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 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 0-7619

                          POWERSOFT TECHNOLOGIES, INC.
              ----------------------------------------------------
             (Exact Name of Registrant as Specified in its Charter)

                 Delaware                               93-0636333
      ------------------------------                 ------------------
     (State or other jurisdiction of                (I.R.S. Employer
      corporation or organization)                   Identification No.


 650 West Georgia Street, Suite 1088, Vancouver, British Columbia Canada V6B 4N8
 -------------------------------------------------------------------------------
               (Address of Principal Executive Offices)(Zip Code)

Registrant's telephone number, including area code:  (604) 685-8318


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                Yes [ ]  No [X]

As of August 4, 1999,  29,259,542  shares of common stock,  $.01 par value, were
issued and outstanding.



<PAGE>

                          POWERSOFT TECHNOLOGIES, INC.
                                    FORM 10-Q

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999

                                TABLE OF CONTENTS

                          PART I. FINANCIAL INFORMATION

                                                                        Page No.

Item 1.  Financial Statements

         Condensed Consolidated Balance Sheets as of June 30, 1999
         (Unaudited) and December 31, 1998.................................... 3

         Condensed Consolidated Statements of Operations for the six
         months ended June 30, 1999 and 1998 (Unaudited).....................  5

         Condensed Consolidated Statements of Operations for the three
         months ended June 30, 1999 and 1998 (Unaudited).....................  6

         Condensed Consolidated Statements of Cash Flows for the six
         months ended June 30, 1999 and 1998 (Unaudited).....................  7

         Notes to the Condensed Consolidated Financial Statements............  9

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations........................................... 11

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings................................................... 14

Item 2.  Changes in Securities............................................... 14

Item 3.  Defaults Upon Senior Securities..................................... 14

Item 4.  Submission of Matters to a Vote of Security Holders................. 14

Item 5.  Other Information................................................... 14

Item 6.  Exhibits and Reports on Form 8-K.................................... 14

Signatures................................................................... 15





                                       2
<PAGE>


                          POWERSOFT TECHNOLOGIES, INC.

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (United States Dollars)

                                                                      As of June 30,   As of December 31,
ASSETS                                                                    1999               1998
------                                                                --------------   ------------------
                                                                       (Unaudited)
<S>                                                                    <C>             <C>
Current assets:

   Cash and cash equivalents .......................................   $   35,263    $    66,249

   Available-for-sale securities (Note 3) ..........................      782,030        439,290

   Accounts receivable, trade, less allowance for doubtful
     accounts of $-0- ..............................................       31,853         29,830

   Prepaid and other current assets ................................       23,222          2,960

   Amounts receivable from related parties .........................       20,334         15,632
                                                                       ----------      ---------

Total current assets ...............................................      892,702        553,961

PROPERTY, PLANT AND EQUIPMENT, NET .................................      675,508        661,805
                                                                        ---------      ---------

                                                                        1,568,210    $ 1,215,766
                                                                       ==========      ==========














See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.


                                       3
<PAGE>


<CAPTION>

                               POWERSOFT TECHNOLOGIES, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS - continued
                                  (United States Dollars)

LIABILITIES AND SHAREHOLDERS' DEFICIT                                 As of June 30,   As of December 31,
                                                                           1999             1998
                                                                      --------------   ------------------
                                                                       (Unaudited)
<S>                                                                    <C>             <C>
Current liabilities:
   Current portion of mortgage loans payable .......................   $  115,303      $   109,159
   Accounts payable ................................................       97,881           96,967
   Margin loan payable (Note 3) ....................................    3,099,607        3,136,264
   Accrued expenses and other liabilities ..........................       13,976           80,091
   Amounts payable to related parties ..............................    1,343,675        1,861,216
                                                                       ----------      -----------

Total current liabilities ..........................................    4,670,442        5,283,697
                                                                       ----------      -----------

Long-term liabilities:
   Mortgage loans payable (Note 4) .................................      727,096          710,277
                                                                       ----------      -----------

     Total liabilities .............................................    5,397,538        5,993,974
                                                                       ----------      -----------

