238,266
Consultants and others 173,660 0 601,277 140,127
Advertising and marketing 875 10,966 6,507 21,482
General and administrative 54,615 425,574 147,404 1,181,410
Bad debt provision 0 5,984 0 5,984
Goodwill amortization 845 0 1,127 0
Depreciation 11,565 20,036 36,711 49,689
----------------------------------------------------
Total operating expenses 294,041 542,971 964,780 1,756,731
----------------------------------------------------
Operating loss (290,057) 72,289 (842,765) (113,235)
-----------------------------------------------------
OTHER INCOME (EXPENSE)
Gain(loss) on sale of equipment 2,802 (8,073) 2,804 (8,073)
Interest income 6 236 315 464
Foreign currency transaction gain (loss) 35 111 0 0
Interest expense 1,392 (2,655) (7,071) (7,773)
-----------------------------------------------------
Total other income and expense 4,235 (10,381) (3,952) (15,382)
-----------------------------------------------------
Net loss before foreign income tax (285,822) 61,908 (846,717) (128,617)
Foreign income tax 0 0 0 0
-----------------------------------------------------
Net loss (285,822) 61,908 (846,717) (128,617)
<P>
Other comprehensive income(loss):
Foreign currency translation
gain (loss) (6,226) 71,000 (33,050) (10,342)
-----------------------------------------------------
Net comprehensive loss $(292,048) $132,908 $(879,767) $(138,959)
=====================================================
Net loss per common share $ (0.01) (0.01) $ (0.04) $ (0.01)
=====================================================
Weighted average number of shares of
common stock outstanding 24,473,320 22,963,320 23,648,429 22,889,070
=====================================================
<P>
</TABLE>
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<TABLE>
Eurosoft Corporation
Consolidated Statement of Stockholders' Equity
<S> <C> <C> <C> <C>
Accumulated
Common Stock Additional Comprehensive
Number Par Paid-in Income
Of shares Value Capital (Loss)
BEGINNING BALANCE,
December 31, 1997 4,000,000 $400 $49,800 $(3,630)
<P>
Year ended December 31, 1998:
Shares contributed
to company (1,900,000) (190) 190 0
Shares issued for services 625,000 63 14,937 0
Shares issued for
acquisitions 19,474,070 1,947 11,294,151 0
Shares canceled (2,800,000) (280) 280 0
Shares issued for cash 3,490,000 349 789,651 0
Foreign currency translation
gain (loss) 0 0 0 5,741
Net loss 0 0 0 0
-------------------------------------------------------------
BALANCE,
December 31, 1998 22,889,070 2,289 12,149,009 2,111
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Year ended December 31, 1999:
-----------------------------
Shares issued for cash 74,250 7 529,993 0
Foreign currency translation
gain (loss) 0 0 0 (105,453)
<P>
Net loss 0 0 0 0
------------------------------------------------------------
BALANCE,
December 31, 1999 22,963,320 2,296 12,679,002 (103,342)
Nine Months ended September
30, 2000: (unaudited)
Shares issued for acquisition 100,000 10 17,490 0
Shares issued for services -
2nd qtr. 1,160,000 116 408,884 0
Shares issued for services -
3rd qtr. 500,000 50 174,950 0
Foreign currency translation
gain (loss) 0 0 0 (33,050)
<P>
Net loss 0 0 0 0
---------------------------------------------------------------
BALANCE, September 30,
2000 (unaudited) 24,723,320 $2,472 $13,280,326 $(136,392)
===============================================================
</TABLE>
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<TABLE>
Eurosoft Corporation
Consolidated Statements of Cash Flows
Nine Months Ended September 30,
(Unaudited)
<S> <C> <C>
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(846,717) $(128,617)
Adjustments to reconcile net loss to net
cash used by operating
activities:
Depreciation 35,033 49,639
Goodwill amortization 1,127 0
Allowance for bad debt 0 5,384
Common stock issued for services 584,000 0
Loss on sale of property and equipment 0 8,073
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 122,236 81,136
(Increase) decrease in accounts receivable -
related parties 15,485 3,204
(Increase) decrease in accounts receivable -
projects in process 83,665 137,382
(Increase) decrease in deposits (15) 3,642
(Increase) decrease in VAT receivable 16,378 0
(Increase) decrease in government
grants receivable (874) 12,534
(Increase) decrease in prepaid expenses
and other assets (2,288) 0
Increase (decrease) in accounts payable (10,759) 32,178
Increase (decrease) in accounts payable -
related parties (1,524) (90,872)
Increase (decrease) in accrued expense (27,088) 6,542
