-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BrpkUv1n5XwH/fI2PbMMM19+F/rovrAmoJoOuHIy8NyKxO+GezFqECGZOws/O+zf IIfPru+3dnVyRezpERvfcQ== 0001005477-99-003805.txt : 19990817 0001005477-99-003805.hdr.sgml : 19990817 ACCESSION NUMBER: 0001005477-99-003805 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EUROTECH LTD CENTRAL INDEX KEY: 0001033030 STANDARD INDUSTRIAL CLASSIFICATION: HAZARDOUS WASTE MANAGEMENT [4955] IRS NUMBER: 592855398 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-22129 FILM NUMBER: 99693570 BUSINESS ADDRESS: STREET 1: 1101 30TH STREET N W STREET 2: STE 500 CITY: WASHINGTON STATE: DC ZIP: 20007 BUSINESS PHONE: 6195516844 MAIL ADDRESS: STREET 1: 1200 PROSPECT STREET STREET 2: STE 425 CITY: LA JOLLA STATE: CA ZIP: 92037 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) |X| QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 1999 |_| 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 333-26673 ---------------------------------------- EUROTECH, LTD. -------------- (Exact name of small business issuer as specified in its charter) District of Columbia 33-0662435 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1216 16th Street, NW Suite 200 Washington, DC 20036-3772 (Address of principal executive offices) (202) 466-5591 (Issuer's telephone number) --------------------------------------------------- (Former name, former address and former fiscal year if changed since last report) Check 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 |_| State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 23,149,454 shares of Common Stock, $0.00025 par value, were outstanding as of June 30, 1999. Transitional Small Business Disclosure Forms (check one): Yes |_| No |X| EUROTECH, LTD. (A Development Stage Company) INDEX TO FORM 10Q JUNE 30, 1999 Page Nos. --------- PART I - FINANCIAL INFORMATION: ITEM I - FINANCIAL STATEMENTS BALANCE SHEETS F-1 At December 31, 1998 and June 30, 1999 STATEMENTS OF OPERATIONS F-2 For the Six Months Ended June 30, 1998 and 1999 For the Period from Inception (May 26, 1995) to June 30, 1999 STATEMENTS OF OPERATIONS F-3 For the Three Months Ended June 30, 1998 and 1999 STATEMENTS OF STOCKHOLDERS' DEFICIENCY F-4 - F-7 For the Period from Inception (May 26, 1995) to December 31, 1998 For the Six Months Ended June 30, 1999 STATEMENTS OF CASH FLOWS F-8 For the Six Months Ended June 30, 1998 and 1999 For the Period from Inception (May 26, 1995) to June 30, 1999 NOTES TO FINANCIAL STATEMENTS F-9 - F-15 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II - OTHER INFORMATION EUROTECH, LTD. (A Development Stage Company) BALANCE SHEETS ASSETS (Note 2)
At December 31, 1998 At June 30, 1999 -------------------- ---------------- (Unaudited) CURRENT ASSETS: Cash $ 1,940 $ 156,887 Receivable from related parties 5,918 5,918 Prepaid expenses and other current assets 200 6,481 ------------ ------------ TOTAL CURRENT ASSETS 8,058 169,286 PROPERTY AND EQUIPMENT - net of accumulated depreciation 31,846 27,749 OTHER ASSETS: Organization and patent costs - net of accumulated amortization 26,587 25,555 Deferred financing costs 2,361 -- Other assets 7,551 9,750 ------------ ------------ TOTAL ASSETS $ 76,403 $ 232,340 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIENCY CURRENT LIABILITIES: Convertible notes payable $ -- $ 450,000 Accrued liabilities 1,716,809 2,318,125 Deferred revenue 225,000 375,000 ------------ ------------ TOTAL CURRENT LIABILITIES 1,941,809 3,143,125 ------------ ------------ CONVERTIBLE DEBENTURES 6,970,000 6,660,000 ------------ ------------ COMMITMENTS AND OTHER MATTERS (Notes 1, 2, 3, 5 and 6) STOCKHOLDERS' DEFICIENCY: Preferred stock - $0.01 par value; 1,000,000 shares authorized; -0- shares issued and outstanding -- Common stock - $0.00025 par value; 50,000,000 shares authorized; 19,621,882 and 23,349,454 shares issued and outstanding at December 31, 1998 and June 30, 1999, respectively 4,905 5,837 Additional paid-in capital 15,452,783 17,175,640 Unearned financing costs (47,500) (4,873) Deficit accumulated during the development stage (24,245,594) (26,747,389) ------------ ------------ TOTAL STOCKHOLDERS' DEFICIENCY (8,835,406) (9,570,785) ------------ ------------ TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 76,403 $ 232,340 ============ ============
See notes to financial statements. F-1 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF OPERATIONS (UNAUDITED)
For the Period For the Six Months Ended June 30, from Inception -------------------------------- (May 26, 1995) to 1998 1999 June 30, 1999 ------------ ------------ ----------------- REVENUES $ -- $ -- $ -- ------------ ------------ ------------ OPERATING EXPENSES: Research and development 560,511 493,149 3,923,254 Consulting fees 178,476 317,486 1,708,357 Compensatory element of stock issuances pursuant to consulting agreements 326,871 660,088 3,131,315 Other general and administrative expenses 881,669 397,552 3,504,505 ------------ ------------ ------------ TOTAL OPERATING EXPENSES 1,947,527 1,868,275 12,267,431 ------------ ------------ ------------ OPERATING LOSS (1,947,527) (1,868,275) (12,267,431) ------------ ------------ ------------ OTHER EXPENSES: Interest expense 429,720 341,107 1,208,240 Amortization of deferred and unearned financing costs 3,049,661 292,413 13,271,718 ------------ ------------ ------------ TOTAL OTHER EXPENSES 3,479,381 633,520 14,479,958 ------------ ------------ ------------ NET LOSS $ (5,426,908) $ (2,501,795) $(26,747,389) ============ ============ ============ NET LOSS PER COMMON SHARE $ (.28) $ (.12) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 19,248,919 20,622,701 ============ ============
See notes to financial statements. F-2 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended June 30, ----------------------------------- 1998 1999 ------------ ------------ REVENUES $ -- $ -- ------------ ------------ OPERATING EXPENSES: Research and development 252,840 199,376 Consulting fees 68,434 203,586 Compensatory element of stock issuances pursuant to consulting agreements 215,931 570,188 Other general and administrative expenses 322,288 243,336 ------------ ------------ TOTAL OPERATING EXPENSES 859,493 1,216,486 ------------ ------------ OPERATING LOSS (859,493) (1,216,486) ------------ ------------ OTHER EXPENSES: Interest expense 299,095 173,593 Amortization of deferred and unearned financing costs 1,803,433 160,687 ------------ ------------ TOTAL OTHER EXPENSES 2,102,528 334,280 ------------ ------------ NET LOSS $ (2,962,021) $ (1,550,766) ============ ============ NET LOSS PER COMMON SHARE $ (.16) $ (.07) ============ ============ WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 19,554,670 21,170,622 ============ ============