Commitments and Contingencies

Shareholders' (deficit) equity:
   Preferred stock, $5 par value, 25,000,000 shares
     authorized, unissued ..........................................         --             --
   Common stock, $.01 par value, 30,000,000 shares
     authorized; issued and outstanding 1999 (29,259,542 shares)
       and 1998 (15,559,542 shares) ................................      292,595          155,595
   Additional paid-in capital ......................................    5,933,296        5,385,296
   Unrealized loss on available-for-sale securities (Note 3) .......   (3,013,340)      (3,356,080)
   Cumulative exchange adjustments .................................       19,384           18,417
   Accumulated deficit .............................................   (7,061,263)      (6,918,936)
                                                                       ----------      -----------

                                                                       (3,829,328)      (4,715,708)
   Common stock issued for consulting services to be received ......         --             62,500
                                                                       ----------      -----------
Total shareholders' (deficit) equity ...............................   (3,829,328)       4,778,208
                                                                       -               -----------

Total liabilities and shareholders' (deficit) equity ...............   $1,568,210      $ 1,215,766
                                                                       ==========      ===========
</TABLE>










See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.



                                       4
<PAGE>

<TABLE>
<CAPTION>
                          POWERSOFT TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED STATEMENTS OF
                             OPERATIONS (UNAUDITED)
                             (United States Dollars)

                                                                                                      Six months ended June 30,
                                                                                                    1999                     1998
                                                                                                    ----                     ----
<S>                                                                                            <C>                     <C>
Revenues:
   Rental income ...................................................................           $    165,365            $    172,751
   Investment income ...............................................................                    679                   2,879
   Other income ....................................................................                  3,641                    --
                                                                                               ------------            ------------

Total revenues .....................................................................                169,685                 175,630
                                                                                               ------------            ------------

Expenses:
   Depreciation ....................................................................                 17,594                  21,294
   Legal and professional fees .....................................................                 18,685                   4,317
   Consulting fees .................................................................                   --                    62,500
   Consulting fees paid to a related company .......................................                250,000                 250,000
   Interest expense ................................................................                189,662                 214,505
   Unrealized gain on available-for-sale securities ................................               (342,740)                   --
   Land lease ......................................................................                 37,263                  38,173
   Rental real estate management fees ..............................................                 10,569                  12,146
   Utilities .......................................................................                  9,439                    --
   Other operating and administrative fees .........................................                 59,040                  76,642
                                                                                               ------------            ------------

     Total expenses ................................................................                249,512                 679,577
                                                                                               ------------            ------------

Net loss ...........................................................................           $    (79,827)           $   (503,947)
                                                                                               ============            ============

Net earnings (loss) per share (basic) ..............................................           $      (0.00)           $      (0.03)
                                                                                               ============            ============


Weighted average number of shares of common stock outstanding ......................             26,534,680              15,559,542
                                                                                               ============            ============
</TABLE>








See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.


                                        5

<PAGE>

<TABLE>
<CAPTION>


                          POWERSOFT TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED STATEMENTS OF
                             OPERATIONS (UNAUDITED)
                            (United States Dollars)


                                                                                                       Three months ended March 31,
                                                                                                         1999               1998
                                                                                                         ----               ----
<S>                                                                                            <C>                     <C>
Revenues:
   Rental income ...................................................................           $     81,199            $     85,196
   Investment income ...............................................................                    116                     269
   Other income ....................................................................                  2,061                    --
                                                                                               ------------            ------------

Total revenues .....................................................................                 83,376                  85,465
                                                                                               ------------            ------------

Expenses:
   Depreciation ....................................................................                  8,797                  11,085
   Legal and professional fees .....................................................                  1,141                   3,149
   Consulting fees .................................................................                   --                      --
   Consulting fees paid to a related company .......................................                125,000                 125,000
   Interest expense ................................................................                 77,723                 125,624
   Unrealized gain on available-for-sale securities ................................               (323,913)                   --
   Land lease ......................................................................                 19,039                  18,965
   Rental real estate management fees ..............................................                  5,400                   6,942
   Utilities .......................................................................                    206                    --
   Other operating and administrative fees .........................................                 26,896                  31,339
                                                                                               ------------            ------------

     Total expenses ................................................................                (59,711)                322,104
                                                                                               ------------            ------------

Net loss ...........................................................................           $    143,087            $   (236,639)
                                                                                               ============            ============

Net earnings (loss) per share (basic) ..............................................           $       0.00            $      (0.02)
                                                                                               ============            ============


Weighted average number of shares of common stock outstanding ......................             29,259,542              15,559,542
                                                                                               ============            ============
</TABLE>



















See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.


