================================================================================

                       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 September 30, 1997

|_| 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                (IRS Employer
        incorporation or organization)              Identification No.)

                              1200 Prospect Street
                                    Suite 425
                            LaJolla, California 92037
                    (address of principal executive offices)

                                 (619) 551-6844
                           (Issuer's telephone number)

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

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

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

            Yes |_|                       No   |X|

      State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 17,887,836 shares of Common
Stock, $0.00025 par value, were outstanding as of November 14, 1997.

      Transitional Small Business Disclosure Format (check one):

            Yes |_|                       No   |X|

================================================================================
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                               INDEX TO FORM 10-Q
                               SEPTEMBER 30, 1997

                                                                       Page Nos.
                                                                       ---------
PART  I - FINANCIAL INFORMATION:

      ITEM 1 - FINANCIAL STATEMENTS

      BALANCE SHEETS                                                       1
            At December 31, 1996 and September 30, 1997

      STATEMENTS OF OPERATIONS                                             2
            For the Nine Months Ended September 30, 1996
            For the Nine Months Ended September 30, 1997
            For the Period from Inception (May 26, 1995) to 
              September 30, 1997

      STATEMENTS OF OPERATIONS                                             3
            For the Three Months Ended September 30, 1996
            For the Three Months Ended September 30, 1997
            For the Period from Inception (May 26, 1995) to 
              September 30, 1997

      STATEMENTS OF STOCKHOLDERS' (DEFICIENCY) EQUITY                    4-5
            For the Period from Inception (May 26, 1995) to 
              December 31, 1996
            For the Nine Months Ended September 30, 1997

      STATEMENTS OF CASH FLOWS                                             6
            For the Nine Months Ended September 30, 1996
            For the Nine Months Ended September 30, 1997
            For the Period from Inception (May 26, 1995) to 
              September 30, 1997

      NOTES TO FINANCIAL STATEMENTS                                     7-13

      ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF        14-17
               OPERATION

PART  II - OTHER INFORMATION

      ITEM 6 - Exhibits and Report on Form 8-K
<PAGE>

PART  I - Financial Information

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                                 BALANCE SHEETS

                                     ASSETS
                                    (Note 2)
                                                           At           At      
                                                      December 31, September 30,
                                                         1996          1997     
                                                      ------------ -------------
                                                                    (Unaudited) 
CURRENT ASSETS: 
  Cash                                                $  380,183    $    -     
  Receivable from related parties                         89,918         5,918 
  Prepaid expenses and other current assets               12,978        14,305 
                                                      ----------    ----------
      TOTAL CURRENT ASSETS                               483,079        20,223

PROPERTY AND EQUIPMENT - net of accumulated                                    
  depreciation                                            10,556        11,817 
                                                                               
INVESTMENT IN JOINT VENTURE (Note 6)                       -            87,000 
                                                                               
OTHER ASSETS:                                                                  
  Organization and patent costs - net of accumulated                
    amortization                                          25,402        29,168 
  Deferred financing costs                                20,304         3,690 
  Deferred offering costs (Note 7)                        75,000           -   
  Other assets                                             3,151         3,151 
                                                      ----------    ----------
      TOTAL ASSETS                                    $  617,492    $  155,049 
                                                      ==========    ========== 

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
  Bank overdraft                                      $    -        $    4,014
  Notes payable (Note 8)                               2,000,000     2,000,000
  Accrued liabilities                                    292,316     1,024,764
  Deferred revenue (Note 4)                                -           225,000
  Notes payable - shareholder (Note 3)                     -           193,140
                                                      ----------    ----------
      TOTAL CURRENT LIABILITIES                        2,292,316     3,446,918
                                                      ----------    ----------
COMMITMENTS AND OTHER MATTERS (Note 2, 7 and 8)        

STOCKHOLDERS' EQUITY (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; 17,223,036 and 17,887,836                               
    shares issued and outstanding at December 31,                              
    1996 and September 30, 1997, respectively              4,306         4,472 
  Additional paid-in capital                           4,804,298     8,206,682 
  Unearned financing costs                            (2,493,219)   (1,815,815)
  Deficit accumulated during the development stage    (3,990,209)   (9,687,208)
                                                      ----------    ----------
      TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)         (1,674,824)   (3,291,869)
                                                      ----------    ----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                               
        (DEFICIENCY)                                  $  617,492    $  155,049 
                                                      ==========    ========== 

See notes to financial statements.


