<PAGE>

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

                                   FORM 10-QSB

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

                  For the quarterly period ended March 31, 2003

         [ ]      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 000-22129

                                 Eurotech, Ltd.
--------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                              District of Columbia
--------------------------------------------------------------------------------
                         (State or other jurisdiction of
                         incorporation or organization)

                                   33-0662435
--------------------------------------------------------------------------------
                      (I.R.S. Employer Identification No.)

                             8665 Sudley Road, #608
                            Manassas, Virginia 20110
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (703) 753-9149
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

                          10306 Eaton Place, Suite 220
                             Fairfax, Virginia 22030
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

The issuer had 98,455,773 shares of common stock issued and outstanding as of
July 3, 2003.



<PAGE>

<TABLE>
                                      EUROTECH, LTD.
                                       FORM 10-QSB
<CAPTION>

                                          INDEX

PART I.  FINANCIAL INFORMATION                                                      PAGE
<S>                                                                                  <C>

Item 1.  Financial Statements
   Condensed Consolidated Balance Sheets as of March 31, 2003 (unaudited).............1

   Condensed Consolidated Statements of Operations for the three
     months ended March 31, 2003 and 2002 (unaudited).................................3

   Condensed Consolidated Statement of Stockholders' Deficiency for
     the three months ended March 31, 2003 (unaudited)................................4

   Condensed Consolidated Statements of Cash Flows for the three months
     ended March 31, 2003 and 2002 (unaudited)........................................6

   Notes to Condensed Consolidated Financial Statements (unaudited)...................7

Item 2.  Management's Discussion and Analysis .......................................28

Item 3.  Controls and Procedures.....................................................31

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings...........................................................33

Item 6.  Exhibits and Reports on Form 8-K............................................33

Signatures...........................................................................S-1

Certifications
</TABLE>



<PAGE>

ITEM 1.  FINANCIAL STATEMENTS.

                         EUROTECH, LTD. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                              AS OF MARCH 31, 2003
                                   (UNAUDITED)

                                     ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                                          $   62,310
  Accounts receivable                                                   158,287
  Advance on purchase of ASI                                             15,000
  Prepaid expenses and other current assets                             111,464
                                                                     -----------
      TOTAL CURRENT ASSETS                                              347,061

PROPERTY AND EQUIPMENT - NET                                            106,638

OTHER ASSETS:
  Intangible assets - Ergo - net of amortization of $33,334             366,666
  Technology rights (Acoustic Core) - net of accumulated
    amortization of $857,528                                          2,325,111
  Patent costs - net                                                     18,876
                                                                     -----------
      TOTAL OTHER ASSETS                                              2,710,653
                                                                     -----------
      TOTAL ASSETS                                                   $3,164,352
                                                                     ===========

                     [balance sheet continued on next page]

     See accompanying notes to condensed consolidated financial statements.

                                       1



<PAGE>

<TABLE>
                               EUROTECH, LTD. AND SUBSIDIARIES

                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                     AS OF MARCH 31, 2003
                                   (UNAUDITED) - CONTINUED
<CAPTION>

                           LIABILITIES AND STOCKHOLDERS' DEFICIENCY

<S>                                                                             <C>
CURRENT LIABILITIES:
  Accounts payable and accrued liabilities                                      $  3,251,115
  Current portion of note payable - related parties                                  605,783
  Obligation under Ergo purchase agreement                                           287,780
                                                                                -------------
      TOTAL CURRENT LIABILITIES                                                    4,144,678

SECURED CONVERTIBLE PROMISSORY NOTE - Less debt discount of $94,917                  405,083
                                                                                -------------
      TOTAL LIABILITIES                                                            4,549,761
                                                                                -------------
MINORITY INTEREST                                                                  4,348,061

COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

STOCKHOLDERS' DEFICIENCY:
  Series A non-voting 3% Convertible Preferred stock - $.01 par value; 25,000
    shares authorized; 21,481 issued and outstanding at March 31, 2003,
    liquidation preference of $2,148,100                                                 215
  Series B non-voting 5% Convertible Preferred stock -
    $.01 par value; 25,000 shares authorized;
    11,450 shares issued and outstanding at March 31, 2003,
    liquidation preference of $11,450,000                                                114
  Common stock - $0.00025 par value; 100,000,000 shares
    authorized; 98,455,773 shares issued and outstanding
    at March 31, 2003                                                                 24,616
  Additional paid-in capital                                                      73,215,507
  Unearned compensation                                                           (2,279,290)
  Accumulated deficit                                                            (68,216,911)
  Treasury stock, at cost; 3,531,976 shares at March 31, 2003                     (8,477,721)
                                                                                -------------
      TOTAL STOCKHOLDERS' DEFICIENCY                                              (5,733,470)
                                                                                -------------
      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                            $  3,164,352
                                                                                =============

            See accompanying notes to condensed consolidated financial statements.

                                              2
</TABLE>



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
                                   (UNAUDITED)

                                                    For the Three Months Ended
                                                            March 31,
                                                 -------------------------------
                                                     2003               2002
                                                 -------------     -------------

REVENUES                                         $    322,612      $     55,585
                                                 -------------     -------------
COSTS AND EXPENSES:
  Cost of goods sold                                   85,798             5,807
  Research and development                             40,796           225,571
  Consulting fees                                      81,706           382,940
  Compensatory element of stock and options
     issuances for consulting fees                  1,515,564           444,634
  Other general and administrative expenses           810,655         1,094,165
  Depreciation and amortization                       169,962           541,768
                                                 -------------     -------------
    TOTAL COSTS AND EXPENSES                        2,704,481         2,694,885
                                                 -------------     -------------
OPERATING LOSS                                     (2,381,869)       (2,639,300)
                                                 -------------     -------------
OTHER EXPENSES (INCOME):
  Interest expense                                     36,322            34,529
  Interest income                                          --            (2,676)
  Debt conversion expense                                  --           390,000
  Other expense                                           403                --
  Loss on abandonment of assets                        21,112                --
  Minority interest in subsidiary                     337,520                --
                                                 -------------     -------------
    TOTAL OTHER EXPENSES                              395,357           421,853
                                                 -------------     -------------
NET LOSS                                         $ (2,777,226)     $ (3,061,153)

PREFERRED STOCK DIVIDENDS - NON CASH                  161,875                --
                                                 -------------     -------------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS     $ (2,939,101)     $ (3,061,153)
                                                 =============     =============
BASIC AND DILUTED NET LOSS PER SHARE             $      (0.03)     $       (.05)
                                                 =============     =============
WEIGHTED AVERAGE COMMON SHARES USED IN
  BASIC AND DILUTED NET LOSS PER SHARE             94,495,893        64,143,859
                                                 =============     =============

     See accompanying notes to condensed consolidated financial statements.

                                       3



<PAGE>

<TABLE>
                                    EUROTECH, LTD. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                               FOR THE THREE MONTHS ENDED MARCH 31, 2003
                                              (UNAUDITED)
<CAPTION>

                                                  Preferred Stock                  Common Stock
                                            ---------------------------     --------------------------
                                               Shares          Amount         Shares          Amount
                                            -----------     -----------     -----------    -----------
<S>                                             <C>         <C>             <C>            <C>
Balance - January 1, 2003                       36,450      $      364      91,723,891     $   22,933
Conversion of Series A Preferred
  Stock into common stock                       (3,519)            (35)        703,800            176
Issuance of common stock in connection
  with private placement                            --              --       5,500,000          1,375
Issuance of common stock for settlement
  of liabilities with related party                 --              --         528,082            132
Common stock of Markland issued to
  consultants and employees                         --              --              --             --
Value allocated to the beneficial
  Conversion feature of Markland
  Preferred Stock in February 2003                  --              --              --             --
Amortization of unearned compensation               --              --              --             --
Net loss                                            --              --              --             --
                                            -----------     -----------     -----------    -----------
Total                                           32,931      $      329      98,455,773     $   24,616
                                            ===========     ===========     ===========    ===========

Series A 3% Convertible Preferred Stock         21,481      $      215
Series B 5% Convertible Preferred Stock         11,450             114
                                            -----------     -----------
Balance - March 31, 2003                        32,931      $      329
                                            ===========     ===========

                See accompanying notes to condensed consolidated financial statements.

                                                  4
</TABLE>



<PAGE>

<TABLE>
                                       EUROTECH, LTD. AND SUBSIDIARIES

                        CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                                  FOR THE THREE MONTHS ENDED MARCH 31, 2003
                                                 (UNAUDITED)
<CAPTION>

                                                  Treasury Stock               Additional
                                          -------------------------------        Paid-in          Unearned
                                              Shares           Amount            Capital        Compensation
                                          -------------     -------------     -------------     -------------
<S>                                         <C>             <C>               <C>               <C>
Balance - January 1, 2003                   (3,531,976)     $ (8,477,721)     $ 69,087,322      $    (86,085)
Conversion of Series A Preferred
  Stock into common stock                           --                --              (141)               --
Issuance of common stock in
  connection with private placement                 --                --           273,625                --
Issuance of common stock for
  settlement of liabilities with
  related party                                     --                --            84,361                --
Common stock of Markland issued to
  consultants and employees                         --                --         3,708,769        (3,708,769)
Value allocated to the beneficial
  conversion feature of Markland
  Preferred Stock in February 2003                  --                --            61,571                --
Amortization of unearned compensation               --                --                --         1,515,564
Net loss                                            --                --                --                --
                                          -------------     -------------     -------------     -------------
Balance - March 31, 2003                    (3,531,976)     $ (8,477,721)     $ 73,215,507      $ (2,279,290)
                                          =============     =============     =============     =============

                    See accompanying notes to condensed consolidated financial statements.