Increase (decrease) in accrued salaries
and payroll taxes 35,627 (1,073)
Increase (decrease) in deferred revenue 0 (6,238)
-----------------------------------------
Net cash provided (used) by operating activities 4,286 112,914
-----------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sale of property and equipment 3,166 0
Acquisition of property and equipment 0 0
-----------------------------------------
Net cash (used) by investing activities 3,166 0
-----------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 0 0
Repayment of debt (20,444) (45,118)
-----------------------------------------
Net cash provided (used) by financing activities (20,444) (45,118)
-----------------------------------------
Effect of exchange rates on cash (4,797) (20,891)
-----------------------------------------
Net increase (decrease) in cash and equivalents (17,789) 46,905
<P>
CASH and equivalents, beginning of period 66,035 167,518
-----------------------------------------
CASH and equivalents, end of period $48,246 $214,423
=========================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid in cash $7,071 $7,773
=========================================
Non-Cash Financing Activities:
Acquisition of subsidiary $17,500 $ 0
=========================================
</TABLE>
<P>
Eurosoft Corporation
Notes to Consolidated Financial Statements
(Information with respect to the nine months ended
September 30, 2000 and 1999 is unaudited)
<P>
(1) Summary of Significant Accounting Principles
<P>
The Company Eurosoft Corporation (the Company)
is a Florida corporation specializing in computer software
consulting, training and Y2K repair. The Company also acts
as a computer software reseller as well as constructs PCs on
a custom order basis. The Company maintains its executive
offices in Lake Worth, Florida and has operating
subsidiaries in Londonderry, Northern Ireland, Helsinki,
Finland, and Darmstadt, Germany. The Company was
incorporated on September 15, 1997, under the laws of the
State of Florida.
<P>
The consolidated financial statements have been prepared in
conformity with generally accepted accounting principles.
The following summarize the more significant accounting and
reporting policies and practices of the Company:
<P>
a) Basis of presentation The Company acquired NewSoft, GmbH,
a German corporation, Do It Development International, OY,
a Finnish corporation, Millennium Three Solutions, Ltd, a
Northern Ireland Corporation, and SICOR, Inc. a Florida
corporation, in stock for stock transactions, in a multiple
reverse merger accounted for as a reorganization of the four
operating subsidiaries. In May 2000, the Company acquired
Amenity Zone, Inc., a Florida corporation, in a stock for
stock transaction accounted for as a purchase. The
consolidated financial statements include the accounts of
Newsoft, Do It, Millennium Three, SICOR and Amenity Zone,
its wholly owned subsidiaries. Inter-company accounts and
transactions have been eliminated in the consolidation.
<P>
b) Revenue recognition For the Company's software
consulting, training and Y2K repair operations, the Company
records revenue as the project proceeds on a billed as
earned basis. For the software reselling and custom hardware
construction operations, the Company records revenue when
the goods are delivered and accepted by the customer.
<P>
c) Use of estimates In preparing the consolidated financial
statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and
liabilities as of the date of the statements of financial
condition, and revenues and expenses for the year then
ended. Actual results may differ significantly from those
estimates.
<P>
d) Net loss per common share Basic net loss per common share
is computed by dividing the net loss by the weighted average
number of common shares outstanding during the period.
<P>
e) Property and equipment All property and equipment are
recorded at cost and depreciated over their estimated useful
lives, using the straight-line method. Upon sale or
retirement, the costs and related accumulated depreciation
are eliminated from their respective accounts, and the
resulting gain or loss is included in the results of
operations. Repairs and maintenance charges which do not
increase the useful lives of the assets are charged to
operations as incurred.
<P>
f) Advertising costs The company expenses the costs of
advertising the first time the advertising takes place.
<P>
g) Government grants The Company has received several
government grants which are conditional as to repayment.