                                       1
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                  For the Nine Months Ended    For the Period
                                        September 30,          from Inception
                                 --------------------------- (May 26, 1995) to 
                                    1996            1997     September 30, 1997
                                 -----------     ----------- ------------------

REVENUES                         $    -          $    -         $    -       
                                 -----------     -----------    -----------
OPERATING EXPENSES:                                             
  Research and development           795,550         276,186      1,659,029  
  Consulting fees                  1,350,641       1,085,705      2,839,435  
  Other general and                                                          
    administrative expenses          312,827         730,615      1,312,327  
                                 -----------     -----------    -----------
                                                                             
    TOTAL OPERATING EXPENSES       2,459,018       2,092,506      5,810,791  
                                 -----------     -----------    -----------
                                                                             
OPERATING LOSS                    (2,459,018)     (2,092,506)    (5,810,791) 
                                 -----------     -----------    -----------
OTHER EXPENSES:                                                 
  Interest expense                     4,983         185,475        228,897  
  Amortization of deferred                                                   
    and unearned financing                                      
    costs                             -            3,419,018      3,647,520  
                                 -----------     -----------    -----------

    TOTAL OTHER EXPENSES               4,983       3,604,493      3,876,417  
                                 -----------     -----------    -----------
                                                                             
NET LOSS                         $(2,464,001)    $(5,696,999)   $(9,687,208) 
                                 ===========     ===========     ===========  
                                                                
NET LOSS PER COMMON SHARE            $ (0.20)       $(0.32)   
                                     =======        ======
                                                              
WEIGHTED AVERAGE NUMBER OF                     
  COMMON SHARES AND COMMON                     
  STOCK EQUIVALENTS
  OUTSTANDING                     12,576,467    17,553,000    
                                  ==========    ==========

See notes to financial statements.


                                       2
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                 For the Three Months Ended    For the Period
                                        September 30,          from Inception
                                 --------------------------- (May 26, 1995) to 
                                    1996            1997     September 30, 1997
                                 -----------     ----------- ------------------

REVENUES                         $    -         $    -           $    -      
                                 -----------     -----------     -----------
OPERATING EXPENSES:              
  Research and development           359,000          5,571        1,659,029 
  Consulting fees                     91,101        432,821        2,839,435
  Other general and                                              
    administrative expenses          170,328        139,160        1,312,327 
                                 -----------     -----------     -----------
                                                                             
    TOTAL OPERATING EXPENSES         620,429        577,552        5,180,791 
                                 -----------     -----------     -----------
                                                                             
OPERATING LOSS                      (620,429)      (577,552)      (5,810,791)
                                 -----------     -----------     -----------
                                                                             
OTHER EXPENSES:                                                  
  Interest expense                     4,983         64,096          228,897
  Amortization of deferred                                                   
    and unearned financing                                       
    costs                             -           2,048,006        3,647,520 
                                 -----------     -----------     -----------
                                                                             
    TOTAL OTHER EXPENSES               4,983      2,112,102        3,876,417 
                                 -----------     -----------     -----------
                                                                             
NET LOSS                         $  (625,412)   $(2,689,654)     $(9,687,208)
                                 ===========    ===========      =========== 
                                                                    
NET LOSS PER COMMON SHARE             $(0.05)        $(0.15)        
                                      ======         ======             
WEIGHTED AVERAGE NUMBER OF                                        
  COMMON SHARES AND COMMON                      
  STOCK EQUIVALENTS             
  OUTSTANDING                     12,576,467     17,827,000
                                  ==========     ==========

See notes to financial statements.


                                       3
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (UNAUDITED)

        FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1996
                  AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
                                                                                             
                                                                                             
                                                               Common Stock      Additional  
                                                 Date of    ------------------     Paid-in   
Period Ended December 31, 1995:                Transaction   Shares     Amount     Capital   
-------------------------------                -----------  --------   -------   ----------  
                                                              (1)                            
                                                                                             
<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  
                                                           ==========  ========  ==========  
</TABLE>

<TABLE>
<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)                             3,000         -            -           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.