See notes to financial statements. F-3 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' DEFICIENCY (UNAUDITED) FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998 AND THE SIX MONTHS ENDED JUNE 30, 1999
Common Stock Additional Date of ---------------------------- Paid-in Period Ended December 31, 1995: Transaction Shares (1) Amount Capital - ------------------------------ ----------- ----------- ----------- ----------- Founder shares issued ($0.00025 per share) 05/26/95 4,380,800 $ 1,095 $ (1,095) Issuance of stock for offering consulting fees ($0.0625 per share) 08/31/95 440,000 110 27,390 Issuance of stock ($0.0625 and $0.25 per share) Various 4,080,000 1,020 523,980 Issuance of stock for license ($0.0625 per share) 08/31/95 600,000 150 37,350 Issuance of stock options for offering legal and consulting fees -- -- 75,000 Offering expenses -- -- (105,398) Net loss -- -- -- ----------- ----------- ----------- Balance - December 31, 1995 9,500,800 2,375 557,227 Year Ended December 31, 1996: Issuance of stock ($0.25 per share) Various 1,278,000 320 319,180 Exercise of stock options 01/18/96 600,000 150 -- Issuance of stock for consulting fees ($0.34375 per share) 03/22/96 160,000 40 54,960 Issuance of stock for consulting fees ($0.0625 per share) 05/15/96 2,628,000 657 163,593 Issuance of stock for consulting fees ($0.590625 per share) 06/19/96 1,500,000 375 885,563 Issuance of stock for consulting fees ($1.82 per share) 11/12/96 57,036 14 104,275 Issuance of stock pursuant to bridge financing ($1.81325 per share) 12/96 1,500,000 375 2,719,500 Amortization of unearned financing costs -- -- -- Repayment by stockholders -- -- -- Net loss -- -- -- ----------- ----------- ----------- Balance - December 31, 1996 17,223,836 $ 4,306 $ 4,804,298 =========== =========== =========== Deficit Accumulated Unearned During the Due from Financing Development Period Ended December 31, 1995: Stockholders Costs Stage Total - ------------------------------ ------------ ----------- ------------ ----------- Founder shares issued ($0.00025 per share) $ -- $ -- $ -- $ -- Issuance of stock for offering consulting fees ($0.0625 per share) -- -- -- 27,500 Issuance of stock ($0.0625 and $0.25 per share) (3,000) -- -- 522,000 Issuance of stock for license ($0.0625 per share) -- -- -- 37,500 Issuance of stock options for offering legal and consulting fees -- -- -- 75,000 Offering expenses -- -- -- (105,398) Net loss -- -- (513,226) (513,226) ----------- ----------- ----------- ----------- Balance - December 31, 1995 (3,000) -- (513,226) 43,376 Year Ended December 31, 1996: Issuance of stock ($0.25 per share) -- -- -- 319,500 Exercise of stock options -- -- -- 150 Issuance of stock for consulting fees ($0.34375 per share) -- -- -- 55,000 Issuance of stock for consulting fees ($0.0625 per share) -- -- -- 164,250 Issuance of stock for consulting fees ($0.590625 per share) -- -- -- 885,938 Issuance of stock for consulting fees ($1.82 per share) -- -- -- 104,289 Issuance of stock pursuant to bridge financing ($1.81325 per share) -- (2,719,875) -- -- Amortization of unearned financing costs -- 226,656 -- 226,656 Repayment by stockholders 3,000 -- -- 3,000 Net loss -- -- (3,476,983) (3,476,983) ----------- ----------- ----------- ----------- Balance - December 31, 1996 $ -- $(2,493,219) $(3,990,209) $(1,674,824) =========== =========== =========== ===========
(1) Share amounts have been restated to reflect the 4 for 1 stock split on June 1, 1996. See notes to financial statements. F-4 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' DEFICIENCY (UNAUDITED) FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998 AND THE SIX MONTHS ENDED JUNE 30, 1999
Common Stock Additional Date of ----------------------------- Paid-in Year Ended December 31, 1997: Transaction Shares (1) Amount Capital - ---------------------------- ----------- ---------- ------------ ------------ Balance - December 31, 1996 17,223,836 $ 4,306 $ 4,804,298 Issuance of stock for consulting fees ($2.50 per share) 03/97 64,000 16 159,984 Issuance of stock for consulting fees ($5.45 per share) 06/97 39,000 9 212,540 Issuance of stock for consulting fees ($5.00 per share) 09/97 59,000 15 294,986 Issuance of stock pursuant to penalty provision of bridge financing ($5.45 per share) 06/97 500,000 125 2,724,875 Value assigned to conversion feature of Convertible Debentures 11/97 -- -- 1,337,143 Value assigned to issuance of 127,500 warrants in consideration for interest and placement fees in connection with Convertible Debentures 11/97 -- -- 284,480 Value assigned to issuance of 35,000 warrants to shareholder for consulting services 11/97 -- -- 39,588 Value assigned to issuance of 364,000 warrants to shareholder as additional consideration for financing activities 11/97 -- -- 862,680 Issuance of stock for consulting fees ($4.00 per share) 12/97 43,000 11 171,989 Accrual of stock issued January 1998 pursuant to penalty provision of bridge financing ($2.00 per share) 12/97 1,000,000 250 1,999,750 Amortization of unearned financing costs -- -- -- Net loss -- -- -- ---------- ------------ ------------ Balance - December 31, 1997 18,928,836 $ 4,732 $ 12,892,313 ========== ============ ============ Deficit Accumulated Unearned During the Due from Financing Development Year Ended December 31, 1997: Stockholders Costs Stage Total - ---------------------------- ---------- ------------ ------------ ------------ Balance - December 31, 1996 $ -- $ (2,493,219) $ (3,990,209) $ (1,674,824) Issuance of stock for consulting fees ($2.50 per share) -- -- -- 160,000 Issuance of stock for consulting fees ($5.45 per share) -- -- -- 212,549 Issuance of stock for consulting fees ($5.00 per share) -- -- -- 295,001 Issuance of stock pursuant to penalty provision of bridge financing ($5.45 per share) -- (2,725,000) -- -- Value assigned to conversion feature of Convertible Debentures -- (1,337,143) -- -- Value assigned to issuance of 127,500 warrants in consideration for interest and placement fees in connection with Convertible Debentures -- (284,480) -- -- Value assigned to issuance of 35,000 warrants to shareholder for consulting services -- (39,588) -- -- Value assigned to issuance of 364,000 warrants to shareholder as additional consideration for financing activities -- (862,680) -- -- Issuance of stock for consulting fees ($4.00 per share) -- -- -- 172,000 Accrual of stock issued January 1998 pursuant to penalty provision of bridge financing ($2.00 per share) -- (2,000,000) -- -- Amortization of unearned financing costs -- 8,426,793 8,426,793 Net loss -- -- (12,441,242) (12,441,242) ------------ ------------ ------------ ------------ Balance - December 31, 1997 $ -- $ (1,315,317) $(16,431,451) $ (4,849,723) ============ ============ ============ ============
