U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
<P>
AMENDMENT NO. 2 TO
FORM 10-QSB
<P>
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
<P>
For the quarterly period ended June 30, 2000
<P>
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
<P>
For the transition period from to
<P>
Commission File No. 000-29585
<P>
EUROSOFT CORPORATION
<P>
(Name of Small Business Issuer in Its Charter)
<TABLE>
<S> <C>
Florida 22-3538310
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)</TABLE>
<P>
703 LUCERNE AVENUE, SUITE 201, LAKE WORTH, FLORIDA 33460
(Address of Principal Executive Offices) (Zip Code)
<P>
(561)540-5886
(Issuer's Telephone Number, Including Area Code)
<P>
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.
<P>
Yes X No
<P>
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
<TABLE>
<S> <C>
Part I - FINANCIAL INFORMATION Page
<P>
Item 1. Financial Statements 3
<P>
Consolidated Balance Sheet at December 31, 1999
and June 30, 2000 4
Consolidated Statements of Operations and
Comprehensive 5
Income (Loss) for the Six Months Ended June 30, 2000
and June 30, 1999
Consolidated Statement of Stockholders' Equity 6
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2000 and June 30, 1999 7-8
Notes to Condensed Financial Statements 9-11
<P>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12
<P>
PART II - OTHER INFORMATION 13
<P>
Item 1. Legal Proceedings 13
<P>
Item 2. Changes in Securities 13
<P>
Item 3. Defaults Upon Senior Securities 14
<P>
Item 4. Submission of Matters to a Vote of Security Holders 14
<P>
Item 5. Other Information 14
<P>
Signatures 14
</TABLE>
<P>
PART I - FINANCIAL INFORMATION
<P>
Item 1. Financial Statements:
<P>
BASIS OF PRESENTATION
<P>
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 six months ended June 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.
<P>
Eurosoft Corporation
Consolidated Balance Sheets
<TABLE>
<S> <C> <C>
June 30, December 31,
2000 1999
-------------------------------------
(unaudited)
CURRENT ASSETS
Cash $ 90,184 $ 66,035
Accounts receivable - net of allowance of
$46,919 and $0, respectively 154,838 192,699
Accounts receivable - related parties 13,958 20,532
Accounts receivable - projects in process 52,526 170,415
VAT receivable 0 16,728
Government grants receivable 57,402 60,437
Prepaid expenses and other current assets 15,830 7,369
-------------------------------------
Total current assets 384,738 534,215
-------------------------------------
PROPERTY AND EQUIPMENT
Automobiles 105,997 113,202
Computer equipment 106,568 113,259
Office furniture and equipment 59,482 63,407
-------------------------------------
Total property and equipment 272,047 289,868
Less: accumulated depreciation (103,724) (84,341)
-------------------------------------
Total property and equipment 168,323 205,527
-------------------------------------
OTHER ASSETS
Goodwill 16,618 0
Deposits 1,129 1,173
-------------------------------------
Total other assets 17,747 1,173
-------------------------------------
Total Assets $570,808 $740,915
=====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $165,276 $174,567
Accounts payable - related parties 0 568
Accrued salaries and payroll taxes 181,609 144,037
Current portion of long-term debt 47,176 44,566
Accrued expenses 3,052 11,543
-------------------------------------
Total current liabilities 397,113 375,281
-------------------------------------
LONG-TERM DEBT 0 33,502
-------------------------------------
Total Liabilities 397,113 408,783
-------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, $0.0001 par value,
10,000,000 shares authorized;0 shares
outstanding at December 31, 1999 and
June 30, 2000 0 0
Common stock, $0.0001par value,
50,000,000 shares authorized;
22,963,320 and 24,223,320 outstanding 2,422 2,296
Additional paid-in capital 13,105,376 12,679,002
Accumulated comprehensive income (loss) (130,166) (103,342)
Accumulated deficit (12,803,937) (12,245,824)
-------------------------------------
Total stockholders' equity 173,695 332,132
-------------------------------------
Total Liabilities and Stockholders' Equity $570,808 $740,915
</TABLE>
Eurosoft Corporation
Consolidated Statements of Operations and
Comprehensive Income(Loss)
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Six Months
Ended Ended
2000 1999 2000 1999
---------------------------------------------
REVENUES
Software consulting, training,
Y2K repair $ 106,083 $ 646,511 $ 142,503 $ 863,894
Software resales, PC hardware sales 36,745 377,524 143,798 716,233
----------------------------------------------
Total revenues 142,828 1,024,035 286,301 1,580,127
COST OF SALES
Cost of sales 75,295 291,374 168,270 551,891
----------------------------------------------
Gross margin 66,533 732,661 118,031 1,028,236
OPERATING EXPENSES
Compensation:
Officers 30,465 81,248 93,050 164,552
Others 17,173 91,198 26,223 113,076
Consultants and others 404,742 379,977 427,617 462,763
Advertising and marketing 1,387 6,106 5,632 10,516
General and administrative 33,361 223,677 92,789 433,200
Bad debt provision 0 0 0 0
Goodwill amortization 282 0 282 0
Depreciation 17,012 17,065 25,146 29,653
----------------------------------------------
Total operating expenses 504,422 799,271 670,739 1,213,760
----------------------------------------------
Operating loss (437,889) (66,610) (552,708) (185,524)
----------------------------------------------
OTHER INCOME (EXPENSE)
Gain(loss) on sale of equipment 0 0 0 (8,073)
