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

                                    FORM 10-Q

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

                    For the Quarter Ended September 30, 1999

                                       OR

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

                        For the transition period from          to
                                                      ---------    ---------
                        Commission File Number 000-26031

                          EURO TRADE & FORFAITING, INC.
             (Exact name of registrant as specified in its charter)

           UTAH                                        87-0571580
(State or other jurisdiction of                     (I.R.S. Employer
incorporation or organization)                       Identification No.)

             4835   North O'Connor,  Suite 134-346, Irving, Texas 75062 (Address
                    of principal executive offices)


Registrant's telephone no., including area code:  (817) 267-1866

         Indicate  by check mark  whether the  registrant  (1) 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
                                             ---       ---
                      APPLICABLE ONLY TO CORPORATE ISSUERS

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common equity, as of the latest practicable date.

                  Class                   Outstanding as of November 15, 1999

Common Stock, $.001 par value                        16,945,224

                                       -1-

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS

Heading                                                                                              Page
-------                                                                                              ----
                          PART I. FINANCIAL INFORMATION

<S>                                                                                                   <C>
Item 1.             Financial Statements                                                              3

Item 2.             Management's Discussion and Analysis of
                     Financial Condition and Results of
                     Operations......................................................................17

Item 3.             Quantitative and Qualitative Disclosures About
                     Market Risk.....................................................................21

                                            PART II. OTHER INFORMATION

Item 1.           Legal Proceedings..................................................................23

Item 2.           Changes in Securities and Use of Proceeds..........................................23

Item 3.           Defaults Upon Senior Securities....................................................23

Item 4.           Submission of Matters to a Vote of
                    Security Holders.................................................................23

Item 5.           Other Information..................................................................23

Item 6.           Exhibits and Reports on Form 8-K...................................................23

                  SIGNATURES.........................................................................24
</TABLE>

                                       -2-

<PAGE>



                                                      PART I

Item 1.           Financial Statements

         The  following  unaudited  Financial  Statements  for the period  ended
September 30, 1999, have been prepared by the Euro Trade & Forfaiting, Inc. (the
"Company").

                                      -3-


<PAGE>
<TABLE>

                          EURO TRADE & FORFAITING, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS
                           FOR THE THREE MONTHS ENDED
                           SEPTEMBER 30, 1999 AND 1998
                         EURO TRADE & FORFAITING, INC.
                          CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
<CAPTION>

                                                          September 30,               June 30,
                                                             1999                      1999
ASSETS

<S>                                                        <C>                       <C>
CURRENT ASSETS
Cash                                                       $ 12,517                  $  9,927
Cash - compensating balances                                  5,200                    13,148
Interest receivable                                             280                     1,337
Forfaiting assets (net of allowance)                          6,046                    17,157
Investments in marketable securities                          1,100                     1,100
Other assets and prepaid expenses                             4,360                       106
                                                           --------                  --------

         TOTAL CURRENT ASSETS                                29,503                    42,775

PROPERTY AND EQUIPMENT - NET                                     45                        55
                                                           --------                  --------

                   TOTAL ASSETS                            $ 29,548                  $ 42,830
                                                           ========                  ========

LIABILITY AND STOCKHOLDERS' EQUITY

LIABILITIES
Accounts payable and bank overdrafts                       $  1,063                  $ 10,598
Accrued expenses                                                264                       425
Loans payable
         Bank                                                 3,573                     7,477
                                                           --------                  --------
         TOTAL CURRENT LIABILITIES                            4,900                    18,500
                                                           --------                  --------

LOAN PAYABLE - NET OF CURRENT PORTION                            18                        24

COMMITMENT                                                     --                        --
                                                           --------                  --------

                   TOTAL LIABILITIES                          4,918                    18,524
                                                           --------                  --------

STOCKHOLDERS' EQUITY
         Common Stock, Par value $0.001, authorized,
         50,000 shares; issued and outstanding
         16,945 shares                                           17                        17
         Additional paid-in capital                          25,264                    25,264
         Retained earnings (deficit)                           (306)                     (630)
         Receivable from stockholder                           (345)                     (345)
                                                           --------                  --------
         TOTAL STOCKHOLDERS' EQUITY                          24,630                    24,306
                                                           --------                  --------

         TOTAL LIABILITY AND STOCKHOLDERS' EQUITY          $ 29,548                  $ 42,830
                                                           ========                  ========
</TABLE>


                             See accompanying notes


                                       -4-
<PAGE>

<TABLE>



                          EURO TRADE & FORFATING, INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                 (In Thousands)
<CAPTION>

                                                          September 30,            September 30,
                                                              1999                      1998

<S>                                                          <C>                      <C>
REVENUE                                                      $ 1,074                  $ 1,524

COST OF REVENUES
Interest                                                         257                      238

                                                             -------                  -------
           TOTAL COST OF REVENUE                                 257                      238
                                                             -------                  -------

                     GROSS PROFIT                                817                    1,286

           Selling, general and administrative                   493                      428
                                                             -------                  -------