                                                        6

<PAGE>


<TABLE>
<CAPTION>

                          POWERSOFT TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED STATEMENTS OF
                             CASH FLOWS (UNAUDITED)
                            (United States Dollars)


                                                                                                     Six months ended June 30,
                                                                                                    1999                     1998
                                                                                                    ----                     ----

<S>                                                                                             <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss .......................................................................                $ (79,827)                $(503,947)
Adjustments to reconcile net loss to net cash
   used in operating activities:
   Depreciation and amortization ...............................................                   17,594                    21,294
   Consulting fee paid in common stock .........................................                     --                      62,500
Changes in working capital components:
   Accounts receivable .........................................................                   (2,023)                  (19,755)
   Prepaid and other current assets ............................................                  (20,262)                    8,905
   Amounts receivable form related parties .....................................                   (4,702)                  (19,085)
   Accounts payable and accrued expenses .......................................                  (65,201)                  (36,317)
   Accrued interest ............................................................                     --                     (13,815)
   Security deposits payable ...................................................                     --                         268
   Amounts due to related parties ..............................................                  167,459                   395,058
   Exchange difference .........................................................                      967                    (2,653)
                                                                                                ---------                 ---------

     Net cash provided by operating activities .................................                   14,005                  (107,547)
                                                                                                ---------                 ---------

</TABLE>








See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.


                                        7

<PAGE>


<TABLE>
<CAPTION>

                          POWERSOFT TECHNOLOGIES, INC.
                      CONDENSED CONSOLIDATED STATEMENTS OF
                       CASH FLOWS (UNAUDITED) - continued
                            (United States Dollars)


                                                                                                         Six months ended June 30,
                                                                                                         1999                1998
                                                                                                         ----                ----

<S>                                                                                               <C>                     <C>
CASH FLOWS FROM INVESTING ACTIVITIES:

   Purchase of available-for-sale securities .......................................              $    --                 $    --
   Proceeds from available-for-sale securities .....................................                   --                      --
   Purchases of property, plant and equipment ......................................                (31,297)                   --
                                                                                                  ---------               ---------

   Net cash used in investing activities ...........................................                (31,297)                   --
                                                                                                  ---------               ---------

CASH FLOWS FROM FINANCING ACTIVITIES

   Increase in short-term borrowings ...............................................                   --                      --
   Increase (decrease) in margin loan payable ......................................                (36,657)                133,346
   Increase (decrease) in mortgage loan ............................................                 22,963                 (10,061)
                                                                                                  ---------               ---------

   Net cash provided by (used in) financing activities .............................                (13,694)                123,285
                                                                                                  ---------               ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS ..........................................                (30,986)                 15,738

CASH AND CASH EQUIVALENTS, BEGINNING OF
   PERIOD ..........................................................................                 66,249                  36,173
                                                                                                  ---------               ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD ...........................................              $  35,263               $  51,911
                                                                                                  =========               =========
</TABLE>












See the accompanying  notes to the unaudited  condensed  consolidated  financial
statements.


                                        8

<PAGE>



                          POWERSOFT TECHNOLOGIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                           JUNE 30, 1999 (UNAUDITED)

NOTE 1.  BASIS OF PRESENTATION

The unaudited condensed  consolidated  financial statements include the accounts
of the  Company  and its wholly  owned  subsidiaries.  The  unaudited  condensed
consolidated  financial  statements  included  herein have been  prepared by the
Company,  without audit, pursuant to the rules and regulations of the Securities
and Exchange  Commission.  Certain information and footnote disclosures normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles have been condense or omitted  pursuant to such rules and
regulations,  although the Company believes that the disclosures are adequate to
make  the  information   presented  not  misleading.   The  unaudited  condensed
consolidated  financial  statements  and the  notes  thereto  should  be read in
conjunction with the consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended  December 31, 1998. In the opinion
of  the  management  of  the  Company,  the  accompanying   unaudited  condensed
consolidated  financial statements contain all necessary  adjustments to present
fairly the financial position,  the results of operations and cash flows for the
periods reported. All adjustments are a normal recurring nature.