Interest income 95 (7) 309 228
Foreign currency transaction gain (loss) (2) (3) (35) (111)
Interest expense (2,729) (2,543) (5,679) (5,118)
----------------------------------------------
Total other income and expense (2,636) (2,553) (5,405) (13,074)
----------------------------------------------
Net loss before foreign income tax (440,525) (69,163) (558,113) (198,598)
Foreign income tax 0 (9,226) 0 (9,226)
----------------------------------------------
Net loss (440,525) (78,389) (558,113) (207,824)
<P>
Other comprehensive income(loss):
Foreign currency translation
gain (loss) (19,589) (11,497) (26,824) (81,342)
----------------------------------------------
Net comprehensive loss $ (460,114) $ (89,886) $(584,937) $(289,166)
================================================
Net loss per common share $ (0.01) $ (0.01) $ (0.01) $ (0.01)
================================================
Weighted average number of shares of
common stock outstanding 22,832,765 22,926,195 23,702,209 22,889,070
========== =========== =========== ==========
</TABLE>
<P>
Eurosoft Corporation
Consolidated Statement of Stockholders' Equity
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Accumulated
Common Stock Additional Comprehensive Total
Number Par Paid-in Income Accumulated Stockholders'
of Shares Value Capital (Loss) Deficit Equity
----------------------------------------------------------------------------
BEGINNING BALANCE,
December 31, 1997 4,000,000 $ 400 $ 49,800 $(3,630) $(68,034) $(21,464)
<P>
Year ended December 31, 1998:
-----------------------------
Shares contributed
to company (1,900,000) (190) 190 0 0 0
Shares issued
for services 625,000 63 14,937 0 0 15,000
Shares issued
for acquisitions 19,474,070 1,947 11,294,151 0 0 11,296,098
Shares canceled (2,800,000) (280) 280 0 0 0
Shares issued
for cash 3,490,000 349 789,651 0 0 790,000
Foreign currency
translation
gain (loss) 0 0 0 5,741 0 5,741
<P>
Net loss 0 0 0 0 (11,857,899) (11,857,899)
---------------------------------------------------------------------------
BALANCE,
December 31,
1998 22,889,070 2,289 12,149,009 2,111 (11,925,933) 227,476
<P>
Year ended December 31, 1999:
-----------------------------
Shares issued
for cash 74,250 7 529,993 0 0 530,000
Foreign currency
translation
gain (loss) 0 0 0 (105,453) 0 (105,453)
<P>
Net loss 0 0 0 0 (319,891) (319,891)
--------------------------------------------------------------------------
BALANCE, December 31,
1999 22,963,320 2,296 12,679,002 (103,342) (12,245,824) 332,132
<P>
Six Months ended June 30, 2000: (unaudited)
----------------------------------------
Shares issued
for acquisition 100,000 10 17,490 0 0 17,500
Shares issued
for services 1,160,000 116 408,884 0 0 409,000
Foreign currency
translation
gain (loss) 0 0 0 (26,824) 0 (26,824)
<P>
Net loss 0 0 0 0 (558,113) (558,113)
------------------------------------------------------------------------
BALANCE, June 30,
2000
(unaudited) 24,223,320 $ 2,422 $ 13,105,376 $(130,166)$(12,803,937) $173,695
========================================================================
</TABLE>
<TABLE>
EuroSoft Corporation
Consolidated Statements of Cash Flows
Six Months Ended June 30,
(Unaudited)
<S> <C> <C>
2000 1999
-----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (558,113) $(207,824)
Adjustments to reconcile net loss to
net cash used by operating
activities:
Depreciation 25,146 29,653
Goodwill amortization 282 0
Common stock issued for services 409,000 0
Loss on sale of property and equipment 0 8,073
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable 84,780 (61,139)
(Increase) decrease in accounts receivable
- related parties 6,574 3,098
(Increase) decrease in accounts receivable
- projects in process 117,889 141,272
(Increase) decrease in deposits 0 3,739
(Increase) decrease in VAT receivable 16,728 (7,119)
(Increase) decrease in government grants
receivable 3,035 (105,840)
(Increase) decrease in prepaid expenses
and other assets (8,461) 37,984
Increase (decrease) in accounts payable (9,291) 10,478
Increase (decrease) in accounts payable
- related parties (568) (32,495)
Increase (decrease) in accrued expense (11,543) (44,505)
Increase (decrease) in accrued salaries
and payroll taxes 37,572 53,664
Increase (decrease) in deferred revenue 0 (6,238)
-----------------------------
Net cash provided (used) by operating activities 113,030 (177,199)
-----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment 0 (18,673)
-----------------------------
Net cash (used) by investing activities 0 (18,673)
-----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock for cash 0 327,500
Repayment of debt (30,892) (22,860)
-----------------------------
Net cash provided (used) by financing activities (30,892) 304,640
-----------------------------
Effect of exchange rates on cash (57,989) (29,653)
-----------------------------
Net increase (decrease) in cash and equivalents 24,149 79,115
<P>
CASH and equivalents, beginning of period 66,035 167,518
-----------------------------
CASH and equivalents, end of period $90,184 $246,633
=============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid in cash $5,679 $5,118
=============================
Non-Cash Financing Activities:
------------------------------
Acquisition of subsidiary $17,500 $0
=============================
</TABLE>
Eurosoft Corporation
Notes to Consolidated Financial Statements
(Information with respect to the six months ended
June 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.