                                       4
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
                                   (UNAUDITED)

        FOR THE PERIOD FROM INCEPTION (MAY 26, 1995) TO DECEMBER 31, 1996
                  AND THE NINE MONTHS ENDED SEPTEMBER 30, 1997

<TABLE>
<CAPTION>
                                                                                             
                                                                                             
                                                               Common Stock      Additional  
                                                 Date of    ------------------     Paid-in   
Period Ended September 30, 1997:               Transaction   Shares     Amount     Capital   
--------------------------------               -----------  --------   -------   ----------  
                                                              (1)                            
                                                                                             
<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          61,000       16     304,985  
Amortization of unearned financing costs                         -         -          -      
Issuance of penalty stock ($5.45 per share)      06/97         500,000      125   2,724,875  
Net loss                                                         -         -          -      
                                                            ----------  -------  ----------  
                                                                                             
Balance - September 30, 1997                                17,887,836  $ 4,472  $8,206,682  
                                                            ==========  =======  ==========  
</TABLE>
<TABLE>
<CAPTION>
                                                                           Deficit
                                                                         Accumulated
                                                              Unearned   During the
                                                 Due from    Financing   Development
Period Ended September 30, 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)                                  -            -            -           305,001 
Amortization of unearned financing costs             -         3,402,404       -         3,402,404 
Issuance of penalty stock ($5.45 per share)          -        (2,725,000)      -            -      
Net loss                                             -            -        (5,696,999)  (5,696,999)
                                                             -----------  -----------  ----------- 
                                                                                                   
Balance - September 30, 1997                     $   -       $(1,815,815) $(9,687,208) $(3,291,869)
                                                             ===========  ===========  =========== 
</TABLE>

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

See notes to financial statements.


                                       5
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                               For the Nine Months Ended      For the Period
                                                    September 30,             from Inception
                                             -----------------------------   (May 26, 1995) to
                                                1996              1997       September 30, 1997
                                             -----------       -----------   ------------------

<S>                                          <C>               <C>               <C>          
CASH FLOWS FROM OPERATING ACTIVITIES
    Net loss                                 $(2,464,001)      $(5,696,999)      $(9,687,208) 
    Adjustments to reconcile net loss to                                                     
      net cash used in operating                                                 
      activities:                                                                
        Depreciation and amortization                351             3,526             4,717 
        Amortization of deferred and                                                         
          unearned financing costs                -              3,419,018         3,647,520 
        Accrued interest                           4,983           185,475           220,770 
        Stock issued for license                  -                 -                 37,500  
        Consulting fees satisfied by                                                         
          stock issuances                      1,105,188           677,550         1,887,027 
        Write-off of deferred offering                                                       
          costs                                   -                 75,000            75,000 
        Cash provided by (used in) the                                                       
          change in assets and                                                   
          liabilities:                                                           
            Advances to related parties           -                 84,000            (5,918)
            (Increase) decrease in                                                           
              prepaid expenses                       900            (1,327)          (14,305)
            Increase in security deposit          (2,500)           -                 (3,151) 
            Increase in unearned revenue          -                225,000           225,000  
            Increase in accrued                                                              
              liabilities                        689,947           546,973           803,994 
                                             -----------       -----------       -----------
           NET CASH USED IN OPERATING                                            
             ACTIVITIES                         (665,132)         (481,784)       (2,809,054) 
                                             -----------       -----------       -----------
CASHFLOWS FROM INVESTING ACTIVITIES                                              
    Organization and patent costs                 -                 (5,162)          (31,358) 
    Investment in joint venture                   -                (87,000)          (87,000) 
    Capital expenditures                          (1,778)           (3,391)          (14,344) 
                                             -----------       -----------       -----------
           NET CASH USED IN INVESTING                                            
             ACTIVITIES                           (1,778)          (95,553)         (132,702) 
                                             -----------       -----------       -----------
CASH FLOWS FROM FINANCING ACTIVITIES                                                
    Proceeds from exercise of stock                                                 
      options                                        150            -                    150  
    Proceeds from issuance of common                                                          
      stock                                      319,500            -                841,500  
    Offering costs                               (75,000)           -                (77,898) 
    Repayment by stockholders                      2,000            -                  3,000  
    Net proceeds from notes payable              341,300           193,140         2,193,140  
    Deferred financing costs                      -                 -                (22,150) 
                                             -----------       -----------       -----------
         NET CASH PROVIDED BY FINANCING                                                       
           ACTIVITIES                            587,950           193,140         2,937,742  
                                             -----------       -----------       -----------
INCREASE (DECREASE) IN CASH                      (78,960)         (384,197)           (4,014) 
                                                                                              