NET INCOME                                                   $   324                  $   858
                                                             =======                  =======

PRIMARY AND FULLY DILUTED
NET INCOME PER SHARE                                         $  0.02                  $  0.06
                                                             =======                  =======

WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES AND COMMON
   SHARES EQUIVALENTS OUTSTANDING                             14,468                   14,468
                                                             =======                  =======

</TABLE>


                             See accompanying notes


                                       -5-
<PAGE>




<TABLE>

                 See accompanying notes EURO TRADE & FORFAITING,
                                      INC.
                         STATEMENT OF STOCKHOLDER EQUITY
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
            AND FOR THE PERIOD FROM FEBRUARY 25, 1997 (INCEPTION) TO
                                  JUNE 30, 1999
                                 (In Thousands)
<CAPTION>
                                                                      Paid-in   Retained   Receivable
                                               Shares     Amount      Capital   Earnings   Stockholder  Total
                                               ------     ------      -------   --------   -----------  -----

<S>                                          <C>        <C>        <C>        <C>         <C>         <C>
BALANCE, February 25, 1997                   $   --     $   --     $   --     $   --      $   --      $   --

Retroactive adjustment for transaction
of November 23, 1998:
Sale of Stock                                  11,750         12     24,988    (25,000)       --          --
Recapitalization                                  195       --           56        (56)       --          --
                                             --------   --------   --------   --------    --------    --------

RESTATED BALANCE, February 25, 1997            11,945         12     25,044        (56)    (25,000)       --

Net Income                                       --         --         --          304        --           304
                                             --------   --------   --------   --------    --------    --------

BALANCE, June 30, 1997                         11,945         12     25,044        248     (25,000)        304

Payment received on Stockholder receivable     25,000     25,000
Net Loss                                         --         --         --       (4,992)       --        (4,992)
                                             --------   --------   --------   --------    --------    --------

BALANCE, June 30, 1998                         11,945         12     25,044     (4,744)          0      20,312

Net income                                       --         --         --          858        --           858
                                             --------   --------   --------   --------    --------    --------

BALANCE
September 30, 1998 (unaudited)                 11,945         12     25,044     (3,886)       --        21,170

Sale of shares for cash                         4,000          4        196       --          (200)       --
Exercise of option                              1,000          1         24       --           (25)       --
Stockholder advance                              --         --         --         --          (120)       (120)
Net income                                       --         --         --        3,256        --         3,256
                                             --------   --------   --------   --------    --------    --------

BALANCE, June 30, 1999                         16,945         17     25,264       (630)       (345)     24,306
Net Income                                       --         --         --          324        --           324
                                             --------   --------   --------   --------    --------    --------
BALANCE
September 30, 1999 (unaudited)               $ 16,945   $     17   $ 25,264   $   (306)   $   (345)   $ 24,630
                                             ========   ========   ========   ========    ========    ========
</TABLE>

                             See accompanying notes

                                       -6-
<PAGE>

<TABLE>

                         EURO TRADE & FORFAITING, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
                                 (In Thousands)
<CAPTION>

                                                          September 30,               September 30,
                                                               1999                     1998


<S>                                                              <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES
         Net Income from operations                              324                      858
         Purchases of forfaiting assets                      (11,328)                  (5,987)
         Cost of forfaiting assets sold and sale proceeds     22,439                    4,691
         Depreciation                                             10                        9
         Adjustments to reconcile net income
         to net cash provided (used) by
         operating activities:
         (Increases) decrease in:
              Interest receivable                              1,057                       45
              Other assets and prepaid expenses               (4,254)                  (2,348)
         Increase (decrease) in:
              Accounts payable and overdrafts                 (9,535)                    (612)
              Accrued expenses                                  (161)                    (567)
                                                            --------                 --------
              NET CASH (USED IN) PROVIDED
              BY OPERATING ACTIVITIES                         (1,448)                  (3,911)
                                                            --------                 --------

CASH FLOW FROM FINANCING ACTIVITIES
         Loans from banks (repayment)                         (3,910)                   1,903
         (Increase) decrease in compensating balances          7,948                   (1,551)
                                                            --------                 --------
              NET CASH PROVIDED BY (USED IN)
              FINANCING ACTIVITIES                             4,038                      352
                                                            --------                 --------

CASH FLOWS FROM INVESTING
         Sales of stock                                         --                       --
         Purchases of marketable securities                     --                       --
                                                            --------                 --------
              NET CASH  PROVIDED BY (USED IN)
              INVESTING ACTIVITIES                              --                       --
                                                            --------                 --------

INCREASE (DECREASE)IN CASH                                     2,590                   (3,559)

CASH AT BEGINNING OF PERIOD                                    9,927                   13,325
                                                            --------                 --------

CASH AT END OF PERIOD                                       $ 12,517                 $  9,766
                                                            ========                 ========

</TABLE>


                             See accompanying notes


                                       -7-
<PAGE>

                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE A   ORGANIZATION AND ACCOUNTING BASIS

Rotunda Oil and Mining,  Inc.,  incorporated  under the Laws of Utah on November
19,  1980,  was a  development  stage  company  until  November 20, 1998 when it
acquired  Euro  Trade &  Forfaiting  Co.  Limited  in  exchange  for 100% of its
outstanding  shares.  See Note B. As a result  of the  merger,  Rotunda  Oil and
Mining, Inc. changed its name to Euro Trade & Forfaiting,  Inc. (The Company) on
December  1,  1998.  Euro  Trade &  Forfaiting  Co.  Limited  is a wholly  owned
subsidiary, incorporated under the laws of United Kingdom on February 25, 1997.


