SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 1999

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934.

For the transition period from _______________________ to _____________________.

Commission File Number 333-26673

                    ----------------------------------------

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

     District of Columbia                                        33-0662435
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                              1216 16th Street, NW
                                    Suite 200
                            Washington, DC 20036-3772
                    (Address of principal executive offices)

                                 (202) 466-5591
                           (Issuer's telephone number)

               ---------------------------------------------------
               (Former name, former address and former fiscal year
                          if changed since last report)

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

                              Yes |X|       No |_|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 23,149,454 shares of Common Stock,
$0.00025 par value, were outstanding as of June 30, 1999.

Transitional Small Business Disclosure Forms (check one):

                              Yes |_|       No |X|
<PAGE>

                                 EUROTECH, LTD.
                         (A Development Stage Company)
                               INDEX TO FORM 10Q
                                 JUNE 30, 1999

                                                                       Page Nos.
                                                                       ---------

PART I - FINANCIAL INFORMATION:

      ITEM I - FINANCIAL STATEMENTS

            BALANCE SHEETS                                                F-1
                  At December 31, 1998 and June 30, 1999

            STATEMENTS OF OPERATIONS                                      F-2
                  For the Six Months Ended June 30, 1998 and
                  1999 For the Period from Inception (May 26,
                  1995) to June 30, 1999

            STATEMENTS OF OPERATIONS                                      F-3
                  For the Three Months Ended June 30, 1998 and 1999

            STATEMENTS OF STOCKHOLDERS' DEFICIENCY                     F-4 - F-7
                  For the Period from Inception (May 26, 1995)
                  to December 31, 1998 For the Six Months
                  Ended June 30, 1999

            STATEMENTS OF CASH FLOWS                                      F-8
                  For the Six Months Ended June 30, 1998 and
                  1999 For the Period from Inception (May 26,
                  1995) to June 30, 1999

            NOTES TO FINANCIAL STATEMENTS                             F-9 - F-15

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

PART II - OTHER INFORMATION
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                                 BALANCE SHEETS

                                     ASSETS
                                    (Note 2)

<TABLE>
<CAPTION>
                                                              At December 31, 1998    At June 30, 1999
                                                              --------------------    ----------------
                                                                                        (Unaudited)
<S>                                                               <C>                   <C>
CURRENT ASSETS:
  Cash                                                            $      1,940          $    156,887
  Receivable from related parties                                        5,918                 5,918
  Prepaid expenses and other current assets                                200                 6,481
                                                                  ------------          ------------

    TOTAL CURRENT ASSETS                                                 8,058               169,286

PROPERTY AND EQUIPMENT - net of accumulated
  depreciation                                                          31,846                27,749

OTHER ASSETS:
  Organization and patent costs - net of accumulated
    amortization                                                        26,587                25,555
  Deferred financing costs                                               2,361                    --
  Other assets                                                           7,551                 9,750
                                                                  ------------          ------------

    TOTAL ASSETS                                                  $     76,403          $    232,340
                                                                  ============          ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
  Convertible notes payable                                       $         --          $    450,000
  Accrued liabilities                                                1,716,809             2,318,125
  Deferred revenue                                                     225,000               375,000
                                                                  ------------          ------------

    TOTAL CURRENT LIABILITIES                                        1,941,809             3,143,125
                                                                  ------------          ------------

CONVERTIBLE DEBENTURES                                               6,970,000             6,660,000
                                                                  ------------          ------------

COMMITMENTS AND OTHER MATTERS (Notes 1, 2, 3, 5 and 6)

STOCKHOLDERS' DEFICIENCY:
  Preferred stock - $0.01 par value; 1,000,000 shares
    authorized; -0- shares issued and outstanding                           --
  Common stock - $0.00025 par value; 50,000,000 shares
    authorized; 19,621,882 and 23,349,454 shares issued and
    outstanding at December 31, 1998 and June 30, 1999,
    respectively                                                         4,905                 5,837
  Additional paid-in capital                                        15,452,783            17,175,640
  Unearned financing costs                                             (47,500)               (4,873)
  Deficit accumulated during the development stage                 (24,245,594)          (26,747,389)
                                                                  ------------          ------------

    TOTAL STOCKHOLDERS' DEFICIENCY                                  (8,835,406)           (9,570,785)
                                                                  ------------          ------------

    TOTAL LIABILITIES AND STOCKHOLDERS'
      DEFICIENCY                                                  $     76,403          $    232,340
                                                                  ============          ============
</TABLE>

See notes to financial statements.


                                      F-1
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                            For the Period
                                                       For the Six Months Ended June 30,    from Inception
                                                       --------------------------------    (May 26, 1995) to
                                                            1998               1999          June 30, 1999
                                                        ------------       ------------    -----------------
<S>                                                     <C>                <C>                <C>
REVENUES                                                $         --       $         --       $         --
                                                        ------------       ------------       ------------

OPERATING EXPENSES:
  Research and development                                   560,511            493,149          3,923,254
  Consulting fees                                            178,476            317,486          1,708,357
  Compensatory element of stock issuances pursuant
     to consulting agreements                                326,871            660,088          3,131,315
  Other general and administrative expenses                  881,669            397,552          3,504,505
                                                        ------------       ------------       ------------

    TOTAL OPERATING EXPENSES                               1,947,527          1,868,275         12,267,431
                                                        ------------       ------------       ------------

OPERATING LOSS                                            (1,947,527)        (1,868,275)       (12,267,431)
                                                        ------------       ------------       ------------

OTHER EXPENSES:
  Interest expense                                           429,720            341,107          1,208,240
  Amortization of deferred and unearned financing
    costs                                                  3,049,661            292,413         13,271,718
                                                        ------------       ------------       ------------

    TOTAL OTHER EXPENSES                                   3,479,381            633,520         14,479,958
                                                        ------------       ------------       ------------

NET LOSS                                                $ (5,426,908)      $ (2,501,795)      $(26,747,389)
                                                        ============       ============       ============

NET LOSS PER COMMON SHARE                               $       (.28)      $       (.12)
                                                        ============       ============

WEIGHTED AVERAGE NUMBER OF COMMON
    SHARES OUTSTANDING                                    19,248,919         20,622,701
                                                        ============       ============
</TABLE>

See notes to financial statements.