CASH - BEGINNING                                  54,001           380,183             -      
                                             -----------       -----------       -----------
CASH - ENDING                                $   (24,959)      $    (4,014)      $    (4,014)
                                             ===========       ===========       ===========
Supplemental Disclosure of Cash Flow Information:                                
  Cash paid during the period for:
    Interest                                 $     -           $     -           $     8,127
                                             ===========       ===========       ===========
    Income taxes                             $     -           $     -           $     -
                                             ===========       ===========       ===========
</TABLE>

See notes to financial statements.


                                       6
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

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 year ended December 31, 1996,
          included in the Company's Form S-1 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 technology
          transfer, holding and management company, formed to commercialize new,
          existing, but previously unrecognized and previously "classified"
          technologies, with a particular emphasis on those developed by
          prominent research institutes and individual researchers in the former
          Soviet Union, and to license Western technologies for business and
          other commercial applications in Central Europe, Eastern Europe,
          Ukraine and Russia. The Company acquires rights to selected
          technologies by purchase, assignments and licensing arrangements. The
          Company operates its business by licensing its technologies to
          end-users and through development and operating joint ventures and
          strategic alliances.

          The Company commenced operations in May 1995. The Company is in the
          development stage and its efforts have been principally devoted to the
          research and development activities and organizational efforts,
          including the identification, review and acquisition of the rights to
          various technologies, recruiting its scientific and management
          personnel and alliances and raising capital.


                                       7
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

NOTE 2  - BUSINESS AND CONTINUED OPERATIONS (Continued)

          The accompanying 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 September 30, 1997, the Company
          has a stockholders' deficiency of $3,292,000, a working capital
          deficiency of $3,427,000 and has an accumulated deficit since
          inception of $9,688,000. The Company requires additional funds to
          continue research and development efforts and complete the necessary
          work to commercialize its technologies. Until completion of the
          development of a technology and 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 or that,
          if any technology 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.

          The Company has financed its operations through sale of its
          securities, shareholder loans and a bridge financing totalling
          $2,000,000. To support its operations during 1997, 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 1997. 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.

NOTE 3  - BORROWINGS UNDER NOTES PAYABLE

          During 1997, the Company has borrowed $193,140 from three shareholders
          of the Company. The loans are due on demand and provide for interest
          at the rate of 10% per annum.


                                       8
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

NOTE 4  - TECHNOLOGY TRANSFER AGREEMENT

          On January 28, 1997, the Company entered into a technology transfer
          consulting arrangement with American Autopark, Ltd. ("Arbat") to
          license its technology, designs, renderings, blueprints and plans for
          the construction and operation of vertical parking structures. The
          Company is to receive a fee equal to $1,250 per parking space in each
          garage erected by Arbat or any of its affiliates based upon the
          technology transferred to Arbat by the Company. Certain shareholders
          of the Company are shareholders of Arbat.

          In August 1997, the Company received a $225,000 technology transfer
          fee under this agreement. The Company has deferred the recognition of
          this revenue until the period in which the facility is constructed.

NOTE 5  - MEMORANDUM OF INTENT

          The Chernobyl Nuclear Power Station (an industrial amalgamation of the
          State Committee of Ukraine on Atomic Energy) ("ChNPP"), Kurchatov, the
          Ukrainian State Construction Corporation ("Ukrstroj") and the Company
          have entered into a Memorandum of Intent (the "Chernobyl Memorandum of
          Intent") which sets forth the intention of ChNPP to enter into a
          "co-operation agreement" with the Company pursuant to which the
          Company will provide the financing for the development of an on-site
          demonstration of the EKOR foam, in conjunction with ChNPP, Ukrstroj
          and Kurchatov, which will provide the test sites, foam application
          equipment and technical support, respectively. In furtherance of the
          foregoing, Ukrstroj and ChNPP have entered into an agreement (the
          "Ukrstroj"-ChNPP Agreement") to conduct such on-site demonstration
          testing of the EKOR foam as in necessary to ascertain the
          specification requirements for its application to the containment of
          Chernobyl Reactor 4. The Ukrstroj-ChNPP Agreement provides for the
          Company's participation in and financing of the EKOR demonstration
          test. The Company estimates that total financing costs for the
          demonstration test will not exceed $100,000.