(1) Share amounts have been restated to reflect the 4 for 1 stock split on June 1, 1996. See notes to financial statements. F-5 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998 AND THE SIX MONTHS ENDED JUNE 30, 1999
Common Stock Additional Date of ------------------------------- Paid-in Year Ended December 31, 1998: Transaction Shares (1) Amount Capital - ---------------------------- ----------- ------------ ------------ ------------ Balance - December 31, 1997 18,928,836 $ 4,732 $ 12,892,313 Issuance of stock for consulting fees ($2.58 per share) 03/98 43,000 11 110,930 Issuance of stock for consulting fees ($0.85 per share) 06/98 143,000 35 215,895 Issuance of stock for consulting fees ($0.32 per share) 09/98 126,617 32 107,503 Issuance of stock for consulting fees 12/98 155,427 39 81,505 Issuance of stock pursuant to penalty provision of bridge financing ($1.0625 per share) 04/98 500,000 125 531,124 Value assigned to conversion feature of Convertible Debentures and 60,000 warrants issued as additional interest 02/98 -- -- 1,100,000 Value assigned to conversion feature of Convertible Debentures and 125,000 warrants issued as additional interest 07/98 -- -- 475,000 Cancellation of stock issued for consulting fees 07/98 (375,000) (94) (93,656) Issuance of stock for conversion of debenture note payable ($0.32 per share) 09/98, 11/98 100,002 25 32,169 Amortization of unearned financing costs -- -- -- Net loss -- -- -- ------------ ------------ ------------ Balance - December 31, 1998 19,621,882 $ 4,905 $ 15,452,783 ============ ============ ============ Deficit Accumulated Unearned During the Due from Financing Development Year Ended December 31, 1998: Stockholders Costs Stage Total - ---------------------------- ------------ ------------ ------------ ------------ Balance - December 31, 1997 $ -- $ (1,315,317) $(16,431,451) $ (4,849,723) Issuance of stock for consulting fees ($2.58 per share) -- -- -- 110,941 Issuance of stock for consulting fees ($0.85 per share) -- -- -- 215,930 Issuance of stock for consulting fees ($0.32 per share) -- -- -- 107,535 Issuance of stock for consulting fees -- -- -- 81,544 Issuance of stock pursuant to penalty provision of bridge financing ($1.0625 per share) -- (531,249) -- -- Value assigned to conversion feature of Convertible Debentures and 60,000 warrants issued as additional interest -- (1,100,000) -- -- Value assigned to conversion feature of Convertible Debentures and 125,000 warrants issued as additional interest -- (475,000) -- -- Cancellation of stock issued for consulting fees -- -- -- (93,750) Issuance of stock for conversion of debenture note payable ($0.32 per share) -- -- -- 32,194 Amortization of unearned financing costs -- 3,374,066 -- 3,374,066 Net loss -- -- (7,814,143) (7,814,143) ------------ ------------ ------------ ------------ Balance - December 31, 1998 $ -- $ (47,500) $(24,245,594) $ (8,835,406) ============ ============ ============ ============
(1) Share amounts have been restated to reflect the 4 for 1 stock split on June 1, 1996. The accompanying notes are an integral part of these financial statements. F-6 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF STOCKHOLDERS' DEFICIENCY (UNAUDITED) FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998 AND THE SIX MONTHS ENDED JUNE 30, 1999
Common Stock Additional Date of ------------------------------- Paid-in Six Months Ended June 30, 1999: Transaction Shares (1) Amount Capital - ------------------------------ ----------- ------------ ------------ ------------ Balance - December 31, 1998 19,621,882 $ 4,905 $15,452,783 Issuance of stock for consulting fees ($0.77 per share) 03/99 116,039 29 89,871 Issuance of stock for consulting fees ($0.72 per share) 06/99 624,332 156 446,532 Issuance of stock for conversion of debenture note payable ($0.35 per share) 02/99 987,201 247 341,029 Value assigned to conversion feature of Convertible Debentures and 84,750 warrants issued as additional interest 01/99 -- -- 175,425 Value assigned to additional consideration for financing activities ($0.72 per share) 05/99 100,000 25 71,975 Issuance of stock for additional working capital ($0.25 per share) 06/99 1,900,000 475 474,525 Modification of warrants issued 06/99 -- -- 123,500 Amortization of unearned financing costs -- -- -- Net loss -- -- -- ---------- -------- ----------- Balance - June 30, 1999 23,349,454 $ 5,837 $17,175,640 ========== ======== =========== Deficit Accumulated Unearned During the Due from Financing Development Six Months Ended June 30, 1999: Stockholders Costs Stage Total - ------------------------------ ------------ ------------ ------------ ------------ Balance - December 31, 1998 $ -- $ (47,500) $(24,245,594) $(8,835,406) Issuance of stock for consulting fees ($0.77 per share) -- -- -- 89,900 Issuance of stock for consulting fees ($0.72 per share) -- -- -- 446,688 Issuance of stock for conversion of debenture note payable ($0.35 per share) -- -- -- 341,276 Value assigned to conversion feature of Convertible Debentures and 84,750 warrants issued as additional interest -- (175,425) -- -- Value assigned to additional consideration for financing activities ($0.72 per share) -- (72,000) -- -- Issuance of stock for additional working capital ($0.25 per share) -- -- -- 475,000 Modification of warrants issued -- -- -- 123,500 Amortization of unearned financing costs -- 290,052 -- 290,052 Net loss -- -- (2,501,795) (2,501,795) ------ ----------- ------------ ----------- Balance - June 30, 1999 $ -- $ (4,873) $(26,747,389) $(9,570,785) ====== =========== ============ ===========
(1) Share amounts have been restated to reflect the 4 for 1 stock split on June 1, 1996. See notes to financial statements. F-7 EUROTECH, LTD. (A Development Stage Company) STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Period from Inception For the Six Months Ended June 30, (May 26, 1995) to 1998 1999 June 30, 1999 ------------ ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (5,426,908) $ (2,501,795) $(26,747,387) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,698 5,128 19,026 Amortization of deferred and unearned financing costs 3,049,661 292,413 13,271,718 Accrued interest 208,329 31,276 31,276 Stock issued for license -- -- 37,500 Consulting fees satisfied by stock issuances 326,871 660,089 3,131,316 ------------ ------------ ------------ Sub-total 1,837,343 (1,512,889) (10,256,553) Cash provided by (used in) the change in assets and liabilities: Decrease in advances to related parties -- -- (5,918) Increase in prepaid expenses (5,453) (6,281) (6,481) Increase in other assets (2,400) (2,199) (9,751) Increase in accrued liabilities 539,425 601,316 1,970,318 Increase in deferred revenue -- 150,000 375,000 ------------ ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES (1,305,777) (770,053) (7,933,385) ------------ ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Organization and patent costs -- -- (31,358) Capital expenditures (20,038) -- (40,972) ------------ ------------ ------------ NET CASH USED IN INVESTING ACTIVITIES (20,038) -- (72,330) ------------ ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from exercise of stock options -- -- 150 Proceeds from issuance of common stock -- 475,000 1,316,500 Offering costs -- -- (2,898) Repayment by stockholders -- -- 3,000 Proceeds from Convertible Debentures 3,000,000 450,000 7,450,000 Proceeds from bridge notes -- -- 2,000,000 Repayments of bridge notes (2,000,000) -- (2,000,000) Borrowings from stockholders -- -- 561,140 Repayment to stockholders -- -- (561,140) Deferred financing costs (235,000) -- (604,150) ------------ ------------ ------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 765,000 925,000 8,162,602 ------------ ------------ ------------ (DECREASE) INCREASE IN CASH (560,815) 154,947 156,887 CASH - BEGINNING 617,756 1,940 -- ------------ ------------ ------------ CASH - ENDING $ 56,941 $ 156,887 $ 156,887 ============ ============ ============ Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 36,630 $ 526 $ 316,447 ============ ============ ============ Income taxes $ -- $ -- $ -- ============ ============ ============
See notes to financial statements. F-8 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements are unaudited. These statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ( the "SEC"). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to state fairly the financial position and results of operations as of and for the periods indicated. These financial statements should be read in conjunction with the Company's financial statements and notes thereto for the year ended December 31, 1998, included in the Company's Form 10K as filed with the Securities and Exchange Commission. The preparation of financial statements in conformity with general accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2- BUSINESS AND CONTINUED OPERATIONS Eurotech, Ltd. (the "Company") was incorporated under the laws of the District of Columbia on May 26, 1995. The Company is a development-stage, technology transfer, holding, marketing and management company, formed to commercialize new, existing but previously unrecognized, and previously "classified" technologies, with a particular current emphasis on technologies developed by prominent research institutes and individual researchers in the former Soviet Union and in Israel, and to license those and other Western technologies for business and other commercial applications principally in Western and Central Europe, Ukraine, Russia and North America. Since the Company's formation, it has acquired development and marketing rights to a number of technologies by purchase, assignments, and licensing arrangements. The Company intends to operate its business by licensing its technologies to end-users and through development and operating joint ventures and strategic alliances. To date, the Company has not generated any revenues from operations. F-9 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 2 - BUSINESS AND CONTINUED OPERATIONS (Continued) The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, as shown in the accompanying financial statements, the Company has incurred losses from operations from inception. As of June 30, 1999, the Company has a stockholders' deficiency of $9,570,785, a working capital deficiency of $2,973,839 and an accumulated deficit since inception of $26,747,389. The Company requires additional funds to commercialize its technologies and continue research and development efforts. Until the commencement of sales, the Company will have no operating revenues, but will continue to incur substantial expenses and operating losses. No assurances can be given that the Company can complete development of any technology, not yet completely developed, or that with respect to any technology that is fully developed, it can be manufactured on a large scale basis or at a feasible cost. Further, no assurance can be given that any technology will receive market acceptance. Being a start-up stage entity, the Company is subject to all the risks inherent in the establishment of a new enterprise and the marketing and manufacturing of a new product, many of which risks are beyond the control of the Company. These factors raise substantial doubt about the Company's ability to continue as a going concern. Since inception, the Company has financed its operations through sale of its securities, shareholder loans, a bridge financing totalling $2,000,000 completed in December of 1996, a Convertible Debenture financing of $3,000,000 completed in November of 1997 and a Convertible Debenture financing of $3,000,000 and $1,000,000 completed during February and July 1998, respectively. Proceeds from the February 1998 Convertible Debenture financing were used to retire the $2,000,000 bridge note. In January 1999, the Company borrowed $450,000 from two stockholders and issued a secured promissory note (see Note 3). In May 1999, the Company borrowed $50,000 from an unrelated party, which was repaid in June 1999. During the quarter ended June 30, 1999, the Company raised $475,000 from the sale of restricted common stock. The Company is exploring additional sources of working capital, which include a private offering of common stock, private borrowings and joint ventures. While no assurance can be given, management believes the Company can raise adequate capital to keep the Company functioning during 1999. No assurance can be given that the Company can successfully obtain any working capital or complete any proposed offerings or, if obtained, that such funding will not cause substantial dilution to shareholders of the Company. Further, no assurance can be given as to the completion of research and development and the successful marketing of the technologies. These financial statements do not include any adjustments relating to the recoverability of recorded asset amounts that might be necessary as a result of the above uncertainty. F-10 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 3 - NOTES PAYABLE Secured Promissory Notes On January 6, 1999, the Company's Chairman and the majority convertible debt holder provided $450,000 of short-term financing to the Company, evidenced by two secured promissory notes. Each secured promissory note bears interest at 13% per annum and is due January 6, 2000. The promissory notes are collateralized by the Company's intangible assets and can be exchanged for 8% Convertible Debentures under terms similar to the current