                                      F-2
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                           For the Three Months Ended June 30,
                                                           -----------------------------------
                                                                 1998               1999
                                                             ------------       ------------
<S>                                                          <C>                <C>
REVENUES                                                     $         --       $         --
                                                             ------------       ------------

OPERATING EXPENSES:
  Research and development                                        252,840            199,376
  Consulting fees                                                  68,434            203,586
  Compensatory element of stock issuances pursuant
    to consulting agreements                                      215,931            570,188
  Other general and administrative expenses                       322,288            243,336
                                                             ------------       ------------

    TOTAL OPERATING EXPENSES                                      859,493          1,216,486
                                                             ------------       ------------

OPERATING LOSS                                                   (859,493)        (1,216,486)
                                                             ------------       ------------

OTHER EXPENSES:
  Interest expense                                                299,095            173,593
  Amortization of deferred and unearned financing costs         1,803,433            160,687
                                                             ------------       ------------

    TOTAL OTHER EXPENSES                                        2,102,528            334,280
                                                             ------------       ------------

NET LOSS                                                     $ (2,962,021)      $ (1,550,766)
                                                             ============       ============

NET LOSS PER COMMON SHARE                                    $       (.16)      $       (.07)
                                                             ============       ============

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING                                                  19,554,670         21,170,622
                                                             ============       ============
</TABLE>

See notes to financial statements.


                                      F-3
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                                   (UNAUDITED)

        FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998
                     AND THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>


                                                                          Common Stock               Additional
                                                       Date of    ----------------------------         Paid-in
Period Ended December 31, 1995:                      Transaction   Shares (1)        Amount            Capital
------------------------------                       -----------  -----------      -----------       -----------
<S>                                                    <C>        <C>              <C>               <C>
Founder shares issued ($0.00025 per share)             05/26/95     4,380,800      $     1,095       $    (1,095)
Issuance of stock for offering consulting fees
  ($0.0625 per share)                                  08/31/95       440,000              110            27,390
Issuance of stock ($0.0625 and $0.25
  per share)                                            Various     4,080,000            1,020           523,980
Issuance of stock for license ($0.0625 per
  share)                                               08/31/95       600,000              150            37,350
Issuance of stock options for offering legal
  and consulting fees                                                      --               --            75,000
Offering expenses                                                          --               --          (105,398)
Net loss                                                                   --               --                --
                                                                  -----------      -----------       -----------
Balance - December 31, 1995                                         9,500,800            2,375           557,227

Year Ended December 31, 1996:

Issuance of stock ($0.25 per share)                     Various     1,278,000              320           319,180
Exercise of stock options                              01/18/96       600,000              150                --
Issuance of stock for consulting fees
  ($0.34375 per share)                                 03/22/96       160,000               40            54,960
Issuance of stock for consulting fees
  ($0.0625 per share)                                  05/15/96     2,628,000              657           163,593
Issuance of stock for consulting fees
  ($0.590625 per share)                                06/19/96     1,500,000              375           885,563
Issuance of stock for consulting fees
  ($1.82 per share)                                    11/12/96        57,036               14           104,275
Issuance of stock pursuant to bridge financing
  ($1.81325 per share)                                    12/96     1,500,000              375         2,719,500
Amortization of unearned financing costs                                   --               --                --
Repayment by stockholders                                                  --               --                --
Net loss                                                                   --               --                --
                                                                  -----------      -----------       -----------

Balance - December 31, 1996                                        17,223,836      $     4,306       $ 4,804,298
                                                                  ===========      ===========       ===========

<CAPTION>
                                                                                           Deficit
                                                                                         Accumulated
                                                                         Unearned         During the
                                                       Due from          Financing        Development
Period Ended December 31, 1995:                      Stockholders          Costs             Stage             Total
------------------------------                       ------------       -----------      ------------       -----------
<S>                                                   <C>               <C>               <C>               <C>
Founder shares issued ($0.00025 per share)            $        --       $        --       $        --       $        --
Issuance of stock for offering consulting fees
  ($0.0625 per share)                                          --                --                --            27,500
Issuance of stock ($0.0625 and $0.25
  per share)                                               (3,000)               --                --           522,000
Issuance of stock for license ($0.0625 per
  share)                                                       --                --                --            37,500
Issuance of stock options for offering legal
  and consulting fees                                          --                --                --            75,000
Offering expenses                                              --                --                --          (105,398)
Net loss                                                       --                --          (513,226)         (513,226)
                                                      -----------       -----------       -----------       -----------
Balance - December 31, 1995                                (3,000)               --          (513,226)           43,376

Year Ended December 31, 1996:

Issuance of stock ($0.25 per share)                            --                --                --           319,500
Exercise of stock options                                      --                --                --               150
Issuance of stock for consulting fees
  ($0.34375 per share)                                         --                --                --            55,000
Issuance of stock for consulting fees
  ($0.0625 per share)                                          --                --                --           164,250
Issuance of stock for consulting fees
  ($0.590625 per share)                                        --                --                --           885,938
Issuance of stock for consulting fees
  ($1.82 per share)                                            --                --                --           104,289
Issuance of stock pursuant to bridge financing
  ($1.81325 per share)                                         --        (2,719,875)               --                --
Amortization of unearned financing costs                       --           226,656                --           226,656
Repayment by stockholders                                   3,000                --                --             3,000
Net loss                                                       --                --        (3,476,983)       (3,476,983)
                                                      -----------       -----------       -----------       -----------

Balance - December 31, 1996                           $        --       $(2,493,219)      $(3,990,209)      $(1,674,824)
                                                      ===========       ===========       ===========       ===========
</TABLE>

(1) Share amounts have been restated to reflect the 4 for 1 stock split on June
1, 1996.

See notes to financial statements.


                                      F-4
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                                   (UNAUDITED)

        FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998
                     AND THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>


                                                                                 Common Stock                Additional
                                                          Date of        -----------------------------         Paid-in
Year Ended December 31, 1997:                           Transaction      Shares (1)          Amount            Capital
----------------------------                            -----------      ----------       ------------       ------------
<S>                                                        <C>           <C>              <C>                <C>
Balance - December 31, 1996                                              17,223,836       $      4,306       $  4,804,298