                                       9
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

NOTE 6  - ISRAELI INVESTMENTS

          Technion Israel Institute of Technology Agreement

          In April of 1997, the Company has agreed in principle with the
          Technion Israel Institute of Technology ("Technion") to participate in
          certain technology research and development projects sponsored by the
          Technion Entrepreneurial Incubator, Ltd. ("TEI"), an Israeli
          corporation controlled by Technion, whereby the Company will provide
          15%-20% of the financing required for, and will receive a 20% equity
          interest in, research and development projects selected by the
          Company. In furtherance of this venture, the Company has opened an
          office at the premises of TEI in Haifa, Israel, has identified three
          present and six potential technology development projects for possible
          investment, and has agreed to invest in a fourth such project,
          involving certain polyurethane technology with potential use in paints
          and coatings. Pursuant to that agreement, the Company will invest
          $60,000 in Chemonol, Ltd. ("Chemonol"), an Israeli corporation
          established to own and develop that technology, in exchange for 20% of
          Chemonol's voting equity. As of June 30, 1997, the Company has made
          its first payment of $15,000 to Chemonol. The last scheduled payment
          of $15,000 is scheduled to be made no later than November 1, 1998. The
          Company has also entered into agreements with the holder of 50% of
          Chemonol's outstanding voting equity (the "Principal Shareholder")
          granting to the Company an option to acquire from the Principal
          Shareholder an additional 31% of Chemonol's voting equity for $93,000,
          and the present right to direct the voting of the Principal
          Shareholder's voting equity. The Company expects to provide
          approximately $310,000 in financing for all such projects in fiscal
          year 1997. There can be no assurance that these or any other
          development projects will result in useful technologies or that the
          same will be commercially saleable or profitable.

          Due to the Company's voting control over Chemonol, the Company expects
          to consolidate the results of Chemonol with its financial results
          commencing with the consummation of the investment.

          Incubator for Technological Entrepreneurship - Kiryat Weizmann, Ltd.

          In July of 1997, the Company has agreed in principle with the
          Incubator for Technological Entrepreneurship - Kiryat Weizmann, Ltd.
          ("Kiryat Weizmann, Ltd.") to participate in certain technology
          research and development.


                                       10
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

NOTE 6  - ISRAELI INVESTMENTS (Continued)

          Pursuant to that agreement, the Company will invest $60,000 in
          Separator, Ltd. ("Separator"), an Israeli corporation established to
          own and develop technology, in exchange for 20% of Separator's voting
          equity. As of September 30, 1997, the Company has made its first and
          second payments of $15,000 to Separator. The last scheduled payment of
          $15,000 is scheduled to be made no later than August 1, 1998. The
          Company has also entered into agreements with the holder of 50% of
          Separator's outstanding voting equity (the "Principal Shareholder")
          granting to the Company an option to acquire from the Principal
          Shareholder an additional 31% of Separator's voting equity for
          $93,000, and the present right to direct the voting of the Principal
          Shareholder's voting equity. There can be no assurance that these or
          any other development projects will result in useful technologies or
          that the same will be commercially saleable or profitable.

          Due to the Company's voting control over Separator, the Company
          expects to consolidate the results of Separator with its financial
          results commencing with the consummation of the investment.

          Ofek Le-Olem Foundation

          In August of 1997, the Company has agreed in principle with the Ofek
          Le-Olem Foundation ("Foundation") to participate in certain technology
          research and development.