                                                      5
</TABLE>



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                                  Accumulated
                                                    Deficit            Total
                                                 -------------     -------------

Balance - January 1, 2003                        $(65,439,685)     $ (4,892,872)
Conversion of Series A Preferred Stock into
  common stock                                             --                --
Issuance of common stock in connection
  with private placement                                   --           275,000
Issuance of common stock for settlement
  of liabilities with related party                        --            84,493
Common stock of Markland issued to
  consultants and employees                                --                --
Value allocated to the beneficial conversion
  feature of Markland Preferred Stock in
  February 2003                                            --            61,571
Amortization of unearned compensation                      --         1,515,564
Net loss                                           (2,777,226)       (2,777,226)
                                                 -------------     -------------
Balance - March 31, 2003                         $(68,216,911)     $ (5,733,470)
                                                 =============     =============

     See accompanying notes to condensed consolidated financial statements.

                                       6



<PAGE>

<TABLE>
                             EUROTECH, LTD. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       (UNAUDITED)
<CAPTION>

                                                              For the Three Months Ended
                                                                       March 31,
                                                            -----------------------------
                                                                2003             2002
                                                            ------------     ------------
<S>                                                         <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss                                                  $(2,777,226)     $(3,061,153)
  Adjustments to reconcile net loss to
    net cash used in operating activities:
      Depreciation and amortization                             169,962          541,768
      Compensatory element of stock issuances                 1,515,564          444,634
      Debt conversion expenses                                       --          390,000
      Loss on abandonment of fixed assets                        21,112               --
      Minority interest in subsidiary                           337,520               --

   Changes in Assets (Increase) Decrease:
     Accounts receivable                                       (158,287)         (53,850)
     Prepaid expenses and other current assets                  108,949          108,329
        Changes in Liabilities Increase (Decrease):
     Accounts payable and accrued liabilities                   156,601          353,595
                                                            ------------     ------------
   NET CASH USED IN OPERATING ACTIVITIES                       (625,805)      (1,276,677)
                                                            ------------     ------------
CASH USED IN INVESTING ACTIVITIES
  Payments on acquisition of intangible assets - Ergo          (112,220)              --
  Advances on purchase of ASI                                   (15,000)              --
                                                            ------------     ------------
NET CASH USED IN INVESTING ACTIVITIES                          (127,220)              --

CASH FLOWS FROM FINANCING ACTIVITIES
  Net proceeds from issuance of common stock                    100,000               --
  Net proceeds from issuance of Series A 3% convertible
    preferred stock                                                  --        1,350,380
  Proceeds from the sale of Series C 5% convertible
    preferred stock of subsidiary                               170,000               --
  Proceeds from notes payable                                   170,000               --
  Repayment of notes payable                                    (11,500)              --
                                                            ------------     ------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                       428,500        1,350,380
                                                            ------------     ------------
(DECREASE) INCREASE IN CASH                                    (324,525)          73,703

CASH AND CASH EQUIVALENTS - BEGINNING                           386,835          465,346
                                                            ------------     ------------
CASH AND CASH EQUIVALENTS - ENDING                          $    62,310      $   539,049
                                                            ============     ============

          See accompanying notes to condensed consolidated financial statements.

                                            7
</TABLE>



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (UNAUDITED) - CONTINUED

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
-------------------------------------------------

                                                      For the Three Months Ended
                                                              March 31,
                                                      --------------------------
                                                          2003           2002
                                                      -----------    -----------
Cash paid during the year for:
  Interest                                            $    2,691     $       --
                                                      ===========    ===========
  Income taxes                                        $       --     $       --
                                                      ===========    ===========

SUPPLEMENTAL DISCLOSURE OF FINANCING INFORMATION:
-------------------------------------------------

Consulting, legal, financing costs, commissions and
  accrued expenses satisfied by issuance of common
  stock and stock options                             $   84,493     $  149,620
                                                      ===========    ===========
Dividends on preferred stock                           $  161,875     $       --
                                                      ===========    ===========
Payable on purchase of Ergo                           $  350,000     $       --
                                                      ===========    ===========
Conversion of convertible debentures, interest and
  penalties to common stock                           $       --     $3,574,419
                                                      ===========    ===========

     See accompanying notes to condensed consolidated financial statements.

                                        8



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BUSINESS DESCRIPTION, GOING CONCERN AND MANAGEMENT PLANS

Eurotech, Ltd. and its subsidiaries (collectively, the "Company") is a
technology transfer, holding, marketing and management company, formed to
commercialize new or existing, but previously unrecognized technologies, with a
particular current emphasis on technologies developed by prominent research
institutes and individual researchers in the United States, former Soviet Union
and in Israel, and to license those technologies for business and other
commercial applications, principally in the United States, Western and Central
Europe, Ukraine, and Russia. Since the Company's formation, it has acquired
development and marketing rights to a number of technologies by purchase,
assignments, and licensing arrangements. The Company's portfolio of
technologically advanced products currently includes: (a) through its license to
its subsidiary, HomeCom Communication, Inc., a Delaware corporation ("HomeCom"),
proprietary materials created to specifically solve the serious problems of how
nuclear and other hazardous wastes are cost effectively contained, (b) through
its license to HomeCom, advanced performance materials for use in industrial
products such as coatings and paints, (c) through its license to its subsidiary,
Markland Technologies, Inc., a Florida corporation ("Markland"), acoustic core
technologies, including nuclear remediation sites, marine dredging, oil
exploration sites, illicit material detection, and (d) through its license to
Markland, cryptographic systems for secure communications, all of which can be
used in homeland and environmental security. The Company intends to
commercialize its technologies using various financial and transactional
vehicles such as technology transfers, licensing, joint ventures, strategic
alliances, and distribution agreements. To date, the Company has not generated
any substantial revenues from operations. As a result of the acquisition of
Markland and Markland's acquisition of Ergo Systems, Inc., a Virginia
corporation ("Ergo"), effective January 1, 2003, the Company is no longer
classified as a development stage company.

The accompanying unaudited condensed consolidated financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the Company as a
going concern. However, for the three months ended March 31, 2003 and 2002, the
Company incurred net losses of approximately $2,777,000 and $3,061,000,
respectively, and as of March 31, 2003, had a working capital deficiency of
approximately $3,798,000. The Company has limited finances and requires
additional funding in order to accomplish its growth objectives and the
marketing of its products and services. There is no assurance that the Company
can reverse its operating losses, or that it can raise additional capital to
allow it to expand its planned operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
in this regard are to obtain other debt and equity financing until profitable
operations and positive cash flows are achieved and maintained.

The Company funded its operations during the three months ended March 31, 2003
through sales of its common stock and the sale of a subsidiary's common stock,
resulting in approximate net proceeds of $275,000. In addition, the Company
received proceeds of $170,000 from the issuance of notes payable. The Company is
exploring other financing alternatives, including private placements,
acquisitions through the Company's public consolidated subsidiary and other
offerings.

The Company's ability to continue as a going concern is dependent upon obtaining
additional financing. These unaudited condensed consolidated financial
statements do not include any adjustments relating to the recoverability of
recorded asset amounts that might be necessary as a result of the above
uncertainty.

The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company 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 accounting
principles generally accepted in the United State of America have been condensed
or

                                       9



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - DESCRIPTION OF COMPANY AND BASIS OF PRESENTATION (Continued)

omitted in accordance with such rules and regulations. The information furnished
in the interim condensed financial statements includes normal recurring
adjustments and reflects all adjustments, which, in the opinion of management,
are necessary for a fair presentation of such financial statements.

Although management believes the disclosures and information presented are
adequate to make the information not misleading, it is suggested that these
interim condensed financial statements be read in conjunction with the Company's
most recent audited financial statements and notes thereto included in its
December 31, 2002 Annual Report on Form 10-K. Operating results for the three
months ended March 31, 2003 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2003.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Consolidation Policy
--------------------

The accompanying unaudited condensed consolidated financial statements include
the accounts of Eurotech, Ltd. (a district of Columbia corporation) and its
subsidiaries, Crypto.com, Inc. ("Crypto"), and commencing December 19, 2002,
Markland and Markland's subsidiaries, Secured Technology, Inc. ("STI") and,
since January 14, 2003, Ergo . All significant intercompany accounts and
transactions have been eliminated in consolidation.

Exchange Agreement - Markland
-----------------------------

On December 19, 2002, the Company completed an exchange agreement with Markland,
a publicly-held, development-stage emerging technologies firm based in New
Haven, Connecticut, pursuant to which the Company agreed to license all of its
rights to the Acoustic Core technology relating to illicit materials detection
and exchange all rights related to certain cryptology technology held by Crypto
for 239,927,344 shares of Markland, representing approximately 80% of the
outstanding common shares at the time of closing.

The exchange has been accounted for as an asset transfer from the Company to its
Markland subsidiary. At the date of the exchange, Markland had no revenue from
continuing operations and the carrying value of its assets was $-0- and its
liabilities approximated $1.8 million. In addition, at the date of the exchange,
Markland had outstanding 5,225 shares of Preferred Stock with a liquidation
preference of $5,225,000. The liquidation preference, less $1,306,250 attributed
to the value of a beneficial conversion feature, was recorded at the date of the
exchange as minority interest. The effect of the Markland exchange on the
consolidated balance sheet was to increase minority interest by $3.9 million,
increase liabilities by approximately $1.8 million and decrease additional
paid-in capital by $5.7 million. The Company includes the results of operations
of Markland from the exchange date, December 19, 2002. No proforma financial
information has been provided due to the insignificant historical continuing
operations of Markland prior to the acquisition.