Issuance of stock for consulting fees
  ($2.50 per share)                                        03/97             64,000                 16            159,984
Issuance of stock for consulting fees
  ($5.45 per share)                                        06/97             39,000                  9            212,540
Issuance of stock for consulting fees
  ($5.00 per share)                                        09/97             59,000                 15            294,986
Issuance of stock pursuant to penalty
  provision of bridge financing
  ($5.45 per share)                                        06/97            500,000                125          2,724,875
Value assigned to conversion feature of
  Convertible Debentures                                   11/97                 --                 --          1,337,143
Value assigned to issuance of 127,500 warrants
  in consideration for interest and placement
  fees in connection with Convertible
  Debentures                                               11/97                 --                 --            284,480
Value assigned to issuance of 35,000 warrants
  to shareholder for consulting services                   11/97                 --                 --             39,588
Value assigned to issuance of 364,000 warrants
  to shareholder as additional consideration
  for financing activities                                 11/97                 --                 --            862,680
Issuance of stock for consulting fees
  ($4.00 per share)                                        12/97             43,000                 11            171,989
Accrual of stock issued January 1998 pursuant
  to penalty provision of bridge financing
  ($2.00 per share)                                        12/97          1,000,000                250          1,999,750
Amortization of unearned financing costs                                         --                 --                 --
Net loss                                                                         --                 --                 --
                                                                         ----------       ------------       ------------
Balance - December 31, 1997                                              18,928,836       $      4,732       $ 12,892,313
                                                                         ==========       ============       ============

<CAPTION>
                                                                                                 Deficit
                                                                                               Accumulated
                                                                             Unearned           During the
                                                          Due from           Financing         Development
Year Ended December 31, 1997:                           Stockholders           Costs              Stage              Total
----------------------------                             ----------         ------------       ------------       ------------
<S>                                                      <C>                <C>                <C>                <C>
Balance - December 31, 1996                              $         --       $ (2,493,219)      $ (3,990,209)      $ (1,674,824)

Issuance of stock for consulting fees
  ($2.50 per share)                                                --                 --                 --            160,000
Issuance of stock for consulting fees
  ($5.45 per share)                                                --                 --                 --            212,549
Issuance of stock for consulting fees
  ($5.00 per share)                                                --                 --                 --            295,001
Issuance of stock pursuant to penalty
  provision of bridge financing
  ($5.45 per share)                                                --         (2,725,000)                --                 --
Value assigned to conversion feature of
  Convertible Debentures                                           --         (1,337,143)                --                 --
Value assigned to issuance of 127,500 warrants
  in consideration for interest and placement
  fees in connection with Convertible
  Debentures                                                       --           (284,480)                --                 --
Value assigned to issuance of 35,000 warrants
  to shareholder for consulting services                           --            (39,588)                --                 --
Value assigned to issuance of 364,000 warrants
  to shareholder as additional consideration
  for financing activities                                         --           (862,680)                --                 --
Issuance of stock for consulting fees
  ($4.00 per share)                                                --                 --                 --            172,000
Accrual of stock issued January 1998 pursuant
  to penalty provision of bridge financing
  ($2.00 per share)                                                --         (2,000,000)                --                 --
Amortization of unearned financing costs                           --          8,426,793          8,426,793
Net loss                                                           --                 --        (12,441,242)       (12,441,242)
                                                         ------------       ------------       ------------       ------------
Balance - December 31, 1997                              $         --       $ (1,315,317)      $(16,431,451)      $ (4,849,723)
                                                         ============       ============       ============       ============
</TABLE>


(1) Share amounts have been restated to reflect the 4 for 1 stock split on June
1, 1996.

See notes to financial statements.


                                      F-5
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY

        FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998
                     AND THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>


                                                                                 Common Stock                  Additional
                                                           Date of      -------------------------------         Paid-in
Year Ended December 31, 1998:                            Transaction     Shares (1)           Amount            Capital
----------------------------                             -----------    ------------       ------------       ------------
<S>                                                        <C>          <C>                <C>                <C>
Balance - December 31, 1997                                               18,928,836       $      4,732       $ 12,892,313
Issuance of stock for consulting fees
  ($2.58 per share)                                          03/98            43,000                 11            110,930
Issuance of stock for consulting fees
  ($0.85 per share)                                          06/98           143,000                 35            215,895
Issuance of stock for consulting fees
  ($0.32 per share)                                          09/98           126,617                 32            107,503
Issuance of stock for consulting fees                        12/98           155,427                 39             81,505
Issuance of stock pursuant to penalty
  provision of bridge financing
  ($1.0625 per share)                                        04/98           500,000                125            531,124
Value assigned to conversion feature of
  Convertible Debentures and 60,000
  warrants issued as additional interest                     02/98                --                 --          1,100,000
Value assigned to conversion feature of
  Convertible Debentures and 125,000 warrants
  issued as additional interest                              07/98                --                 --            475,000
Cancellation of stock issued for consulting fees             07/98          (375,000)               (94)           (93,656)
Issuance of stock for conversion of debenture
  note payable ($0.32 per share)                          09/98, 11/98       100,002                 25             32,169
Amortization of unearned financing costs                                          --                 --                 --
Net loss                                                                          --                 --                 --
                                                                        ------------       ------------       ------------
Balance - December 31, 1998                                               19,621,882       $      4,905       $ 15,452,783
                                                                        ============       ============       ============

<CAPTION>
                                                                                               Deficit
                                                                                              Accumulated
                                                                             Unearned         During the
                                                           Due from          Financing        Development
Year Ended December 31, 1998:                            Stockholders          Costs             Stage              Total
----------------------------                             ------------      ------------       ------------       ------------
<S>                                                      <C>               <C>                <C>                <C>
Balance - December 31, 1997                              $         --      $ (1,315,317)      $(16,431,451)      $ (4,849,723)
Issuance of stock for consulting fees
  ($2.58 per share)                                                --                --                 --            110,941
Issuance of stock for consulting fees
  ($0.85 per share)                                                --                --                 --            215,930
Issuance of stock for consulting fees
  ($0.32 per share)                                                --                --                 --            107,535
Issuance of stock for consulting fees                              --                --                 --             81,544
Issuance of stock pursuant to penalty
  provision of bridge financing
  ($1.0625 per share)                                              --          (531,249)                --                 --
Value assigned to conversion feature of
  Convertible Debentures and 60,000
  warrants issued as additional interest                           --        (1,100,000)                --                 --
Value assigned to conversion feature of
  Convertible Debentures and 125,000 warrants
  issued as additional interest                                    --          (475,000)                --                 --
Cancellation of stock issued for consulting fees                   --                --                 --            (93,750)
Issuance of stock for conversion of debenture
  note payable ($0.32 per share)                                   --                --                 --             32,194
Amortization of unearned financing costs                           --         3,374,066                 --          3,374,066
Net loss                                                           --                --         (7,814,143)        (7,814,143)
                                                         ------------      ------------       ------------       ------------
Balance - December 31, 1998                              $         --      $    (47,500)      $(24,245,594)      $ (8,835,406)
                                                         ============      ============       ============       ============
</TABLE>

(1) Share amounts have been restated to reflect the 4 for 1 stock split on June
1, 1996.

The accompanying notes are an integral part of these financial statements.