outstanding debentures. As additional consideration for the financing, the Company issued to the secured promissory note holders warrants to purchase 84,750 shares of the Company's common stock at an exercise price of $0.36 per share. The warrants expire five years from January 6, 1999. The Company has assigned a value to the debt's beneficial conversion feature and warrants amounting to $175,425, and such amount is being amortized over 180 days commencing January 6, 1999. NOTE 4 - STOCKHOLDERS' DEFICIENCY Significant Common Stock Issuances During 1999 During the six months ended June 30, 1999, a debenture holder converted $310,000 of principal and $31,276 of accrued interest into 987,201 shares of common stock. During the six months ended June 30, 1999, the Company issued 740,371 shares of common stock as consideration for consulting services performed by various employees and consultants, including related parties, through June 30, 1999. Shares issued under these arrangements were valued at $536,403, which was all charged to operations during the six months ended June 30, 1999. During the quarter ended June 30, 1999, the Company sold 1,900,000 shares of its restricted common stock for $475,000. F-11 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 4 - STOCKHOLDERS' DEFICIENCY (Continued) Earnings Per Share Securities that could potentially dilute basic earnings per share ("EPS") in the future that were not included in the computation of diluted EPS because to do so would have been anti-dilutive for the periods presented consist of the following: Warrants to purchase common stock 1,696,250 Convertible Debentures (assumed conversion at June 30, 1999 market value price and at largest discount) 16,174,380 Option to purchase common stock 50,000 ---------- Total as of June 30, 1999 17,920,630 ========== Substantial issuance after June 30, 1999 through July 31, 1999: Warrants to purchase common stock 50,000 ========== NOTE 5 - TECHNOLOGY INVESTMENTS AND LICENSING AGREEMENT Investments in Israeli Technology Companies During 1997 and 1998, the Company agreed to acquire a 20% interest in seven separate Israeli technology, research and development companies ("incubators"). The Company's share of losses incurred by these companies has been accounted for on the equity basis and included in research and development expenses. The Company had, as of December 31, 1998, a 20% interest in Chemonol, an Israeli research and development company. On January 20, 1999, the Company entered into an agreement to invest $300,000 in exchange for an additional 16% of Chemonol's voting stock. The agreement provides for the Company to make four (4) equal payments of $75,000 commencing March 1, 1999, July 1, 1999, October 1, 1999 and January 1, 2000. At the completion of the transaction, the Company will own 36% of Chemonol. During the six months ended June 30, 1999, the Company paid $150,000 under the agreement, which was charged to research and development costs. During the six months ended June 30, 1999, an additional $71,000 was invested in the seven Israeli technology incubators. The amount charged to research and development expenses related to these investments for the six months ended June 30, 1999 approximated $221,000, which reduced the carrying value of the Company's investment in these seven companies to $-0- at June 30, 1999. F-12 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 5 - TECHNOLOGY INVESTMENTS AND LICENSING AGREEMENT (Continued) Proposed Sale of Technology The Company received a deposit on a proposed sale of its sublicensing rights to Re-sealable Container Systems and TetraPak containers. The proposed transaction is presently in the discussion stage and to-date, no agreements have been signed. Included in unearned revenue is the $150,000 deposit related to the proposed sale. NOTE 6 - CONTINGENCIES AND OTHER MATTERS Concentration of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk consist principally of cash which is at one bank. Future concentration of credit risk may arise from trade accounts receivable. Ongoing credit evaluations of customers' financial condition will be performed and, generally, no collateral will be required. International Operations The Company has strategic alliances, collaboration agreements and licensing agreements with entities which are based in Russia and Ukraine. Both of these countries have experienced volatile and frequently unfavorable economic, political and social conditions. The Russian economy and the Ukraine economy are characterized by declining gross domestic production, significant inflation, increasing rates of unemployment and underemployment, unstable currencies, and high levels of governmental debt as compared to gross domestic production. The prospects of wide-spread insolvencies and the collapse of various economic sectors exist in both countries. In view of the foregoing, the Company's business, earnings, asset values and prospects may be materially and adversely affected by developments with respect to inflation, interest rates, currency fluctuations, government policies, price and wage controls, exchange control regulations, taxation, expropriation, social instability, and other political, economic or diplomatic developments in or affecting Russia and Ukraine. The Company has no control over such conditions and developments, and can provide no assurance that such conditions and developments will not adversely affect the Company's operations. F-13 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 6 - CONTINGENCIES AND OTHER MATTERS (Continued) Litigation In December 1997, Raymond Dirks, Jessy Dirks, Robert Brisotti and David Morris filed an action in the Supreme Court for the State of New York, County of New York, against Eurotech, Ltd. for breach of contract, seeking injunctive relief, specific performance and monetary damages of nearly $5 million (the "Dirks Litigation"). The Dirks Litigation arises solely from an agreement between Eurotech and National Securities Corporation ("National") relating to financial advisory services to be performed by National Securities Corporation, a broker/dealer with which the plaintiffs were affiliated and of which Raymond Dirks Research was a division. Eurotech granted National a warrant certificate for 470,000 shares at $1.00 per share as a retainer for general financial advisory services. In conjunction with the separation of the plaintiffs and Raymond Dirks Research from National Securities Corporation, National assigned a significant portion of the warrant certificate to the plaintiffs. It is Eurotech's position that the warrant certificate is voidable. The plaintiffs allege, among other things, that they are entitled to damages composed of both the