Significant Accounting Policies Basis Of Consolidation
-------------------------------------------------------

The consolidated  financial  statements  include the accounts of the company and
its wholly owned subsidiary. The company is engaged in a single line of business
as a financier in connection  with  international  trade and the arrangement and
syndication  of  transferable  export letters of credit.  Any  pre-consolidation
inter-company balances have been eliminated.


Accounting Method
-----------------

The Company maintains its books on the accrual basis of accounting.


Cash and Cash Equivalents
-------------------------

The Company  considers  all purchases  from  financial  institutions  of demand,
deposits, time deposits and certificate of deposits to be cash equivalents.


Compensating Balances
---------------------

Cash in the amount of $5.2 million was on deposit in financial  institutions  as
compensating  balances  for loans and  commitments.  The  amount is based on the
financial  institutions  assessment of risk. See Note F. The Company borrows the
funds necessary to purchase  forfaiting assets. The lenders require that cash be
deposited in interest bearing accounts until the corresponding loan matures.

Collateral
----------

The  Company  reports  assets  that it has  pledged  as  collateral  in  secured
borrowing and other arrangements when the secured party cannot sell or re-pledge
the assets, or when Euro Trade can substitute  collateral or otherwise redeem it
on short notice.


                                       -8-
<PAGE>

                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE A   ORGANIZATION AND ACCOUNTING BASIS (Continued)

Transactions of Foreign Currencies
----------------------------------

The  Company  and its  subsidiary  treat  the U.S.  dollar  as their  functional
currency.  Accordingly,  gains and  losses  resulting  from the  translation  of
accounts  designated in other than the functional  currency are reflected in the
determination of net income.

At  September  30,  1999,  monetary  assets and  liabilities  of The Company are
denominated in the following currencies:
<TABLE>
<CAPTION>
                                                                   U.S.          Pounds        Deutsche
                                                  Total           Dollars       Sterling         Marks
                                                  -----           -------       --------         -----
<S>                                                <C>              <C>            <C>            <C>
Forfaiting Assets                                  100%             66             2              32
Current Liabilities                                100%              1             26             73
</TABLE>

At June 30, 1999, monetary as
sets and liabilities of The Company are denominated
in the following currencies: U.S. Pounds Deutsche Total Dollars Sterling Marks
<TABLE>
<CAPTION>
                                                                   U.S.          Pounds        Deutsche
                                                  Total           Dollars       Sterling         Marks
                                                  -----           -------       --------         -----
<S>                                                <C>              <C>            <C>            <C>
Forfaiting Assets                                  100%             73             --             27
Current Liabilities                                100%             63             1              37
</TABLE>


Income Taxes
------------

The Company and its subsidiary  will not be included in a  consolidated  federal
income tax return filed by the parent. Federal income taxes are calculated as if
the companies filed on a separate return basis, and the amount of current tax or
benefit  calculated  is either  remitted to or received  from The  Company.  The
amount of current and deferred  taxes  payable or refundable is recognized as of
the date of the  financial  statements,  using  currently  enacted  tax laws and
rates.  Deferred  tax  expenses  of benefits  are  recognized  in the  financial
statements for the changes in deferred tax liabilities or assets between years.


                                       -9-
<PAGE>



                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE A   ORGANIZATION AND ACCOUNTING BASIS (Continued)

Depreciation
------------

Depreciation  is calculated  to write down the cost of tangible  fixed assets to
their residual values over the period of their estimated  useful lives using the
straight-line method as follows:

        Computer Equipment                                    3 years
        Furniture, Fixtures and Fittings                      4 years


Net Income Per Share
--------------------

Net income per share is computed  using the  weighted  average  number of common
shares and common share equivalents  outstanding during the respective  periods.
Common shares  equivalents  consist of The Company's  preferred stock and shares
issuable upon the exercise of stock options. All stock options have been treated
as if they were outstanding for all periods.


Forfaiting Transactions
-----------------------

Proprietary  transactions  are  recorded on the trade  date.  Profits and losses
arising from sales entered into for the account and risk of the  subsidiary  are
recorded  on the  settlement  date  basis.  Amounts  receivable  and payable for
forfaiting  transactions that have not yet reached their contractual  settlement
date are recorded net on the balance sheet.


Fair Value of Financial Instruments
-----------------------------------

The carrying value of financial  instruments  such as cash and cash  equivalents
and  accrued  interest  income  approximate  their fair  market  value using the
specific identification method.