                                      F-6
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                                   (UNAUDITED)

        FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1998
                     AND THE SIX MONTHS ENDED JUNE 30, 1999

<TABLE>
<CAPTION>


                                                                                 Common Stock                  Additional
                                                           Date of      -------------------------------         Paid-in
Six Months Ended June 30, 1999:                          Transaction     Shares (1)           Amount            Capital
------------------------------                           -----------    ------------       ------------       ------------
<S>                                                        <C>          <C>                 <C>               <C>
Balance - December 31, 1998                                             19,621,882          $  4,905          $15,452,783

Issuance of stock for consulting fees
  ($0.77 per share)                                        03/99           116,039                29               89,871

Issuance of stock for consulting fees
  ($0.72 per share)                                        06/99           624,332               156              446,532

Issuance of stock for conversion of debenture
  note payable ($0.35 per share)                           02/99           987,201               247              341,029

Value assigned to conversion feature of
  Convertible Debentures and 84,750 warrants
  issued as additional interest                            01/99                --                --              175,425

Value assigned to additional consideration for
  financing activities ($0.72 per share)                   05/99           100,000                25               71,975

Issuance of stock for additional working
  capital ($0.25 per share)                                06/99         1,900,000               475              474,525

Modification of warrants issued                            06/99                --                --              123,500

Amortization of unearned financing costs                                        --                --                   --

Net loss                                                                        --                --                   --
                                                                        ----------          --------          -----------
Balance - June 30, 1999                                                 23,349,454          $  5,837          $17,175,640
                                                                        ==========          ========          ===========

<CAPTION>
                                                                                               Deficit
                                                                                              Accumulated
                                                                             Unearned         During the
                                                           Due from          Financing        Development
Six Months Ended June 30, 1999:                          Stockholders          Costs             Stage              Total
------------------------------                           ------------      ------------       ------------       ------------
<S>                                                        <C>              <C>               <C>                <C>
Balance - December 31, 1998                                $    --          $  (47,500)       $(24,245,594)      $(8,835,406)

Issuance of stock for consulting fees
  ($0.77 per share)                                             --                  --                  --            89,900

Issuance of stock for consulting fees
  ($0.72 per share)                                             --                  --                  --           446,688

Issuance of stock for conversion of debenture
  note payable ($0.35 per share)                                --                  --                  --           341,276

Value assigned to conversion feature of
  Convertible Debentures and 84,750 warrants
  issued as additional interest                                 --             (175,425)                --                --

Value assigned to additional consideration for
  financing activities ($0.72 per share)                        --              (72,000)                --                --

Issuance of stock for additional working
  capital ($0.25 per share)                                     --                   --                 --           475,000

Modification of warrants issued                                 --                   --                 --           123,500

Amortization of unearned financing costs                        --              290,052                 --           290,052

Net loss                                                        --                   --         (2,501,795)       (2,501,795)
                                                            ------          -----------       ------------       -----------
Balance - June 30, 1999                                     $   --          $    (4,873)      $(26,747,389)      $(9,570,785)
                                                            ======          ===========       ============       ===========
</TABLE>

(1) Share amounts have been restated to reflect the 4 for 1 stock split on June
1, 1996.

See notes to financial statements.


                                      F-7
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                           For the Period
                                                                                                           from Inception
                                                                         For the Six Months Ended June 30, (May 26, 1995) to
                                                                               1998            1999         June 30, 1999
                                                                           ------------    ------------      ------------
<S>                                                                        <C>             <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                                               $ (5,426,908)   $ (2,501,795)     $(26,747,387)
    Adjustments to reconcile net loss to net cash used in
      operating activities:
        Depreciation and amortization                                             4,698           5,128            19,026
        Amortization of deferred and unearned financing costs                 3,049,661         292,413        13,271,718
        Accrued interest                                                        208,329          31,276            31,276
        Stock issued for license                                                     --              --            37,500
        Consulting fees satisfied by stock issuances                            326,871         660,089         3,131,316
                                                                           ------------    ------------      ------------

            Sub-total                                                         1,837,343      (1,512,889)      (10,256,553)

        Cash provided by (used in) the change in assets and liabilities:
            Decrease in advances to related parties                                  --              --            (5,918)
            Increase in prepaid expenses                                         (5,453)         (6,281)           (6,481)
            Increase in other assets                                             (2,400)         (2,199)           (9,751)
            Increase in accrued liabilities                                     539,425         601,316         1,970,318
            Increase in deferred revenue                                             --         150,000           375,000
                                                                           ------------    ------------      ------------

      NET CASH USED IN OPERATING ACTIVITIES                                  (1,305,777)       (770,053)       (7,933,385)
                                                                           ------------    ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
    Organization and patent costs                                                    --              --           (31,358)
    Capital expenditures                                                        (20,038)             --           (40,972)
                                                                           ------------    ------------      ------------

      NET CASH USED IN INVESTING ACTIVITIES                                     (20,038)             --           (72,330)
                                                                           ------------    ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from exercise of stock options                                          --              --               150
    Proceeds from issuance of common stock                                           --         475,000         1,316,500
    Offering costs                                                                   --              --            (2,898)
    Repayment by stockholders                                                        --              --             3,000
    Proceeds from Convertible Debentures                                      3,000,000         450,000         7,450,000
    Proceeds from bridge notes                                                       --              --         2,000,000
    Repayments of bridge notes                                               (2,000,000)             --        (2,000,000)
    Borrowings from stockholders                                                     --              --           561,140
    Repayment to stockholders                                                        --              --          (561,140)
    Deferred financing costs                                                   (235,000)             --          (604,150)
                                                                           ------------    ------------      ------------

      NET CASH PROVIDED BY FINANCING
         ACTIVITIES                                                             765,000         925,000         8,162,602
                                                                           ------------    ------------      ------------

(DECREASE) INCREASE IN CASH                                                    (560,815)        154,947           156,887

CASH - BEGINNING                                                                617,756           1,940                --
                                                                           ------------    ------------      ------------

CASH - ENDING                                                              $     56,941    $    156,887      $    156,887
                                                                           ============    ============      ============

Supplemental Disclosure of Cash Flow Information:
  Cash paid during the period for:
    Interest                                                               $     36,630    $        526      $    316,447
                                                                           ============    ============      ============

    Income taxes                                                           $         --    $         --      $         --
                                                                           ============    ============      ============
</TABLE>

See notes to financial statements.