          Pursuant to that agreement, the Company will invest $60,000 per
          company in Comsyntech, Ltd. ("Comsyntech") and Remptech, Ltd.
          ("Remptech"), Israeli corporations established to own and develop
          technology, in exchange for 20% of Comsyntech's and Remptech's voting
          equity. As of September 30, 1997, the Company has made its first
          payment of $21,000 per company to Comsyntech and Remptech. The last
          scheduled payment of $13,000 is scheduled to be made no later than
          February 1, 1999. The Company has also entered into agreements with
          the holders of 50% of Comsyntech's and Remptech's outstanding voting
          equity (the "Principal Shareholders") granting to the Company an
          option to acquire from the Principal Shareholders an additional 31% of
          Comsyntech's and Remptech's voting equity for $93,000, and the present
          right to direct the voting of the Principal Shareholders' voting
          equity. There can be no assurance that these or any other development
          projects will result in useful technologies or that the same will be
          commercially saleable or profitable.

          Due to the Company's voting control over Comsyntech and Remptech, the
          Company expects to consolidate the results of Comsyntech and Remptech
          with its financial results commencing with the consummation of the
          investment.


                                       11
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

NOTE 7  - ABORTED PROPOSED PUBLIC OFFERING

          On June 23, 1997, the Company decided not to proceed with a proposed
          preferred stock offering. Accordingly, the deferred offering costs of
          $75,000 has been charged to operations during the second quarter of
          1997.

          The Company is considering alternative financing arrangements and
          there is no assurance that the Company will complete any offering.

NOTE 8  - BRIDGE FINANCING PENALTY

          In December 1996, the Company completed a private placement of 40
          units, consisting of $2,000,000 in one year promissory notes and
          1,000,000 shares of common stock. Under this agreement, if a
          registration statement, which includes the common shares issued
          pursuant to this agreement is not declared effective by the Securities
          and Exchange Commission ("SEC") by April 1, 1997, then an additional
          500,000 shares are to be issued to the holders of such shares, and if
          same is not declared effective by the SEC by July 1, 1997, then an
          additional 500,000 shares are to be issued to the holders of such
          shares.

          The Company has not met either filing deadline and accordingly, the
          Company has issued the additional penalty shares to such holders
          during May of 1997 and August of 1997.

          During the second half of 1997, the Company will recognize as a
          non-cash charge to financing costs $3.9 million related to the common
          shares issued under this bridge financing.

NOTE 9  - STRATEGIC ALLIANCE

          The National German Research Center (Forschung-Szentrum) Julich and
          the Company has developed a strategic alliance to facilitate the rapid
          approval of the Company's EKOR Foam by the German Radiation Protection
          Agency for the use in the containment, transportation, storage and
          disposal of radioactive wastes within Germany.

          The Research Center Julich plays an important role in the German
          nuclear industry including a responsibility for approving all
          materials utilized in nuclear activities. The Research Center is also
          a member of the European Network of Testing Facilities for the Quality
          Checking of radioactive waste packages.


                                       12
<PAGE>

                                 EUROTECH, LTD.
                          (A Development Stage Company)

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1997

NOTE 10 - DUKE ENGINEERING & SERVICES, INC. TEAMING AGREEMENT

          In April of 1997, the Company has agreed in principle with Duke
          Engineering Services, Inc. ("Duke") to work together as a team to
          market the EKOR technology on a worldwide basis. The Company and Duke
          intend to consider the formation of a new joint business entity as the
          market for the work develop. In September of 1997, there was a
          memorandum of understanding between the two parties to define
          additional terms and conditions that are specific to the Bechtel
          Hanford proposed project that was beyond the broad-based teaming
          agreement. The Bechtel Hanford proposed project includes the
          application of the EKOR foam.

          Each party shall bear its own costs and expenses in connection with
          the marketing of this proposal. Duke, upon the contract award, will
          assume the role of prime contractor and the Company will be a
          subcontractor to Duke. This agreement will expire in one year from the
          date of signature.


                                       13
<PAGE>

ITEM 2.               MANAGEMENT'S DISCUSSION AND ANALYSIS
                              AND PLAN OF OPERATION

General

The following discussion contains certain forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein.