The results of  operations  for the three and six month  periods  ended June 30,
1999 are not  necessarily  indicative of the results to be expected for the full
year.

The unaudited  condensed  statements  of operations  for the three and six month
periods  ended  June 30,  1998,  have been  reclassified  to conform to the 1999
presentation.

NOTE 2.  CONTINUING OPERATIONS

These unaudited condensed  consolidated  financial statements have been prepared
on the going concern basis of accounting  which assumes the Company will realize
its assets and discharge its  liabilities in the normal course of business.  The
Company is currently operating at a loss and has minimal in net tangible assets.
Should the Company be unable to  continue as a going  concern it may be required
to  realize  its assets and  settle  its  liabilities  at amounts  substantially
different from the current carrying values.

The  Company's  ability to continue as a going concern is dependent on continued
financial  support  from its  principal  shareholder,  Mr. Fai H. Chan,  who has
signed a letter of financial support to the Company.



                                        9

<PAGE>


                          POWERSOFT TECHNOLOGIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     JUNE 30, 1999 (UNAUDITED) - continued

NOTE 3.  AVAILABLE-FOR-SALE SECURITIES

The cost and approximate market value of investment securities were as follows:

                                             June 30,            December 31,
                                               1999                 1998
                                           ---------------      ------------
Corporate equity securities (a):
   Cost                                $   3,795,370       $    3,795,370
   Less gross unrealized losses            (3,013,340)          (3,356,080)
                                           ---------------      ------------

   Estimated fair value                $   782,030         $    439,290
                                           ===============      ============

   Carrying value                      $   782,030         $    439,290
                                           ===============      ============

Margin loan payable (b)                $   3,099,607       $    3,136,264
                                           ===============      ============

     (a)  Included in the above  securities  are  48,535,276  shares at June 30,
          1999,  and  December  31,  1998,   representing  3.9  percent  of  the
          outstanding  common stock of Heng Fung Holdings Company Limited ("Heng
          Fung").   These  securities  were  acquired  in  1997  at  a  cost  of
          $3,811,208.  Fai H. Chan and Robert Trapp, directors of Heng Fung, are
          also officers, directors and/or shareholders of the Company.

          The investment  securities  held by the Company are not subject to any
          contractual or statutory resale  restrictions and any portion of these
          securities  can be reasonably  expected to qualify for sale within one
          year.

     (b)  All  investments  are  pledged to secure  the  Company's  margin  loan
          payable. The loan is payable on demand and bears interest at Hong Kong
          best lending plus 3.5% per annum.

NOTE 4.  SALE OF ASSETS

On January 18, 1999,  the Company  entered  into an  agreement  with SAR Trading
Limited  ("SAR") wherein SAR agreed to buy and the Company agreed to sell all of
its interests in the majority of its subsidiaries for  approximately  $4,838,000
in the form of the assumption of certain  liabilities.  In  consideration of the
assumption of the  assumption of  liabilities,  the Company  agreed to issue two
notes payable to SAR in the amounts of $1,000,000 and  $2,472,272,  which is the
$3,838,000  difference,  net of related party accounts receivable of $1,365,278.
The $1,000,000 note is immediately  convertible into 20,000,000 common shares of
the Company at a conversion price of $0.05 per share. The $3,838,000 note can be
converted into shares of common stock of the Company,  in minimum  increments of
$250,000 each, at the average 15 day trading price of the Company's common stock
at the option of the Company by giving  seven  trading days notice in writing to
SAR.  The  agreement  is  subject  to  shareholder  approval.  This  transaction
essentially  liquidates the  operations of the Company and transfers  control of
the Company to SAR.

NOTE 5.  FORGIVENESS OF DEBT

On  February 5, 1999,  13,700,000  shares of common  stock of the  Company  were
issued to SAR in exchange for forgiveness of debt of $685,000.


                                       10

<PAGE>



ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The  following  discussion  should  be read in  conjunction  with the  Condensed
Consolidated  Financial Statements of the Company and the related notes thereto,
and  other  financial   information   that  is  included   elsewhere  herein  or
incorporated by reference.