                                       F-8
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 1 - BASIS OF PRESENTATION

      The accompanying financial statements are unaudited. These statements have
      been prepared in accordance with the rules and regulations of the
      Securities and Exchange Commission ( the "SEC"). Certain information and
      footnote disclosures normally included in the financial statements
      prepared in accordance with generally accepted accounting principles have
      been condensed or omitted pursuant to such rules and regulations. In the
      opinion of management, the financial statements reflect all adjustments
      (which include only normal recurring adjustments) necessary to state
      fairly the financial position and results of operations as of and for the
      periods indicated. These financial statements should be read in
      conjunction with the Company's financial statements and notes thereto for
      the year ended December 31, 1998, included in the Company's Form 10K as
      filed with the Securities and Exchange Commission.

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

NOTE 2- BUSINESS AND CONTINUED OPERATIONS

      Eurotech, Ltd. (the "Company") was incorporated under the laws of the
      District of Columbia on May 26, 1995. The Company is a development-stage,
      technology transfer, holding, marketing and management company, formed to
      commercialize new, existing but previously unrecognized, and previously
      "classified" technologies, with a particular current emphasis on
      technologies developed by prominent research institutes and individual
      researchers in the former Soviet Union and in Israel, and to license those
      and other Western technologies for business and other commercial
      applications principally in Western and Central Europe, Ukraine, Russia
      and North America. Since the Company's formation, it has acquired
      development and marketing rights to a number of technologies by purchase,
      assignments, and licensing arrangements. The Company intends to operate
      its business by licensing its technologies to end-users and through
      development and operating joint ventures and strategic alliances. To date,
      the Company has not generated any revenues from operations.


                                       F-9
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 2 - BUSINESS AND CONTINUED OPERATIONS (Continued)

      The accompanying unaudited financial statements have been prepared in
      conformity with generally accepted accounting principles, which
      contemplate continuation of the Company as a going concern. However, as
      shown in the accompanying financial statements, the Company has incurred
      losses from operations from inception. As of June 30, 1999, the Company
      has a stockholders' deficiency of $9,570,785, a working capital deficiency
      of $2,973,839 and an accumulated deficit since inception of $26,747,389.
      The Company requires additional funds to commercialize its technologies
      and continue research and development efforts. Until the commencement of
      sales, the Company will have no operating revenues, but will continue to
      incur substantial expenses and operating losses. No assurances can be
      given that the Company can complete development of any technology, not yet
      completely developed, or that with respect to any technology that is fully
      developed, it can be manufactured on a large scale basis or at a feasible
      cost. Further, no assurance can be given that any technology will receive
      market acceptance. Being a start-up stage entity, the Company is subject
      to all the risks inherent in the establishment of a new enterprise and the
      marketing and manufacturing of a new product, many of which risks are
      beyond the control of the Company. These factors raise substantial doubt
      about the Company's ability to continue as a going concern.

      Since inception, the Company has financed its operations through sale of
      its securities, shareholder loans, a bridge financing totalling $2,000,000
      completed in December of 1996, a Convertible Debenture financing of
      $3,000,000 completed in November of 1997 and a Convertible Debenture
      financing of $3,000,000 and $1,000,000 completed during February and July
      1998, respectively. Proceeds from the February 1998 Convertible Debenture
      financing were used to retire the $2,000,000 bridge note. In January 1999,
      the Company borrowed $450,000 from two stockholders and issued a secured
      promissory note (see Note 3). In May 1999, the Company borrowed $50,000
      from an unrelated party, which was repaid in June 1999. During the quarter
      ended June 30, 1999, the Company raised $475,000 from the sale of
      restricted common stock. The Company is exploring additional sources of
      working capital, which include a private offering of common stock, private
      borrowings and joint ventures.

      While no assurance can be given, management believes the Company can raise
      adequate capital to keep the Company functioning during 1999. No assurance
      can be given that the Company can successfully obtain any working capital
      or complete any proposed offerings or, if obtained, that such funding will
      not cause substantial dilution to shareholders of the Company. Further, no
      assurance can be given as to the completion of research and development
      and the successful marketing of the technologies.

      These financial statements do not include any adjustments relating to the
      recoverability of recorded asset amounts that might be necessary as a
      result of the above uncertainty.


                                      F-10
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 3 - NOTES PAYABLE

      Secured Promissory Notes

      On January 6, 1999, the Company's Chairman and the majority convertible
      debt holder provided $450,000 of short-term financing to the Company,
      evidenced by two secured promissory notes. Each secured promissory note
      bears interest at 13% per annum and is due January 6, 2000. The promissory
      notes are collateralized by the Company's intangible assets and can be
      exchanged for 8% Convertible Debentures under terms similar to the current
      outstanding debentures. As additional consideration for the financing, the
      Company issued to the secured promissory note holders warrants to purchase
      84,750 shares of the Company's common stock at an exercise price of $0.36
      per share. The warrants expire five years from January 6, 1999.

      The Company has assigned a value to the debt's beneficial conversion
      feature and warrants amounting to $175,425, and such amount is being
      amortized over 180 days commencing January 6, 1999.

NOTE 4 - STOCKHOLDERS' DEFICIENCY

      Significant Common Stock Issuances During 1999

      During the six months ended June 30, 1999, a debenture holder converted
      $310,000 of principal and $31,276 of accrued interest into 987,201 shares
      of common stock.

      During the six months ended June 30, 1999, the Company issued 740,371
      shares of common stock as consideration for consulting services performed
      by various employees and consultants, including related parties, through
      June 30, 1999. Shares issued under these arrangements were valued at
      $536,403, which was all charged to operations during the six months ended
      June 30, 1999.

      During the quarter ended June 30, 1999, the Company sold 1,900,000 shares
      of its restricted common stock for $475,000.


                                      F-11
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 4 - STOCKHOLDERS' DEFICIENCY (Continued)

      Earnings Per Share

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

Warrants to purchase common stock                                      1,696,250
Convertible Debentures (assumed conversion at June 30, 1999
    market value price and at largest discount)                       16,174,380
Option to purchase common stock                                           50,000
                                                                      ----------
Total as of June 30, 1999                                             17,920,630
                                                                      ==========

Substantial issuance after June 30, 1999 through July 31, 1999:

Warrants to purchase common stock                                         50,000
                                                                      ==========

NOTE 5 - TECHNOLOGY INVESTMENTS AND LICENSING AGREEMENT

      Investments in Israeli Technology Companies

      During 1997 and 1998, the Company agreed to acquire a 20% interest in
      seven separate Israeli technology, research and development companies
      ("incubators"). The Company's share of losses incurred by these companies
      has been accounted for on the equity basis and included in research and
      development expenses.