                                       10



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Acquisition of Ergo Systems, Inc.
---------------------------------

On January 14, 2003, Markland completed the acquisition of Ergo from Ocean Data
Equipment Corporation, a Delaware corporation ("ODEC"). The Company agreed to
pay ODEC $400,000 in cash, payable without interest over a period of one year.
This purchase price was later modified to require $50,000 due at closing,
$150,000 due upon the completion of Phase I research efforts as they relate to
the advancement of Acoustic Core technology in the inspection of cargo
containers (of which $62,000 has been advanced to ODEC as of March 31, 2003),
$100,000 due upon completion of Phase 2 research efforts as they relate to cargo
inspection, and a final payment of $100,000 due upon completion of Phase 3
research efforts as they relate to cargo inspection.

The funds for this acquisition are expected to come from operating capital and
future earnings. The purchase price was determined through arms-length
negotiations, and was based on estimated future earnings from the contract.

Ergo's assets consist of a U.S. Government General Services Administration
contract to provide border security logistic support and product development
services to the United States Government and related unpatented technology. The
Company will continue to provide these support services to five US Border ports
of entry in the states of California, Texas, Michigan and New York. The
government contract is renewable annually, unless cancelled by either party.

The purchase price of $400,000 was allocated entirely to this contract. The
contract is being amortized over a three-year period commencing with the date of
the acquisition, January 14, 2003. Amortization expense related to the contract
for the period ended March 31, 2003 was $33,334. No proforma financials have
been included as separate financial information for this business is not
available at this time.

Equity Method of Accounting for Unconsolidated Foreign Affiliates
-----------------------------------------------------------------

Investment in companies in which the Company has a 20% to 50% interest and has
the ability to exercise significant influence over operating and financial
policies are accounted for on the equity method. In addition, investments in
Israeli-based technology companies, in which the Company has a 52% to 57%
interest in, have been accounted for under the equity method because the Company
does not have sufficient control in order to consolidate such entities,
including, among other things, no control over management, board of directors
and financial decisions. However, as of March 31, 2003, such investees do not
have any revenue nor any significant assets and liabilities.

At March 31, 2003, investments in companies accounted for under the equity
method consist of the following foreign companies, which are located in Israel:

         Chemonol, Ltd. ("Chemonol")                 57%
         Rademate, Ltd. ("Rademate")                 52%
         Comsyntech, Ltd. ("Comsyntech")             52%
         Remptech, Ltd. ("Remptech")                 50%
         Sorbtech, Ltd. ("Sorbtech")                 52%
         Amsil, Ltd. ("Amsil")                       52%
         Corpem, Ltd. ("Corpem")                     20%

                                       11



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Loss Per Common Share
---------------------

Basic loss per common share is computed based on weighted average shares
outstanding and excludes any potential dilution. Diluted loss per share reflects
the potential dilution from the exercise or conversion of all dilutive
securities into common stock based on the average market price of common shares
outstanding during the period. No effect has been given to outstanding options,
warrants or convertible preferred stock in the diluted computation, as their
effect would be antidilutive.

Stock-Based Compensation
------------------------

The Company follows Statement of Financial Accounting Standards No. 123 (SFAS
123), "Accounting for Stock-Based Compensation." SFAS 123 establishes accounting
and reporting standards for stock-based employee compensation plans. This
statement allows companies to choose between the fair value based method of
accounting as defined in this statement and the intrinsic value based method of
accounting as prescribed by Accounting Principles Board Opinion No. 25 (APB 25),
"Accounting for Stock Issued to Employees."

The Company has elected to continue to follow the accounting guidance provided
by APB 25, as permitted for stock-based compensation relative to the Company's
employees. Stock and options granted to other parties in connection with
providing goods and services to the Company is accounted for under the fair
value method as prescribed by SFAS 123.

In December 2002, the Financial Accounting Standard Board ("FASB") issued SFAS
No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure -
an Amendment of SFAS Statement No. 123" ("SFAS 148"). This statement amends SFAS
123 to provide alternative methods of transition for a voluntary change to the
fair value-based method of accounting for stock-based employee compensation. In
addition, SFAS 148 amends the disclosure requirements of SFAS 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. SFAS 148 also requires that those effects be
disclosed more prominently by specifying the form, content, and location of
those disclosures. The Company has adopted the increased disclosure requirements
of SFAS 148 since December 2002. The Company will continue to use the intrinsic
value method of accounting for stock-based employee compensation.

                                       12



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The additional disclosures required by SFAS 148 are as follows:

<TABLE>
<CAPTION>
                                                                            At March 31,
                                                                   -----------------------------
                                                                       2003             2002
                                                                   -------------    ------------
<S>                                                                <C>              <C>
     Net loss attributable to common stockholders, as reported     $ (2,939,101)    $(3,061,153)
     Add:  Stock-based employee compensation expense included
             in reported net loss applicable to common
             stockholders                                                    --              --
     Less: Total stock-based employee compensation
              expense determined under the fair value-based
              method of all awards                                           --              --
                                                                   -------------    ------------
     Proforma Net Loss Applicable to Common Stockholders           $ (2,939,101)    $(3,061,153)
                                                                   =============    ============
     Net Loss Applicable to Common Stockholders Per Basic and
       Dilutive Shares:
         As reported                                               $       0.03     $      0.05
                                                                   =============    ============
         Proforma                                                  $       0.03     $      0.05
                                                                   =============    ============
</TABLE>

Segment Reporting
-----------------

SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information", requires a new basis of determining reportable business segments,
i.e., the management approach. This approach requires that business segment
information used by management to assess performance and manage company
resources be the source for information disclosure. On this basis, the Company
is organized and operates as one business segment to acquire and manage the
commercialization of advanced technologies from research institutes and
individual inventors worldwide and to select the optimum approach to
commercialization from acquiring technologies through licensing, joint venture,
spinning-out or sale.

Reclassifications
-----------------

Certain prior year balances have been reclassified to conform to the current
year presentation.

Impact of Recently Issued Accounting Standards
----------------------------------------------

In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No.
145, "Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement
No. 13, and Technical Corrections". SFAS No. 145 requires that gains and losses
from extinguishment of debt be classified as extraordinary items only if they
meet the criteria in Accounting Principles Board Opinion No. 30 ("Opinion No.
30"). Applying the provisions of Opinion No. 30 will distinguish transactions
that are part of an entity's recurring operations from those that are unusual
and infrequent that meet the criteria for classification as

                                       13



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

an extraordinary item. The adoptions of SFAS 145 did not have a significant
impact to the condensed consolidated financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities." SFAS No. 146 addresses financial accounting
and reporting for costs associated with exit or disposal activities and
nullified Emerging Issues Task Force Issue No. 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including certain costs incurred in a restructuring." SFAS No. 146 requires
that a liability for a cost associated with an exit or disposal activity be
recognized when the liability is incurred. These costs include lease, costs to
consolidate facilities or relocate employees, and certain termination benefits
provided to employees that are involuntarily terminated under the terms of a
one-time benefit arrangement. A fundamental conclusion reached by the FASB in
this statement is that an entity's commitment to a plan, by itself, does not
create a present obligation to others that meets the definition of a liability.
SFAS No. 146 also establishes that fair value is the objective for initial
measurement of the liability. The provisions of this statement are effective for
exit or disposal activities that are initiated after December 31, 2002, with
early application encouraged. The adoptions of SFAS 146 did not have a
significant impact to the condensed consolidated financial statements.

In April 2003, the FASB issued SFAS No. 149 ("SFAS 149"), "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." The Statement
amends and clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities
under Statement 133. This Statement is effective for contracts entered into or
modified after June 30, 2003, except as stated below and for hedging
relationships designated after June 30, 2003. The guidance should be applied
prospectively. The provisions of this Statement that related to Statement 133
Implementation Issues that have been effective for fiscal quarters that began
prior to June 15, 2003, should continue to be applied in accordance with their
respective effective dates. In addition, certain provisions relating to forward
purchases or sales of when-issued securities or other securities that do not yet
exist, should be applied to existing contracts as well as new contracts entered
into after June 30, 2003. The adoption of SFAS No. 149 is not expected to have
an impact on the Company's financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity". SFAS No. 150
establishes standards for classification and measurement in the statement of
financial position of certain financial instruments with characteristics of both
liabilities and equity. It requires classification of a financial instrument
that is within its scope as a liability (or an asset in some circumstances).
SFAS No. 150 is effective for financial instruments entered into or modified
after May 31, 2003 and, otherwise, is effective at the beginning of the first
interim period beginning after June 15, 2003.

                                       14



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Impact of Recently Issued Accounting Standards (Continued)
----------------------------------------------------------

In November 2002, the FASB issued Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others (" FIN 45"). FIN 45 requires a company, at the time it
issues a guarantee, to recognize an initial liability for the fair value of
obligations assumed under the guarantee and elaborates on existing disclosure
requirements related to guarantees and warranties. The initial recognition
requirements of FIN 45 are effective for guarantees issued or modified after
December 31, 2002. Adoption for the disclosures requirements is effective for
interim and annual periods ending after December 15, 2002. The adoption of FIN
45 did not have a significant impact to the condensed consolidated financial
statements.