INTRODUCTION

The Company  was  originally  incorporated  in 1958 and until June 1994 had been
engaged in business other than those it presently operates.

The Company owns an Apartment Building in North Vancouver, British Columbia, and
until June 1995 the Company's  operations were comprised of that single segment.
In 1995 and 1996, the Company,  through various  subsidiaries,  acquired certain
interests in PRC, including:

          (i)  Min  You,  which  has an  option  to lease a  production  line in
               Cangzhou Factory for cement manufacturing;
          (ii) a 70% interest in Wuhan, a PRC container manufacturer;
          (iii)an  interest  in the Duck  Farm  pursuant  to which  the  Company
               operated a duck farm in PRC; and
          (iv) an  option  to form  Heng Li in order  to  develop  a  commercial
               building in Zhangjiagang Free Trade Zone, PRC.

In the fourth quarter of 1997, the Company  determined that it would discontinue
substantially  all of its  operations in PRC. The  Divestiture  included (i) the
transfer of 81% of the Company's  interest in Min You to two unrelated  parties;
(ii)  effecting  an agreement  to reverse the  acquisition  of a 70% interest in
Wuhan;  (iii) the  termination  of the Company's  interest in the Duck Farm; and
(iv) the termination of the Heng Li joint venture agreement.

Presently,  the Company  retained a 19% interest in Min You, but full provisions
have been made against the remaining  cost of investment in Min You, and 100% of
the outstanding capital stock of Vancouver Hong Kong.

On January 18, 1999,  the Company  entered  into an  agreement  with SAR Trading
Limited  ("SAR") wherein SAR agreed to buy and the Company agreed to sell all of
its interests in the majority of its subsidiaries for  approximately  $4,838,000
in the form of the assumption of certain  liabilities.  In  consideration of the
assumption of the  assumption of  liabilities,  the Company  agreed to issue two
notes payable to SAR in the amounts of $1,000,000 and  $2,472,272,  which is the
$3,838,000  difference,  net of related party accounts receivable of $1,365,278.
The $1,000,000 note is immediately  convertible into 20,000,000 common shares of
the Company at a conversion price of $0.05 per share. The $3,838,000 note can be
converted into shares of common stock of the Company,  in minimum  increments of
$250,000 each, at the average 15 day trading price of the Company's common stock
at the option of the Company by giving  seven  trading days notice in writing to
SAR.  The  agreement  is  subject  to  shareholder  approval.  This  transaction
essentially  liquidates the  operations of the Company and transfers  control of
the Company to SAR.

On  February 5, 1999,  13,700,000  shares of common  stock of the  Company  were
issued to SAR in exchange for forgiveness of debt of $685,000.


                                       11

<PAGE>



RESULTS OF CONTINUING OPERATIONS

SIX MONTHS ENDED JUNE 30, 1999 AS COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1998

There were no significant  changes in the revenues and expenses  attributable to
the operation of Vancouver Hong Kong's real estate between the six-months  ended
June 30, 1999 and six-months ended June 30, 1998.

Investment income decreased from $2,879 in through June 30, 1998 to $679 through
June 30, 1999. The Company has not engaged in investment activity during the six
month ended June 30,  1999.  This is because of the  uncertainty  related to the
international securities markets. Investment income in 1999 consists of interest
income.

Consulting  expense  decreased  from an  aggregate of $62,500 for the six months
ended June 30, 1998 to nil for the six months ended June 30,  1999.  This is due
to the Company's reduced use of consulting services.  Interest expense decreased
from  $214,505 for the  six-months  ended June 30, 1998 to $189,662 for the same
period  in 1999.  This is due to the  decrease  in  margin  loans  payable.  The
outstanding   balance  of  margin  loans  payable  amounted  to  $3,099,607  and
$3,136,264 at June 30, 1999, and June 30, 1998,  respectively.  Other  operating
expenses  decreased from $76,642 in 1998 to $59,040 in 1998. The decrease is due
to reduced professional fees and financial, travel and miscellaneous expenses.

THREE  MONTHS ENDED JUNE 30, 1999 AS COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1998

There were no significant  changes in the revenues and expenses  attributable to
the  operation of  Vancouver  Hong Kong's real estate  between the  three-months
ended June 30, 1999 and three-months ended June 30, 1998.