                                      -10-


<PAGE>




                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE A   ORGANIZATION AND ACCOUNTING BASIS (Continued)

Revenue Recognition
-------------------

Interest income on forfaiting  assets is recognized  based on principal  amounts
outstanding,  at  applicable  interest  rates.  Accrual of  interest on loans is
discontinued  (non-accrual  status) when reasonable doubt exists as to the full,
timely  collection  of interests or  principle,  or when payment of principle or
interest  is past due 90 days,  unless the loan is  currently  in the process of
collection.  When a loan is placed on non-interest income in the current period,
income  recognition  on such loans is on the cash basis,  unless the  reasonable
doubt is reversed.  All cash receipts on  reasonable  doubt loans are applied to
the principal balance

Because  forfaiting assets typically mature in less than one year, the company's
policy is to recognize fees and costs  associated  with these assets in the year
received or paid.


Allowance for Loan Losses
-------------------------

Management  makes  regular  credit  reviews of the  forfaiting  portfolio  on an
individual  loan  basis.  Past  experience,  current  economic  conditions,  and
problems  associated with specific  lenders,  are all factors in determining the
adequacy of the  allowance  balance.  The  allowance  is  increased by provision
charged to operating expense and by recoveries on loans previously  charged off,
and reduced by charge-offs.

Interim Financial Information (Unaudited)
-----------------------------------------

The  accompanying  unaudited  financial  statements  for the three  months ended
September  30, 1999 and 1998 have been  prepared in  accordance  with  generally
accepted  principles  for  interim  financial  information.  In the  opinion  of
management,  all adjustments (consisting only of normal,  recurring adjustments)
necessary for a fair presentation,  have been included.  Results for the interim
period are not  necessarily  indicative of the results to be expected for a full
year.

Accrued Compensated Absences
----------------------------

The Company has not  established a policy with respect to compensated  absences.
Accordingly,  no accrual has been made as  prescribed  by Statement of Financial
Accounting Standards No. 43.


Use of Estimates
----------------

The  preparation  of  the  financial  statements  requires  management  to  make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements and the  accompanying  notes.  Actual results could differ from those
estimates.


                                      -11-



<PAGE>



                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE B   REORGANIZATION

The following are the principal  terms with respect to the exchange of shares of
capital stock of Euro Trade & Forfaiting, Inc. (The Company), a Utah corporation
(formerly  Rotunda  Oil and  Mining,  Inc.)  for  the  shares  of  Euro  Trade &
Forfaiting Co. Limited (Euro Trade) a United Kingdom corporation.


Pre-Exchange Capitalization
---------------------------

On November 10, 1998, The Company  declared a reverse stock split of 1 for 1,000
of the outstanding  shares. As a result,  19.5 million  outstanding  shares were
reduced to 195 thousand outstanding shares.

Euro Trade issued 15 million  preferred shares and 9.2 million common shares for
cash on February 25, 1997.  An option for .8 million  shares of the common stock
was issued on the same date and funded as required by United Kingdom law.

The option was exercised immediately prior to the exchange.


Equity Conversion Mechanics
---------------------------

At the closing of the exchange,  The Company  issued and exchanged  11.8 million
shares of restricted Rule 144 common stock for all of the outstanding common and
preferred shares of Euro Trade.

After the closing,  two options  were granted for .5 million  shares each of the
company's  common  stock  at a  price  of  $.025.  The  options  were  exercised
immediately.

Additionally,  The Company issued an aggregate of 4 million new shares of common
stock at $.05 per share.

The Company will hold the shares of Euro Trade,  which will  continue to operate
as a subsidiary.


Post Exchange Capitalization
----------------------------

After the exchange  and the  subsequent  offering of 5 million  shares of common
stock,  the  capitalization  consisted of 16.9 million shares of common stock of
which 11.8 million are restricted.






                                      -12-


<PAGE>



                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE B   REORGANIZATION (Continued)

Basis of Consolidation
----------------------

The accompanying  financial  statements have been prepared to give effect to the
exchange completed on November 20, 1998. The two companies in the exchange are:

         Euro Trade & Forfaiting, Inc., a Utah corporation,
         (formerly Rotunda Oil and Mining, Inc.), "The Company"

         Euro Trade & Forfaiting Co. Limited
         a United Kingdom corporation, "Euro Trade"

After the  exchange,  The Company  owned all of the  outstanding  shares of Euro
Trade. The exchange is accounted for as if The Company  purchased Euro Trade for
stock. All assets are reflected at historical cost. For purposes of the proforma
statement of stockholders' equity,  multiple transactions are considered to have
taken place  concurrently.  All  subsequent  references  to the company mean the
combined entity.


NOTE C   PROPERTY AND EQUIPMENT

Property and equipment  consists of office  furniture and computer  equipment as
follows:

                                        September 30,            June 30,
                                            1999                   1999
                                       ------------           -------------
     Cost                              $       136             $        136
     Less: Accumulated depreciation              91                      81
                                       ------------           -------------
                                       $         45            $         55
                                       ============            ============
     Depreciation expense              $         10            $         38
                                       ============            ============



NOTE D   INCOME TAX

The Company has cumulative losses at September 30, and June 30, 1999, that could
result in a net  operating  loss carry  forwards  for federal  income and United
Kingdom tax purposes.  Ownership  changes in The Company may result in an annual
limitation on the utilization of operating loss carryforwards.