value of the stock on the date of their purported exercise of an alleged assignment of the warrant certificate, and the decrease in value of the price of the stock since the date of their purported exercise. Eurotech believes that the plaintiffs have significantly overstated their monetary damage claim and that, having sought monetary damages, the plaintiffs are not entitled to any type of equitable relief. Process was served upon Eurotech at its California office in late January 1998. Based on the advice of its outside counsel, Eurotech believes that the plaintiffs' claims will be resolved favorably to the Company. In response to the Dirks litigation, the Company has filed an appropriate response, including counterclaims relating thereto. However, it is possible that the Company will be adjudged liable in the Dirks Litigation, and if so, the resolution of the litigation could have a material adverse effect on the Company. Former Employee Dispute The former president has advised the Company that he believes that he was wrongfully terminated under the provisions of a certain employment agreement allegedly executed by the Company in his behalf, and has made demand for certain payments, as provided in the employment agreement in his possession. The Company has taken the position that there is no valid employment agreement with the former president and that he is not entitled to the payments demanded and is attempting to negotiate a settlement of the matter. The Company is unable to predict the outcome of this matter or any potential liability, which the Company may incur. F-14 EUROTECH, LTD. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 1999 NOTE 7 - SUBSEQUENT EVENT Employment Agreements In April 1999, the Company entered into an employment agreement with the President of the Company providing for an annual salary of $140,000. In addition, the Company issued 60,000 shares of common stock. As of July 1, 1999, the President resigned. On July 7, 1999, the Company entered into a letter agreement with its new President providing for a salary of $100,000 for the year commencing July 7, 1999, with an initial signing bonus of warrants to purchase 50,000 shares of common stock at a price equal to the market price at July 1, 1999. The warrants are exercisable for a term of three years. F-15 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS General The following is a discussion and analysis of the results of operations of the Company and should be read in conjunction with the financial statements and related notes contained in this Form 10-Q. Certain information contained in this Form 10-Q may contain forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties. Actual results could differ materially from current expectations. Among the factors that could affect the Company's actual results and could cause results to differ from those contained in the forward-looking statements contained herein is the Company's ability to commercialize its technologies successfully, which will be dependent on business, financial and other factors beyond the Company's control, including, among others, market acceptance, ability to manufacture on a large scale basis and at feasible costs, together with all the risks inherent in the establishment of a new enterprise and the marketing and manufacturing of new products. Overview The Company, incorporated in May 1995, is a development stage, technology transfer, holding and management company formed to commercialize new, existing but previously unrecognized, and previously "classified" technologies, with a particular current emphasis on technologies developed by prominent research institutes and individual researchers in the former Soviet Union and in Israel, and to commercialize those and other Western technologies for business and other commercial applications principally in Europe, Ukraine, Russia and North America. Until recently, the Company had been principally engaged in identifying, monitoring, reviewing and assessing technologies for their commercial applicability and potential, and in acquiring selected technologies by equity investment, purchase, assignment and licensing arrangements. Although the Company intends to continue identifying, monitoring, reviewing and assessing new technologies, its primary emphasis will be focused on commercializing four of its present technologies ("Principal Technologies"). The Company believes that the Principal Technologies are presently ready for commercialization and marketing. To that end, the Company has decided to devote its business activities and resources principally to the marketing and sale of the Principal Technologies. The Company recently has initiated a marketing and sales program for the Principal Technologies, and also has initiated discussions with a number of prominent, potential users of the technologies, with a view towards the future negotiation and execution of licensing and/or joint venture marketing and sales agreements. The Company intends to operate its business by licensing its technologies to end-users and through development and operating joint-ventures and strategic alliances. To date, the Company has not generated any revenues from these operations. The Company has not been profitable since inception and expects to incur substantial operating losses over the next twelve months. For the period from inception to June 30, 1999, the Company incurred a cumulative net loss of approximately $26,747,000. The Company expects that it will generate losses until at least such time as it can commercialize its technologies, if ever. No assurance can be given that any of the Company's technologies can be manufactured on a large scale basis or at a feasible cost. Further, no assurance can be given that any technology will receive market acceptance. Being a start-up stage entity, the Company is subject to all the risks inherent in the establishment of a new enterprise and the marketing and manufacturing of a new product, many of which risks are beyond the control of the Company. Results of Operations For the Six Months Ended June 30, 1999 vs. the Six Months Ended June 30, 1998 The Company has had no revenues since inception. Consulting expenses increased from $505,000 for the six months ended June 30, 1998 to $978,000 for the six months ended June 30, 1999. The increase in consulting expense is principally the result of the Company's increase in non-cash compensation issued to consultants and its Board of Directors and Advisory Board. Other general and administrative expenses decreased from $882,000 for the six months ended June 30, 1998, to $398,000 for the six months ended June 30, 1999, primarily due to a decrease in professional fees and other costs related to