The grants are to be applied as reductions of salaries and
employment taxes paid to new employees. They are intended
by the government to induce increases in employment, as
Northern Ireland has experienced high unemployment over the
last few years. To date, the Company has been increasing
employment and applying accumulated grants as offsets to
salary expense and, at present, is not obligated to
<P>
Eurosoft Corporation
Notes to Consolidated Financial Statements
<P>
(1) Summary of Significant Accounting Principles (Continued)
<P>
g) Government grants (continued) repay any of these grants.
The Company does not expect to have to repay any of the
grant amounts. These grants, if required to be repaid, do
not require the payment of interest. The term for adding
the required employees under these grants is three years.
Once the government approves the award of the grant, it is
obligated to remit the amount to the Company under the terms
of the grant. The Company has amortized approximately
$124,000 and $46,800 of the grants against salary expense
for the years ending December 31, 1999 and 1998,
respectively.
<P>
h) Recent accounting pronouncements Staff Accounting
Bulletin 101 - Revenue Recognition, (SAB 101), was issued on
December 3, 1999, and its effective date has been deferred
twice. The Company expects to adopt the provisions of SAB
101 upon its final effective date, if this occurs. The
Company does not expect SAB 101 to have any effect on it
financial statements.
<P>
i) Foreign currency transaction and translation gains
(losses) The principal operating entities of the Company are
its subsidiaries, NewSoft, GmbH, Millennium Three Solutions,
Ltd. and Do It Development International, O.Y., which are
located in Germany, Northern Ireland and Finland. SICOR,
Inc. was an operating subsidiary in 1998. The functional
currency of the subsidiaries are: The Deutsche Mark, Pound
Sterling and Finnish Mark. SICOR's functional currency is
the US Dollar. Any time these operating entities receive
payment in any currency other than their functional
currency, they record a transaction gain or loss. On a
consolidated basis, the Company's reporting currency is the
US Dollar. The Company translated the income statement
items using the average exchange rate for the period and
balance sheet items using the end of period exchange rate,
except for equity items, which are translated at historical
rates, in accordance with SFAS 52.
<P>
j) Segments In 1998, SICOR, then a New Jersey-based entity,
expended approximately $10,266,000 in cash in a marketing
program aimed primarily at European businesses. This
marketing effort was expected to generate substantial Y2K
software repair contracts for Eurosoft's three Europe-based,
wholly-owned operating subsidiaries. This marketing program
failed to live up to expectations and, in January 1999,
SICOR became inactive.
<P>
The Company's three remaining operating subsidiaries are all
located in Europe. All of the Company's revenues were
earned within Europe. Virtually all of the company's
expenses were expended in Europe, with the only significant
expenditure outside Europe being the marketing program.
<P>
k ) Interim financial information The financial statements
for the nine months ended September 30, 2000 and 1999 are
unaudited and include all adjustments which in the opinion
of management are necessary for fair presentation, and such
adjustments are of a normal and recurring nature. The
results for the nine months are not indicative of a full
year results.
<P>
(2) Significant Acquisitions On March 21, 1998, the Company
acquired 100% of the issued and outstanding common stock of
NewSoft, in exchange for 550,000 shares of common stock of
the Company, 500,000 shares of common stock of SICOR, which
became 1,000,000 shares of the Company, and a $300,000 cash
investment in NewSoft. On December 3, 1998, the Company
acquired 100% of the issued and outstanding stock of Do It
in exchange for 1,000,000 shares of common stock of the
Company, and $100,000 in cash. On December 3, 1998, the
Company acquired 100% of the issued and outstanding common
stock of Millennium Three in exchange for 4,000,000 shares
of common stock of the Company and a $500,000 cash
investment in Millennium Three. On October 2, 1998, the
Company acquired 100% of the issued and outstanding common
stock of SICOR in exchange for 25,922,070 shares of common
stock of the Company. The acquisitions were
<P>
Eurosoft Corporation
Notes to Consolidated Financial Statements
<P>
(2) Significant Acquisitions (Continued)
<P>
a multiple reverse merger accounted for as a
reorganization of the four operating subsidiaries. In May
2000, the Company issued 100,000 shares of common stock to
acquire Amenity Zone, (AZI), in exchange for 100% of AZI's
issued and outstanding common stock. This transaction was
accounted for as a purchase. As a result, the Company
recorded goodwill in the amount of $16,900, which the
Company is amortizing over five years. The Company recorded
$282 of amortization at September 30, 2000.