In January 2003, the FASB issued FASB Interpretation No. 46 (" FIN 46"),
"Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51."
FIN 46 requires certain variable interest entities to be consolidated by the
primary beneficiary of the entity if the equity investors in the entity do not
have the characteristics of a controlling financial interest or do not have
sufficient equity at risk for the entity to finance its activities without
additional subordinated financial support from other parties. FIN 46 is
effective for all new variable interest entities created or acquired after
January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN 46 must be applied for the first interim
or annual period beginning after June 15, 2003. The Company is currently
evaluating the effect that the adoption of FIN 46 will have on its results of
operations and financial condition.

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:
                                                                      Life
                                                                   ---------
               Machinery and equipment                 $248,151     5 years
               Less:  Accumulated depreciation          141,513
                                                       ---------
                                                       $106,638
                                                       =========

Depreciation expense for the three months ended March 31, 2003 and 2002 amounted
to $11,189 and $13,946, respectively.

NOTE 4 - PATENT COSTS

Patent costs consisted of the following:
                                                                      Life
                                                                   ---------
               Cost of patents                         $ 29,801     17 years
               Less:  Accumulated amortization           10,925
                                                       ---------
                                                       $ 18,876
                                                       =========

                                       15



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 4 - PATENT COSTS (Continued)

Patent costs capitalized represent legal and other costs related to filing of
patent applications in various countries.

Amortization expense for the three ended March 31, 2003 and 2002 is $438 and
$438, respectively.

NOTE 5 - NOTES PAYABLE

Related Parties
---------------

On December 23, 2001, the Company converted accrued salaries and accrued
consulting fees into five promissory notes with three employees and two
consultants, totaling $212,187. The Company agreed to pay the principal and the
interest at a rate per annum equal to 3.23% on February 1, 2003. On December 28,
2001, the Company issued 29,291 shares of its common stock valued at $.345 per
share to one of the consultants for the payment of one note. As of March 31,
2003, the remaining principal balance was $175,783.

On August 1, 2002, the Company converted accrued salaries into two promissory
notes, with two Israeli employees, totaling $164,000. The Company agreed to pay
the principal and the interest at a rate per annum equal to 5% on August 1,
2003. The balance as of March 31, 2003 was $164,000.

On November 1, 2002, the Company converted accrued salaries into two promissory
notes, with two Israeli employees, totaling $96,000. The Company agreed to pay
the principal and the interest at a rate per annum equal to 5% on November 1,
2003. The principal balance as of March 31, 2003 was $96,000.

On December 4, 2002, Markland entered into a note payable agreement with Market
LLC for the principal amount of $11,500. Principal, together with interest,
which accrues at the rate of 10% per annum, are both due upon demand. This note
was paid-off in full on March 6, 2003.

Secured Convertible Promissory Note
-----------------------------------

On December 10, 2002, Markland entered into a Restated and Amended Secured
Convertible Revolving Credit Note Agreement for $500,000. Interest under this
note accrues at the annual interest rate of 6% per annum, calculated on the
basis of a 360-day year and actual number of days elapsed. The principal and
accrued interest under this note is due on June 30, 2004, however, may be
prepaid by the Company at any time without penalty. As of December 31, 2002,
approximately $2,000 of interest has been accrued on this note and is included
in accrued expenses on the consolidated balance sheet.

The note may be converted at any time, in whole or in part, into shares of
Markland's common stock. The total number of shares of common stock issuable
upon conversion will be determined by dividing the principal amount of this note
being converted by 80% of the closing bid price of Markland's common stock based
on the average of the five trading days immediately preceding the date of
conversion. The value of the beneficial conversion feature of $125,000 will be
amortized as interest expense over the period ending June 30, 2004.

                                       16



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 5 - NOTES PAYABLE (Continued)

Secured Convertible Promissory Note (Continued)
-----------------------------------------------

On January 22, 2003, the Company entered into a note payable agreement with
Woodward LLC, which allows the Company to borrow up to $200,000. On January 22,
2003 the Company borrowed the principle amount of $125,000. Principal together
with interest, which accrues at the rate of 10% per annum, are both due upon
demand. As of March 31, 2003, accrued interest under this note was approximately
$2,330.

On March 10, 2003, based upon the above agreement with Woodward LLC, the Company
entered into an additional promissory note payable in the amount of $45,000.
Principal, together with interest, which accrues at the rate of 10% per annum,
are both due upon demand. As of March 31, 2003, accrued interest under this note
was approximately $260.

NOTE 6 - ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

Accounts payable and other current liabilities at March 31, 2003 consist of the
following:

               Liabilities from discontinued former
                 Subsidiary of Markland (a)                      $1,298,711
               Interest                                              14,514
               Insurance                                             57,291
               Professional fees                                    939,867
               Rent                                                  79,415
               Consulting fees                                      292,505
               Deferred compensation and board fees (b)             163,246
               Other                                                405,566
                                                                 -----------
                                                                 $3,251,115
                                                                 ===========

               (a) Represents liabilities related to two former subsidiaries of
               Markland, CWTel and Quest Net Corp. The Company is currently
               determining which of the liabilities were discharged in the CWTel
               bankruptcy. Any adjustments as a result of this review will be
               credited to paid-in capital.

               (b) At March 31, 2003, three employees of the Company agreed to
               defer a certain percentage of their salaries, totaling $112,946.
               At March 31, 2003, six board members of the Company agreed to
               defer their board fees totaling $50,300.

                                       17



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 7 - EXCHANGE AGREEMENTS

Exchange Agreement - Markland (December 19, 2002)
-------------------------------------------------

On December 19, 2002, in connection with the Exchange Agreement dated as of
December 9, 2002, by and among the Company, Markland, Crypto, STI, ipPartners,
Inc., Market LLC and James LLC (the "Exchange"), the Company agreed to license
and transfer certain intellectual property to a newly-formed subsidiary of
Markland, STI, in exchange for 239,927,344 shares of Markland's newly issued
common stock (the "Exchange Shares"). The Exchange Shares, on December 9, 2002,
constituted 80% of Markland's outstanding common stock making Markland a
majority-owned subsidiary of Eurotech. In addition, as part of the agreement,
ipPartners was issued 29,990,917 shares of Markland's common stock, valued at
$300,000, in exchange for their forgiveness and discharge of certain obligations
owed to ipPartners with respect to the property transferred to STI.

As a result of the Exchange and other subsequent stock issuances, the Company
owned 78.12% of Markland's voting securities at December 31, 2002. Prior to the
Exchange, Market LLC and James LLC controlled Markland. The Company's ownership
interest in Markland will be diluted as Markland issues additional common shares
and in the event Markland's Series C Preferred Stock is converted into common
shares.

The rights licensed from Eurotech in the Exchange consist of certain proprietary
technology known as Acoustic Core used to detect illicit substances, and certain
cryptology technology held by the Company's subsidiary, Crypto.

Exchange Agreement - Markland (March 27, 2003)
----------------------------------------------

On March 27, 2003, the Company entered into an exchange agreement with Markland.
As an owner of 239,927,344 restricted shares of Markland's common stock, the
Company agreed to exchange 100 million shares of Markland's common stock for
16,000 shares of Series D Convertible Preferred stock of Markland having a
liquidation value of $16 million. This transaction closed in May 2003.

The preferred stock is convertible into shares of Markland's common stock at a
variable percentage of the then current market price, subject to certain
adjustments. If the market price of Markland common stock is less than, or equal
to $0.05, it is convertible at 80% of the market price. If the market price is
greater than $0.05, but less than or equal to $0.10, at 75% of the market value.
If the market price is greater than $0.10, but less than or equal to $0.15, at
70% of the market price, and if the market price is greater than $0.15, at 65%
of the market price.

Markland can redeem the Series D Preferred according to the following schedule.
During the first 180 days after the closing, it can be redeemed at 120% of the
stated value and accrued dividends. From 181 days until 270 days, it can be
redeemed for 125% of the stated value and dividends. From 271 days and ending
360 days after the closing, it can be redeemed for 135% of the stated value and
dividends.

                                       18



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 7 - EXCHANGE AGREEMENTS (Continued)

Exchange Agreements - Woodward, LLC
-----------------------------------

On March 27, 2003, the Company entered into an exchange agreement with Woodward
LLC. The Company agreed to cancel the obligation to issue Woodward LLC 10
million shares of the Company's common stock due to the price reset, and in
exchange for $1.069 million worth of HomeCom Series G Preferred stock. In
addition, in a separate agreement, the Company agreed to retire all shares of
its outstanding Series A 3% Convertible Preferred stock held by Woodward LLC and
the rights of Woodward LLC to receive shares of the Company's Series B 5%
Convertible Preferred stock in exchange for 16,000 shares of Series D
Convertible Preferred stock of Markland. This transaction closed in May 2003. In
connection with such closing, Woodward terminated its security interest in the
shares of Markland owned by the Company, which security interest had been
granted in December 2002.

Exchange Agreement - HomeCom
----------------------------

On March 27, 2003, the Company entered into a license and exchange agreement
with HomeCom. As part of the agreement, HomeCom agreed to issue 11,250 shares of
Series F Convertible Preferred stock of HomeCom, $.01 par value per share, which
will represent, upon conversion, 75% of the issued and outstanding shares of
HomeCom stock, par value $.001 per share, subject to dilution related to common
stock issuable upon conversion of HomeCom's outstanding Series B-E Convertible
Preferred stock and warrants or options, and the Series G Convertible Preferred
stock of HomeCom convertible into common stock. The Company agreed to license
the rights it owns to the EKOR, HNIPU and Electro Magnetic Radiography (EMR)
technologies to HomeCom. The Company and HomeCom plan to file a proxy to
authorize the issuance of the additional shares. Upon the closing of the sale of
the HomeCom's existing web hosting business (which also requires stockholder
approval), the Company will have rights to majority control of the HomeCom Board
of Directors and responsibility for the assignment of any new executive
management positions in HomeCom. The above transactions closed in May 2003, at
which time a definitive license agreement was entered into between the Company
and HomeCom.