Plan of Operation

Eurotech, Ltd. (the "Company") is a technology transfer, holding and management
company formed to commercialize new, existing but previously unrecognized, and
previously "classified" technologies, with a particular emphasis on those
developed by prominent research institutes and individual researchers in the
former Soviet Union, and to license those and other Western technologies for
business and other commercial applications in Central Europe, Eastern Europe,
Ukraine, Russia and North America. Through the technology management expertise
of its senior executives, the Company identifies, monitors, reviews and assesses
technologies for their commercial applicability and potential, and acquires
selected technologies by purchase, assignments, and licensing arrangements. The
Company operates its business by licensing its technologies to end-users and
through development and operating joint ventures and strategic alliances.

The Company was organized and commenced operation in May of 1995. The Company is
in the development stage and its efforts have been principally devoted to the
research and development activities and organizational efforts, including the
identification, review and acquisition of various technologies, recruiting its
scientific and management personnel and alliances and raising capital.

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 September 30, 1997, the Company incurred a cumulative net loss of
approximately $9,687,000. The Company expects that it will generate losses until
at least such time as it can commercialize its technologies, if ever. No
assurances can be given that the Company can complete development of any
technology or that, if any technology 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.


                                       14
<PAGE>

The Company's plan of operation for the next twelve months will consist of
activities aimed at:

-     Identification, evaluation and acquisition of technologies which were
      developed by a prominent research institute and individual researchers in
      the former Soviet Union, and other developed in Germany, Israel and the
      United States.

-     Funding development for on-site demonstration testing of its proprietary
      silicon-organic (EKOR) compound technology for possibly remediating the
      severe radioactive contamination problems that persist in Chernobyl,
      Ukraine and three sites in Russia.

-     Introduction of its waste-to-energy technology in the city of Cherkassy,
      Ukraine.

-     Introduction of its automated parking technology in Moscow, Russia.

-     Continued funding of the development of silicon carbide "wafer" technology
      in conjunction with I.V. Kurchatov Institute in Moscow and Euro-Asian
      Physical Society.

-     Funding of the Technion Israel Institute Technology Agreement for the
      Chemonol Project.

-     Seeking to establish further strategic partnerships and joint ventures for
      the development, marketing, sales, license and manufacturing of the
      Company's existing and proposed technologies.

Results of Operation

For the Nine Months Ended September 30, 1997 Vs. the Nine Months Ended September
30, 1996:

The Company commenced operations on May 26, 1995. The Company had no revenues
for the aforementioned periods. However, the Company did receive a $225,000
technology transfer fee in the third quarter, which the Company tends to
recognize over the period of the construction of the parking garage (see Note
4). Consulting and other general and administrative expenses increased from
$1,663,000 for the nine months ended September 30, 1996 to $1,816,000 for the
nine months ended September 30, 1997 as a result of a increase in professional
fees from $76,000 in 1996 to $320,000 in 1997.

Research and development expenses decreased in the nine months ended September
30, 1997 to $276,000 from $796,000 for the nine months ended September 30, 1996
as the Company completed the research and development related to the EKOR
Project and advanced it to the commercialization stage.

For the nine months ended September 30, 1997 and the nine months ended September
30, 1996, the Company incurred operating losses of $2,093,000 and $2,459,000,
respectively. The losses are principally due to expenses incurred in the
development of the technologies, including administrative expenses and
consulting expenses.


                                       15
<PAGE>

Interest expense and amortization of deferred and unearned finance costs
increased from $5,000 in 1996 to $3,605,000 for the nine months ended September
30, 1997. This increase was attributable to financing costs related to
promissory notes of $193,000 and a bridge loan of $2,000,000.

The Company will record an additional charge against income of approximately
$1,815,000 during the fourth quarter of 1997 related to shares of common stock
issued in connection with the bridge financing completed in December of 1996.
The Company intends to invest significantly in research and development of its
technologies. As a result, there can be no assurance that the Company will be
profitable on a quarterly or annual basis.

Liquidity and Capital Resources

The Company's principal sources of working capital have been net proceeds of
approximately $842,000 from the offering of common stock under Rule 504 of
Regulation D, shareholder advances aggregating $583,000 and from the bridge
financing discussed below, completed in December of 1996 of $2,000,000. Of the
shareholder advances, promissory notes evidencing approximately $200,000 of
shareholder indebtedness were exchanged for units in the bridge financing and
$141,000 was repaid from the proceeds of the bridge financing. The net proceeds
of the bridge financing reflect the cancellation of the notes referred to above
and are being used for repayment of accrued liabilities and funding the
development of certain technologies and for other working capital purposes.