      The Company had, as of December 31, 1998, a 20% interest in Chemonol, an
      Israeli research and development company. On January 20, 1999, the Company
      entered into an agreement to invest $300,000 in exchange for an additional
      16% of Chemonol's voting stock. The agreement provides for the Company to
      make four (4) equal payments of $75,000 commencing March 1, 1999, July 1,
      1999, October 1, 1999 and January 1, 2000. At the completion of the
      transaction, the Company will own 36% of Chemonol. During the six months
      ended June 30, 1999, the Company paid $150,000 under the agreement, which
      was charged to research and development costs.

      During the six months ended June 30, 1999, an additional $71,000 was
      invested in the seven Israeli technology incubators.

      The amount charged to research and development expenses related to these
      investments for the six months ended June 30, 1999 approximated $221,000,
      which reduced the carrying value of the Company's investment in these
      seven companies to $-0- at June 30, 1999.


                                      F-12
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 5 - TECHNOLOGY INVESTMENTS AND LICENSING AGREEMENT (Continued)

      Proposed Sale of Technology

      The Company received a deposit on a proposed sale of its sublicensing
      rights to Re-sealable Container Systems and TetraPak containers. The
      proposed transaction is presently in the discussion stage and to-date, no
      agreements have been signed. Included in unearned revenue is the $150,000
      deposit related to the proposed sale.

NOTE 6 - CONTINGENCIES AND OTHER MATTERS

      Concentration of Credit Risk

      Financial instruments which potentially subject the Company to
      concentration of credit risk consist principally of cash which is at one
      bank. Future concentration of credit risk may arise from trade accounts
      receivable. Ongoing credit evaluations of customers' financial condition
      will be performed and, generally, no collateral will be required.

      International Operations

      The Company has strategic alliances, collaboration agreements and
      licensing agreements with entities which are based in Russia and Ukraine.
      Both of these countries have experienced volatile and frequently
      unfavorable economic, political and social conditions. The Russian economy
      and the Ukraine economy are characterized by declining gross domestic
      production, significant inflation, increasing rates of unemployment and
      underemployment, unstable currencies, and high levels of governmental debt
      as compared to gross domestic production. The prospects of wide-spread
      insolvencies and the collapse of various economic sectors exist in both
      countries.

      In view of the foregoing, the Company's business, earnings, asset values
      and prospects may be materially and adversely affected by developments
      with respect to inflation, interest rates, currency fluctuations,
      government policies, price and wage controls, exchange control
      regulations, taxation, expropriation, social instability, and other
      political, economic or diplomatic developments in or affecting Russia and
      Ukraine. The Company has no control over such conditions and developments,
      and can provide no assurance that such conditions and developments will
      not adversely affect the Company's operations.


                                      F-13
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 6 - CONTINGENCIES AND OTHER MATTERS (Continued)

      Litigation

      In December 1997, Raymond Dirks, Jessy Dirks, Robert Brisotti and David
      Morris filed an action in the Supreme Court for the State of New York,
      County of New York, against Eurotech, Ltd. for breach of contract, seeking
      injunctive relief, specific performance and monetary damages of nearly $5
      million (the "Dirks Litigation"). The Dirks Litigation arises solely from
      an agreement between Eurotech and National Securities Corporation
      ("National") relating to financial advisory services to be performed by
      National Securities Corporation, a broker/dealer with which the plaintiffs
      were affiliated and of which Raymond Dirks Research was a division.
      Eurotech granted National a warrant certificate for 470,000 shares at
      $1.00 per share as a retainer for general financial advisory services. In
      conjunction with the separation of the plaintiffs and Raymond Dirks
      Research from National Securities Corporation, National assigned a
      significant portion of the warrant certificate to the plaintiffs. It is
      Eurotech's position that the warrant certificate is voidable.

      The plaintiffs allege, among other things, that they are entitled to
      damages composed of both the value of the stock on the date of their
      purported exercise of an alleged assignment of the warrant certificate,
      and the decrease in value of the price of the stock since the date of
      their purported exercise. Eurotech believes that the plaintiffs have
      significantly overstated their monetary damage claim and that, having
      sought monetary damages, the plaintiffs are not entitled to any type of
      equitable relief.

      Process was served upon Eurotech at its California office in late January
      1998. Based on the advice of its outside counsel, Eurotech believes that
      the plaintiffs' claims will be resolved favorably to the Company. In
      response to the Dirks litigation, the Company has filed an appropriate
      response, including counterclaims relating thereto. However, it is
      possible that the Company will be adjudged liable in the Dirks Litigation,
      and if so, the resolution of the litigation could have a material adverse
      effect on the Company.

      Former Employee Dispute

      The former president has advised the Company that he believes that he was
      wrongfully terminated under the provisions of a certain employment
      agreement allegedly executed by the Company in his behalf, and has made
      demand for certain payments, as provided in the employment agreement in
      his possession. The Company has taken the position that there is no valid
      employment agreement with the former president and that he is not entitled
      to the payments demanded and is attempting to negotiate a settlement of
      the matter. The Company is unable to predict the outcome of this matter or
      any potential liability, which the Company may incur.


                                      F-14
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                  JUNE 30, 1999

NOTE 7 - SUBSEQUENT EVENT

      Employment Agreements

      In April 1999, the Company entered into an employment agreement with the
      President of the Company providing for an annual salary of $140,000. In
      addition, the Company issued 60,000 shares of common stock. As of July 1,
      1999, the President resigned. On July 7, 1999, the Company entered into a
      letter agreement with its new President providing for a salary of $100,000
      for the year commencing July 7, 1999, with an initial signing bonus of
      warrants to purchase 50,000 shares of common stock at a price equal to the
      market price at July 1, 1999. The warrants are exercisable for a term of
      three years.


                                      F-15
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

General

The following is a discussion and analysis of the results of operations of the
Company and should be read in conjunction with the financial statements and
related notes contained in this Form 10-Q.

Certain information contained in this Form 10-Q may contain forward-looking
statements. The forward-looking statements are subject to certain risks and
uncertainties. Actual results could differ materially from current expectations.
Among the factors that could affect the Company's actual results and could cause
results to differ from those contained in the forward-looking statements
contained herein is the Company's ability to commercialize its technologies
successfully, which will be dependent on business, financial and other factors
beyond the Company's control, including, among others, market acceptance,
ability to manufacture on a large scale basis and at feasible costs, together
with all the risks inherent in the establishment of a new enterprise and the
marketing and manufacturing of new products.

Overview

The Company, incorporated in May 1995, is a development stage, technology
transfer, holding and management company formed to commercialize new, existing
but previously unrecognized, and previously "classified" technologies, with a
particular current emphasis on technologies developed by prominent research
institutes and individual researchers in the former Soviet Union and in Israel,
and to commercialize those and other Western technologies for business and other
commercial applications principally in Europe, Ukraine, Russia and North
America.