Intellectual Property Sales Agreement
-------------------------------------

On March 5, 2003, the Company acquired from Polymate, Ltd. the remaining 1%
ownership in the following technologies acquired or developed by Polymate, Ltd.
- HNIPU, Firesel, RAD-Y, Rubcon, Electronic Glues, Liquid Ebonite Materials
("LEM"), Kauton and Hypocorr. As part of the above March 27, 2003 license and
exchange agreement with HomeCom, Polymate, Ltd. will receive 1,500 shares of
HomeCom Series F Convertible Preferred stock for the relinquishment of its
rights to the above technologies. This transaction closed in May 2003.

NOTE 8 - STOCKHOLDERS' DEFICIENCY

On February 1, 2002, the Company amended its Articles of Incorporation to
designate 25,000 of its 5,000,000 authorized preferred stock as a "Series A 3%
Convertible Preferred Stock," par value $.01 per share, with a liquidation
preference of $100 per share. In February 2002, the Company entered into a
securities purchase agreement with Woodward LLC to purchase 25,000 shares of
Series A 3%

                                       19



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 8 - STOCKHOLDERS' DEFICIENCY (Continued)

Convertible Preferred Stock for $2,500,000. Through December 31, 2002, the
Company received, from the sale of such Preferred Stock, $2,500,000, less
commissions and expenses of $149,620.

The holder (Woodward LLC) of the Series A 3% Convertible Preferred Stock is
entitled to receive dividends at a rate of three percent per annum of the
liquidation preference of $100 per share, which is fully cumulative. The
dividends on the Series A 3% Convertible Preferred stock accrue from the date of
issuance of each share and are payable semi-annually on June 30 and December 30
of each year, commencing on June 30, 2002. The dividends on the Series A 3%
Preferred Stock are payable only when, as and if, declared by the Board of
Directors out of funds legally available.

At March 31, 2003, cumulative dividends in arrears on the Series A 3%
Convertible Preferred Stock was $76,450.

The holder of the Series A 3% Convertible Preferred Stock has no voting rights.
As of September 1, 2002, each Series A 3% Preferred Stock can be converted to
fully paid and non-assessable shares of common stock, at the option of the
holder by dividing $.50 into the liquidation preference. At the Company's
option, all accrued or declared, but unpaid dividends on the Series A 3%
Convertible Preferred Stock may be paid in cash or in common stock. Under a
repricing rights agreement dated February 1, 2002, common shares issued upon
conversion were subject to monthly repricing on or after October 1, 2002, if the
average bid price for any of the lowest five business days during the repricing
period were not equal or greater than $3.618.

On September 30, 2002, the Company entered into a termination and modification
agreement with Woodward LLC, with respect to the repricing rights agreement, and
all repricing rights with respect to the Series A Convertible Preferred stock
were satisfied in full in exchange for 17,000 shares of Series B 5% Convertible
Preferred stock of the Company.

Under certain circumstances, the Company, at its option, may redeem the Series A
3% Convertible Preferred Stock at $732.60 per share.

On January 16, 2003, Woodward LLC converted 3,519 shares of Series A 3%
Convertible Preferred Stock with a liquidation preference of $351,900 into
703,800 shares of common stock at a conversion price of $.50 per share.

On March 27, 2003, in connection with an exchange agreement, the Company agreed
to retire all shares of its outstanding Series A 3% Convertible Preferred Stock
(see Note 7).

Series B 5% Convertible Preferred Stock
---------------------------------------

On October 8, 2002, the Company amended its Articles of Incorporation to
designate 25,000 of its 5,000,000 authorized preferred stock as a "Series B 5%
Convertible Preferred stock", par value $.01 per share, with a liquidation
preference of $1,000 per share.

                                       20



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 8 - STOCKHOLDERS' DEFICIENCY (Continued)

Series B 5% Convertible Preferred Stock (Continued)
---------------------------------------------------

The holder of the Series B 5% Convertible Preferred stock is entitled to receive
dividends at a rate of five percent per annum of the liquidation preference of
$1,000 per share, which is fully cumulative. The dividends on the Series B 5%
Convertible Preferred stock accrue from the date of issuance of each share and
are payable annually.

As discussed above, on September 30, 2002, the Company agreed to issue to
Woodward LLC 17,000 shares (reduced by 5,725 shares) of its Series B 5%
Convertible Preferred stock in exchange for the cancellation of all repricing
rights with respect to the Series A 3% Convertible Preferred Stock. In addition,
during the year ended December 31, 2002, Woodward LLC purchased 175 shares of
Series B 5% Convertible Preferred stock for $175,000.

At March 31, 2003, cumulative dividends on the Series B 5% Convertible Preferred
stock was $291,404.

At the option of the Company, each share of the Series B Preferred stock is
redeemable by the Company for $1,000. The Series B Preferred stock was
convertible by the holder at various prices as defined in the agreement.
However, on March 27, 2003, in connection with an exchange agreement with
Woodward LLC, the Company agreed to retire the rights of Woodward LLC to receive
shares of the Company's Series B 5% Convertible Preferred stock (see Note 7).

New Equity Line
---------------

On March 27, 2003 Markland Technologies, Inc. entered into a Private Equity
Credit Agreement with Market LLC ("Market"). Markland agreed to issue and sell
to Market LLC up to $10,000,000 dollars worth of its common stock over the next
three years. Prior to any sales, the Company is required to file a registration
statement with the Securities and Exchange Commission, relating to the shares to
be issued, and to have such registration statement declared effective.

After the registration statement is declared effective, Markland will be able to
put shares to Market according to the terms outlined in the agreement. The
minimum put amount is $1,000,000 dollars over the life of the agreement and
$25,000 per put. Failure to satisfy the minimum put requirement over the life of
the Private Equity Credit Agreement will result in a charge to Markland.

Shares will be issued to Market, in connection with each put, at 92% of the
average of the closing bid prices for the lowest (3) three (not necessarily
consecutive) trading days during the (10) trading day period immediately
following the put date. Under certain conditions, the Company will be required
to issue additional shares and/or accrue financial penalties.

Common Stock Transactions
-------------------------

During January 2003, the Company entered into private placements with four
individuals and sold 5,500,000 shares of the Company's common stock for a price
of $.05 per share, totaling $275,000 of which $175,000 was received in December
2002.

                                       21



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 8 - STOCKHOLDERS' DEFICIENCY (Continued)

Common Stock Transactions (Continued)
-------------------------------------

On January 16, 2003, Woodward LLC converted 3,519 shares of Series A 3%
Convertible Preferred stock with a liquidation preference of $351,900 into
703,800 shares of common stock at a conversion price of $.50 per share.

On February 24, 2003, the Company entered into a creditor settlement agreement
with Verdi Consultants, Inc. The Company agreed to issue 528,082 restricted
shares of the Company's common stock in satisfaction of $84,493 owed by the
Company to Verdi Consultants, Inc. At the date of issuance, the stock was valued
using the average price for the five business days prior to the settlement
agreement.

Minority Interest in Subsidiary
-------------------------------

On December 9, 2002, Markland entered into an Exchange Agreement with Market LLC
and James LLC who agreed to exchange a note payable in the amount of $3,812,000
and $1,413,000, respectively ($5,225,000 in value) of convertible promissory
notes, inclusive of accrued interest for 5,225 shares (8,000 authorized, $.0001
par value, $1,000 per share liquidation preference) of Markland's newly issued
Series C Cumulative Convertible Preferred Stock, ("Series C Preferred Stock").

The holders of the Series C Preferred Stock are entitled to receive dividends on
each share of preferred stock, which shall accrue on a daily basis at the rate
of 5% per annum on the sum of the liquidation preference plus all accumulated
and unpaid dividends thereon. These dividends shall accrue whether or not they
have been declared or there are legally available funds with which to pay them,
and at the option of the holders are payable either in cash or in unrestricted
Markland common stock.

The Series C Preferred Stock is redeemable at any time by Markland, and cannot
be converted by the holders without written permission for a period of 6 months
following the issuance of the shares and then only 10% may be converted per
month thereafter. The Series C Preferred Stock is convertible at the option of
the holder at a conversion price ranging from 65% to 80% of the Markland common
stock's market price at the time of the conversion, subject to an adjustment
pursuant to any stock split. The amount of the associated discount is dependent
upon the market price at the time of the conversion.

As of the date of issuance in accordance with EITF 98-5, "Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios," the Company calculated that as of the date of
issuance there was a beneficial conversion feature in the amount of $1,306,250.
In accordance, with the EITF, Markland has recorded a deemed dividend of
$65,018, in the quarter ended March 31, 2003, relating to the accretion of the
beneficial conversion feature of the Series C Preferred Stock, which was
included in minority expense. The deemed dividend increases the loss
attributable to common stockholders in the calculation of basic and diluted net
loss per common share and is included in stockholders' deficiency as a charge to
accumulated deficit and a credit to additional paid-in capital. As the Series C
Preferred Stock is convertible in stages over a period of 16 months, Markland
will record the accrual of the deemed dividend of the beneficial conversion
feature over this same period.