                                       -13-
<PAGE>


                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE E   FORFAITING ASSETS

Forfaiting is a method of financing  international  trade. The Company purchases
from an exporter the debt due by an importer  when credit is required.  The debt
is usually  evidenced by a series of negotiable  financial  instruments  such as
promissory  notes or by deferred payment letters of credit opened by a bank. The
notes are usually guaranteed by a bank in the importer's country and, subject to
the quality of the guarantor,  become marketable amongst international banks and
other financial  institutions.  In forfaiting,  the notes are purchased  without
recourse to the exporter.

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107,  Disclosure about Fair
Value of  Financial  Instruments.  The  estimated  fair value  amounts have been
determined  by The  Company  and  independent  experts  using  available  market
information and appropriate valuation methodologies.

The fair value of the non-impaired  financial  instruments  approximate carrying
value due to the short-term maturity of the instruments.  The fair values of the
non-impaired  financial  instruments  are (in  thousand)  $4,582 and  $15,676 at
September 30 and June 30, 1999 respectively.

The following disclosure of the financial instruments which are impaired is made
in accordance with the requirements of SFAS No. 118, Accounting by Creditors for
Impairment of a Loan-Income Recognition and Disclosures.  The carrying values of
the impaired financial instruments are measured at market value.

The  market  value of the  impaired  financial  instruments  is as  follows  (in
thousands):
<TABLE>
<CAPTION>

                                                                          September 30,              June 30,
                                                                               1999                    1999
                                                                        -------------------      ---------------
<S>                                                                     <C>                      <C>
   Recorded investments in impaired financial instruments               $              8,221     $         8,221
   Less allowance for losses                                            $            (6,740)            (6,740)
                                                                        -------------------      ---------------
   Market value of impaired financial instruments                       $              1,481     $         1,481
                                                                        ====================     ===============
</TABLE>


The activity in the allowance for losses account is as follows (in thousands):
<TABLE>
<CAPTION>
                                                                          September 30,              June 30,
                                                                              1999                    1999
                                                                        -------------------      ---------------
<S>                                                                     <C>                      <C>
   Beginning balance                                                    $        6,740           $         7,018
   Additions charged to operations                                                   0                         0
   Reductions - sale of asset                                                        0                       278
                                                                        -------------------      ---------------
   Ending balance                                                       $        6,740           $         6,740
                                                                        ==============           ===============
</TABLE>


                                       -14-
<PAGE>



                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE E   FORFAITING ASSETS (Continued)

The Company  does not accrue  interest on its  impaired  financial  instruments.
Therefore,  no interest income was recognized during the impairment  period. Any
cash  receipts  on these  financial  instruments  are  recorded  as income  when
collected.

The composition of the notes by country of issuers bank was:

                                             September 30,          June 30,
          Country                                1999                1999
         ------------                        ------------        ------------

          Germany                                 6.1%                4.5%
          Turkey                                 26.1                22.2
          Russia                                 48.8                28.8
          Ukraine                                 7.5                 4.5
          Czech Republic                          9.1                 2.9
          Indonesia                              -.--                34.6
          Nigeria                                 2.4                 2.5
          Thailand                              --.--               --.--
          Japan                                 --.--               --.--
                                             ------------        ------------
          Total                                  100%                100%
                                             ============         ============

NOTE F   SHORT TERM BORROWING

Short-term borrowing consisted of the following (in thousands):

                                            September 30,          June 30,
                                                1999                 1999
                                            ------------           --------
         Loans payable to banks             $  3,573                $7,477
         Bank over drafts                        650                 1,254

Interest paid on short term  borrowings for the periods ended  September 30, and
June30, 1999 was 0.3 million and $0.7 million respectively.

Weighted  average interest rates on short term borrowing from banks was 6.2% for
the periods ended September 30, and June 30, 1999.

The  Company  had long  term debt in  conjunction  with the  purchase  of office
equipment.


                                       -15-
<PAGE>



                          EURO TRADE & FORFAITING, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998


NOTE G   FOREIGN EXCHANGE

The Company is subject to foreign  exchange risk through future foreign currency
cash flow as movement in currency  exchange  rates  impact:  1) the U.S.  dollar
value of foreign  currencies  and 2) the U.S.  dollar value of cost  incurred in
foreign currencies.

Foreign  exchange  gains  (losses)   included  in  the  consolidated   financial
statements at September 30, 1999 was 9,200.


NOTE H   COMMITMENTS

At September 30, 1999, The Company had a commitment to purchase $5.2 million and
$9.0 million in forfaiting  assets.  The fees earned were recorded in the period
that the commitments were given.