Until recently, the Company had been principally engaged in identifying,
monitoring, reviewing and assessing technologies for their commercial
applicability and potential, and in acquiring selected technologies by equity
investment, purchase, assignment and licensing arrangements. Although the
Company intends to continue identifying, monitoring, reviewing and assessing new
technologies, its primary emphasis will be focused on commercializing four of
its present technologies ("Principal Technologies").

The Company believes that the Principal Technologies are presently ready for
commercialization and marketing. To that end, the Company has decided to devote
its business activities and resources principally to the marketing and sale of
the Principal Technologies. The Company recently has initiated a marketing and
sales program for the Principal Technologies, and also has initiated discussions
with a number of prominent, potential users of the technologies, with a view
towards the future negotiation and execution of licensing and/or joint venture
marketing and sales agreements.

The Company intends to operate its business by licensing its technologies to
end-users and through development and operating joint-ventures and strategic
alliances. To date, the Company has not generated any revenues from these
operations.

<PAGE>

The Company has not been profitable since inception and expects to incur
substantial operating losses over the next twelve months. For the period from
inception to June 30, 1999, the Company incurred a cumulative net loss of
approximately $26,747,000. The Company expects that it will generate losses
until at least such time as it can commercialize its technologies, if ever. No
assurance can be given that any of the Company's technologies can be
manufactured on a large scale basis or at a feasible cost. Further, no assurance
can be given that any technology will receive market acceptance. Being a
start-up stage entity, the Company is subject to all the risks inherent in the
establishment of a new enterprise and the marketing and manufacturing of a new
product, many of which risks are beyond the control of the Company.

Results of Operations

For the Six Months Ended June 30, 1999 vs. the Six Months Ended June 30, 1998

The Company has had no revenues since inception. Consulting expenses increased
from $505,000 for the six months ended June 30, 1998 to $978,000 for the six
months ended June 30, 1999. The increase in consulting expense is principally
the result of the Company's increase in non-cash compensation issued to
consultants and its Board of Directors and Advisory Board. Other general and
administrative expenses decreased from $882,000 for the six months ended June
30, 1998, to $398,000 for the six months ended June 30, 1999, primarily due to a
decrease in professional fees and other costs related to the completion of a
registration statement.

Research and development expenses decreased for the six months ended June 30,
1999 to $493,000, from $560,000, for the six months ended June 30, 1998. During
1998, the Company paid $187,500 to Professor Oleg L. Figovsky, Ph.D. in
connection with four technology purchase agreements. These payments were charged
to research and development expenses during the first quarter of 1998. Research
and development expenditures for the six months ended June 30, 1999 included
$221,000 related to the Company's continuing investment in its seven Israeli
technology companies and $272,000 for its German and Russian technologies.

For the six months ended June 30, 1999 and 1998, the Company incurred operating
losses of $1,868,000 and $1,948,000, respectively. The losses are principally
due to expenses incurred in the acquisition and development of its technologies,
consulting costs, general and administrative expenses and the lack of revenues.

Other expenses, consisting of interest expense and amortization of deferred and
unearned finance costs, decreased from $3,479,000 for the six months ended June
30, 1998 to $634,000 for the six months ended June 30, 1999. Amortization of
deferred and unearned financing costs decreased from $3,050,000 for the six
months ended June 30, 1998 to $292,000 for the six months ended June 30, 1999.
The decrease in the amortization of deferred and unearned financing costs is
principally attributable to portions of unearned financing costs having been
fully amortized during 1998.

The Company expects to incur significant losses during 1999. The Company
anticipates that any revenue recognized in 1999 will be substantially offset by
expenses incurred by the Company in its efforts to commercialize, sell and
market its Principal Technologies.

For the Three Months Ended June 30, 1999 vs. the Three Months Ended June 30,
1998

Consulting expenses increased from $284,000 for the three months ended June 30,
1998 to $774,000 for the three months ended June 30, 1999. The increase in
consulting expense is principally the result of the Company's increase in
non-cash compensation issued to consultants and its Board of Directors and
Advisory Board. Other general and administrative expenses decreased from
$322,000 for the three months ended June 30, 1998, to $243,000 for the three
months ended June 30, 1999, primarily due to a decrease in professional fees and
other costs related to the completion of a registration statement.

<PAGE>

Research and development expenses decreased for the three months ended June 30,
1999 to $199,000, from $253,000, for the three months ended June 30, 1998.
Research and development expenditures for the three months ended June 30, 1999
included $105,000 related to the Company's continuing investment in its seven
Israeli technology companies and $94,000 for its German and Russian
technologies.

For the three months ended June 30, 1999 and 1998, the Company incurred
operating losses of $1,216,000 and $859,000, respectively. The losses are
principally due to expenses incurred in the acquisition and development of its
technologies, consulting costs, general and administrative expenses and the lack
of revenues.

Other expenses, consisting of interest expense and amortization of deferred and
unearned finance costs, decreased from $2,103,000 for the three months ended
June 30, 1998 to $334,000 for the three months ended June 30, 1999. Amortization
of deferred and unearned financing costs decreased from $1,803,000 for the three
months ended June 30, 1998 to $161,000 for the three months ended June 30, 1999.
The decrease in the amortization of deferred and unearned financing costs is
principally attributable to portions of unearned financing costs having been
fully amortized during 1998.

The Company expects to incur significant losses during 1999. The Company
anticipates that any revenue recognized in 1999 will be substantially offset by
expenses incurred by the Company in its efforts to commercialize, sell and
market its Principal Technologies.

Liquidity and Capital Resources

The Company's principal sources of working capital from inception through
December 31, 1998 have been net proceeds of $842,000 from the offering of common
stock under Rule 504 of Regulation D, shareholder advances aggregating $761,440,
a bridge financing completed in December 1996 of $2,000,000, $3,000,000
principal amount of 8% Convertible Debentures completed in November 1997, due
November 27, 2000, $3,000,000 principal amount of 8% Convertible Debentures
completed in February 1998, due February 23, 2001 and $1,000,000 principal
amount of 8% Convertible Debentures completed in July of 1998, due July 20,
2001.

During the six months ended June 30, 1999, the Company's principal source of
cash was the January 1999 secured promissory notes from which it derived net
proceeds of approximately $450,000, a $150,000 deposit received in connection
with a proposed sale of certain sublicensing rights and proceeds of $475,000
from the sale of restricted common stock.