                                       22



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 8 - STOCKHOLDERS' DEFICIENCY (Continued)

Minority Interest in Subsidiary (Continued)
-------------------------------------------

In addition, Markland has determined that the maximum potential exposure under
the beneficial conversion feature using the assumption that the fair market
value of the Markland common stock is $.15 at the date of conversion and,
accordingly, a conversion price at 65% of market value should be used, amounts
to approximately $2,800,000.

For the quarter ended March 31, 2003, dividends of approximately $161,875 were
accrued for the preferred stock and were included in minority interest expense.

The holders are not subject to any limitations on the number of conversions of
Series C Preferred Stock or subsequent sales of the corresponding Markland
common stock that they can effect, other than a prohibition on any holder having
a beneficial ownership of more than 9.999% of the outstanding shares of
Markland's common stock.

Warrants
--------

In March 2003, in order to assist the Company to raise additional working
capital, the Company entered into warrant cancellation agreements with three
individuals canceling 525,000 warrants with exercise prices ranging from $1.00
to $3.00. The Company agreed to issue those warrants back to the three
individuals once the filing of all necessary amendments to the Articles of
Incorporation of the Company to authorize an increase in the number of
authorized shares of common stock to at least 200,000,000 shares.

At March 31, 2003, the Company had outstanding warrants to purchase 2,706,333
shares of the Company's common stock at prices ranging from $0.34 to $5.00 per
share.

The following table summarizes the common stock warrants transactions during the
three months ended March 31, 2003:

<TABLE>
<CAPTION>
                                                      Number of
                                                       Warrants      Exercise Prices     Expiration Date
                                                     ------------    ---------------     ---------------
<S>                                                   <C>            <C>                      <C>
Balance outstanding at December 31, 2002              3,231,333
  Granted                                                     -                    -
  Exercised                                                   -                    -
  Cancelled                                            (525,000)     $ 1.00 - $ 3.00          11/06
                                                     -----------
Balance outstanding at March 31, 2003                 2,706,333
                                                     ===========
</TABLE>

                                       23



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 8 - STOCKHOLDERS' DEFICIENCY (Continued)

Options
-------

In March 2003, in order to assist the Company to raise additional working
capital, the Company entered into option cancellation agreements with three
individuals canceling 1,075,000 options with exercise prices ranging from $.50
to $.71. The Company agreed to issue those warrants back to the three
individuals once the filing of all necessary amendments to the Articles of
Incorporation of the Company to authorize an increase in the number of
authorized shares of common stock to at least 200,000,000 shares.

<TABLE>
<CAPTION>
                                                                                               Weighted
                                                             Weighted         Outside the      Average
                                      Under the Plans        Average             Plans         Exercise
                                       Stock Options      Exercise Price     Stock Options      Price
                                      ---------------     --------------     -------------     --------
<S>                                       <C>                 <C>               <C>              <C>
Balance at December 31, 2002              1,062,500           $ 1.65            2,844,000        $ .75
  Granted                                         -                -
  Exercised                                       -                -
  Cancelled                                (450,000)            (.71)            (625,000)        (.50)
                                          ----------          -------           ----------       ------
Balance at March 31, 2003                   612,500           $ 2.34            2,219,000        $ .82
                                          ==========          =======           ==========       ======
</TABLE>

Earnings Per Share
------------------

Securities that could potentially dilute basic earnings per share ("EPS") in the
future, and that were not included in the computation of diluted EPS because to
do so would have been anti-dilutive for the periods presented, consist of the
following:

         Common shares potentially issuable in connection
         with conversion of the Series A and B preferred stock          (A)

         Options to purchase common stock                            2,831,500

         Warrants to purchase common stock                           2,706,333

         Repricing rights provisions under common stock sales        10,000,000
                                                                    ------------
                                                                     15,537,833
                                                                    ============

         (A) The potential dilution of the Series A and Series B Convertible
Preferred stock as of March 31, 2003 is not reflected above as a result of a
March 27, 2003 agreement under which, all Series A and Series B Convertible
Preferred shares are to be retired in May 2003 (See Note 7).

                                       24



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 9 - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

Office Lease and Required Security Deposit
------------------------------------------

On August 30, 2000, the Company entered into a lease agreement for office space
in Fairfax, Virginia for a period of five years. Under the lease agreement,
annual rent approximates $224,000 subject to certain escalation adjustments. In
connection with this lease, the Company is required to provide the landlord with
a stand-by letter of credit in the amount of $224,038. The stand-by letter of
credit is to be renewed annually and at September 1, 2002, the Company did not
renew this stand-by letter of credit.

The landlord, SMII Fairfax, LLC, as of December 31, 2002, claims that the
Company owes back rent of $59,562, which has been accrued by the Company. On
February 14, 2003, the landlord filed suit in the Fairfax County General
District Court alleging breach of contract for unlawful detainer. Without
admitting or denying liability, the Company is currently negotiating with the
landlord and expects a settlement in the near future.

New Compensation Agreements
---------------------------

On March 28, 2003, the Company entered into a two-year employment agreement with
Carey Naddell. Under the terms of the agreement, Mr. Naddell shall be the
Company's Chief Operating Officer during the period, which will be completed
within three months. After that, he will assume the office of the President and
Chief Executive Officer and any additional duties assigned by the Board of
Directors. The Company agreed to pay a salary of $10,000 per month and 1,000,000
shares of the Company's common stock.

Effective January of 2003, Markland entered into four one-year compensation
agreements with two officers and two consultants to the Company, which provide
for aggregate yearly remuneration of $570,000.

In addition, these agreements provide for the issuance of 6.01% of Markland's
outstanding common stock in three installments, 50% of the shares will be issued
on or about March 21, 2003, 25% of the shares on or about July 1, 2003 and 25%
of the shares on or about October 1, 2003. If necessary, an additional issuance
will occur on December 31, 2003, so that the total amount of shares issued up to
December 31, 2003 will equal 6.01% of the outstanding common stock as of
December 31, 2003. Based 310 million common shares outstanding, a total of
approximately 19,000,000 shares of Markland's common stock would be issuable
under these compensation agreements, of which 9,345,225 were issued during the
quarter ended March 31, 2003. The amount charged to operations related to these
agreements for the three months ended March 31, 2003 was $1,401,784.

During the months of February and March 2003, Markland entered into four new
one-year consulting agreements, which provide for aggregate monthly remuneration
of $3,000. In connection with those agreements, Markland issued 3,800,000 shares
of its restricted common stock. The shares were valued at $890,000, of which
$67,083 was charged to operations as of March 31, 2003.

                                       25



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 9 - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Agreement to Acquire ASI Technology Corporation Assets
------------------------------------------------------

On March 19, 2003, Markland and ASI Technology Corporation, a Nevada
corporation, ("ASI") entered into a Technology Purchase Agreement (the
"Agreement"). Under the Agreement, ASI agreed to sell and the Company agreed to
purchase certain assets relating to ASI's gas plasma antenna technology,
including patents, patent applications, equipment, government contract rights
and other intellectual property rights. The closing of the transaction will
occur on the earlier of the date the last of the government contracts are
assigned to Markland or ninety days after the date of the Agreement (June 17,
2003). ASI will be responsible for the performance of its obligations under the
contracts until they are assigned to the Company and will pay the Company all of
its revenues from the contracts billed for periods after April 1, 2003. Markland
has agreed to use its best efforts to manage and administer the contracts during
this period prior to closing and to pay ASI a fee of $2,500 per month for
administrative support.

In consideration, Markland agreed to pay ASI $1,150,000 dollars. $150,000 in
cash, $10,000 of which was paid on execution of the Agreement and $10,000 of
which is payable every thirty days following the date of execution of the
Agreement until the closing, at which time the remaining balance is due and
payable. In addition to the cash payment, the Company is required to issue to
ASI, on closing, $1,000,000 dollars worth of the Company's common stock at the
then current market price. In the event that the Company fails to register such
stock on behalf of ASI, the Company will have to issue an additional $150,000 of
stock to ASI.

In connection with the Agreement, ASI and Markland entered into a registration
rights agreement entitling ASI to include its shares of Markland's common stock
in future registration statements filed by Markland under the Securities Act of
1933 in connection with public offerings of Markland's common stock.

Also in connection with the Agreement, ASI and Markland entered into a
sublicense agreement pursuant to which ASI has sublicensed to Markland the right
to develop and sell products to certain government, military and homeland
security customers in the United States and Canada using Markland's plasma
sterilization and decontamination technology.

The closing of the sale of the plasma antenna technology is subject to a number
of conditions and the Agreement may be terminated prior to closing under certain
circumstances.

As of March 31, 2003, Markland paid an advance of $15,000 with respect to above
purchase agreement.

Risk of Environmental Liability; Present Lack of Environmental Liability Self
Insurance
-----------------------------------------------------------------------------

The Company's radioactive contaminant technology is subject to numerous national
and local laws and regulations relating to the storage, handling, emission,
transportation and discharge of such materials, and the use of specialized
technical equipment in the processing of such materials. There is always the
risk that such materials might be mishandled, or that there might be equipment
or technology failures, which could result in significant claims for personal
injury, property damage, and clean-up or remediation. Any such claims against
the Company could have a material adverse effect on the Company. The Company
does not presently carry any environmental liability insurance, and may be
required to obtain such

                                       26



<PAGE>

                         EUROTECH, LTD. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 9 - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS (Continued)

Risk of Environmental Liability; Present Lack of Environmental Liability Self
Insurance (Continued)
-----------------------------------------------------------------------------

insurance in the future in amounts that are not presently predictable. There can
be no assurance that such insurance will provide coverage against all claims,
and claims may be made against the Company (even if covered by insurance
policies) for amounts substantially in excess of applicable policy limits. Any
such event could have a material adverse effect on the Company.