NOTE I   MINIMUM FUTURE RENTALS

The Company occupies  premises provided under a lease agreement through February
27, 2002. The lease future minimum rentals are summarized below:

                          Year Ending June, 30                        Amount
                          --------------------                    ------------
                                 2000                             $  165,500
                                 2001                                165,500
                                 2002                                110,400
                              Thereafter                                   0

The lease has an option to renew for five years.


NOTE J   INVESTMENTS IN MARKETABLE SECURITIES

All securities held at September 30, 1999 are classified as "Available for Sale"
as defined by Statement of Financial  Accounting  Standards No. 115. "Accounting
for  Certain  Investments  in  Debt  and  Equity  Securities"  (SFAS  115).  The
securities are summarized as follows (in thousands):

                            Cost                            Market Value
                        ------------                        ------------
Common stock                1,100                              1,100

Given the large number of shares and other uncertainties, there is not assurance
that the full value of the shares could be realized at September 30, 1999.


                                       -16-
<PAGE>



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

         The  following  information  should  be read in  conjunction  with  the
financial statements and notes thereto appearing elsewhere in this Form 10-Q.

                              Results of Operations

Acquisitions

         The Company continues to pursue strategic  alternatives to maximize the
value of its portfolio of businesses.  Some of these alternatives have included,
and will continue to include selective  acquisitions,  divestitures and sales of
certain  assets.  The  Company  has  provided,  and may from time to time in the
future,  provide  information to interested  parties  regarding  portions of its
businesses for such purposes.

         The following  table sets forth the  percentage  relationship  to total
revenues of principal items contained in the Company's  Consolidated  Statements
of Operations for the three month periods ended  September 30, 1999 and 1998. It
should be noted that percentages  discussed  throughout this analysis are stated
on an approximate basis.

<TABLE>
<CAPTION>

                                                                                   Three Months Ended
                                                                                     September 30,
                                                                             -----------------------------
                                                                                1999                 1998
                                                                             ---------             ---------
                                                                                       (Unaudited)
<S>                                                                            <C>                   <C>
         Total revenue....................................................     100%                  100%
         Cost of revenues - interest......................................      24                    16
         Provision for losses..............................................      -                     -
         Gross profit......................................................     76                    84
         Selling, general and administrative
           expenses........................................................     46                    28
         Net income (loss).................................................     30                    56
</TABLE>


         For the three months  ended  September  30, 1999  compared to the three
         months ended September 30, 1998.

         Revenues for the three month period  ended  September  30, 1999 ("first
quarter of 1999")  decreased  27% to $1.1  million  from $1.5 million in for the
three month period ended  September  30, 1998  ("first  quarter of 1998").  This
decrease in revenue is attributed primarily to reduction in trading activity due
to deteriorating market conditions,  resulting in a decrease in the portfolio of
forfaiting  assets  during  the  quarter  and  an  increase  in  cash  and  cash
equivalents  at the end of the quarter.  Revenue in the first quarter arose from
the sale of Indonesian assets and proceeds received from another asset held to


                                       -17-

<PAGE>



maturity.  The  Indonesian  assets were sold in the period due to  deteriorating
market conditions in East Timor. During the first quarter of 1998, there were no
negative external factors affecting the sale of assets.

         Cost of revenues increased 8% for the first quarter of 1999 compared to
the 1998 period.  This result is due to interest expense  increasing to $257,000
in the first quarter of 1999 from $238,000 in 1998,  reflecting  higher interest
costs due a higher level of borrowing  related to financing a greater  number of
transactions during the 1999 period.

         Selling,  general and administrative  expenses for the first quarter of
1999 increased 15% to $493,000 from $428,000 in 1998.  This result is attributed
to  increased  operating  activity  and  increased  legal and  accounting  costs
incurred in filing the Company's  registration statement with the Securities and
Exchange Commission in 1999.

         Net income for the first quarter of 1999 totaled $324,000,  or $.02 per
share of common  stock,  compared to net income for the first quarter of 1998 of
$858,000 or $.05 per share of common stock.

         No tax provision  has been made for three month period ended  September
30, 1999,  or for the fiscal years ended June 30, 1999,  1998 or 1997,  based on
pre-tax operation  losses.  The Company pays taxes under both the United Kingdom
and United States tax laws.

Liquidity and Capital Resources

         Short term trading  investments and related  short-term  borrowings are
reported as cash flow from operating  activities.  Working  capital at September
30, 1999 was a $24.0 million  compared to $33.2  million at June 30, 1999.  This
28% decrease in working capital is attributed to the $5.4 million (23%) decrease
in cash due to increases in other  current  assets and loans,  and $11.1 million
(65%)  decrease in  forfaiting  assets,  reflecting  sale and maturity of assets
during  the  quarter  with  no  corresponding  further  acquisition  of  assets.
Partially  offsetting the decrease in working capital was the $9.5 million (90%)
decrease  accounts payable due to reduction of overdrafts and short-term  loans,
achieved from the sales proceeds from  forfaiting  assets,  and the $3.9 million
decrease  in bank loans  payable,  reflecting  repayment  made from sale  and/or
maturity of corresponding forfaiting assets.