the completion of a registration statement. Research and development expenses decreased for the six months ended June 30, 1999 to $493,000, from $560,000, for the six months ended June 30, 1998. During 1998, the Company paid $187,500 to Professor Oleg L. Figovsky, Ph.D. in connection with four technology purchase agreements. These payments were charged to research and development expenses during the first quarter of 1998. Research and development expenditures for the six months ended June 30, 1999 included $221,000 related to the Company's continuing investment in its seven Israeli technology companies and $272,000 for its German and Russian technologies. For the six months ended June 30, 1999 and 1998, the Company incurred operating losses of $1,868,000 and $1,948,000, respectively. The losses are principally due to expenses incurred in the acquisition and development of its technologies, consulting costs, general and administrative expenses and the lack of revenues. Other expenses, consisting of interest expense and amortization of deferred and unearned finance costs, decreased from $3,479,000 for the six months ended June 30, 1998 to $634,000 for the six months ended June 30, 1999. Amortization of deferred and unearned financing costs decreased from $3,050,000 for the six months ended June 30, 1998 to $292,000 for the six months ended June 30, 1999. The decrease in the amortization of deferred and unearned financing costs is principally attributable to portions of unearned financing costs having been fully amortized during 1998. The Company expects to incur significant losses during 1999. The Company anticipates that any revenue recognized in 1999 will be substantially offset by expenses incurred by the Company in its efforts to commercialize, sell and market its Principal Technologies. For the Three Months Ended June 30, 1999 vs. the Three Months Ended June 30, 1998 Consulting expenses increased from $284,000 for the three months ended June 30, 1998 to $774,000 for the three months ended June 30, 1999. The increase in consulting expense is principally the result of the Company's increase in non-cash compensation issued to consultants and its Board of Directors and Advisory Board. Other general and administrative expenses decreased from $322,000 for the three months ended June 30, 1998, to $243,000 for the three months ended June 30, 1999, primarily due to a decrease in professional fees and other costs related to the completion of a registration statement. Research and development expenses decreased for the three months ended June 30, 1999 to $199,000, from $253,000, for the three months ended June 30, 1998. Research and development expenditures for the three months ended June 30, 1999 included $105,000 related to the Company's continuing investment in its seven Israeli technology companies and $94,000 for its German and Russian technologies. For the three months ended June 30, 1999 and 1998, the Company incurred operating losses of $1,216,000 and $859,000, respectively. The losses are principally due to expenses incurred in the acquisition and development of its technologies, consulting costs, general and administrative expenses and the lack of revenues. Other expenses, consisting of interest expense and amortization of deferred and unearned finance costs, decreased from $2,103,000 for the three months ended June 30, 1998 to $334,000 for the three months ended June 30, 1999. Amortization of deferred and unearned financing costs decreased from $1,803,000 for the three months ended June 30, 1998 to $161,000 for the three months ended June 30, 1999. The decrease in the amortization of deferred and unearned financing costs is principally attributable to portions of unearned financing costs having been fully amortized during 1998. The Company expects to incur significant losses during 1999. The Company anticipates that any revenue recognized in 1999 will be substantially offset by expenses incurred by the Company in its efforts to commercialize, sell and market its Principal Technologies. Liquidity and Capital Resources The Company's principal sources of working capital from inception through December 31, 1998 have been net proceeds of $842,000 from the offering of common stock under Rule 504 of Regulation D, shareholder advances aggregating $761,440, a bridge financing completed in December 1996 of $2,000,000, $3,000,000 principal amount of 8% Convertible Debentures completed in November 1997, due November 27, 2000, $3,000,000 principal amount of 8% Convertible Debentures completed in February 1998, due February 23, 2001 and $1,000,000 principal amount of 8% Convertible Debentures completed in July of 1998, due July 20, 2001. During the six months ended June 30, 1999, the Company's principal source of cash was the January 1999 secured promissory notes from which it derived net proceeds of approximately $450,000, a $150,000 deposit received in connection with a proposed sale of certain sublicensing rights and proceeds of $475,000 from the sale of restricted common stock. The Debentures discussed above may be converted into shares of the Company's common stock at beneficial conversion rates based on the timing of the conversion. During the six months ended June 30, 1999, a debenture holder exercised the conversion right under the November 27, 1997 Convertible Debenture agreement and converted principal of $310,000 and accrued interest of $31,276 into 987,201 shares of the Company's common stock. Based on the bid price of the Company's common stock at June 30, 1999, the Debentures' principal could be converted into approximately 16 million shares of the Company's common stock. On January 6, 1999, the Company's Chairman and the majority convertible debt holder provided $450,000 of short-term financing to the Company, evidenced by two secured promissory notes. Each secured promissory note bears interest at 13% per annum and is due January 6, 2000. The promissory notes are collateralized by the Company's intangible assets and can be exchanged for 8% Convertible Debentures under terms similar to the current outstanding debentures. During the six months ended June 30, 1999, the Company received deposits of $150,000 in connection with the proposed sale of its sublicensing rights to Resealable Container Systems and TetraPak Containers. The proposed transaction is presently in the discussion stage and to-date, no agreements have been signed. The Company has agreed in principle to fund the commercialization of certain technologies developed in the former Soviet Union by scientists and researchers at Kurchatov, other institutes associated therewith, and EAPS, collectively the "Scientists". Kurchatov will provide the materials, facilities and personnel to complete