In December 1996, the Company entered into a purchase agreement for an offering
of up to an aggregate of 40 units to certain accredited investors as defined
pursuant to Rule 501 of the Securities Act of 1933 (as amended) (the "Act")
pursuant to Rule 506 of Regulation D under the Act (the "Bridge Financing").
Each unit consists of one promissory note issued by the Company in the principal
amount of $50,000 bearing interest at the rate of 12% per annum and 25,000
shares of the Company's Common Stock. Under the agreement, the notes are due one
year from the issuance date. Gross proceeds received under this offering were
$2,000,000. Holders of the shares of common stock issued pursuant to this
agreement have, among other things, demand and mandatory registration rights,
including penalties, which could require the Company to issue to the unit
holders up to 1,000,000 additional shares of common stock if shares are not
registered within the specified time frame. As of December 31, 1996, the Company
has recorded an additional 500,000 shares of Common Stock to be issued under the
offering based on the Company's belief that it would not meet one of the filing
deadlines. To date, the Company has not met either filing deadline and,
accordingly, the Company has issued the additional penalty shares to such
holders during May of 1997 and August of 1997.

The Company had a working capital deficiency and stockholders' deficiency of
$3,427,000 and $3,292,000, respectively, as of September 30, 1997.


                                       16
<PAGE>

The report of the Company's independent certified public accountants for the
year ended December 31, 1996 contains an explanatory paragraph relating to the
Company's ability to continue as a going concern.

The Company has agreed to fund the commercialization of certain technologies
developed in the former Soviet Union by scientists and researchers at the I.V.
Kurchatov Institute ("Kurchatov"), other institutes associated therewith, and
the Euro-Asian Physical Society ("EAPS"), collectively the "Scientists".
Kurchatov will provide the materials, facilities and personnel to complete the
necessary work to commercialize such technologies. In addition, the Company
expects to fund during 1997 development and commercialization expenses related
to other technologies developed by scientists and researchers in Germany,
Russia, Israel and the United States. Total planned expenditures under these
programs, including related general and administrative expenses, are expected to
approximate $1,500,000 during 1997. The Company's principal sources of funding
these expenditures included the remaining cash from the bridge financing as of
December 31, 1996 ($380,000) and additional loans from shareholders. 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.

As discussed above, the Company will require additional financing to continue to
fund research and development efforts, operating costs and complete necessary
work to commercialize its technologies. No assurance can be given that
additional financing can be obtained, or if obtainable, that the terms will be
satisfactory to the Company.

The Company is exploring additional sources of working capital including private
sales of securities, joint ventures and licensing of technologies and an
offering of its common stock. In September 1996, the Company received a letter
of intent from an underwriter pursuant to which the firm has agreed in principle
to underwrite, on a firm commitment basis, 5,000,000 shares of cumulative
convertible preferred stock (not including an underwriter's over-allotment
option equal to up to 75,000 shares) at an initial public offering price of
$10.00 per share. In connection therewith, the Company has incurred offering
costs aggregating $75,000, which if the offering is not consummated, will be
charged to expense. On June 23, 1997, the Company decided not to proceed with
this offering and, accordingly, the deferred offering costs of $75,000 was
charged to operations during the third quarter of 1997. The Company is
considering alternative financing arrangements, and there is no assurance that
the Company will complete that or any other offering.

While no assurance can be given, management believes the Company can raise
adequate capital to keep the Company functioning during 1997. 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 a 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.


                                       17
<PAGE>

PART II. OTHER INFORMATION

         Item 6. Exhibits and Reports on Form 8-K

                (a) Exhibits:

                    Exhibit (27) -- Financial Data Schedule

                (b) Reports on Form 8-K

                    None
<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.

                                               EUROTECH, LTD.


                                               /s/ Randolph A. Graves, Jr.
                                               ---------------------------------
Dated: November 14, 1997                       By: Randolph A. Graves, Jr.
                                               Chairman, Chief Executive Officer
                                               and Chief Financial Officer