         Net cash used in operating activities for the first quarter of 1999 was
$1.4 million  compared to $3.9 million used in the first  quarter of 1998.  This
was due  primarily to a  comparative  reduction in trading  activity  during the
quarter.

                                       -18-

<PAGE>



         Net cash used in financing activities for the first quarter of 1999 was
$900,000  compared to $2.0  million  provided by  financing  activities  for the
comparable  1998  period.  This is  attributed  primarily  to the  $7.9  million
decrease in compensating  balances during the first quarter of 1999. The Company
did not use or realize any cash flow from  investing in either the first quarter
of 1999 or 1998.

         At September 30, 1999 the Company had total assets of $29.5 million and
stockholders'  equity of $24.6  million.  In  comparison,  at June 30, 1999, the
Company  had total  assets of $42.8  million and total  stockholders'  equity of
$24.3 million.

Inflation

         In the opinion of management,  inflation has not had a material  effect
on the operations of the Company.

Year 2000

         Year 2000 issues may arise if computer programs have been written using
two digits (rather than four) to define the applicable year. Thus, on January 1,
2000 any clock or date recording  mechanism  including  date sensitive  software
that uses only two digits to represent  the year,  may recognize a date of 00 as
1900 instead of 2000.  This could result in a system failure or  miscalculations
causing  disruption of  operations,  including  among other things,  a temporary
inability to process  transactions,  send invoices,  or engage in similar normal
business activity.

         The Company has checked all of its computer  hardware and believes that
the  hardware  is year 2000  compliant.  The  Company's  software  was  recently
upgraded and management  believes that all software,  including internal systems
for databases,  are year 2000 compliant and use the four-digit year.  Management
believes  that the  Company's  equipment  currently in operation  including  fax
machines and personal computers, will function properly with respect to dates in
the year 2000 and no adverse issues are anticipated.  It is the Company's policy
that all equipment and software purchased will be year 2000 compliant.

         Failure to correct a year 2000 problem could result in an  interruption
of certain normal business activities or operations.  Management does not expect
any issues that would cause such an interruption.  The Company has not developed
any  contingent  plans  regarding  failure  of any year  2000  operation  of the
business.  No substantial capital and maintenance  expenditures will be required
to maintain and, or, upgrade operating  facilities to remain  competitive and to
comply with environmental requirements.  The Company is not subject to the Clean
Air Act or its amendment of 1990.


                                       -19-

<PAGE>




         The Company has contacted 100% of its significant  third party business
contacts  to  determine  the  extent to which the  Company's  operations  may be
impacted  by a third  party's  failure  to make  their  own  systems  year  2000
compliant.  All of those third parties  contacted  have  responded that they are
either Year 2000  compliant,  or  anticipate  achieving  compliance  well before
January 1, 2000. The Company reviewed the third party responses with the view of
the  significance  of that  particular  party to the  operation  of the Company.
Accordingly,  the Company has concluded that it is unlikely its operations  will
be effected by a potential third party Year 2000 compliance problem.

         The Company has very little or no control  over third  parties and have
little ability to verify or enforce their claims to being year 2000 ready.  As a
result, management believes that the Company's most reasonably likely worst case
scenarios  involve  areas where it relies on third  parties,  including  utility
companies  and other  service  providers.  If any of the  Company's  significant
service  providers or third parties do not  successfully  and timely become year
2000  ready,  the  Company's  business  or its  operations  could  be  adversely
affected.   This  would  most  likely   consist  of  a  loss  of   communication
capabilities.

         As of the date hereof,  the Company has expended  approximately  $3,000
associated  with year 2000  compliance  expenses.  This includes the purchase of
Centennial 2000 Pro Software,  attendance at free government sponsored year 2000
courses,  and time spent by the Company's  office manager in assessing year 2000
issues.

Risk Factors and Cautionary Statements

         This report contains certain  forward-looking  statements.  The Company
wishes to advise readers that actual results may differ  substantially from such
forward-looking  statements.  Forward-  looking  statements  involve  risks  and
uncertainties  that could cause actual results to differ  materially  from those
expressed in or implied by the  statements,  including,  but not limited to, the
following: trading market risks, currency fluctuations, wold economic conditions
and risks generally associated with the trading of financial instruments.


                                       -20-

<PAGE>



Item 3.           Quantitative and Qualitative Disclosures About Market
                  Risk

         Foreign Currency Exchange Rate Risk

         The  Company is subject  to the risk of price  fluctuations  related to
anticipated  revenues,  operating costs and expenditures  incurred in currencies
other than US dollars. The Company has not generally used derivative instruments
to manage this risk.

         Equity Price Risk

         The Company is not  currently  subject to equity  price risk  resulting
from  investments  in marketable  equity  securities of unrelated  parties.  Any
future  investments  will be  accounted  for in  accordance  with  Statement  of
Financial  Accounting  Standards No. 115.  Accounting for Certain Investments in
Debt and Equity Securities "SFAS 115".