The Debentures discussed above may be converted into shares of the Company's
common stock at beneficial conversion rates based on the timing of the
conversion. During the six months ended June 30, 1999, a debenture holder
exercised the conversion right under the November 27, 1997 Convertible Debenture
agreement and converted principal of $310,000 and accrued interest of $31,276
into 987,201 shares of the Company's common stock. Based on the bid price of the
Company's common stock at June 30, 1999, the Debentures' principal could be
converted into approximately 16 million shares of the Company's common stock.

On January 6, 1999, the Company's Chairman and the majority convertible debt
holder provided $450,000 of short-term financing to the Company, evidenced by
two secured promissory notes. Each secured promissory note bears interest at 13%
per annum and is due January 6, 2000. The promissory notes are collateralized by
the Company's intangible assets and can be exchanged for 8% Convertible
Debentures under terms similar to the current outstanding debentures.

<PAGE>

During the six months ended June 30, 1999, the Company received deposits of
$150,000 in connection with the proposed sale of its sublicensing rights to
Resealable Container Systems and TetraPak Containers. The proposed transaction
is presently in the discussion stage and to-date, no agreements have been
signed.

The Company has agreed in principle to fund the commercialization of certain
technologies developed in the former Soviet Union by scientists and researchers
at Kurchatov, other institutes associated therewith, and EAPS, collectively the
"Scientists". Kurchatov will provide the materials, facilities and personnel to
complete the necessary work to commercialize such technologies. The Company also
has agreed in principle to provide funding in connection with the marketing and
sale of its Principal Technologies. Total expenditures under these programs
approximated $128,000 during the six months ended June 30, 1999. The Company's
principal source of funding for these expenditures during the six months ended
June 30, 1999 was the proceeds from the Debenture Offerings and proceeds from
the sale of restricted common stock.

On January 20, 1999, the Company entered into an agreement to invest $300,000 in
exchange for an additional 16% interest in Chemonol, an Israeli research and
development company. The agreement obligates the Company to make four equal
payments of $75,000, commencing March 1, 1999, July 1, 1999, October 1, 1999 and
January 1, 2000. At the completion of the transaction, the Company will own 36%
of Chemonol's common stock. During the six months ended June 30, 1999, the
Company paid $150,000 under this obligation.

The Company will require additional financing to continue to fund research and
development efforts, operating costs and complete necessary work to
commercialize its technologies. As the development of each technology is
completed and the technology's commercial applications are identified, the
Company will seek joint venture partners to fund any further capital
expenditures, including the project financing. The Company is exploring
additional sources of working capital, including further private sales of
securities, joint ventures and licensing of technologies. The report of the
Company's independent certified public accountants at December 31, 1998 contains
an explanatory paragraph which expresses substantial doubt as to the Company's
ability to continue as a going concern.

No assurance can be given that the Company can successfully obtain any
additional financing or, if obtained, that such funding will not cause dilution
to shareholders of the Company. Further, no assurance can be given as to the
completion of research and development and the successful marketing of the
Company's technologies.

The Company had a working capital deficiency and stockholders' deficiency of
$2,974,000 and $9,571,000, respectively, as of June 30, 1999.

Year 2000 Compliance

The Company recognizes the need to ensure its operations will not be adversely
impacted by Year 2000 software failures. Software failures due to processing
errors potentially arising from calculations using the Year 2000 date are a
known risk. The Company is addressing this risk to the availability and
integrity of financial systems and the reliability of operational systems. The
Company has established processes for evaluating and managing the risks and
costs associated with this problem. The computing portfolio was identified and
an initial assessment has been completed. The cost of achieving Year 2000
compliance will not have a material impact on the accompanying financial
statements.

<PAGE>

Impact of Recently Issued Accounting Standards

Statement of Financial Accounting Standards No. 130, "Comprehensive Income"
(SFAS 130), was issued in June 1997. SFAS 130 requires reclassification of
earlier financial statements for comparative purposes. SFAS 130 requires that
all items defined as comprehensive income, including changes in the amounts of
certain items, foreign currency translation adjustments and gains and losses on
certain securities, be shown in a financial statement SFAS 130 does not require
a specific format for the financial statement in which comprehensive income is
reported, but does require that an amount representing total comprehensive
income be reported in that statement. The adoption of SFAS 130 did not have a
material effect on the Company's financial statements.

Statement of Financial Accounting Standards No. 131, "Disclosures About Segments
of an Enterprise and Related Information" ("SFAS 131"), was issued in June 1997.
SFAS 131 becomes effective for the Company's fiscal year 1999 and requires
restatement of disclosures for earlier periods presented for comparative
purposes. This new standard requires companies to disclose segment data based on
how management makes decisions about allocating resources to segments and how it
measures segment performance. SFAS 131 requires companies to disclose a measure
of segment profit or loss, segment assets, and reconciliations to consolidated
totals. It also requires entity-wide disclosures about a company's products and
services, its major customers and the material countries in which it holds
assets and reports revenues. The adoption of SFAS 131 did not have a material
effect on the Company's financial statements.

Statement of Financial Accounting Standards No. 132, "Employers' Disclosures
About Pensions and Other Postretirement Benefits" ("SFAS 132"), was issued in
February 1998. SFAS 132 becomes effective for 1999 and requires restatement of
disclosures for earlier periods presented for comparative purposes. SFAS 132
revises employers' disclosure about pension and other postretirement benefit
plans. It does not change the measurement or recognition of those plans, but
rather standardizes the disclosure requirements for pensions and other
postretirement benefits to the extent practicable, requires additional
information on changes in the benefit obligations and fair values of plan assets
that will facilitate analysis, and eliminates certain disclosures that are no
longer useful. The adoption of SFAS 132 did not have a material effect on the
Company's financial statements.

<PAGE>

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

Dated: 8/16/99
       -------

                                          EUROTECH, LTD.
                                          (Registrant)


                                          /s/ Don V. Hahnfeldt
                                          -------------------------------------
                                          Don V. Hahnfeldt
                                          President and Chief Financial Officer


<PAGE>

                          PART II -- OTHER INFORMATION.

Item 1. Legal Proceedings.

      There have been no material legal proceedings to which the Company is a
      party which have not been disclosed in previous filings with the
      Securities and Exchange Commission. There are no material developments to
      be reported in any previously reported legal proceedings.

Item 2. Changes in Securities and Use of Proceeds.

      Not applicable.

Item 3. Defaults Upon Senior Securities.

      Not applicable.

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

      Not applicable.

Item 5. Other Information.

      Current president resigned from the Company and a new president was added
      on July 7, 1999.

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

      (a)   Exhibits.

            Not applicable.

      (b)   Reports on Form 8-K.

Item 27. Financial Data Schedule (2)

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(2) Filed herewith