<P>
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 six months ended June 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 six 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) 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 June
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.
<P>
(4) Income Taxes The Company has a consolidated met
operating loss carryforward for US income tax purposes,
amounting to $12,804,000 at June 30, 1999, expiring $68,000
at December 31, 2014, $11,858,000 at December 31, 2018,
$320,000 at December 31, 2019 and $558,000 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 June 30, 1999, the Company has a
deferred U.S. tax asset of approximately $5,122,000, 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>
(9) Subsequent Events
<P>
a) Stockholders' equity In July 2000, the Company
issued 500,000 shares of common stock for services valued at
$175,000.
<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 six months ended
June 30, 2000 of $286,301 compared to $1,580,127 for the six
months ended June 30, 1999. The Company's core competencies as
an IT services provider/software provider and management
consulting firm provided the majority of the revenue for the
six month period ended June 30, 2000. The decrease in
revenues was a result of the Company redefining its initiatives
after leaving the disappointing Y2K remediation business
behind. The Company's operating expenses decreased nominally
for the six month period ending June 30, 2000 ($1,160,739) from
the six month period ending June 30, 1999 ($1,213,760). This
was based on the following factors: (i) The Company's general
and administrative expenses decreased from $433,200 (for period
ending June 30, 1999) to $92,789 (for period ending June 30,
2000) due to a nominal amount of expenses for Y2K remediation
work; (ii) The Company's operating expenses for consultants
increased from $462,763 (for period ending June 30, 1999) to
$917,617 (for period ending June 30, 2000) due to the Company
hiring additional consultants to reinvent itself and increase
its competencies in IT and management consulting; (iii) The
Company's expenses for Officers and others decreased from
$277,628 (for period ending June 30, 1999) to $119,273 (for
period ending June 30, 2000) based on a decrease in Y2K
remediation work. The above increases and decreases basically
offset each other. Therefore, this resulted in a nominal
decrease in operating expenses for the Company during the six
month period ending June 30, 2000 from the six month period
ending June 30, 1999.
<P>
Liquidity:
<P>
Net cash provided (used) by operating activities increased from
($177,199) for the six month period ending June 30, 1999 to
$113,030 for the six month period ending June 30, 2000. This
was due mainly to the Company issuing its common stock for
services rendered
<P>
Future Outlook:
<P>
The Company intends to reinvent itself over the next several
months through a modification in business plan. The Company
will continue in its core competencies, IT and management
consulting, but begin a new marketing initiative, which will
allow the Company to tap into new revenue streams. The Company
will launch this initiative sometime in the fiscal third
quarter of 2000. The primary basis is to capitalize on the
Company's broad global diversity and technology skills. The
initiative will be an offering of services to aid businesses in
the development of their foreign markets in an efficient and
affordable scale. US Companies will be able to launch German
based commerce sites for less than $2,000. The Company also has
premium products developed for this market, as well as the
planned addition of Swedish and Finnish before year-end and
Spanish, French and Italian during Fiscal 2001. The Company's
marketing strategy will initially seek a partnership with a US
based Internet marketing firm and will expand as resources
allow.
<P>
PART II - OTHER INFORMATION
<P>
Item 1. Legal Proceedings. Not applicable
<P>
Item 2. Changes in Securities.
<P>
On June 2, 2000, the Company issued the following shares
under an S-8 Registration Statement:
<P>
Richard I. Anslow- 50,000 shares
Gregg E. Jaclin- 10,000 shares
<P>
On June 16, 2000, the Company issued the following shares
under an S-8 Registration Statement:
<P>
Darin S. Reubel-100,000 shares
Mark A. Mintmire-300,000 shares
Donald F. Mintmire-700,000 shares
<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: October 20, 2000
<P>