the necessary work to commercialize such technologies. The Company also has agreed in principle to provide funding in connection with the marketing and sale of its Principal Technologies. Total expenditures under these programs approximated $128,000 during the six months ended June 30, 1999. The Company's principal source of funding for these expenditures during the six months ended June 30, 1999 was the proceeds from the Debenture Offerings and proceeds from the sale of restricted common stock. On January 20, 1999, the Company entered into an agreement to invest $300,000 in exchange for an additional 16% interest in Chemonol, an Israeli research and development company. The agreement obligates the Company to make four equal payments of $75,000, commencing March 1, 1999, July 1, 1999, October 1, 1999 and January 1, 2000. At the completion of the transaction, the Company will own 36% of Chemonol's common stock. During the six months ended June 30, 1999, the Company paid $150,000 under this obligation. The Company will require additional financing to continue to fund research and development efforts, operating costs and complete necessary work to commercialize its technologies. As the development of each technology is completed and the technology's commercial applications are identified, the Company will seek joint venture partners to fund any further capital expenditures, including the project financing. The Company is exploring additional sources of working capital, including further private sales of securities, joint ventures and licensing of technologies. The report of the Company's independent certified public accountants at December 31, 1998 contains an explanatory paragraph which expresses substantial doubt as to the Company's ability to continue as a going concern. No assurance can be given that the Company can successfully obtain any additional financing or, if obtained, that such funding will not cause dilution to shareholders of the Company. Further, no assurance can be given as to the completion of research and development and the successful marketing of the Company's technologies. The Company had a working capital deficiency and stockholders' deficiency of $2,974,000 and $9,571,000, respectively, as of June 30, 1999. Year 2000 Compliance The Company recognizes the need to ensure its operations will not be adversely impacted by Year 2000 software failures. Software failures due to processing errors potentially arising from calculations using the Year 2000 date are a known risk. The Company is addressing this risk to the availability and integrity of financial systems and the reliability of operational systems. The Company has established processes for evaluating and managing the risks and costs associated with this problem. The computing portfolio was identified and an initial assessment has been completed. The cost of achieving Year 2000 compliance will not have a material impact on the accompanying financial statements. Impact of Recently Issued Accounting Standards Statement of Financial Accounting Standards No. 130, "Comprehensive Income" (SFAS 130), was issued in June 1997. SFAS 130 requires reclassification of earlier financial statements for comparative purposes. SFAS 130 requires that all items defined as comprehensive income, including changes in the amounts of certain items, foreign currency translation adjustments and gains and losses on certain securities, be shown in a financial statement SFAS 130 does not require a specific format for the financial statement in which comprehensive income is reported, but does require that an amount representing total comprehensive income be reported in that statement. The adoption of SFAS 130 did not have a material effect on the Company's financial statements. Statement of Financial Accounting Standards No. 131, "Disclosures About Segments of an Enterprise and Related Information" ("SFAS 131"), was issued in June 1997. SFAS 131 becomes effective for the Company's fiscal year 1999 and requires restatement of disclosures for earlier periods presented for comparative purposes. This new standard requires companies to disclose segment data based on how management makes decisions about allocating resources to segments and how it measures segment performance. SFAS 131 requires companies to disclose a measure of segment profit or loss, segment assets, and reconciliations to consolidated totals. It also requires entity-wide disclosures about a company's products and services, its major customers and the material countries in which it holds assets and reports revenues. The adoption of SFAS 131 did not have a material effect on the Company's financial statements. Statement of Financial Accounting Standards No. 132, "Employers' Disclosures About Pensions and Other Postretirement Benefits" ("SFAS 132"), was issued in February 1998. SFAS 132 becomes effective for 1999 and requires restatement of disclosures for earlier periods presented for comparative purposes. SFAS 132 revises employers' disclosure about pension and other postretirement benefit plans. It does not change the measurement or recognition of those plans, but rather standardizes the disclosure requirements for pensions and other postretirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate analysis, and eliminates certain disclosures that are no longer useful. The adoption of SFAS 132 did not have a material effect on the Company's financial statements. 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. Dated: 8/16/99 ------- EUROTECH, LTD. (Registrant) /s/ Don V. Hahnfeldt ------------------------------------- Don V. Hahnfeldt President and Chief Financial Officer PART II -- OTHER INFORMATION. Item 1. Legal Proceedings. There have been no material legal proceedings to which the Company is a party which have not been disclosed in previous filings with the Securities and Exchange Commission. There are no material developments to be reported in any previously reported legal proceedings. Item 2. Changes in Securities and Use of Proceeds. 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. Current president resigned from the Company and a new president was added on July 7, 1999. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits. Not applicable. (b) Reports on Form 8-K. Item 27. Financial Data Schedule (2) - ---------- (2) Filed herewith EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EUROTECH, LTD. BALANCE SHEET AS OF JUNE 30, 1999 AND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999. 1,000 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 157 0 6 0 0 169 41 13 232 3,143 6,660 0 0 6 (9,576) 232 0 0 0 0 493 0 579 (2,502) 0 (2,502) 0 0 0 (2,502) (0.12) (0.12)
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