Business Risks
--------------

The Company requires additional funds to commercialize its technologies and
continue research and development efforts. Until the commencement of sales, the
Company will have no operating revenues, but will continue to incur substantial
expenses and operating losses. No assurances can be given that the Company can
complete development of any technology not yet completely developed or that,
with respect to any technology that is fully developed, products incorporating
the technology can be manufactured on a large-scale basis or at a feasible cost.
Further, no assurance can be given that any technology will receive market
acceptance.

NOTE 10 - SUBSEQUENT EVENTS

On May 12, 2003, HomeCom Communications, Inc. ("HomeCom") entered into a Private
Equity Credit Agreement ("HomeCom Equity Agreement") with Market LLP
("Investor"). Pursuant to the HomeCom Equity Agreement, and upon the terms and
subject to condition contained therein, HomeCom has agreed to issue and sell to
Investor up to $10,000,000 of the common stock of HomeCom, $.0001 par value per
share (the "Common Stock").

On April 30, 2003, HomeCom issued a secured promissory note ("Note") due
September 30, 2003 to Macnab LLC (the "Holder"). As per the Note, HomeCom
promises to pay the Holder for value received the principal sum of $150,000,
plus interest of 10% per annum on or before September 30, 2003 (the "Maturity
Date"). HomeCom shall pay the principal amount of the Note, plus interest, at
the earlier of the Maturity Date upon the occurrence of an event of default
defined in the Note. This Note is collateralized by all of HomeCom's assets.

                                       27



<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.

THE FOLLOWING IS A DISCUSSION OF OUR FINANCIAL CONDITION, RESULTS OF OUR
OPERATIONS AND LIQUIDITY. THIS DISCUSSION SHOULD BE READ TOGETHER WITH OUR
FINANCIAL STATEMENTS AND NOTES INCLUDED IN THIS REPORT IN RESPONSE TO ITEM 8
BELOW.

CERTAIN INFORMATION IN THIS REPORT, INCLUDING THE FOLLOWING DISCUSSION, MAY
INCLUDE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. WE INTEND THE DISCLOSURE IN
THESE SECTIONS AND THROUGHOUT THIS REPORT TO BE COVERED BY THE SAFE HARBOR
PROVISIONS FOR FORWARD-LOOKING STATEMENTS. ALL STATEMENTS REGARDING OUR EXPECTED
FINANCIAL POSITION AND OPERATING RESULTS, OUR BUSINESS STRATEGY, OUR FINANCING
PLANS, AND THE OUTCOME OF ANY CONTINGENCIES ARE FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS CAN SOMETIMES BE IDENTIFIED BY THE COMPANY'S USE OF
FORWARD-LOOKING WORDS SUCH AS "MAY," "BELIEVE," "PLAN," "WILL," "ANTICIPATE,"
"ESTIMATE," "EXPECT," "INTEND" AND OTHER PHRASES OF SIMILAR MEANING. KNOWN AND
UNKNOWN RISKS, UNCERTAINTIES, AND OTHER FACTORS COULD CAUSE THE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY THE STATEMENTS. THE
FORWARD-LOOKING INFORMATION IS BASED ON VARIOUS FACTORS AND WAS DERIVED USING
NUMEROUS ASSUMPTIONS.

YOU SHOULD CAREFULLY CONSIDER THE ASSUMPTIONS DESCRIBED BELOW AND ELSEWHERE IN
THIS REPORT. IF FORWARD-LOOKING STATEMENTS FAIL TO ACTUALLY OCCUR, OUR BUSINESS,
BUSINESS PROSPECTS, FINANCIAL CONDITION OR OPERATING RESULTS MAY BE HARMED. IN
THAT CASE, THE TRADING PRICE OF OUR COMMON STOCK MAY DECLINE OR WE MAY BE FORCED
OUT OF BUSINESS AND YOU COULD LOSE YOUR ENTIRE INVESTMENT IN US.

IF WE ARE UNABLE TO ADEQUATELY PROTECT OR ENFORCE OUR RIGHTS TO INTELLECTUAL
PROPERTY OR MAINTAIN RIGHTS TO THIRD-PARTY PATENTS, WE MAY LOSE VALUABLE RIGHTS,
EXPERIENCE REDUCED MARKET SHARE, ASSUMING ANY, OR INCUR COSTLY LITIGATION TO
PROTECT SUCH RIGHTS.

OUR FINANCIAL STATEMENTS WERE PREPARED ON THE ASSUMPTION THAT WE WILL CONTINUE
AS A GOING CONCERN, AND OUR INDEPENDENT ACCOUNTANT HAS EXPRESSED A SUBSTANTIAL
DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.

As a result of our losses from operations and our limited capital resources,
investors should be aware that there are serious risks of us not being able to
continue as a going concern. In the event that we are unable to raise additional
funds from private as well as public sources and/or do not achieve our planned
growth in revenue, we may be required to discontinue some or all of our
operations, to reduce the development of some or all of our products, or to
reduce our workforce, all of which would materially adversely effect our
business. There can be no assurance that such capital would be available to us,
or, if it is available to us, that it would be on terms favorable to us.

OVERVIEW

We are a technology transfer, holding, marketing, and management company engaged
in the business of acquiring, developing, and marketing emerging chemical and

                                       28



<PAGE>

electronic technologies designed to create products for use in the environmental
and security sectors. We manage engineering and scientific development programs
designed to identify products and processes that have differentiated
characteristics with possibly reduced manufacturing and/or use risks. Our
portfolio of technologies and potential products include: (a) through our
HomeCom subsidiary (i) proprietary materials created to specifically solve the
problems of how nuclear and other hazardous wastes are cost effectively
contained, and (ii) advanced performance materials for use in industrial
products such as coatings and paints, and (b) through our Markland subsidiary,
automatic detection of explosives and illicit materials for use in homeland
security. We are seeking to commercialize our technologies using various
financial and transactional vehicles including: technology transfer, licensing,
joint venture, and distribution agreements.

Our business is divided into three divisions: (i) Nuclear & Environmental
Technology Solutions, (ii) Security & Safeguards (which is currently conducted
through our Markland subsidiary) and (iii) Advanced Performance Materials.

Our nuclear and environmental technologies consist of a family of silicon-based
geopolymers known as EKOR(TM), a fire-resistant surface fixative known as Rad-X
and a set of remote sensing technologies (known as Electromagnetic Radiography,
or EMR, and Acoustic Core, or AC) for subsurface investigation. All three
technologies are aimed at initial opportunities for sale or licensing within key
U.S. Department of Energy, or DOE, geographic areas and overseas in the United
Kingdom, Germany and Russia. During 2002, we completed several demonstration
contracts for EKOR(TM) In December, 2002, we agreed to license the rights that
we own to the AC technology to Markland. In March, 2003, we entered into an
agreement to license the rights that we own to certain of these technologies of
HomeCom. We entered into such agreement with HomeCom in May 2003 See "Business
-- Recent Events" below.

Our safeguards and security technologies, now conducted through Markland, are
intended to provide or be a part of cost efficient and reliable solutions to
homeland security needs. Two technologies currently under development are the AC
technology and Crypto.com(TM) relating to, respectively, "in-situ" detection of
various materials including certain explosives and illicit materials and
"cyber-space" security solutions to provide a high level of encryption-based
security. We have also previously launched, and Markland continues to develop, a
development program for an Automated Portal Threat Inspection System, or APTIS,
to fill a homeland security need for automatic, efficient screening for plastic
explosives carried by personnel and baggage at airports and secure facilities.

Our advanced performance materials technologies centers around other technology
not related to hazardous waste and security. The technology based upon Hybrid
Nonisocyanate Polyurethane, or HNIPU, is intended as a replacement for
conventional polyurethane binders, commercial coatings, paints, adhesives, and
foams. We are in discussions with domestic and international parties relating to
licensing, selling and/or joint venturing for developing and commercializing
certain HNIPU technologies and variants. The technologies can be used,
potentially, for non-toxic industrial paints and coatings and non-toxic foam
products such as, but not limited to, certain components contained in automotive
interiors.

During second quarter 2002, we successfully demonstrated an acrylic version of
HNIPU. In March, 2003, we entered into an agreement to license the rights that
we own in HNIPU to HomeCom.

We hold a greater than 50% equity interest in several Israeli research and
development companies which may be deemed to be subsidiaries. In addition, we
also own a majority interest in Crypto.com, Inc., a Delaware corporation, which,
prior to the Markland transaction, held certain encryption technology assets
currently under development. Such assets, including the trademark "crypto.com"
were transferred to Markland in December 2002, although Crypto, though holding
no assets, remains a majority-owned subsidiary of ours.

                                       29



<PAGE>

We were incorporated under the laws of the District of Columbia on May 26, 1995.
Our executive office is located at 8665 Sudley Road, #608, Manassas, Virginia
20110 and our telephone number is (703) 753-9149. Each of our operational
divisions (some conducted through subsidiaries) are described in the following
sections. In this Report, the terms "Company," "we," "us," "our" and similar
terms refer to Eurotech, Ltd., a District of Columbia corporation.