<P>
(3) Stockholders' Equity The Company has authorized
50,000,000 shares of $0.0001 par value common stock and
10,000,000 shares of $0.0001 par value preferred stock.
Rights and privileges of the preferred stock are to be
determined by the Board of Directors prior to issuance. At
inception, the Company issued 2,000,000 shares to the
founders for services valued at par, or $200, which was
immediately expensed. In 1997 the Company issued 2,000,000
shares in exchange for $50,000 in cash. In 1998 the Company
issued 625,000 shares for services valued at $15,625, which
was immediately expensed. In 1998 the Company issued
3,490,000 shares for $790,000 in cash. In 1998 the Company
issued 550,000 shares in connection with the acquisition of
NewSoft, 1,000,000 shares for Do It, 4,000,000 for
Millennium Three, and 19,472,070 for SICOR. 1,900,000 shares
were contributed back to the Company and 2,800,000 shares
previously owned by SICOR were retired at acquisition date.
In 1999, the Company issued 74,250 shares in exchange for
$530,000 in cash. In May 2000, the Company issued 100,000
shares of common stock to acquire 100% of the issued and
outstanding common stock of Amenity Zone. In May 2000,
under S-8 registration, the Company issued 60,000 shares of
common stock to settle a legal bill in the amount of $24,000
and 1,100,000 shares of common stock for services valued at
$385,000, which were immediately expensed. In July 2000,
the Company issued 500,000 shares of common stock under an
S-8 registration for services valued at $175,000, which were
immediately expensed.
<P>
(4) Income Taxes The Company has a consolidated met
operating loss carryforward for US income tax purposes,
amounting to $13,093,000 at September 30, 1999, expiring
$68,000 at December 31, 2014, $11,858,000 at December 31,
2018, $320,000 at December 31, 2019 and $847,000 at December
31, 2020. There may be certain limitations on the Company's
ability to utilize the loss carry-forwards due to the change
in control of the subsidiaries where the losses were
incurred. At December 31, 1999, the Company had
approximately $60,300 in operating loss carryforward for
Finnish income tax purpose, $118,700 in Northen Ireland, and
$5,700 in Germany. At September 30, 1999, the Company has a
deferred U.S. tax asset of approximately $5,237,000, for
which the Company has established a 100% valuation
allowance, as the Company has no history of profitable
operations.
<P>
(5) Commitments and Contingencies The Company is committed
to operating leases in Northern Ireland, Germany and
Finland. Under the exchange rates in effect at December 31,
1999, the Company is obligated to lease payments totaling
$71,300 in 2000, $20,500 in 2001, $4,100 in 2002, $1,000 in
2003 and $0 thereafter, for an aggregate commitment of
$96,900. The Company's office space in the US and Finland
are leased under month to month lease agreements.
<P>
The Company is also obligated under two employment
agreements with an officer and another employee for $72,700
and $56,600 per year at exchange rates in effect at December
31, 1999, for a total remaining commitment at December 31,
1999 of $258,600.
<P>
(6) Advertising and Marketing In 1998, the Company
undertook a very extensive and expensive advertising and
marketing campaign with the expectation of generating
substantial revenue from Y2K consulting and repair. This
campaign failed to generate any material revenues or
contracts beyond that which the Company's existing personnel
were able to generate from their personal efforts. The
Company expended approximately $10.5 million on this
campaign.
<P>
Eurosoft Corporation
Notes to Consolidated Financial Statements
<P>
(7) VAT Tax Receivable In Germany, Finland and Northern
Ireland, as in many other countries, the government charges
a Value Added Tax, (VAT), that is similar in nature to sales
tax in the U.S. There are three major differences. First
is that VAT is charged at each point of sale. Second is
that there are no exemptions from the collection of VAT.
Finally, each company files a VAT return with the government
monthly reflecting the gross VAT collected and VAT paid. If
the VAT paid is greater than the amount collected, the
Company receives a refund from the government approximately
two to five months later.