Consulting  expense  decreased  from an aggregate of $426,000 for the six months
ended June 30, 1997 to $312,500 for the six months ended June 30, 1998.  This is
due to the  Company's  reduced  use of  consulting  services.  Interest  expense
decreased  $47,901 or 38% for the  three-months  ended June 30, 1999 compared to
the same period in 1998.  This is due to the decrease in margin  loans  payable.
The most  significant  item for the  three  months  ended  June 30,  1999 is the
unrealized gain on investment securities of $323,913.

INFLATION

The effect on inflation on the  Company's  operations is not material and is not
anticipated to have any material effect in the future.

LIQUIDITY AND CAPITAL RESOURCES

The net cash  provided by operating  activities  for the six months period ended
June 30,  1999  amounted  to $14,005.  The  Company  meets its  working  capital
requirements  from  the  proceeds  of  margin  loans,  described  below  and the
collection of amounts from related parties.

During the six months  period ended June 30, 1999,  the Company made  additional
cash investments in securities or facilities in the amount of $31,297.

The net cash used by financing activities amounted to $13,694 for the six months
period ended June 30, 1998.  This is due primarily to the decrease in the margin
loan payable.

The net cash used in operating  activities  for six months period ended June 30,
1998  amounted to  $107,547.  This was  primarily  due to the  operating  losses
experienced,  increases in receivable from the container segment and the payment
of amounts  that were  payable to related  parties.  The Company met its capital
requirements  from the  proceeds of bank  borrowings  and the issuance of common
shares.

As  discussed  in Note 2 of the notes to the  condensed  consolidated  financial
statements, the Company's operating losses and deficiency in net tangible assets
raise substantial doubts concerning the Company's ability to continue as a going
concern.  However, the Company's principal shareholder has agreed to continue to
provide the Company with necessary financial support.

EXCHANGE RATE RISK

At present, the Company's revenues and expenses are denominated in U.S. dollars,
Hong Kong dollars and  Canadian  dollars.  In view of the  exchange  rate pegged
between Hong Kong dollars and U.S.  Dollars,  the Company's Hong Kong operations
are not subject to any direct  exposure from the  fluctuation  of U.S.  Dollars.
Also, the Company's  disposal of its operations in PRC in 1997 nearly eliminates
its exposure to exchange  rate risk with the PRC  Renminbi.  The Renminbi is the
currency of the PRC.  The  Company is exposed to exchange  rate risk in its real
estate  operations in Canada.  The Company's real estate activity  transactions,
including long-term debt, are payable in Canadian dollars.

The Company is not involved in any hedging activities in foreign currencies.

The Year 2000

The Year  2000  issue  refers  to the  fact  that  many  computer  systems  were
originally  programmed  using two digits rather than four digits to identify the
applicable  year.  When the year 2000 occurs,  these systems could interpret the
year as 1900 rather than 2000. Unless hardware, system software and applications
are corrected to be Year 2000 compliant,  computers and the devices they control
could  generate  miscalculations  and  creative  operational  problems.  Various
systems could be affected  ranging from complex  information  technology  ("IT")
computer systems to non-IT devices such as an individual machine's  programmable
logic controller.

The Company has an informal  contingency plan for its applications.  The Company
is working  continually  with the third party  suppliers of software and related
services in resolving Year 2000 issues.  The Company's formal  contingency plans
are currently being developed in conjunction with these suppliers.  Testing will
be performed and completed by mid-calendar  year 1999. The Company will continue
to monitor the progress of the  suppliers in the  resolution of Year 2000 issues
and continue to evaluate the necessity of an independent contingency plan.


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<PAGE>


                           PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

         Not applicable.

ITEM 2.  CHANGES IN SECURITIES

         None

ITEM 3.  DEFAULTS IN SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit 27:       Financial Data Schedule.


                                   SIGNATURES


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



Date:  August 20, 1999                      POWERSOFT TECHNOLOGIES, INC.,
                                            A Delaware Corporation



                                            By: /s/ Robert H. Trapp
                                               ---------------------------------
                                               Robert H. Trapp
                                               Secretary and Treasurer





















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