OUR RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2003 COMPARED WITH THREE MONTHS ENDED MARCH 31,
2002

For the three months ended March 31, 2003 and the three months ended March 31,
2002, we incurred operating losses of $2,381,869 and $2,639,300 respectively.
The decreased losses result principally from decreased expenses incurred in the
acquisition and development of our technologies, consulting costs, general and
administrative expenses without an offsetting increase in revenues.

For the three months ended March 31, 2003, we recognized $322,612 in revenue
from operations relating to the Markland acquisition of Ergo. For the three
months ended March 31, 2002, we recognized $55,585 in revenue.

Research and development expenses decreased by $184,775 to $40,796 for the three
months ended March 31, 2003 from $225,571 for the three months ended March 31,
2002. During the first three months in 2003, we spent $40,676 to develop
technologies. We continued to fund the commercialization of EKORTM, including
variants and product improvements being further developed, in Russia, by
scientists and researchers at Kurchatov Institute and members of Euro-Asian
Physical Society (EAPS).

Consulting expenses increased by $769,696 to $1,597,270 for the three months
ended March 31, 2003 from $827,574 for the three months ended March 31, 2002,
which includes $1,515,564 for the three months ended March 31, 2003 and $444,634
for the three months ended March 31, 2002 of compensatory element of stock
issuances pursuant to consulting and other agreements. The increase in
consulting expense resulted principally from a increase in the number of
consultants the Company paid with warrants and/options working in our business
development area.

Other general and administrative expenses decreased by $283,510 to $810,655 for
the three months ended March 31, 2003 from $1,094,165 for the three months ended
March 31, 2002. The decrease is attributable principally to decreases in
expenses associated with office rent, legal expenses, and employee benefits.

Depreciation and amortization decreased by $371,806 to $169,962 for the three
months ended March 31, 2003 from $541,768 for the three months ended March 31,
2002. The decrease is attributable to EKOR(TM)'s impairment during December
2002.

Other expenses/other income decreased by $26,496 to $395,357 for the three
months ended March 31, 2003 from $421,853 for the three months ended March 31,
2002. Such amounts are insignificant to total operating results.

                                       30



<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

SUMMARY OF WORKING CAPITAL AND STOCKHOLDERS' DEFICIENCY

As of March 31, 2003, we had working capital deficiency of $3,797,617 and
Shareholders' Deficiency of $5,733,470 compared to March 31, 2002 in which the
Company had a working capital deficiency of approximately $3,159,106 and
Stockholders' Deficiency of $4,892,872.

LIQUIDITY

Since we have yet to generate significant revenues from our various business
activities, we are dependent on financing our operating expenses from issuances
of equity or debt securities. As of July 3, 2003, we had approximately $14,000
in cash and cash equivalents. The Restructuring Agreements with Woodward allows
for a potential funding source for up to an additional $1,300,000 on a basis
going forward.

During the first quarter 2003, we sold 5,500,000 units to four accredited
investors at $0.05 per share. We raised $275,000 from the sale of these units,
which $175,000 was received in the 4th quarter of 2002.

We are investigating additional various financing options to meet our short-term
liquidity needs. This effort is impeded by the fact that essentially all of our
outstanding authorized capital is already committed pursuant to the outstanding
financing transactions with Woodward. We believe our shareholders should agree
to increase our authorized capital at a special meeting of shareholders to be
held later in the year. If our shareholders do vote to increase our authorized
capital, we believe that we should be able to arrange a transaction or
transactions to meet our short-term liquidity needs. However, there can be no
assurances that our shareholders will vote to approve an increase in our
authorized capital or that we will be able to arrange a transaction or
transactions to meet our short-term liquidity needs, in which case we would most
likely be unable to continue in business. Again, depending on the market price
of our outstanding common stock, further financing may cease to be available or
be available only on terms that result in an unacceptable level of dilution.

ITEM 3.  CONTROLS AND PROCEDURES.

The Company's Chief Executive Officer and Chief Financial Officer (collectively,
the "Certifying Officers") are responsible for establishing and maintaining
disclosure controls and procedures for the Company. Such officers have concluded
(based on their evaluation of these controls and procedures as of a date within
90 days of the filing of this report) that the Company's disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in this report is accumulated and communicated to the Company's
management, including its principal executive officers as appropriate, to allow
timely decisions regarding required disclosures.

The Certifying Officers also have indicated that there were no significant
changes in the Company's internal controls or other factors that could
significantly affect such controls subsequent to the date of their evaluation,
and there were no corrective actions with regard to significant deficiencies and
material weaknesses.

                                       31



<PAGE>

                       NOTE ON FORWARD-LOOKING STATEMENTS

The information set forth in this Report on Form 10-QSB under the Sections
"Management's Discussion and Analysis or Plan of Operation", "Management's plans
regarding liquidity and capital resources" and elsewhere relate to future events
and expectations and as such constitute "Forward-Looking Statement" within the
meaning of the Private Securities Litigation Act of 1995. The words "believes,"
"anticipates," "plans," "expects," and similar expressions in this report are
intended to identify forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties, and other factors which may
cause the actual results, performance or achievements of the Company to
materially differ from any future results, performance, or achievements
expressed or implied by such forward-looking statements and to vary
significantly from reporting period to reporting period. Such factors include,
among others, those listed from time to time in the Company's filings with the
Securities and Exchange Commission. Although management believes that the
assumptions made and expectations reflected in the forward-looking statements
are reasonable, there is no assurance that the underlying assumptions will, in
fact, prove to be correct or that actual future results will not be different
from the expectations expressed in this report.

                                       32



<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

On February 14, 2003, SMII Fairfax, LLC, the landlord of the Company's corporate
headquarters located at 10306 Eaton Place, Fairfax, Virginia, filed suit in the
Fairfax County General District Court alleging breach of contract for unlawful
detainer. Without admitting or denying liability, the Company has CONSENTED TO
JUDGMENT AND IS EXPECTING A COURT RULING; in connection therewith, the Company
has vacated such premises. While the Company looks for permanent space, the
Company has established a mail stop located at 8665 Sudley Road, #608, Manassas,
Virginia 20110.

On October 21, 2002, our former legal counsel filed a Demand for Arbitration
before the American Arbitration Association seeking $288,755 dollars in alleged
unpaid legal fees from us. The dispute was subsequently resolved pursuant to a
Settlement Agreement dated April 15, 2003 pursuant to which we are to pay such
counsel the sum of $310,581 by a combination of cash and stock in accordance
with a schedule and on the terms set forth in the Settlement Agreement. The
satisfaction of this payment obligation is to occur no later than by December
22, 2003.

The Company may, from time to time, be involved in actual or potential legal
proceedings that the Company considers to be in the normal course of business.
The Company does not believe that any of these proceedings will have a material
adverse effect on its business.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits

                  Exhibit
                  Index
                  Number            Description
                  ------            -----------

                  10.31.5  License Agreement, dated May 22, 2003, between
                           Eurotech, Ltd. and HomeCom Communications, Inc.

                  10.31.6  First Amendment to Exchange Agreement, dated May 22,
                           2003, between Eurotech, Ltd. and Woodward, LLC

                  10.31.7  Termination of Pledge and Security Agreement, dated
                           May 22, 2003, between Eurotech, Ltd., Woodward, LLC
                           and Krieger & Prager LLP.

                  99.1     Certification Pursuant To 18 U.S.C. Section 1350, As
                           Adopted Pursuant to Section 906 Of The Sarbanes-Oxley
                           Act Of 2002(*)

                  99.2     Certification Pursuant To 18 U.S.C. Section 1350, As
                           Adopted Pursuant to Section 906 Of The Sarbanes-Oxley
                           Act Of 2002(*)

* A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.

         (b)      Reports on Form 8-K

                  On April 7, 2003, the Company filed a report on Form 8-K
                  regarding the execution of a definitive agreement with HomeCom
                  Communications, Inc. and related matters.

                                       33



<PAGE>

                                   SIGNATURES

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

                                     EUROTECH, LTD.

Date:  July 10, 2003                 By: /s/ Carey Naddell
                                         -------------------------------------
                                         Carey Naddell, President and
                                         Chief Executive Officer
                                         (Principal Executive Officer)

Date:  July 10, 2003                 By: /s/ Randolph A. Graves
                                         -------------------------------------
                                         Randolph A. Graves, Vice President,
                                         Secretary and Chief Financial Officer
                                         (Principal Financial Officer)

                                       S-1



<PAGE>

                                  CERTIFICATION

I, Carey Naddell, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Eurotech, Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The Registrant's other certifying officer and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have:

         (a)      designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant is made
                  known to us by others, particularly during the period in which
                  this quarterly report is being prepared;

         (b)      evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the Evaluation
                  Date); and

         (c)      presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on my
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors;

         (a)      all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         (b)      any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6. The Registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: July 10, 2003

/s/ Carey Naddell
-------------------------------------
Carey Naddell
President and Chief Executive Officer



<PAGE>

                                  CERTIFICATION

I, Randolph A. Graves, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Eurotech, Ltd.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The Registrant's other certifying officer and I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have:

         (a)      designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant is made
                  known to us by others, particularly during the period in which
                  this quarterly report is being prepared;

         (b)      evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the Evaluation
                  Date); and

         (c)      presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5. The Registrant's other certifying officer and I have disclosed, based on my
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors;

         (a)      all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         (b)      any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6. The Registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: July 10, 2003

/s/ Randolph A. Graves
-----------------------------------------------------
Randolph A. Graves
Vice President, Secretary and Chief Financial Officer