<P>
(8) Going Concern As reflected in the accompanying
financial statements, the Company incurred a significant net
loss of approximately $11,858,000 in 1998, and $320,000 in
1999, resulting in an accumulated deficit of approximately
$12,092,000 at December 31, 1999. The ability of the Company
to continue as a going concern is dependent upon achieving
profitability in its ongoing operations and potentially
obtaining additional capital and/or financing. The Company
is currently seeking to raise additional equity in order to
expand its existing operations. The financial statements do
not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
<P>
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
<P>
EUROSOFT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS
<P>
Forward-Looking Statements
<P>
Forward-looking statements, based on management's current
views and assumptions, are made throughout the Management's
Discussion and Analysis and elsewhere in this report to
stockholders. These statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from historical results and those presently
anticipated or projected. Among the factors that may affect
operating results are the following: success of the
Company's change in focus; competitive environment; and
general economic conditions.
<P>
Results of Operations:
<P>
The Company achieved limited revenues for the nine months
ended September 30, 2000 of $158,112 compared to $1,386,397
for the nine months ended September 30, 1999. The Company's
core competencies as an IT service/ software provider and
management consulting firm for the nine month period ended
September 30, 2000. The decrease in revenues was a result of
the Company redefining its business initiatives after
leaving the disappointing Y2K remediation business. The
Company's operating expenses decreased for the nine months
ended September 30, 2000 ($964,780) from the nine months
ended September 30, 1999 ($1,756,731). This was based on the
following factors: 1. The Company's general and
administrative expenses decreased from 1,181,410 (for the
period ending September 30, 1999) to 147,404 (for the period
ending September 30, 2000) due to a large reduction in Y2K
related work and a streamlining of the Company to preserve
capital for future business plans; 2. The Company's
operating expenses for consultants increased from 140,127
(for the period ending September 30, 1999) to 601,277 (for
the period ending September 30, 2000) due to the Company
hiring additional consultants to develop a new business plan
based on its core competencies of IT and Management
consulting; 3. The Company's expenses for officers and
others decreased from 358,039 (for the period ending
September 30, 1999) to 171,754 (for the period ending
September 30, 2000) based primarily on the slowdown and
eventual elimination of Y2K remediation work. Therefore,
this resulted in a decrease in operating expenses for the
Company during the nine month period ending September 30,
2000 from the nine month period ending September 30, 1999.
<P>
Liquidity:
<P>
Net cash provided (used) by operating activities increased
from $112,914 for the nine month period ending September 30,
1999 to $4,286 for the nine month period ending September
30, 2000. This was due mainly to the Company issuing its
common stock for services rendered.
<P>
Future Outlook:
<P>
The Company is currently in the midst of a redefinition of
business plan. The Company has attempted to build various
revenue models around its core competencies in IT consulting
and management consulting. These have included the resale of
various commercial software products along with
implementation schemes and a German-American business portal
intended to open the doors of e-commerce to a diverse base
of global consumers by providing cultural insight along with
precise language translation. To date the Company has
limited success with its reselling of software, but it does
show great promise, especially through its UK operations.
The business development portal, undercapitalized, and
therefore under marketed at a time when Internet business
was generally weak, is currently considered a failure and
may or may not be pursued in the future with adequate
funding. The Company currently intends to refocus on its UK
operations and is currently seeking funding to launch those
initiatives.
<P>
PART II - OTHER INFORMATION
<P>
Item 1. Legal Proceedings. Not applicable
<P>
Item 2. Changes in Securities. None
<P>
Item 3. Defaults Upon Senior Securities. Not Applicable
<P>
Item 4. Submission of Matters to a Vote of Security Holders.
<P>
None.
<P>
Item 5. Other Information. None
<P>
Item 6. Exhibits and Reports of Form 8-K. On May 10, 2000,
the Company filed an 8-K12g3 for the Stock Acquisition and
Reorganization Agreement between the Company and Amenity
Zone, Inc. ("Amenity) dated May 8, 2000.
<P>
Exhibit 27 - Financial Date Schedule - Electronic Filing
Only
<P>
SIGNATURES
<P>
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly
caused this 10-QSB report to be signed on its behalf by the
undersigned there unto duly authorized.
<P>
EUROSOFT CORPORATION
(Registrant)
<P>
By: /s/ William H. Luckman
-----------------------
William H. Luckman
Executive Vice President
Date: November 20, 2000