         The Company has financed its operations  primarily through purchase and
sale of forfaiting  assets.  In the three months ended  September 30, 1999, cash
used in operations  was $1.4  million.  This is attributed to net income for the
period of $324,000  and a decrease in  forfaiting  assets  accounts  payable and
overdrafts  by $11.1 million and $9.5 million  respectively,  and an increase of
other  assets  of $4.2  million.  The  Company  had an  accumulated  deficit  at
September 30, 1999 of $317,000.  The Company did not provide for any  additional
loan losses in the  unaudited  results for the three months ended  September 30,
1999.  Management  believes  that  reserves  accrued  in the prior  periods  are
adequate to provide for loan losses in the existing forfaiting asset portfolio.

         At September 30, 1999 the Company's  principal  source of liquidity was
$17.7 million in cash, of which $5.2 million is held as compensating balances on
Bank debt of $3.6  million.  At  September  30, 1999 the Company had no material
long-term debt or long term commitments.

         There can be no assurance  that either the net income for the period or
the current loan loss provisions are indicative of future operations.  There are
no assurances that continuing  financing will be available at terms favorable to
the Company.  The Company has no current plans to raise capital from the sale of
its stock.

Interest Rate Risk

         The Company is subject to the effects of interest rate  fluctuations on
its financial  instruments.  A sensitivity analysis of the projected incremental
effect of a hypothetical 10% change in the 1999 period-end interest rates on the
fair value of its financial instruments is provided in the following table.

                                       -21-

<PAGE>



<TABLE>
<CAPTION>

Dollars in Thousands

                                                                        Fair
                                                    Carrying           Market           Incremental (1)
                                                     Value             Value             Incr./(Decr.)
                                               ------------------ ---------------- -------------------------
<S>                                                  <C>              <C>                        <C>
Financial assets:
  Investment in Forfaiting Assets                    $6,046           $5,959                     $(87)
Financial liabilities:
  Fixed-rate and variable rate debt
 ( all due within one year)                          $3,573           $3,604                     $ 31
</TABLE>

(1)      Reflects a 10 % increase in interest rate of financial assets and a 10%
         decrease in interest rates of financial liabilities.

         Fair  value  of cash  and  cash  equivalents,  receivables,  short-term
borrowings, accounts payable, accrued interest and variable- rate long-term debt
approximate  their carrying  values.  These items are relatively  insensitive to
changes in interest rates due to the short-term  maturity of the  instruments or
the variable nature of underlying interest rates. Accordingly,  these items have
been excluded from the above table.

         At September  30, 1999,  the  Company's  operating  portfolio  included
forfaiting  assets  totaling $6.0 million after  allowance for $7.0 million loan
reserves.  The fair value of these  instruments  will  increase or decrease as a
result of changes in market  interest  rates.  The  Company  accounts  for these
financial  instruments in accordance with SFAS 107.  Accordingly,  each year the
Company  adjusts the balances of its  portfolio to fair market  value.  With any
resulting  adjustment  being charged or credited to income as an unrealized loss
or gain and  included in cost of revenue.  Realized  gains and losses  resulting
from the  disposition of such assets are recorded as income in the period during
which  such  disposition  takes  place.  During the first  quarter of 1999,  the
Company  realized  gains of $790,000 in  connection  with its  forfaiting  asset
portfolio.   The  Company   provides  no  assurance   that  these   results  are
representative on a going forward basis.

         The Company's exposure to increases in interest rates that might result
in a corresponding decrease in the fair value of its forfaiting assets portfolio
could have an unfavorable effect on the Company's results of operations and cash
flows.



                                      -22-

<PAGE>



                                     PART II

Item 1.           Legal Proceedings

         There are  presently no other  material  pending legal  proceedings  to
which the Company or any of its  subsidiaries  is a party or to which any of its
property is subject and, to the best of its knowledge,  no such actions  against
the Company are contemplated or threatened.

Item 2.           Changes In Securities and Use of Proceeds

         This Item is not applicable to the Company.

Item 3.           Defaults Upon Senior Securities

         This Item is not applicable to the Company.

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

         This Item is not applicable to the Company.

Item 5.           Other Information

         This Item is not applicable to the Company.

Item 6.           Exhibits and Reports on Form 8-K

         (a)      Exhibit 27 - Financial Data Schedules

         (b)      Reports on Form 8-K

                  No reports on Form 8-K were  filed by the  Company  during the
         three month period ended September 30, 1999.

                                      -23-

<PAGE>



                                   SIGNATURES

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

                                             EURO TRADE & FORFAITING, INC.



Date:  November 23, 1999                     By: /S/ JOHN VOWELL
                                                 -----------------------------
                                                 John Vowell, President,
                                                 Chief Executive Officer
                                                 and Director


Date:  November 23, 1999                     By:  /S/ MUKESH PANCHOLI
                                                 -----------------------------
                                                  Mukesh Pancholi
                                                  Secretary, Treasurer
                                                  and Director


Date:  November 23, 1999                     By:  /S/ NAREN DESAI
                                                 -----------------------------
                                                  Naren Desai
                                                  Principal Accounting
                                                  Officer

                                      -24-